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Al& <br /> transpo <br /> 2026 OPERATING BUDGET ASSUMPTIONS <br /> REVENUES: <br /> Federal, State, and Local: Transpo continues to avail ourselves of annual federal <br /> capital formula grant funds for preventative maintenance and operating assistance. The <br /> application of such funds towards the operating budget assists with offsetting any <br /> increased expenses. In the past year, expenses have been increasing greater than <br /> revenues. This has increased the challenge of providing a balanced budget. Transpo <br /> will continue to pursue competitive grant opportunities to fund capital improvements and <br /> expenses. <br /> Ridership and Revenue: Transpo, like public transportation agencies across the <br /> country, continues to rebuild ridership following the COVID-19 Pandemic. The 2022 <br /> ridership was 72% pre-pandemic ridership and continued to increase into 2024 where <br /> ridership was 88% of pre covid numbers. <br /> In June of 2025, Transpo implemented the Connect Transit plan. It is still early in the <br /> implementation process to determine the effects it has on ridership and expenses. <br /> EXPENSES: <br /> Employee Wages and Benefits: For 2026, Transpo budgeted an increase in wages <br /> and employee benefits from the 2025 budget. Wage increases are dictated by <br /> Collective bargaining agreements. Health insurance premiums have remained <br /> unchanged, for the fifth year in a row, in the 2026 budget. <br /> Transfer — Capital Improvement Fund/Restricted Liability Reserve: The 2026 <br /> budget does not provide the opportunity to transfer funds into the capital account to fund <br /> capital purchases. If at the end of 2026, a budget surplus would occur, the surplus <br /> would be transferred to the capital account to fund 2027 capital purchases. <br /> UPON THE ADOPTION OF THE ANNUAL BUDGET BY THE SOUTH <br /> BEND PUBLIC TRANSPORTATION BOARD OF DIRECTORS, A <br /> MONTHLY BUDGET, BASED ON HISTORICAL AND FUTURE TRENDS, <br /> 4 <br />