Muni officials reported a possible budget shortfall this fiscal year Tuesday, a prediction that was not unexpected.
The transit agency revealed Tuesday that if its first-quarter revenue and expense report holds true for the remainder of the year, it could face a $17 million shortfall caused mostly by higher than projected salary, overtime costs and vacant positions within the agency.
“The first-quarter financials show we do have some challenges going forward,” said Nathaniel Ford, the executive director and chief executive officer of the Metropolitan Transportation Authority.
For the past five years, Muni has maneuvered its way around potential deficits by increasing fares, implementing service cuts and reducing costs.
However, chief financial officer Sonali Bose said historically the first quarter is a poor projection for the remaining fiscal year because of additional seasonal revenues and spikes in expenses that vary through out the year.
“Whatever happens in the first quarter is not always what happens for revenues and cost for the rest of the year,” she said.
Muni earned $149 million in revenue during the first quarter and had about $130 million in expenses. But the agency projects expenses of about $708 million by the end of the year, and if the first quarter provides any indication, Muni would only generate $691 million by the end of the year.
Bose said even if the agency needs to close the gap, it can do so because Muni anticipates seeing an increase in revenues from grants and by the aggressive filling of internal vacancies, controlling overtime and increased enforcement activities.
A report by the San Francisco Planning and Urban Research Association predicts that Muni will need to find between $284 million and $929 million in new revenues by the year 2015 even if the transit agency improves its productivity. It currently costs Muni more money per passenger to operate its motor coach, cable car, trolley coach and light rail than it collects on its fare, with an average cost of $2.18 per passenger.
However, Muni’s Third Street Light Rail project, which goes online in January, is expected to increase ridership by 50,000 a day. The agency is also exploring the possibility of adding bus rapid transit service — which dedicates a lane of traffic exclusively to buses, improving dependability and other factors — to major corridors across The City, such as Van Ness Avenue and Geary Boulevard, which officials said will also boost ridership.