The Bay Area Rapid Transit District has closed its books on the fiscal year 2019-2020 budget, one that’s been upended by nearly six months of public health and economic crisis.
Though originally faced with an estimated $120 million operating deficit, staff was able to present a budget to the Board of Directors Thursday that not only balanced expenses without using reserves but also had money left over to carry into the current fiscal year which began July 1.
BART lost an estimated $150 million in revenue, driven largely by a 94 percent drop in ridership at its lowest point and a precipitous decline in parking revenue and sales tax earnings.
Almost all this underperformance came during the fourth quarter in the wake of the shelter-in-place mandate, staff said, though ridership and revenues were tracking on budget prior to the pandemic.
BART received $186 million in federal relief funding, critical to keeping the agency afloat and likely saving it from mass layoffs or more drastic service cuts for the time being.
The agency allocated $65.2 million of the CARES Act funding to help offset the looming FY21 deficit, and it further reduced operating expenses to set aside an additional $3.5 million for operating reserves.
Operating hours were reduced and most trains continue to run with 30-minute headways rather than the pre-pandemic 15-minute headways.
Staff also fine-tuned labor costs to identify possible savings by instituting a hiring freeze, cutting overtime and using load shedding, a process that moves workers from daily operations to capital improvement or maintenance projects, and, in turn, shifts the costs of the work to the more stable capital budget.
Fiscal year 2020-2021
The Board of Directors must now turn its attention towards the current fiscal year.
Staff said it won’t plan for federal relief in the next budget cycle, and the Federal Emergency Management Association said fewer of BART’s expenses will be eligible for reimbursement as emergency response.
The $65.2 million drawn from the CARES Act will help offset declining revenues, but BART’s long-term viability depends largely on whether the average 400,000-plus daily riders will eventually return.
Ridership levels have plateaued at about 12 percent of pre-pandemic levels, and the stations serving low income neighborhoods have consistently been some of BART’s busiest during shelter-in-place, a sign that the rail continues to be in moving essential workers.
The agency has hinged many of its recovery forecasts on the idea that containment of the coronavirus would lead to a gradual increase in ridership. But performance from peer agencies doesn’t seem to bear this hypothesis out, staff told the board Thursday, based on a survey of rail networks in cities such as Washington D.C., Atlanta, Chicago and New York City.
Given the continued closure of offices and the Metropolitan Transportation Commission’s decision to rubber stamp a partial work-from-home strategy as part of its long-term planning vision for the Bay Area, there’s no guarantee commuter traffic will bounce back.
“I was honestly disgusted by the MTC’s action. Not only does it not make any sense, but they’re basically passing the buck,” Director Rebecca Saltzman said, suggesting the BART Board vote on a resolution opposing this step.
“We need to do this not just for the future of BART, though it’s critical for the future of BART, but for the future of the whole region,” Saltzman said.
The Board of Directors will see a revised budget proposal on October 8 for discussion, and will vote on the revision on October 22.