This meeting is being recorded.

No.

Good afternoon, everyone.

My name is Gree Han.

And uh oh, I'm I'm oh, you weren't ready?

Sorry.

Jumping on exactly that was your exact one.

Yeah.

Oh, somebody was a queen queen.

I think it's okay now.

Okay.

I think we're good now.

You ready?

Sorry.

Oh, let you do that because I was so close.

Thank you.

Okay.

Starting at my name's Greg Hahn.

Um chairman of the board for the Indianapolis Public Transportation Corporation.

And this is our board of directors meeting for July.

And it's July sixteenth, twenty twenty-six.

And it's now four oh two PM.

So Bob, would you please uh call rule?

Yes, uh the directors please indicate your attendance when I call your name, Director Smith.

Yeah, Director Quick.

President.

Mr.

Chair, we have a quorum.

Thank you, sir.

Um, next we're going to do awards and commendations, and our president and CEO, Jennifer Purz will present any awards and commendations we have for June.

All right.

Thank you, Tamika.

Um, we're gonna start out with our June twenty twenty-six safe drivers.

The folks on the screen here were recognized for their safe driving in the month of June and received a National Safety Council patch pin and certificate.

I'll call attention to Byron Reed, the operator at the top of this list.

He has had 16 years of safe driving as a coach operator on our fixed route service.

27 years of service in total to Indigo.

So congratulations to Byron Reed.

And then we have our employee of the month for July, Dantez Motley is a coach operator on our fixed route transportation.

His nominator commended him for his outstanding customer service and great attitude and his assistance to the folks, the mentors uh in the mentorship and apprenticeship program.

So thank you, Dantes, for your amazing service and congratulations on your award.

Okay.

That is all I have for right now.

We're going to come back with one more special word at the end of the meeting.

Okay.

Thanks, Jennifer.

Moving on to item uh three committee reports.

Um we will enter into the record the uh governance and audit committee report for its meeting on July the 9th, 2026.

Uh is there any objection?

Comments.

Okay.

Uh no, I the regular agenda we would have item four.

And we'll begin with action item A1, and that's consideration and approval of the board meeting minutes from June 18, 2026.

Are there any questions or comments from the board members on that?

Okay.

Can I get a motion for consideration and approval?

So move of the June 18th, 2026 board meeting.

Sorry.

So moved.

Okay.

There being a motion and a second.

All those in favor say aye.

Aye.

All those opposed, nay.

Mr.

Chair.

If I may interject, just for the record, I want to note that Director Gardner is present.

Okay.

And uh with uh there was no nay votes, so that is part of the record.

And now we go to item A2.

Um, and that's the introduction of the 2027 budget.

And that'll be presented by our chief financial officer, Justin Bergham and budget manager Andrea Carroce.

Thank you.

Thank you.

Good afternoon.

Uh Justin Burko, Chief Financial Officer for Indigo, alongside Andrea Crocia.

Uh, here to present our 2027 budget.

Uh now I know it's probably hard to believe.

We're already thinking about 2027, so maybe the snowy snapshot of uh bus downtown will get you in the mood to think about next year's budget.

Um before we get into the numbers, I want to thank quite a few people.

Um, here you'll see the members of the team that directly led the budget process this year.

Uh but I want to first acknowledge all the budget leaders at IndieGo.

Uh, that includes the frontline staff, managers, and directors, uh, not a part of the finance department uh that owned their roles as responsible stewards of Indigo's mission and strategic plan.

The team faced some unique budget considerations this cycle, um, but I'm pleased to share that the results.

I'm pleased to share the results of their work with you this afternoon.

I mentioned that uh the finance and leadership team.

Uh so I would like to thank Jenny and the rest of the executive team, uh staff for their guidance and support.

Uh and I can't thank enough the team, um, the budget and grants team, uh, Andrea, uh, Sarah Harder, the newest member of our budget team, uh, and Cassie Bilby, our grants grants manager.

Uh, they do the extremely important work of organizing, presenting, and then reporting on our budget each year.

So thank you guys.

With that, I'm pleased to present the results of everyone's hard work.

And that is a total FY 2027 budget of 374.5 million dollars.

As a result, I'm sorry, as a reminder, we fund three annual appropriations, the operating capital, and debt service budgets each year.

In 2027, we're proposing an operating budget of 164 million dollars, a capital budget of 189.7 million dollars, and a debt service budget of 20.8 million in total.

Uh, this represents a 13.4 decrease from the adopted budget for 2026.

Um, before we get into the details of the budget, I wanted to take a step back and share what the expectations were of the team uh when it came to considering their requests for next year.

We asked all chiefs, directors, and managers to work together to create a budget that was built around the strategic strategies and objectives in our strategic plan.

Each line item or budget initiative was to have a direct impact on at least one of the following protecting frontline workers, increasing ridership, or prioritizing long-term stability.

During our lengthy budget reviews and discussions, budget preparers were expected to share the ways in which their budgets supported one or more of these objectives.

The goal was to keep these front and center throughout the entire budget process.

Next, to support long-term fiscal sustainability, which is one of our strategic plan pillars.

We asked preparers to use zero-based or modified zero-based budgeting for 2027.

And just a reminder that zero-based budgeting means we ask preparers to imagine their budget starts at zero each year and then build it back up from there rather than starting from last year's number and adding increases the following year.

Every initiative should be justified, and preparers had to be prepared to show how each budget supports the priorities and objectives from the last slide, not just to point to what was spent before.

This is different from the traditional approach where departments carry forward last year's budget and had a set increase.

That tends to let costs stick around year after year, even sometimes when they're no longer needed.

Zero-based budgeting forces a fresh look at everything instead.

The goal is to limit budget creep and make sure resources go where they're most needed rather than where they went last year.

And under a modified approach, some fixed costs can be exempted from the full justification, but most spending still goes through this detailed review.

With that philosophy and methodology in mind, our team went to work and we're pleased to present the results of that effort, which is a proposed operating budget of 164 million dollars for 2027.

This represents a 6.6% total variance when compared to the 2026 adopted budget.

By main expenditure category or character, we're budgeting $87.6 million for personnel services, $57.4 million for other services and charges, and $19 million for materials and supplies.

Personnel services includes wage increases for all staff at a budgeted FTE count of $929.5.

This represents a net increase of 10, which is nearly entirely driven by the ramp up in staffing required in late 2027 as we prepare to open the East Campus fleet storage and maintenance facility.

Personnel services also includes Indigo's costs associated with our employee medical insurance, which we are projecting to increase by approximately 1.2 to 1.5 million dollars from 2026.

The budget for other services and charges will cover the costs of our paratransit operations, security contract, as well as all of our IT software and maintenance subscriptions.

Materials and supplies includes the costs associated with procuring fuel for our fleet of vehicles, as well as stock parts and tires.

You'll notice a large variance in this category in the table on this slide, driven primarily by the extreme volatility we've seen in the fuel market recently.

So we're building in a little bit of budget for that next year.

So that's what's driving that increase.

By budget category or line item, these significant investments in areas such as operating materials and supplies, paratransit operations, and other contracted services are some of the largest drivers of the in-keep increase compared to 26, but you'll notice that most have more than one significant tie to the objectives in our strategic plan.

On the revenue side of the operating budget, the makeup of how we fund our operations is going to remain largely unchanged from 2026.

We have three categories of operating revenue: local, state and federal, and other.

Uh, based on the type of property and the property owner.

So to account for this cap, the total max levy was reduced by approximately $5.1 million next year.

Total transit income tax is estimated to be $83.8 million, $51.6 million of which will be supporting the operating budget next year.

The remaining income tax revenue will be split between our debt service and our capital program.

Fair box collections are budgeted at $6.4 million in 2027.

This represents an 8.5% increase from the 26th adopted budget as a result of our recent fair policy updates that went into effect earlier this year and based on some recent trends of collections so far.

And finally, we've got $4.2 million budgeted in the other local revenue category.

And this is primarily made up of advertising on our buses and stops and interest earned on investments from our state and federal partners.

We're planning on using $55.7 million to support the operating budget next year.

That includes $11.4 million from the Indiana Department of Transportation Public Mass Transit Fund or PMTF.

This $11 million represents what was appropriate approved in the state's most recent biennium budget and sees no increase for 2027.

On the federal formula side, we are projecting $18.3 million in operating revenue.

This will support our EDA paratransit operations, safety and security initiatives, and our preventive maintenance activities.

This represents no change from our operating budget allocation for 2026.

Thanks.

Good afternoon, members of the board, executive team, Andre Krocha, interim budget director, and continuing with the presentation.

While the operating budget addresses our day-to-day expenditures, the capital budget provides a roadmap for larger investments that support our long-term goals.

For 2027, we're budgeting 189.7 million towards capital projects, which we group into five categories: BRT and on-street infrastructure, facilities, fleet replacement, information technology, and safety and security.

Consistent with recent years, the largest share of our capital investments continues to be directed towards BRT facilities and modernizing our fleet.

The most significant capital investments in 2027 include continued construction of the blue line, our third BRT route connecting the east and west side of Indianapolis through downtown, the construction of the East Campus bus storage and maintenance facility, and the replacement of fixed route and paratransit vehicles.

As we continue on strengthening Indigo's long-term financial stability, this budget reflects the first steps toward a revenue constrained capital budget as we prioritize projects based on available funding.

Next year is when we'll fully see a revenue constraint capital budget approach, and we've taken steps into that direction this year.

Next slide, please.

We fund capital projects through three main sources: grants, local taxes, and that includes property and income tax, as well as through proceeds from the issuance of municipal bonds.

The issuance of bonds allows us to stretch our local income tax revenue and make them upfront investments in capital projects.

And for 2027, we will be using nearly 55 million in bond proceeds to fund those investments.

This reflects the outstanding work of our grants team in identifying competitive and formula funding opportunities and securing those funds through applications and reporting process.

In many cases, we're able to fund 80% of any given capital project with this grants.

So the work they do is critical to maximizing the value of our local dollars.

Next slide, please.

Next, the third and final budget we fund on an annual basis is our debt service budget.

We currently have four debt issuances that have helped fund BRT design and construction, replacement of vehicles and equipment, and investments in operating infrastructure such as facilities.

We issue debt because many of these projects require significant upfront funding.

Borrowing allows us to make this investment today and repay the cost over time.

That also help us facilitate grant funding.

Many federal grants requires to contribute a local match or have funding available upfront to qualify for this grant.

We without that upfront funding from the bonds, we couldn't fund many of these projects.

The oldest issuance is from 2018 and was issued with a 10-year term to maturity.

So we will no longer have debt service obligations related to that project after 2028.

The most recent issuance secured 125 million last year to support construction and equipment of the blue line.

This issue carries a 20-year term to maturity with a maximum annual debt service payments of 10 million.

Finally, just a few reminders on where we stand along our budget timeline.

The next step in our budget approval process after the introduction this evening will be to hold a public hearing the evening of Thursday, July 30th.

And then at next month board meeting on August 20th, we will seek adoption of our 2027 budget.

And we will have ordinances and resolutions for you to sign, which will formally adopt the 2027 budget.

From there, we will seek adoption with the city county council.

And then finally, the department of local government finance at the state level.

So in between 29 and the adoption meeting next month, if any member of the board would like to discuss the budget 101 or have additional questions, please feel free to reach out to any of the budget uh team members on the screen, and we'll happily make ourselves available to do so.

Uh also you will receive a copy of the budget book before the budget hearing on July 30th.

This document contains all the information that we covered tonight in much greater detail.

And I have to say that our team puts a lot of time and effort producing this uh book every year to make sure that it's thought of and transparent.

And that concludes our presentation.

Uh, we'll be happy to take any questions.

Thank you, Justin and Andrea.

Um, are there any questions or comments from the board?

Okay.

Um, I just want to uh uh thank the budget team and as I expressed in the finance committee meeting earlier, all the hard work that went into doing this uh from Jenny and her executive team to the department heads are going to have a piece of a piece of this pie.

Um I I think um should be commended.

I want to point out that the we have uh a three million dollar contribution that we're making to the City of Indianapolis Department of Public Works, a one-time payment for the West Washington Street work.

Uh absent that $3 million contribution, just in his team has again for the second year in a row now, slowed the growth of our budget.

So we're not growing in spite of the fact that we are growing as an organization.

Our budget is not growing as fast as it would have been in the past.

So congratulations to Justin and the budget team for and Jenny, you and your executive team for putting this together.

Great job.

Thank you.

Thanks, Rurik.

Um, as Andre indicated, the board will hold a public hearing on the proposed 2027 budget on July 30th, 2026 at 4 p.m.

Uh, hearing from the boardroom.

Okay.

So next we go to information items.

And item uh I want is the finance report.

And that'll be done by our chief financial officer.

Justin Burke.

Thank you.

Uh good evening again, Justin Burko, uh, CFO for Indigo, uh, here to talk a little bit about our financials for 2026 with the June 2026 financial summary.

Uh on the revenue side of the financial summary, uh total revenue for the month of June was over budget by one and a half million dollars.

Passenger service revenue uh had a strong month coming in uh 166,000 over budget.

This continues the positive trend we've seen throughout the year.

As year to date, uh we're above budget by 352,000 and above prior years collections at this point uh by around 724,000.

We've received all of our public mass transit funds for the year, uh so that's why you'll see a zero dollar amount in the monthly column.

And we received our final spring settlement for property taxes, which is why that line is over budget for June.

Uh year to date, all of our local income and property taxes have been received at or above budget.

On the expense side, uh personnel services as a category were under budget by $632,000 or approximately 10%.

So that was a contributing factor and part of the variance here for the month.

And year to date, the category as a whole is under budget by 22%.

Materials and supplies were under budget by 7% for the month.

Within this category, maintenance materials and other supplies were slightly over budget as a result of a few one-time operating equipment purchases that were made during the month.

Year to date were $1.6 million under budget in that category.

And year to date, we're under budget by nearly the same percentage, uh, which comes out to $11.9 million.

That concludes my report uh for this afternoon, and I'd be happy to answer uh any questions.

Justin, uh are there any questions or comments on the board?

Thank you very much.

Um item I2 is a submittal of department reports, and uh without objection, the department reports will be entered into the record.

Any questions?

Okay.

Okay, and I'm gonna now turn it back over to uh Jim.

Hi everybody, this is Jennifer Pierce, President CEO, and I want to end our meeting here with a special recognition.

Um Melvin Wright is here tonight.

Um, I guess it's still this afternoon.

Uh we want to celebrate his retirement this afternoon after almost 18 years as an operator for Indigo.

Um Melvin is known for his outstanding customer service and what we will call his quick wit.

I hear you've got a sense of humor.

I didn't get to experience it, but I've heard it's quite amusing.

Um we're really grateful for your service to Indigo.

Um thank you for our putting in so many years and such great work, and we want to wish you very best in your retirement.

Um, your plaque is in the hands of our operations team and will be given to you officially at another time.

But if you would like to come up, we would love to shake your hand and take a photo.

So congratulations.