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TO: |
Board of Trustees |
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THROUGH: |
Jay Fox, Executive Director |
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FROM: |
Viola Miller, Chief Financial Officer |
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PRESENTER(S): |
Viola Miller, Chief Financial Officer |
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TITLE:
title
Proposed UTA 2025 Final Budget
end
AGENDA ITEM TYPE:
Discussion
RECOMMENDATION:
Informational report for discussion
BACKGROUND:
Each year, the Authority is required to prepare an operating and capital budget for the succeeding year. After consultation with the Board of Trustees, and in accordance with Utah Code 17B-1-702 and 17B-2a-801, and Board Policy 2.3 Budget, the Executive Director has prepared the final 2025 budget for Board review.
The Board of Trustees conducted six budget work sessions in August. On September 11, 2024, the Board of Trustees received a presentation on the 2025 tentative budget. Subsequently, at their September 25, 2024, Board meeting, the Board approved resolution R2024-09-06 adopting the 2025 Tentative Budget and conducted a public hearing on October 10, 2024.
The 2025 Tentative Budget was sent to the Governor’s office, the Utah State Legislature, service area mayors, council members, commissioners, metropolitan planning organizations, and others. The budget has also been made available to the public on UTA’s website and was open for comment throughout the public comment period. The 30-day public comment period concluded on November 6, 2024, with all comments provided to the Trustees.
The 2025 proposed Final Budget will be reviewed at the November 13, 2024, Board of Trustees meeting with adoption scheduled for the December 4, 2024 Board of Trustees meeting.
The detail of the 2025 proposed Final Budget is attached.
DISCUSSION:
At UTA, we prepare our annual budget as part of a long-term financial strategy for responsible, accountable stewardship of public funds. Investments in transit today, including replacement and major repair of infrastructure, align with Utah’s Unified Transportation Plan developed in collaboration between UTA, the Utah Department of Transportation, our regional planning partners, and the communities we serve.
Our budget is fiscally responsible, strategic, and responsive to changing needs and emerging demands. On a local level, Utah’s growth creates opportunities and challenges for mobility and connectivity. Traffic congestion, commute time, housing accessibility, and air quality area few of the issues that transit seeks to address. On a regional and state level, economic development and major events like the upcoming 2034 Olympics present significant transit opportunities to benefit Utah’s future. Our 2025 proposed budget allocates funds in the most efficient manner possible, recognizing that the growing demand for transit service exceeds available resources.
The UTA 2025 budget includes $465 million in operating expenses and $330 million in capital investment to fund the provision of safe, convenient, and reliable public transportation service and key investments in Utah’s mobility infrastructure. The budget includes federal, state, and local contributions from our partners.
The 2025 proposed Final Budget was developed with an emphasis on creating value. This will be accomplished by:
• Prioritizing efficiency within the organization
• Enhancing service delivery
• Investing in UTA culture
The 2025 Operating Budget:
• Increases funding for On Demand service
• Provides resources for service expansion for April’s 2025 Change Day
• Provides continued support to the TRAX Ambassador program
• Includes a service strategy that supports continued efforts to improve operator working conditions
• Provides additional resources for maintenance training
• Enhances effectiveness and organizational compliance by increasing grants management services
• Focuses on increased information systems development, security and support
• Includes additional development of organizational policies
ALTERNATIVES:
The Board could choose to revise the proposed 2025 Final Budget. This would lengthen the approval process and potentially push approval into 2025. The Board could also choose to not adopt the proposed 2025 Final Budget as presented.
FISCAL IMPACT:
Proposed changes would decrease Revenue by $11,880,000 in 2025 as compared to the Adopted Tentative Budget.
Revenues
Sales Tax Revenue Reductions: $(11,663,000)
Based on UTA consultations with the Economic Evaluation Unit at the University of Utah, forecasted budget for sales tax revenues in 2025 were reduced by $8,163,000. In addition, the inclusion of the impact of HB430 (2024) led to an additional reduction of forecasted sales tax revenues of $3,500,000.
Other Revenue Reductions: $(217,000)
Reflects minor adjustments to sponsored service and grant forecast revenues.
Operating Expenditures
Proposed changes would increase Operating Expense by $2,568,000 in 2025 as compared to the Adopted Tentative Budget.
Electric Rate Increases: $1,838,000
Adjustments were made to electricity rates and expenses after the initial Tentative Budget was prepared, based on current expectations for changes in electric power rates.
Technical Budget Adjustments $730,000
A series of adjustments to the Tentative Budget including the addition of 8.8 FTE budgeted Operator Trainees ($525,000), staffing cost adjustments for the Board ($110,000), employee holiday gift tax adjustments ($112,000), Grant department expense adjustments ($87,000), Vanpool insurance cost increases ($80,000), Fares department reorganization costs ($53,000), Communications department reorganization ($30,000) and capital offset adjustments for Accounting (-$267,000).
Capital Expenditures
No changes are being proposed for Capital Expense in 2025 as compared to the Adopted Tentative Budget.
The reduction in Revenue and additional Operating expenses described will be covered by funds from UTA’s unrestricted cash reserves.
ATTACHMENTS:
2025 Final Operating Budget - Exhibit A
2025 Final Capital Budget - Exhibit A-1
2025 Final Operating Budget - Exhibit A-2 (Operating by Office)
2025 Final Operating Budget - Exhibit A-3 (Operating by Mode)
Changes from 2025 Tentative Operating Budget - Exhibit B
Changes from 2025 Tentative Capital Budget - Exhibit B-1