August 15, 2018

2

March 2018

Capital Budget

Guidance

April 2018Operating

Budget Guidance

April 2018Business Plan & Budget Kickoff•Present Draft Parameters & Goals

May 17Midyear Budget Workshop•FY2018 Review/ Forecast

•Finalize Parameters

•FY2019 Goals Guidance

May 9Capital Budget Due

June 26Budget Workshop•Preliminary Funding Envelope

•Discretionary Capital Project Prioritization

July 5Operating

Budget Due

July 19Budget Workshop•5 Year Cash Flow Update

•Draft Capital Plan

•Discretionary Capital Project Prioritization

August 15Budget Workshop•Presentation of Budgets

September 2018•Public Budget Review September 5

•Finance & Audit Committee Briefing

•Public Hearing September 19

•Board Approval September 27

METRO Staff

METRO Board

FY2019 Budget Workshop

3

1. FY2019 Funding Envelope

2. Goals and Targeted Investments

3. FY2019 Proposed Capital Budget

4. FY2019 Proposed Operating Budget

5. Summary of Budgets and Timeline

10

Cash Flow SummaryFY2019 – FY2023 Draft Sources & Uses Summary

4

13 5

FY2019 Goals

FY2019 Business Plan Goals

Attaining Universal Accessibility

Investing in Enhanced Safety

Improving Security

Maintaining a State of Good Repair

Improving the Customer Experience

Planning for the Future

Marketing our Service

6

Universal Accessibility Initiatives focus on ADA compliance and enhancing our customers’ ability to access METRO service.

Capital Budget: $ in millionsTier 1 Bus Stop ADA Compliance 4.6

New Bus Shelters 2.9

Accessibility Enhancement at Public Facilities

0.2

Bus Stop Signage Upgrade 1.3

First & Last Mile Universal Accessibility Program 0.7

9.7

Operating Budget: $ in millionsMETROLift 62.5 Concrete, Sidewalk, Bus Shelters & Rail Platform Repairs

0.1

62.6

Total 72.3$

7

Safety Initiatives reduce accidents and incidents to our patrons and employees.

Capital Budget: $ in millionsTraffic Signal Arms on Main St. 2.7 Sunset Reconstruction 2.0 Quad Gates at Wheeler & U of H 1.8 Rail Simulator 1.7 Audible Pedestrian Signals on Red Line 1.4 Rail Alignment Fencing 0.8 Bluetooth Proximity Alert System 1.0 Pavement Markings 1.0 Shared Lanes at TMC, Capital & Rusk 0.8 Red Line Signal Timing Optimization 0.7 LRV Cab Cameras 0.6 Pre-Signals or Signal Timings 0.4 Rail Signage Upgrades 0.4 LED Backplates on Traffic Signals 0.3 Automatic Wayside Horns 0.2 Automatic Pedestrian Gate 0.2

16.0

Operating Budget: $ in millionsSafety Department 9.3 Bus & Rail Training 2.6

Rail Safety Program 1.3

13.2

Total 29.2$

8

Security Initiatives reduce crime on METRO vehicles and at METRO facilities.

Capital Budget: $ in millionsNorthwest Transit Center Reconfiguration & Parking Upgrade 17.9

Magnolia Transit Center Expansion 3.7

21.6

Operating Budget: $ in millionsMETRO Police Department 26.5

Security Services 2.3

28.8

Total 50.4$

9

State of Good Repair Initiatives extend the life of METRO’s capital assets, including revenue vehicles and public facilities.

Capital Budget: $ in millionsBus Replacements 39.2 Arboc Vans - Alternative Service 8.0 METROLift Vans 4.3 Light Rail System & Vehicle Upgrades 5.5 Engine & Transmission Assemblies 5.0 Red Line Rail Tie Upgrade 3.9 Data Center Management 3.7 Kashmere BOF Electrical System 3.3 Hybrid Bus Batteries 2.0 Northwest BOF Bus Wash 1.5 Network Upgrades and Management 1.3 Bus Axles 0.8 Hiram Clarke BOF Waste Water Rehab 0.7 Polk BOF Oil Water Separator System 0.6 Mission Bend Park & Ride Pavement Rehab.

0.5

Non-Revenue Vehicles - Heavy Duty 0.3 80.6

Operating Budget: $ in millionsBus Maintenance 106.9 Facilities Maintenance Department 33.2 Rail Maintenance 22.8 State of Good Repair Division 0.7

163.6

Total 244.2$

10

Customer Experience Initiatives focus on providing quality service and amenities to our riders.

Capital Budget: $ in millionsBOOST Corridors 2.7 Bluetooth Proximity Alert System (BPAS) * 1.0 Mobile Ticketing 0.5 Westheimer Enhanced Bus Service 0.4 Bluetooth Beacons * 0.2

4.8 * Includes technology to improve accessibilty for disabled community.

Operating Budget: $ in millionsBus & Rail Transportation 161.4 Vanpool 11.3 Customer Service 4.8 Government & Public Affairs 4.5 Service Planning & Scheduling 2.6

184.6

Total 189.4$

11

Planning Initiatives focus on investments which will allow METRO to position itself for future growth and changes in the region.

Operating Budget: $ in millionsLong Range Plan (LRP) Development 3.3 Draft LRP Public Outreach 1.4 Final LRP Public Engagement & Education

4.6

Bond Referendum Education 3.4

Legal Expenses 1.9

14.6

Total 14.6$

12

Marketing Initiatives focus on providing information and education about METRO and the services we provide in order to increase awareness and ridership.

Operating Budget: $ in millionsCommunications Department (includes Marketing & Corporate Communications, Press Office and Social Media) 10.8

Total 10.8$

8

FY2019

$217.7 million

FY2018

$286.0 million31.4% over FY2018

13

10

$192.6 million

FY2019

14

FY19 Budget Local Grant

Bus Stop Accessibility and Site Improvement Program

4.6$ 4.6$ -$

Traffic Signal Arms at Main & Pease and Main & Jefferson

2.7$ 2.7$ -$

Red Line Pedestrian Signals to Audible

1.4$ 1.4$ -$

Northwest Transit Center Reconfiguration & Parking Expansion

17.9$ $12.2 5.7$

Magnolia Transit Center Expansion

3.7$ 1.0$ 2.7$

Rail Tie Overhauls 3.9$ 3.9$ -$ Engine & Transmission Assemblies

4.9$ 4.9$ -$

P&R Reimagining/MAX Lanes 9.8$ 9.8$ -$ BOOST Corridors 3.5$ 3.5$ -$ Bus GPS Router Replacement 3.1$ 3.1$ -$ West Bellfort P&R 1.7$ 1.3$ 0.4$ US 290 Cypress L-Ramp 9.6$ 2.5$ 7.1$ North Post Oak Lane Configuration

6.2$ 1.2$ 5.0$

METRONext Project 5.8$ 5.8$ -$ (in millions)

Non-Bus Acquisition Examples

13 15

Executives submit budget requests to Capital Budget Review (CBR) Committee.

CBR prioritizes and recommends projects to CEO.

Requests presented to METRO Board for funding approval.

FY2019 Proposed Operating Budget

602.2$ Million BASE 2.034% (blended)

3.3$ Long Range Plan (LRP) Development1.4$ Draft LRP Public Outreach4.6$ Final LRP Public Engagement & Education3.4$ Bond Referendum Education1.9$ Legal Expenses1.0$ Allowance: Real Estate Fund Investments2.6$ Allowance: New Service0.3$ Allowance: Autonomous Vehicle Pilot

4.2$ Targeted Investments (Within Envelope)1.3$ Rail Safety Program (Funding Transfer)

626.2$ Million

2019 Proposed Operating Budget: $626.2 million

416

FY2018 Operating Budget620.1$ 2018 Budget(29.9)$ Adjustments for one-

time expenditures590.2$ Million - Adjusted Base

Controlled by President & CEO

Parameter

517

FY2018 FY2019

518

FY2019FY2018

FY2019 ProposedWorkforce

4,275

FY2018 Authorized Workforce

4,229

Total FY2019 Proposed Workforce:4,275

• Increased Service• Safety & Security• Targeted Investments

19

(in millions)

320

Description Approved FY2018 Budget

Proposed FY2019Budget

Operating Budget 620.1$ 626.2$ 6.1$ 1.0%GMP Transfer 176.8 180.0 3.2 1.8%Capital Budget 217.7 286.0 68.3 31.4%Debt Service 97.0 104.0 7.0 7.2%

Total 1,111.6$ 1,196.2$ 84.6$ 7.6%

Change Dollars Percent

21

March 2018

Capital Budget

Guidance

April 2018Operating

Budget Guidance

April 2018Business Plan & Budget Kickoff•Present Draft Parameters & Goals

May 17Midyear Budget Workshop•FY2018 Review/ Forecast

•Finalize Parameters

•FY2019 Goals Guidance

May 9Capital Budget Due

June 26Budget Workshop•Preliminary Funding Envelope

•Discretionary Capital Project Prioritization

July 5Operating

Budget Due

July 19Budget Workshop•5 Year Cash Flow Update

•Draft Capital Plan

•Discretionary Capital Project Prioritization

August 15Budget Workshop•Presentation of Budgets

September 2018•Public Budget Review September 5

•Finance & Audit Committee Briefing

•Public Hearing September 19

•Board Approval September 27

METRO Staff

METRO Board