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MTA board approves reserve fund policy to cover short-term state and federal grant timing gaps
Summary
The board adopted a reserve fund policy (MA25-015) establishing an operating reserve funded by Choose How You Move collections; the board amended language to limit use without prior approval to unforeseen state or federal grant timing issues of 180 days or less and authorized initial funding already appropriated by Metro Council.
The Metropolitan Transit Authority board voted to adopt a reserve fund policy to create a board‑governed operating reserve, drawing on initial Choose How You Move collections that Metro Council appropriated earlier this year.
Amanda (staff member) told the board Metro Council had approved a supplemental appropriation that included $36,465,000 to seed the reserve fund and that staff had requested an additional $10,735,000 in the FY26 budget to yield a projected beginning‑of‑year reserve of $47,200,000. “The reserve will reduce our reliance on a line of credit for short‑term cash timing issues and is expected to save roughly $16,000 a year in line‑of‑credit fees,” Amanda said.
Board member Catherine Hayes questioned one sentence in the draft policy that used the phrase “grant funding shortfalls or timing issues.” Members clarified that the board intended the policy to allow staff to use reserves without prior board approval only for state and federal grant timing issues (not permanent shortfalls) lasting 180 days or less. The board amended the draft language accordingly — deleting the words “funding shortfalls or” and specifying state and federal grant timing issues — before voting.
The board’s motion (MA25‑015) as amended reads in effect: reserves may be used without board approval to address any unforeseen state or federal grant timing issues that are less than or equal to 180 days. For any longer or structural shortfalls, staff said they will return to the board with mitigation plans.
Why it matters: staff said the reserve fund is a best practice that gives the agency flexibility to absorb short federal or state reimbursement timing gaps (for example, federal or TDOT reimbursements that take longer than vendor payment cycles) while preserving capital and avoiding borrowing costs.
The board adopted MA25‑015 with the amendment; the policy will guide transfers and drawdowns from the reserve going forward.
