RTD’s clean 2025 audit still shows financial pressures persisted

RTD received an unmodified audit opinion for 2025, and the related single audit reported no findings, according to the district’s 2025 annual comprehensive financial report and auditor materials. But the audited statements also show the agency’s financial strain continued through 2025 rather than being limited to a one-time accounting timing issue.

RTD’s audited report says total net position fell to $3.04 billion at year-end, down from $3.29 billion a year earlier. Unrestricted net position slipped to $452.2 million from $462.8 million. In its management discussion, RTD attributed the decline to nearly flat sales-tax growth, staffing and wage increases, higher fringe benefits and rising purchased-transportation costs.

One part of RTD’s 2025 results does appear to reflect timing. RTD said grant operating assistance rose to $234.1 million in 2025 from $53 million in 2024 largely because federal preventive-maintenance funding for fiscal 2024 was still pending at the end of 2024 and was received in 2025. Even with that delayed boost, however, the district still reported a $244.4 million decrease in net position in 2025, after a $282 million decrease in 2024.

The broader operating picture also remained weak. RTD’s operating loss widened to $1.31 billion in 2025 from $1.17 billion in 2024 and $1.05 billion in 2023. Sales and use tax revenue, the agency’s largest revenue source, grew 1.3% in 2025 after declining 0.1% in 2024. Fare revenue fell 3.9% year over year to $61.4 million and accounted for 4.9% of total revenue.

On the cost side, audited expenses rose in several of the same categories RTD has highlighted in recent budget discussions. Salaries and wages increased 10.9% to $311.1 million, fringe benefits rose 13.7% to $138.3 million, and purchased transportation climbed 13.5% to $292.1 million. RTD attributed those increases to union contracts, staffing growth, restored benefits, new bus fixed-route contracts and higher commuter-rail concession costs.

The audit also helps distinguish some grant-related activity from RTD’s core operating pressures. RTD said grants receivable increased at year-end because of East Colfax bus rapid transit and preventive-maintenance awards. The agency also said services expense rose 35.7% in 2025 partly because RTD is the direct grant recipient for the East Colfax BRT project while Denver is the subrecipient.

Those grant-related items matter because RTD’s more recent budget discussions have focused on a longer-running structural gap. In late May and early June, RTD staff told board members the agency had been operating in a significant structural deficit since federal COVID-era aid ended in 2024 and outlined a roughly $215 million structural budget deficit for fiscal 2027. This month’s committee materials said potential responses under discussion include debt refinancing, labor-cost changes, fare increases, new revenue options and service-hour reductions that could save as much as $102 million.

The audited statements do not resolve those policy choices, but they do support RTD’s recent description of weak revenue growth and rising expenses. The report says post-pandemic travel shifts, remote work, reduced fares and zero fares for youth have left fares contributing only a small share of total revenue. RTD also said light-rail slowdowns and preventive-maintenance work hurt fare collections in 2025.

One partial offset is debt. The audited report says outstanding debt fell 5% to $2.68 billion in 2025. Separate board materials say RTD is pursuing another refinancing package that could produce about $37.8 million in 2027 cash-flow savings under current assumptions, though those materials also say refinancing alone will not close the gap.

The agency’s cash position also weakened. RTD’s cash-flow statement shows cash and cash equivalents fell to $399.9 million at the end of 2025 from $527.9 million a year earlier. Recent committee materials say RTD should maintain at least $200 million in unrestricted cash, a threshold likely to factor into the board’s decisions on the 2027 and 2028 budgets.

In short, the clean audit appears to settle questions about whether RTD’s 2025 statements were fairly presented, but it does not materially change the agency’s larger budget picture. Delayed preventive-maintenance revenue improved reported 2025 results, yet the audited statements still show a large decline in net position alongside weak revenue growth and rising costs.