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BART likely to need new funding source beyond fare revenue in coming years, budget officials say

Ridership recovery continues to struggle mightily amid pandemic

BART will likely need a new funding source in the coming years, the transit agency's budget officials said Thursday, as relying mostly on fare revenue is not expected to support operating expenses through the end of the decade.

A BART train arrives at a station in the East Bay. (Photo by Ray Saint Germain/BCN Foundation)

BART's fare revenue has been unable to consistently reach beyond an average of 30% of its pre-pandemic levels over the last two years, and only began to come close last October, outperforming ridership and fare revenue projections in the agency's fiscal year 2022 budget.

That ridership fell again, however, amid the Bay Area's surge in cases tied to the omicron variant over the last three months.

As such, BART now projects it will only reach 36% of its pre-pandemic ridership when the fiscal year ends June 30, a significant drop from the 53% of pre-pandemic ridership the agency projected in the FY 2022 budget.

And while BART has received roughly $1.3 billion in federal relief funding since the pandemic began, the agency has used roughly half of that amount, spending $25 million per month over the last six months.

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At that pace and with the agency's current operating schedule, budget officials said BART will run out of federal funding in 2024 between January and September, depending on how many riders have returned to the system by then.

"It is clear that we are facing our most challenging revenue outlook throughout our system's 50-year period," BART Assistant General Manager for Performance and Budget Pamela Herhold said during Thursday's meeting of the BART Board of Directors.

Herhold added that cutting expenses will not allow BART to make up its projected deficits beyond 2024, with cumulative totals ranging from $225 million and $2.2. billion over the next 10 years, while still maintaining adequate service across the five counties in which it operates.

Before the pandemic, BART officials had projected average weekday ridership to surpass 500,000 once the agency's expansion into central Santa Clara County is complete.

BART's base projection is now just 70% of pre-pandemic expectations, with best-case projections at only 80%.

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To make up for the long-term loss in fare revenue, BART officials said they are in the exploratory stage of placing a revenue-generating measure on a future ballot, most likely in November 2024.

The Metropolitan Transportation Commission has considered a funding measure that would support beleaguered transit agencies across all nine counties in the Bay Area.

BART budget officials also floated the possibility for funding measures specifically for BART's three-county district -- which includes Alameda, Contra Costa and San Francisco counties -- or all five counties in which the agency operates.

Board members balked at the BART-exclusive funding measures, arguing that voters are likely to grow fatigued if each transit agency in the Bay Area proposes its own ballot measure.

"We just need to look at it and make sure it actually gets us to a place where we can operate for the next 10, 20 years and know that we're fiscally solvent and we can continue to not only put out the service we're putting out today, but can continue to increase service," Board Chair Rebecca Saltzman said.

BART budget officials noted that funding public transit is already be a low priority for voters, pointing to an August 2021 survey by Oakland analytics firm EMC Research of 800 likely November 2022 voters.

Just 22% of respondents said funding public transportation was a "very high priority." More than half of respondents, meanwhile, said funding homelessness services, public education and pandemic-related services were their top priority.

Multiple board members said that generating support for a potential funding measure will require BART and other transit agencies to make a succinct argument about why they are essential to the region.

"We have to rebuild public trust and show the public what kind of system BART is today in 2022," Board Director Janice Li said. "And it's really necessary for our survival to communicate better about what we're doing."

Board Director Debora Allen suggested BART should reconsider its staffing priorities to improve its financial standing, arguing that the BART's recent efforts to pivot away from traditional policing are not encouraging former riders to return to the system.

Allen added that potential BART riders view the system as unsafe, and issues like addressing homelessness and personal security are regularly cited in the agency's rider surveys as areas where BART could improve.

"We do not change that (image) with ambassadors and restroom attendants and elevator attendants and social workers to help homeless people," she said. "Those are all really important initiatives for some people, but at the end of the day, the average regular rider wants to see a secure presence at BART."

Allen also argued that crime within the BART system is generally correlated with fare evasion, and suggested that hastening BART's efforts to add new fare gates that are harder to evade at its stations would spur riders to return.

"

The current projection is for that to be done in five years ... The slow walk on the fare gates is not helping us," she said. "Fare gate replacement will be the one thing that makes former riders turn around and go 'hey, maybe there's some real change now and maybe let's give it a try'."

Saltzman said she has had discussions with BART's budget staff about potential cost-cutting measure's the agency could take beyond what it has already done, like an incentivized retirement program, but argued it would do little to address the structural challenges BART will face going forward without high fare revenues.

"Ultimately, those aren't things that are going to close a billion-dollar gap," she said. "Since we've already cut so much, it's just not there."

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BART likely to need new funding source beyond fare revenue in coming years, budget officials say

Ridership recovery continues to struggle mightily amid pandemic

by Eli Walsh / BCN Foundation /

Uploaded: Thu, Feb 10, 2022, 11:09 pm

BART will likely need a new funding source in the coming years, the transit agency's budget officials said Thursday, as relying mostly on fare revenue is not expected to support operating expenses through the end of the decade.

BART's fare revenue has been unable to consistently reach beyond an average of 30% of its pre-pandemic levels over the last two years, and only began to come close last October, outperforming ridership and fare revenue projections in the agency's fiscal year 2022 budget.

That ridership fell again, however, amid the Bay Area's surge in cases tied to the omicron variant over the last three months.

As such, BART now projects it will only reach 36% of its pre-pandemic ridership when the fiscal year ends June 30, a significant drop from the 53% of pre-pandemic ridership the agency projected in the FY 2022 budget.

And while BART has received roughly $1.3 billion in federal relief funding since the pandemic began, the agency has used roughly half of that amount, spending $25 million per month over the last six months.

At that pace and with the agency's current operating schedule, budget officials said BART will run out of federal funding in 2024 between January and September, depending on how many riders have returned to the system by then.

"It is clear that we are facing our most challenging revenue outlook throughout our system's 50-year period," BART Assistant General Manager for Performance and Budget Pamela Herhold said during Thursday's meeting of the BART Board of Directors.

Herhold added that cutting expenses will not allow BART to make up its projected deficits beyond 2024, with cumulative totals ranging from $225 million and $2.2. billion over the next 10 years, while still maintaining adequate service across the five counties in which it operates.

Before the pandemic, BART officials had projected average weekday ridership to surpass 500,000 once the agency's expansion into central Santa Clara County is complete.

BART's base projection is now just 70% of pre-pandemic expectations, with best-case projections at only 80%.

To make up for the long-term loss in fare revenue, BART officials said they are in the exploratory stage of placing a revenue-generating measure on a future ballot, most likely in November 2024.

The Metropolitan Transportation Commission has considered a funding measure that would support beleaguered transit agencies across all nine counties in the Bay Area.

BART budget officials also floated the possibility for funding measures specifically for BART's three-county district -- which includes Alameda, Contra Costa and San Francisco counties -- or all five counties in which the agency operates.

Board members balked at the BART-exclusive funding measures, arguing that voters are likely to grow fatigued if each transit agency in the Bay Area proposes its own ballot measure.

"We just need to look at it and make sure it actually gets us to a place where we can operate for the next 10, 20 years and know that we're fiscally solvent and we can continue to not only put out the service we're putting out today, but can continue to increase service," Board Chair Rebecca Saltzman said.

BART budget officials noted that funding public transit is already be a low priority for voters, pointing to an August 2021 survey by Oakland analytics firm EMC Research of 800 likely November 2022 voters.

Just 22% of respondents said funding public transportation was a "very high priority." More than half of respondents, meanwhile, said funding homelessness services, public education and pandemic-related services were their top priority.

Multiple board members said that generating support for a potential funding measure will require BART and other transit agencies to make a succinct argument about why they are essential to the region.

"We have to rebuild public trust and show the public what kind of system BART is today in 2022," Board Director Janice Li said. "And it's really necessary for our survival to communicate better about what we're doing."

Board Director Debora Allen suggested BART should reconsider its staffing priorities to improve its financial standing, arguing that the BART's recent efforts to pivot away from traditional policing are not encouraging former riders to return to the system.

Allen added that potential BART riders view the system as unsafe, and issues like addressing homelessness and personal security are regularly cited in the agency's rider surveys as areas where BART could improve.

"We do not change that (image) with ambassadors and restroom attendants and elevator attendants and social workers to help homeless people," she said. "Those are all really important initiatives for some people, but at the end of the day, the average regular rider wants to see a secure presence at BART."

Allen also argued that crime within the BART system is generally correlated with fare evasion, and suggested that hastening BART's efforts to add new fare gates that are harder to evade at its stations would spur riders to return.

"

The current projection is for that to be done in five years ... The slow walk on the fare gates is not helping us," she said. "Fare gate replacement will be the one thing that makes former riders turn around and go 'hey, maybe there's some real change now and maybe let's give it a try'."

Saltzman said she has had discussions with BART's budget staff about potential cost-cutting measure's the agency could take beyond what it has already done, like an incentivized retirement program, but argued it would do little to address the structural challenges BART will face going forward without high fare revenues.

"Ultimately, those aren't things that are going to close a billion-dollar gap," she said. "Since we've already cut so much, it's just not there."

Comments

Michael Austin
Registered user
Pleasanton Meadows
on Feb 12, 2022 at 6:04 pm
Michael Austin , Pleasanton Meadows
Registered user
on Feb 12, 2022 at 6:04 pm

Bart recently spent $227 Million for new Bart headquarters in downtown Oakland. Bart should be reducing the number of trains each day, lay off that staff until such time ridership picks up. Silicon Valley companies are hiring. Laid off Bart staff will not be out of work.


Pleasanton Parent
Registered user
Pleasanton Meadows
on Feb 12, 2022 at 6:27 pm
Pleasanton Parent, Pleasanton Meadows
Registered user
on Feb 12, 2022 at 6:27 pm

How about enforcing existing ridership rules, making the stations and trains safe, and not basing salaries on other cities rates for workers…..on systems that deliver a much better ridership experience.


Michael Austin
Registered user
Pleasanton Meadows
on Feb 12, 2022 at 7:28 pm
Michael Austin , Pleasanton Meadows
Registered user
on Feb 12, 2022 at 7:28 pm

There is a move underway to begin charging drivers a mileage fee when driving on the freeways. That move is occurring within the transit authority. The metropolitan transportation commission is the transit authority, I believe.

They expect to have that freeway fee in place within ten years. We already pay that fee when we purchase gas and are taxed for that gas we purchased.


Grumpy
Registered user
Vineyard Avenue
on Feb 15, 2022 at 5:54 am
Grumpy, Vineyard Avenue
Registered user
on Feb 15, 2022 at 5:54 am

It’s good that BART is thinking about how they can make it safer and cleaner.

The ridership numbers will probably return to much closer to pre-pandemic levels on their own when companies return to the office. That’ll be this year.

So I’m not actually expecting many meaningful changes from them.


MichaelB
Registered user
Pleasanton Meadows
on Feb 15, 2022 at 9:38 am
MichaelB, Pleasanton Meadows
Registered user
on Feb 15, 2022 at 9:38 am

"There is a move underway to begin charging drivers a mileage fee when driving on the freeways. That move is occurring within the transit authority. The metropolitan transportation commission is the transit authority, I believe.
They expect to have that freeway fee in place within ten years. We already pay that fee when we purchase gas and are taxed for that gas we purchased."

It doesn't matter what we already pay. Expect even more of this micromanaging behavior with additional fees/costs for anything associated with personal transportation/energy consumption as part of meeting state "climate goals".

The end result is that you will no longer be living in a free society. So called "progressive" (authoritarian) bureaucrats (with the help of compliant media outlets) will tell you what to do, how to get around, how to run your business, how much energy is allowed to be used, etc. - because they supposedly "know better", are being "fair", or are "saving the planet".


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