Yesterday, the Capital Metro board approved a comprehensive long-range financial plan that will guide the agency through several financial challenges over the next few years while increasing cash reserves to a projected $68 million by 2018.
The landmark plan outlines a strategy to address ten agency goals, including moving forward on schedule with MetroRapid and covering the major expenditures associated with transitioning to a new labor structure for bus and paratransit service and implementing the federally-mandated Positive Train Control system.
"Capital Metro is juggling a number of fiscal priorities, with maintaining our service to customers being first and foremost," said Capital Metro President/CEO Linda S. Watson. "This long range financial plan allows us to make significant improvements to our service, like replacing aging buses and implementing MetroRapid, while providing funds to address federal mandates and to transition to a new labor structure. I am confident this long-range financial plan is the most prudent strategy the agency could enact for the future financial health of the transit system."
Of significant concern has been ensuring that Capital Metro’s aging fleet can be replaced on a regular schedule. The long-range plan includes a seven-year strategy that will replace a total of 292 vehicles (buses, vans, and sedans).
That strategy includes Capital Metro borrowing $20 million to jumpstart the vehicle replacement program in FY2013-14 and to allow the agency to stay on track to meet the Texas Legislature’s cash savings requirements as specified in SB650.
Even with the estimated 2.5-3.1 percent interest rate paid over ten years, Capital Metro expects to save millions in bus maintenance costs over the life of the loan.
The long-range financial plan is a key component of the agency’s new strategic plan objective to strengthen the financial health and accountability of Capital Metro, and follows on the heels of many other financial management improvements that have been implemented under the direction of the board and Linda S. Watson.
The plan is a result of many months of work by the board’s Finance & Audit Committee and Capital Metro’s finance department staff, led by Interim Chief Financial Officer Billy Hamilton.
The agency will make adjustments to the plan as budget assumptions change over time.