Metro Transit audit finds clean opinion as commissioners bolster reserves with federal relief funds

Jody Dobson, a partner at Baker Tilly, told the Waukesha City Transit Commission on June 19 that Metro Transit’s 2024 financial statements received "a clean or an unmodified audit opinion," and auditors found no grant-related findings.

The opinion, Dobson said, means the statements "are a fair presentation in all material respects of the financial position and the results of operations for the year." She reviewed revenue and expense trends and noted Metro produced a full set of financial statements that are also included in the citywide financials.

Why it matters: Commissioners said the audit confirms routine financial controls but also highlights trade-offs the system faces as federal pandemic-relief funds are spent down. Staff and auditors described how relief dollars helped the agency both reduce the local levy share in 2024 and build a transit reserve to prepare for upcoming capital needs.

Key findings and figures cited during the meeting included an increase in Metro’s segregated transit reserve from about $190,000 to $690,000 in 2024 after leveraging federal funding, modest overall revenue growth in 2024 compared with 2023, and a small decrease in operating expenses driven mainly by lower purchased-transportation costs. Dobson said there were no material journal entries or corrections that would change the financial picture presented throughout the year.

Commissioners pressed staff on several technical points. Alderman Joe Piper questioned the roughly $3.2 million shown for salaries and wages and whether that amount included contracted operators; staff confirmed the total combines Transdev contract employees, security personnel and any city employees accounted to the transit fund. Piper also asked about a reported negative change in net assets of about $283,007; Dobson explained that noncash depreciation (about $1.5 million) affects reported net position but does not represent a cash outflow and most capital assets are grant-funded.

On debt and interest expense, Dobson said there is no debt outstanding in the transit fund and that any local borrowing tied to buses is reflected in the city's debt-service accounts. Commission staff said the city generally covers interest expense rather than the transit fund transferring funds back for that purpose.

ARPA and reserve strategy: Commissioners and staff discussed how Metro used remaining ARPA funds to reduce the levy share and seed the reserve. Staff reported that as of the end of last year about $1.2 million of ARPA remained (ARPA only) and the total COVID-related pool (ARPA, CARES, etc.) was about $3.6 million. Staff said the commission expects to spend or obligate much of the ARPA amounts before the federal deadline (Sept. 30, 2029) but intends to retain a substantial portion in a reserve to smooth capital spending, especially for upcoming bus replacements.

Ridership and fares: Staff noted a change in ridership accounting: part of a route previously run by MCTS (Milwaukee County Transit System) transferred in mid-2023, which increased Waukesha’s reported fixed-route ridership. Commissioners heard that fixed-route ridership is approaching 500,000 but passenger-fare receipts were down year-over-year, in part because of provider accounting differences; staff said fare capping was adopted to recover some revenue while limiting cost impacts on riders and may be revisited for 2026.

Formal actions and next steps: The commission approved the May 8 meeting minutes (motion recorded as moved by Alderman Joe Piper; the motion passed). Staff said no formal motion was needed on the audit presentation, which was received as a report. Chair closed the meeting and the commission adjourned.

The commission also noted two action items tied to WisDOT operating assistance could not be considered because the state had not provided required documentation; those items were deferred.

The commission did not take further formal action at the June 19 meeting; staff said they will continue planning to use the COVID-relief balance and reserve to address near-term capital needs and will report back as obligations are finalized.