1. MAX Program Finance Department
David Leininger
Executive Vice President
Chief Financial Officer
June 19, 2017

2. Finance Department Organization
Joe Costello
SVP
Accounting
Business Planning & Analysis
Payment Systems & Statistical Reporting
Risk Management
Treasury

3. Current Key Projects Conversion of Payroll System to Kronos
Issuance of long-term debt for two large rail corridors
Comprehensive Payments System
Upgrade to current mobile app – GoPass
Installation of validators on rail platforms and buses
New Fareboxes
FY 2018 Annual Budget and Twenty-Year Financial Plan

4. DART Board Calendar For Budget and Financial Plan Consideration
Date
Subject
Feb 28
FY 2017 Financial Outlook
March 28
FY 2018 Preliminary Financial Outlook
Apr 25
Approval of FY 2018 Financial Standards
May 23
FY 2018 Capital Budget Overview
Jun 27
FY 2018 Operating Budget Overview
Jul 11
Draft 2018 Annual Budget & Twenty-Year Financial Plan
Aug 8
Budget & Finance Committee and Board Approval to Distribute FY 2018 Annual Budget and Twenty-Year Financial Plan to Service Area Cities
Aug 22
Budget & Finance Committee Recommends Approval of the FY 2018 Annual Budget and Twenty-Year Financial Plan to Committee-of-the-Whole and Board
Aug 24
Briefing for Service Area City Managers and Finance Directors
Sep 12
Committee-of-the-Whole Review of FY 2018 Annual Budget and Twenty-Year Financial Plan
Sep 26
Board Approval of FY 2018 Annual Budget and Twenty-Year Financial Plan

5. Budget & Financial Plan Overview
Budget & Financial Plan developed within the Board Policy framework of the approved Financial Standards
Twenty-Year Financial Plan
Constructed from detailed data on capital projects, reserves, cashflows, operating expenses, revenues, sales tax and inflation projections, and debt service assumptions
Reviewed and updated annually with prior year actual results and revised assumptions – budget for upcoming year is first year of 20-year financial plan
Demonstrates financial sustainability

6. Board-Approved Financial Standards Policy
The Board shall review and approve a set of Financial Standards each year as part of the Budget and Financial Plan approval process.
Requires a two-thirds vote (10 votes)
General Standards
Business Planning Parameters
Debt Standards

7. Financial Standards – General
Prudently manage financial affairs
Establish appropriate cash reserves
Compliance with legal/statutory/Board policy requirements

8. Financial Standards – Business Planning Parameters
Framework for developing Budget and Twenty- Year Financial Plan
Establish future business targets

9. Business Planning Parameter – B9
The Twenty-Year Financial Plan shall include funding for asset replacements and expansion projects. Capital projects in excess of $1 million shall be approved by the Board. Timely replacement of assets shall be the highest priority to ensure a safe system. Accordingly, the Twenty-Year Financial Plan shall include replacement reserves by major asset category to ensure adequate future funding. The reserve levels shall be based on an independent assessment of asset condition (to be completed at least once every five years)…

10. Financial Standards – Debt
Limit the level of debt incurred
Debt assumptions based on market parameters

11. Coverage Ratios Financial Standard D7
External Coverage: Annual sales taxes must exceed current year debt service by 2.0
Internal Coverage: It is a goal that revenues available to pay for operations minus operating expenses must cover current year debt service, meaning a ratio >= 1.0

12. Financial Capacity