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CapMetro reports 2024 preliminary finances; long-range plan outlines timing for reserve pressure
Summary
CapMetro reported preliminary, unaudited 2024 year-end financials showing sales-tax receipts near budget and underspending on capital; staff presented a 10-year financial model that could require expense adjustments by the late 2020s under conservative growth assumptions.
Capital Metropolitan Transportation Authority staff on Monday presented preliminary, unaudited 2024 year-end financial results and a 10-year long-range financial forecast that highlights timing risks to reserves under conservative sales-tax growth assumptions.
Catherine Walker, CapMetro's executive vice president and chief financial and risk officer, said the agency recorded year-to-date sales-tax remittances of about $389 million, which she said represented 98.1% of budgeted sales-tax receipts. Operating expenses were about $404 million, or 94% of the year-to-date operating budget, Walker said. Capital spending for fiscal year 2024 was about $146 million, roughly 35% of a $411 million capital budget, she said.
Walker identified project timing as the main reason for the capital underspend: the third bus garage land purchase, electric-bus replacements and charger work, and other large projects did not spend as much as planned during the fiscal year.
On the operating side, Walker said salary-and-benefit spending was about 90% of budget, reflecting vacancy savings; professional-services spending came in well under budget; and purchased-transportation costs ran slightly over plan, in part because of overtime and efforts to maintain service.
The agency also presented a long-range financial model projecting revenues and expenses across multiple scenarios. Walker said a 1% change in sales-tax growth is roughly worth $4 million to CapMetro and that the model assumes a baseline sales-tax growth rate of 3.5% in one scenario and a more conservative 2% in others. Under a 3.5% growth assumption, model runs showed that the agency would need to begin considering expense changes around 2028; under a stronger growth assumption the timing of pressure on reserves could move later into the next decade.
Board Member Stratton asked whether the board should consider any immediate policy changes given macroeconomic uncertainty; Walker said staff monitors sales-tax receipts monthly and will start the agency's annual budgeting process next month, and that the presentation was intended to inform that process.
Walker recommended maintaining a minimum of $70 million in reserves for state-of-good-repair and reminded the board that CapMetro currently holds several restricted reserves including statutory operating reserves and budget-stabilization funds.
