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A California transportation agency builds consensus and transparency through independent financial modeling and funding strategy support.
Background
A leading regional transportation planning and financing entity in Northern California plays a pivotal role in coordinating transit services across a complex network of operators, jurisdictions, and funding sources. Like many metropolitan transportation authorities, the agency is tasked with balancing long-term infrastructure investment with short-term operational sustainability — often amid shifting ridership patterns, evolving policy mandates, and constrained public funding.
Challenge
The agency sought an independent, third-party review of projected operating deficits for five major transit operators over a five-year horizon. The objectives were twofold:
- To inform the sizing, messaging, and design of a potential regional sales tax measure.
- To develop fair-share contribution methodologies that could guide stakeholder discussions around funding strategies for one operator's anticipated shortfalls.
This effort came at a time when regional transit systems were grappling with post-pandemic recovery, declining farebox revenue, and increased pressure to deliver equitable and climate-resilient mobility solutions.
Approach
MGO deployed a structured and transparent methodology to validate financial projections and support collaborative funding strategy development.
The MGO team:
- Reviewed financial models and supporting documentation submitted by each transit operator, validating inputs against industry benchmarks and publicly available sources such as budget documents, Annual Comprehensive Financial Reports (ACFRs), and board presentations.
- Compiled and analyzed data requested by key stakeholders — including board members and state legislators — to promote transparency and support informed decision-making.
- Conducted best-practices research on national and international transit systems to develop adaptable fair-share contribution methodologies. These frameworks were designed to be usable by a broad coalition of stakeholders — including policymakers, county representatives, transit operators, and elected officials.
Value to Client
MGO's final report was presented to all five transit operators, multiple board members, county representatives, and agency leadership. It provided a clear and actionable summary of the key assumptions driving each operator's financial model — identifying both commonalities and discrepancies. To support ongoing stakeholder engagement, MGO also developed tailored presentation materials for use in future discussions with additional groups.
MGO's report was one of many steps taken by the regional transportation agency in its preparations for legislative consideration of a sales tax measure to bolster the various operators' financial positions. This work helped the agency build consensus around funding strategies, improve transparency in financial planning, and lay the groundwork for more equitable and sustainable transit investment across the region.
Advance Your Strategy With Independent Insight
MGO helps public agencies validate financial models, strengthen fiscal governance, and build stakeholder confidence through transparent, data-driven analysis.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
