MCOG staff presents draft FY 2025–26 transportation budget; recommends 10% reserve as local revenues dip

Mendocino Council of Governments (MCOG) staff on May 5 presented a draft Fiscal Year 2025–26 budget that reflects a modest decline in local Transportation Development Act (TDA) revenues and recommends maintaining a 10% reserve to protect transit operations.

The staff presentation recapped fund sources, highlighted a revised auditor estimate and described proposed allocations across transit operations, planning, bicycle and pedestrian set‑asides, and the new Northern Rural Energy Network (NREN) program. Staff said the county auditor’s revised estimate of local funds was $4,306,000 and that, compared with recent audited years, local revenues are beginning to trend downward.

Staff recommended that MCOG set a reserve at 10% of the auditor’s estimate (approximately $431,000 using the earlier estimate; staff noted a recalculated figure of about $416,000 when applying the revised estimate). The recommendation reflects a desire to preserve contingency funds if sales‑tax‑based local transportation funds decline further.

Why it matters: Transit accounts for most local transportation funding in Mendocino County, and staff said holding a reserve would let MCOG and the Mendocino Transit Authority (MTA) continue service while revenues fluctuate.

Key details from the presentation

- Local revenues: staff described audited local-transportation receipts that were higher during recent years and are now dipping. The auditor’s early estimate used in packet materials was $4,306,000. - Reserve policy: staff proposed 10% of the auditor’s estimate as a prudent reserve. That equated to roughly $431,000 under one calculation and about $416,000 when recomputed against the revised estimate; staff said the transit committee recommended recalculating the 10% against the revised figure. - Transit allocations: staff said transit claims were proposed to increase modestly (around 4.5% in the draft compared with the prior budget) by combining local transportation funds, State Transit Assistance and capital reserves. Transit allocations remain the highest-priority use of local funds and typically make up about 80% of allocations. - Planning and active-transportation: staff proposed a planning target of about 3% and noted the 2% optional allocation for bicycle and pedestrian projects; the Covelo Trail project is winding down and related funds have been drawn down. - Federal and other funds: staff said federal formula funds were assumed at estimated levels in the draft but that federal allocations remained uncertain. The NREN (Northern Rural Energy Network) program is a new state-managed fund that MCOG has begun budgeting for staff and direct expenses. - Program reserves and repayments: MCOG staff described an ongoing MTA repayment plan that contributes to the available fund balance and noted some one‑time reallocation activity related to earlier COVID-era federal relief draws.

Public comment and board discussion

A member of the public who identified themself as Gizmo Manasino urged MCOG to budget for public-transit roles in emergency coastal evacuations (for example, tsunami evacuations) and to ensure MTA participation in regional warning and evacuation plans.

Other discussion by board members focused on the timing of the Technical Advisory Committee and Social Services Transportation Advisory Council reviews, recalculating the 10% reserve based on the revised auditor estimate, and confirming that staff will return with a final budget and resolution for adoption at the June 2 meeting.

Next steps and timeline

Staff said the draft budget will return for final action at the June 2 MCOG meeting. The packet materials and supplemental exhibits, including draft allocating resolutions and required findings, will be posted online prior to that meeting. Staff also said the planning work program typically receives administrative amendments during the year as multi‑year projects and carryover funds are finalized.

Ending note: Staff emphasized the draft status of the document and invited direction from the board rather than immediate action; the board did not take a formal budget vote at this meeting.