Due to shelter-in-place orders for the San Francisco Bay Region, BART ridership is down to only 12 percent of its pre-pandemic level. (Kevin N. Hume/S.F. Examiner)

BART’s final revenue numbers roll in worse than expected

Most recent budget report projects $51 million operating budget deficit for current fiscal year

As shelter-in-place orders extend into their sixth month, Bay Area Rapid Transit’s budget woes continue to grow more sinister.

Staff unveiled the latest — and, to date, the most ominous — projections for the next two years to the BART Board of Directors on Thursday.

The numbers included a $78 million drop in estimated revenues — from a projected $148 million in the most recently adopted budget to a final tally of $70 million — and a projected $51 million operating budget deficit overall for this current fiscal year, which runs through next June.

The report also projects a $177 million shortfall for the year after.

Though BART has rolled out a comprehensive 15-Step “Plan to Welcome Riders Back” and joined fellow Bay Area transit agencies in a regional commitment to a set of health and safety standards, the hoped for robust return of ridership has plateaued. It holds steady at a mere 12 percent of pre-pandemic levels, an uptick from its lowest point of 6 percent in April.

Officials say office closures and longer-term plans for hybrid staffing will continue to cause the rail network’s recovery to stagnate.

Agency spokesperson Alicia Trost said her department has launched a number of social media campaigns to educate the public on the ventilation and air flow in trains and created digital advertisements specifically targeting essential workers.

They’re also communicating with large employers whose workers previously commuted on BART, assuring them trains are ready to safely serve their employees once offices reopen.

A sustainable return to previous ridership levels, however, largely depends on the development of a vaccine and/or widespread testing capacity, according to the staff report.

Staff believes the agency can make up $52 million of revenue shortfalls this fiscal year with an extended hiring freeze and cuts to certain contracts or supply purchases.

Savings will depend most heavily on continued load shedding, the process by which employees typically responsible for day-to-day function of the trains, stations and overall system, who are currently needed less because fewer trains are running, can be moved to capital projects. Doing so moves the cost of their labor and benefits from the operating budget — the one that’s taken a massive hit due to the decrease in fare-generated revenues and sales tax receipts — to the capital budget, where funding is far less impacted by the pandemic.

Expense reductions assume current levels of service for the duration of the fiscal year, which means earlier close times and later weekend openings as well as 30-minutes between trains.

Should greater demand from riders mean trains need to run later or more frequently, that would mean more operators would be needed for day-to-day work and savings would drop.

“It would be a good thing,” Budget Director Christopher Simi emphasized. “But savings would be reduced.”

There was one bright spot in an otherwise grim presentation: BART concluded the most recent fiscal year with $50 million more than it had projected in April.

Staff largely attributed this improvement to the help of union partners in cutting overtime and speeding up capital projects so labor and benefits costs were allocated towards capital budgets.

When the board passed a revised two-year budget in June, it was also banking on getting another round of federal relief funds later this year.

Federal stimulus was a lifeboat for the agency this year. The CARES Act provided $377 million to support operations, and it put more dollars in residents’ pockets to encourage spending which, in turn, upped sales tax receipts.

But Congress has stalled on a deal for a second stimulus package, and staff anticipates there won’t be any news of how much, if any, money will be provided to transit agencies nationwide until early 2021.

The Board did not take any action at Thursday’s meeting. Staff will return in early October with recommendations to revise the budget to help keep the agency afloat, and the Board will tentatively vote on a budget revision by the end of the month.

Simi said without federal funding there’s no silver bullet solution, and balancing the budget would certainly require a variety of solutions from all stakeholders. He cautioned the directors to anticipate difficult decisions and significant tradeoffs in managing through this crisis.

“I want to reassure the public, BART management and my fellow directors that I am willing and ready to do everything we possibly can to identify funding to fill that shortfall and make sure we set ourselves up as best as we possibly can […],” Board member Janice Li said. “If we don’t do that, if we don’t fight like hell, honestly, that’s when we will have to start making devastating, terrible decisions.”

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