As Bay Area Rapid Transit moves close to its $1 billion fiscal cliff in the coming years, its Board failed to consider what services would look like under a 10% cut.
The request came by Director Debora Allen who took issue that BART was seeing an 8% spending increase in operational cost while at the same time the agency was prepared to ask the state and public for more money. She sought to see if the Board was willing to look at what a 10% cut across the board cut would look like.
At the May 11 meeting, the board agreed to take a straw poll to see if there was support for a cuts analysis. The board essentially voted down the analysis proposed by Allen with a 3-6 vote.
Mark Foley, who represents Contra Costa County, voted against the exercise saying he actually wanted to increase services to win riders back—completely ignoring the presentation highlighting operational cost increases, budget projections and down ridership.
The outcome of that vote is 6 of the Board Members won’t even consider looking at cuts or service reductions even though within 5-years, BART is anticipated to have a $1 billion shortfall—instead, it will seek a bailout from the State or voters at some point in the future.
Ironically, on May 26, BART issued a statement on BART finances from Board President and GM saying it needed more funding to avoid service and staffing cuts.
Recap: How they voted on May 11 and what was said on a potential exercise to see what BART would look like with a 10% cut across the board:
You can watch the presentation and discussion by clicking here (Item b),
According to the presentation:
- It shared that Fiscal Year 2023 is showing ridership is 12% below budget as of April 30 while admitting return-to-office has largely flattened and is no longer a forecast to be major driver in ridership growth.
- Plan for modest ridership growth
- Fiscal Year 23 Fare revenue project to be $30-35 million below budget (14-16%).
- Sales Tax remains largest single revenue source.
- Strong sales tax revenues and higher-than-expected State Transit Assistance in FY 23 offset below budget ridership revenue.
- FYI 23 labor is trending above budget, driven by wage increases, high overtime, low vacancy rate, and capital under-recover, partially offset by benefit savings (pension, medical insurance, and retiree medical)
- FY 24 vacancy rate adjusted: 6% for operating, 18% for capital, operating further decreases to 5% in FY25.
- Fiscal Year 2025 – shows deficit will be increased from $78 million $94
Director Liz Ames highlighted expressed concerns about projections becoming reality with ridership being 12% below budget and asked about what staff was doing to address and reduce overtime.
Staff explained overtime has been high this year as they dealt with issues throughout the year and provided overtime to keep trains running during wet weather—projecting less issues and they will not have to throw so much overtime out there for staff. They also have been working to fill open positions.
Ames wanted to see departments reduce overtime and find ways to reduce budget—once looking at this at a “granular level” and being working to reduce the budget, not expand it.
Director Debora Allen called herself the “small minority voice” on the board and stated she had a conversation with staff about process after at the last meeting asking staff to come back which included items to be cut while also asking for an analysis of what a 10% cut across operational expenses would look like.
“It would be somewhere around $800 million,” stated Allen. “So, 10% would be $80 million in cuts to the operating expenses outside of allocations and debt services, did anybody do that?
Staff apologized and stated they were working on cost reduction efforts while going through the budget process only to say they would go back and listen to the meeting because they did not recall that specific direction.
“A 10% cut across the board, as we talked about in our call the other day, doesn’t quite translate to 10% of our operating budget because a good portion of our operating budget is fixed in nature such as pension, our power bills,” Pam Herhold, AGM of Performance and Budget.
Allen interjected calling it “only fixed if you keep your labor the same because your pension cost would go down some. Not entirely equivalent.”
Herhold said the focus was to put out a “safe and reliable service” which was a point of discussion and our effort while admitting there is more work to be done and not ready to put into a budget action plan at this time.
“Do you think you will make some cuts to the operating expenses of $868 million in this budget?” asked Allen.
Herhold replied they had made some reductions already and did not believe they would get to a 10% reduction across the board decrease.
Allen noted that BART staff was 8% higher than what they had projected to spend in the current fiscal year.
“Maybe you reduced the increases, I dunno. But we are going up 8% from the current year,” stated Allen.
Deputy General Manager Michael Jones interjected stated they had not received direction from the board to implement a 10% cut.
“I don’t know if you asked that as a single director but we haven’t taken a vote on that,” stated Jones.
Allen stated she asked for it in the last meeting and asked for someone to come back with ideas.
“If that needs to be a vote, do I need to make a motion here and take a vote and see if anyone is with me here for you to do that work?” asked Allen. “This is the process conversation I was talking about.”
Jones stated again they did not receive direction to bring back to this board a 10% cut.
Allen again stated it was discussed.
“Our comments are our comments director,” replied Jones.
“So I am asking you, here is the question, do I need to make a motion to ask you to ask my follow colleagues where they want to direct you to do this,” asked Allen.
General Counsel Matt Burrows stated this was for information only and no motions could take place in which Allen suggested if the last budget session was for information only she couldn’t have made a motion then either. Burrows agreed.
Allen again asked “what is the process? I would like to have some analysis of what it would look like, of what staff believes, could be cut from this $868 million of operating expenses?”
She continued that, nobody knows what the process is and she can’t even ask for it.
Director Janice Li then asked general counsel if they could give an informal direction if a consensus of the Board shows interest. Burrows said they could.
After some back and forth over voting and technicalities, Director Bevan Dufty suggested they could take a straw poll of the Board of Directors and see if they agreed with Allen’s request to have staff come back with what a 10% budget cut might look like.
Allen then made the request.
“I would ask my board colleagues of how they would feel about asking staff to come back to us with what things could be cut that could get us to a 10% operating cost cut,” asked Allen. “I am interested In your thoughts.”
Director Li said they could go down to line and get peoples thoughts.
“I can start first, I will say I do not support staff taking the time to look at a 10% cut across the board for operations, certainly not for this June approval,” stated Li.
Director Lateefah Simon stated they focus on “performance based budgeting” that across the board cuts (such as Oakland) are “demonstrative” of good fiscal policy. She was not in favor of across the board cuts.
“I would hate for us in the moment to cut cleaners, cut police, and cut safety workers, I would hate for us to cut the general operations of what makes the trains go,” explained Simon. “What I think is important is to lift up scenario opportunities that not across the board but are very focused, laser, on ways we can shave. It is dangerous for public sector finance to operations in times of deep financial distress to pluck down the line to shave in that way.”
Director Dufty said he did not support staff work on a 10% cut.
“I think the path we are on is the appropriate and thoughtful path,” said Dufty.
Director John McPartland said he was down the middle on the idea since he had been on the receiving end of cutting services.
“I agree with my colleagues that I don’t think it will work and it will end up being destructive to the extreme. I have been in those firehouses when we did the brown outs and they end up having substantial consequences to the public we serve when you don’t get there on time and the house is on fire or when you are having a heart attack how long can you hold your breath,” explained McPartland. “Having said that, in this conversation, sometime in the near future we should end up taking a look at it from the stand point of exercising due diligence because anyone who is reading this, or seeing this, oh so you have decided to bury your heads in the sand and not consider any of those things… the public is going to be the final victim of this. I think it’s worthwhile to identify those things, isolate them and take a look at them individually. Look at it and say that is unacceptable. It’s a no for now.”
Director Robert Raburn stated “absolutely not”.
Director Liz Ames stated she would like staff to explore cuts where possible.
“Maybe its not 10% across the board as my colleagues have mentioned the concerns. But I think this is a good goal to achieve,” stated Ames. “The state wants to see skin in the game and they want to see us take some action. I think this is a good exercise and hopefully it helps with our budget process, reduces our budget as we go along to the 2026 vote. This is worthy of exploration.”
Director Rebecca Saltzman stated, “absolutely not and the state is not asking us to make this 10% cut.”
Director Mark Foley stated he did not support this saying an across-the-board cut would hurt services.
“I am looking at expanding services to win back riders,” stated Foley who called the proposal the wrong direction.
Allen stated she appreciated the Board taking the time to express how they felt about her idea which the board as a whole was not willing to direct staff to come back with the cuts.
“I know we are looking at a budget that is going to increase operating expenses by 8%,” stated Allen. “The Rail Plan is a part of that. We are being told its cost neutral but we are spending 8% more than we did last year. That is bothersome to me when we are out asking bail out money of over $300 million per year for multiple years from the state of California that we are still increasing our operating expenses and have done so ever since 2019 since before the pandemic.”
Allen encourages BART to hold a public workshop on the budget and they could weigh in on the money being spend.
“Ultimately, we continue to talk about going back to the public for more money once the states money runs out. This is a crisis. This is a crisis like our public safety, and we cannot keep going along and saying more money please with the taxpayers,” shared Allen. “At some point, we have to bring this thing under control to a sustainable, fiscal level that works for the next 50-years.”
Director Li closed the discussion by stating she was still very supportive of staff direction while not ready to vote on the budget, but areas did require additional discussion such as parking policy changes and fare increases.
“I strongly support the service plan that allows us to improve weekend and weeknight services in a cost neutral way,” said Li while stating the talk for the meeting is how they make transit safer, reliable and better. “I strongly support staying the course and not cutting service prematurely.”
Li said staff has already presented a variety of cuts including the preliminary budget which aimed to keep service strong which keeping service strong was the goal of a majority of the board. She also stated that last year the MTC surveys already had them do the 10% cut scenario last year. She said the Governors budget is coming out—this is not the time to make drastic decisions. The state budget must be approved by June 15, which allows them to know what their numbers would look like.
Allen again confirmed with staff about the Fiscal Year 2024 budget operating expenses and that she saw them going up and if she was wrong. Staff said she was absolutely correct.
“It’s gone up folks, not down,” stated Allen.
May 10: Poll Say BART Riders Would Return with More Police, Greater Cleanliness and Enforcement of Rules
San Francisco — BART riders and others who have stopped using the system or reduced their use dramatically say they would return in significant numbers if crime, safety and cleanliness issues are addressed, according to new polling released today by the Bay Area Council.
Concerns about crime far outweigh remote work as the reason they are not riding. The findings offer an encouraging path forward for a system that is teetering on the brink of a fiscal cliff as BART ridership hovers at historic lows following the pandemic.
A Bay Area Council analysis of the poll findings suggests that by taking a much stronger and swifter approach to crime, safety and cleanliness, BART could see up to 300,000 more trips over the course of the workweek, pushing ridership above 50% of pre-pandemic levels.
- 79% say they feel more comfortable riding BART when there is a uniformed police officer or security present
- 73% say BART should prioritize adding more uniformed police on trains and in stations
- 62% say BART should improve fare gates to prevent fare evaders; 66% want fare gates to fully enclose station entrances
- 79% say BART should eject people from the system that violate the passenger code of conduct, which prohibits drugs, smoking, drinking and other illegal or unacceptable behavior
- 65% say BART should focus on core operations and leave social service issues to other public agencies
- 90% put high priority on more frequent cleaning
Full Story – click here