Transit fund 'worse than we thought,' transportation director says

Transportation Director Sean Egan told the council that, despite improving service performance, the transit fund’s financial position has deteriorated compared with the same point last year and that the gap between revenues and expenditures is larger than expected.

"While our service performance has continued to improve, our financial position is worse off than we were at this point last year," Egan said during the presentation introduction. City Manager Beau Ferguson earlier recapped the numbers the council saw last year, saying the transit fund had about a $10,000,000 surplus in FY '25 and projects had shown the fund staying positive through FY '26 before turning negative later.

Ferguson reminded council of decisions made the previous year: staff did not recommend a tax increase; the council kept the portion of the tax that supports transit at a revenue-neutral 2.4¢; and the council prioritized and funded fare-free transit. Egan said he will explain the specific reasons this year’s performance has undercut prior projections and that staff will present options and difficult choices going forward.

Neither Egan nor Ferguson proposed specific new revenue measures at the retreat. Council members were asked to hear the presentation and engage in prioritization as staff develops recommendations.