Capital Metro updates financial forecast, returns $130 million to contingency fund

Capital Metropolitan Transportation Authority’s Finance, Audit and Administration Committee heard an update on the agency’s financial status at its meeting on Aug. 14.

Catherine Walker, chief financial and risk officer, presented a financial report as of the third quarter of Fiscal Year 2022-23.

According to the presentation, sales tax remittances received as of May are 7 percent higher than May 2022 and 3.4 percent higher than the year-to-date budget.

In terms of operating expenses, Capital Metro has spent $267.6 million of its $387.5 million budget to date, or 69.1 percent of the full-year budget. Walker said the figure is “a little light” relative to where the number would generally be at this point in the year, and she attributed the delay in spent funds to vacancy savings and the timing of consultation, computer software and other professional fees.

The fiscal year’s capital project budget is $475 million. Of that, Capital Metro has spent $91.9 million to date, or 19.3 percent of the full-year budget. This includes the McKalla Red Line Station, MetroRapid Lines, Orange and Blue lines, electric bus replacements and the Enterprise Resource Planning System. The agency has issued $73.2 million in outstanding commitments, or 15.4 percent of the full-year budget. Projects include the Orange Line, McKalla Red Line Station, MetroRapid Lines, bus electrification infrastructure, electric bus replacements and the Airport Lamar Red Line Grade Separation.

The presentation also included a rundown of budget transfers made from Capital Metro’s contingency fund in the third quarter. Transfers to exceed $150,000 must be reported to the board each quarter.

In April, staff transferred $350,808 from the contingency fund to federal strategic advisory support services for assistance to Strategic Planning and Development staff in monitoring Federal Transit Administration updates. Also that month, staff approved a transfer of $401,500 from the contingency fund for a workforce analysis and $183,500 for a consulting fee related to public relations and state and federal legislative contracts. In May, staff approved a transfer of $330,950 to cover the cost of additional legal fees and financial advisory fees related to Project Connect.

This quarter also included a slew of transfers back into the contingency fund. The returned funds reflect the updated capital forecast at this point in the fiscal year. In some cases, the funds allocated at the start of the fiscal year are now delayed. In other cases, the funding allocated won’t be spent until another fiscal year.

“Or, a third scenario might be that we have a project that we just decided we don’t want to do anymore,” Walker said. “It’s not part of our strategy; it doesn’t fit the agency. We’ve done a wholesale shift on, perhaps, some project work that we need to do, and we’re making different decisions now than when the budget was built a year and a half ago.”

Many of the transfers pertain to information technology or other administrative matters. Of note, the list includes $6.4 million in electric bus chargers, due to the fact that the program is now slated to be implemented in a future fiscal year.

“The point is that we took a critical look at our capital budget, and we said we’ve just planned too much work for ourselves – there’s physically too much work to get done in the rest of the fiscal year,” Walker said. “So what we did is we moved, effectively, $130 million into the capital contingency budget.”

Photo by WhisperToMe, made available through a Creative Commons license via Wikimedia Commons.

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