Failed strategies, planning mangle SFMTA budgets

Included in the San Francisco Municipal Transportation Agency’s mammoth $791 million budget this year was a mostly unnoticed $7 million funding injection from downtown parking garages.

A strategy to enforce a long-dormant ordinance against discounted garage parking rates was supposed to generate that income. It mattered little that the garage plan produced limited outreach, no public hearings and no legitimate shot at being carried out. That extra $7 million helped the agency achieve a “balanced” budget for this fiscal year, which began on June 30.

Click on the photo at right to see a snapshot of the SFMTA's budgetary problems.

Alas, the SFMTA is now facing a midyear deficit of $28 million, and, predictably, it has revised its budget to reflect zero dollars in projected income from the now-abandoned garage parking plan.

That failed project is not the first time the SFMTA has made a bold financial projection that didn’t add up in the end. During the 2010 fiscal year, the SFMTA forecast receiving $15 million for selling taxi medallions. It made nothing that year from those sales.

In the 2011 fiscal year, it projected spending $30.8 million in overtime pay. It spent $65 million.

Supervisor David Campos said the SFMTA’s unrealistic budget projections reflect a lack of accountability at the upper management levels.

“We see this all the time at the SFMTA — they make budgets that are unrealistic or just not well thought out,” Campos said.

The midyear budget revisions can have a significant effect on San Francisco residents. In February 2010, when the agency was scrambling to make up a $17.8 million shortfall, it hastily approved a $20 increase to residential parking permits and increased citations and fines. Those changes went into effect just two months later.

In 2009, facing a monstrous unforeseen midyear deficit — caused in large part by the recession — the agency approved a 10 percent service reduction.

One of the SFMTA’s main problems is that it has to approve two-year budget cycles, which can make forecasting revenues highly speculative for the second year, said Tom Radulovich, executive director of Livable City and a BART board member.

“There’s an incentive to make these bold speculations, because if you don’t project revenue in the future, you’ll have to make cuts now,” Radulovich said.

Paul Rose, spokesman for the SFMTA, said the agency’s budget development process is no different than any other city department. Every revenue proposal must be reviewed and approved by the City Controller’s Office before it can be factored into the agency’s budget.

“We have to make budget projections two years into the future for an $800 million agency, and we come within 2 percent of that goal,” Rose said.


Transit users  won’t feel pinch

Despite facing a $28 million midyear deficit, the San Francisco Municipal Transportation Agency does not have plans for cost-cutting or revenue-generating measures that could significantly affect its customers.

Instead, the agency aims to make up its shortfall by monitoring its overtime pay and hiring practices, possibly delaying projects until they’re absolutely necessary and taking advantage of cost-saving efficiencies such as using part-time operators, said spokesman Paul Rose. The agency has about 6½ months to make up its shortfall this fiscal year, which ends on June 30.

“We’re going to monitor our budget closely and make adjustments to ensure that we stay within our means,” Rose said. “There are a number of things we could pursue to make sure we end the year with a balanced budget.”

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