San Francisco Bay Area Rapid Transit District 
2005 Annual Report 


Contents


San Francisco Bay Area Rapid Transit District 
2005 Annual Report 

1 Message from the General Manager 
4 Report of Independent Auditors 
5 Management’s Discussion and Analysis (unaudited) 
FINANCIAL STATEMENTS 
Proprietary Fund – Enterprise Fund: 
12 Statements of Net Assets 
13 Statements of Revenues, Expenses and Changes in Net Assets 
14 Statements of Cash Flows 
Fiduciary Fund – Retiree Health Benefit Trust: 
16 Statement of Trust Net Assets 
16 Statement of Changes in Trust Net Assets 
NOTES TO FINANCIAL STATEMENTS 
17 Reporting Entity and Summary of Significant Accounting Policies 
21 Cash, Cash Equivalents and Investments 
26 Receivables and Other Assets 
26 Capital Lease Receivable and Liability 
27 Capital Assets 
29 Accounts Payable and Other Liabilities 
29 Long-Term Debt 
37 Risk Management 
38 Federal Financial Assistance 
38 State and Local Financial Assistance 
39 Employees’ Retirement Benefits 
40 Money Purchase Pension Plan 
41 Other Postemployment Benefits 
42 Board of Directors’ Expenses 
42 Transit Financing Authority 
43 Related Organizations and Projects 
44 Commitments and Contingencies 
45 Subsequent Event 
46 Sources and Uses of Funds 
47 Performance Highlights 
47 Average Weekday Trips and On-Time Performance 
48 BART Governance 

2005



Message from the General Manager 

Thomas E. Margro 

2005 marks the midpoint of the decade 
and in many respects, for BART, it is 
analogous to the midpoint in a sharp 
curve of track. In 2005 BART saw a 
steady increase in ridership, new 
contracts with its labor unions, cost 
cutting without reductions in service 
and the beginning of an important 
earthquake strengthening project. 
As with any curve, we can only 
anticipate what lies ahead. The 
information contained in this annual 
report will help us forecast our future 
challenges and maintain BART’s 
standing as an industry leader. 

BART Annual Report 2005 

1 



Labor Contracts 

BART’s most precious resource is its talented, dedicated and resourceful 
workforce. In 2005 the District succeeded in reaching new contract agreements 
to keep workers compensated fairly while preparing for future challenges 
without affecting service to riders. This last component is key. What is good 
for riders is good for BART. The new labor agreements skillfully balanced the 
bottom line of the budget without the need for an additional fare increase or 
service cuts. Maintaining strong ridership and the good will of the public is 
essential to BART’s financial health. 

Ridership Increases 

BART’s consistent emphasis on providing safe, reliable transportation is paying 
off at the fare gates. Ridership is steadily increasing as the Bay Area begins 
a modest economic recovery and the combination of unpredictable gasoline 
prices and even more unpredictable traffic gridlock prompts commuters to 
search for cost-effective, dependable transportation. Perhaps at no time since 
the 1989 Loma Prieta earthquake has BART been so vital to the Bay Area in 
terms of both the economy and the quality of life. 

Earthquake Safety 

BART is already planning for the next major earthquake. The Earthquake 
Safety Program is designed to upgrade the original BART system operating 
facilities to ensure they can return to operation shortly after a major earthquake.
This $1.3 billion program is now in its final design phase. 


System Security 

BART is not only working to secure the system against acts of Nature but 
against human-made threats as well. The March 2004 attacks on the Madrid, 
Spain train system reemphasized the importance of this effort but finding 
the funds to pay for increased security remains a daunting challenge. 
BART has identified at least $250 million in unfunded security needs and is 
working hard to gain at least a fraction of the money. 

From top: ridership increases; 
BART Police K9 unit on duty; 
Capitol Corridor Intercity Rail 
Meantime, work to make the system more secure continues in a variety of 
ways, including: 

. A new public awareness campaign to remind passengers they are a critical 
component in the overall security network; 
. The Transportation Security Administration will provide three more highly 
trained dogs for the BART Police Department’s acclaimed K9 unit; 
. And BART’s continual assessment and revision of its Emergency Plan. 
Other steps are less visible by their very nature. 
It will take leadership and ingenuity to negotiate the 


but with 2005 in the rearview 

2 

2005

BART Annual Report 2005 


Revenue Enhancement 

The push to obtain funds for security is hardly BART’s 
only monetary concern. Even with increased ridership, 
the struggle to balance the bottom line for operations 
takes creativity. BART is looking for ways to enhance 
revenues on a variety of fronts. 

The implementation of daily parking fees at the 

10 busiest East Bay stations began in late 2005. In 

2005 the daily parking fees resulted in no significant 

impact on ridership. 

BART is also working to develop a marketing 

partnership to issue “rewards” credit cards and even 

advertising in tunnels that, to the rider, appear to be 

“mini-movies.” 

System Expansion 

BART is forging ahead on several capital projects 
that would eventually expand the 43 station, 104 mile 
system. Here’s a quick overview: 

. The West Dublin/Pleasanton Station is an infill station 
as part of a mixed-use development along the 
Dublin/Pleasanton line. It is projected to open in FY 09. 
. The Oakland Airport Connector would link the 
Coliseum/Oakland Airport Station to Oakland 
International Airport. BART is now soliciting interest in 
the project as a Public Private Partnership. 
. The eBART extension into Eastern Contra Costa 
County would add service 23 miles beyond the 
Pittsburg/Bay Point Station toward Brentwood. 
Lightweight diesel multiple-unit trains as well as 
Bus Rapid Transit and conventional BART are being 
evaluated as transportation modes. 
. The Warm Springs Extension would add 5.4 miles 
of new tracks south of Fremont Station to a new 
station in the Warm Spring District of the City of 
Fremont. In 2005 BART released the draft Environment 
Impact Statement. 
. Renewed public interest in a BART extension to serve 
Livermore along the 580 Corridor has prompted several 
BART Directors to begin a dialogue with stakeholders. 
curves ahead in the year 2006, 

Capitol Corridor 

In 2005 BART was once again selected to manage 
Capitol Corridor, which provides service between 
San Jose and Sacramento. The Capitol Corridor 
continues to flourish, with increasing ridership and the 
new Oakland Coliseum Intercity Rail Platform among 
its 2005 accomplishments. 

BART as a Trend Setter 

As if all this weren’t enough, BART finished its 
one-year reign as the American Public Transportation 
Association’s “#1 Transit System in America” by 
maintaining its trend-setting status in the industry. 

. BART organized fund-raising efforts to aid the victims 
of the Asian Tsunami and Hurricane Katrina, establishing 
itself as an important partner in the larger community. 
. In early 2005, a BART-sponsored team of students 
became the first Oakland school group to win the 
Northern California Regional Future City engineering 
competition, earning a trip to Washington, D.C. 
mirror, BART has already proven it’s headed in the right direction.


BART Annual Report 2005 

3 


Report of Independent Auditors 
To the Board of Directors of the San Francisco Bay Area Rapid Transit District 

We have audited the accompanying financial statements of the Enterprise Fund and the Retiree Health Benefit Trust 
Fund of the San Francisco Bay Area Rapid Transit District (the District) as of and for the year ended June 30, 2005, 
which collectively comprise the District’s basic financial statements as listed in the table of contents. These financial 
statements are the responsibility of the District’s management. Our responsibility is to express opinions on these 
financial statements based on our audit. The financial statements of the District as of June 30, 2004, were audited by 
other auditors whose report dated December 8, 2004, expressed an unqualified opinion on those financial statements. 

We conducted our audit in accordance with auditing standards generally accepted in the United States of 
America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the 
Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes 
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate 
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal 
control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test 
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles 
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. 
We believe that our audit provides a reasonable basis for our opinions. 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position 
of the Enterprise Fund and the Retiree Health Benefit Trust Fund of the District, as of June 30, 2005 and the changes 
in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting 
principles generally accepted in the United States of America. 

As discussed in Note 1 to the financial statements, the District adopted the provisions of Governmental Accounting 
Standards Board (GASB) Statement No. 40, Deposit and Investment Risk Disclosures — an amendment of GASB 
Statement No. 3. 

In accordance with Government Auditing Standards, we have also issued our report dated November 23, 2005 
on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with 
certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report 
is to describe the scope of our testing of the District’s internal control over financial reporting and compliance and 
the results of that testing, and not to provide an opinion on the District’s internal control over financial reporting or on 
compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards 
and should be considered in assessing the results of our audit. 

The management’s discussion and analysis, as listed in the table of contents, is not a required part of the 
basic financial statements but is supplementary information required by accounting principles generally accepted in 
the United States of America. We and the other auditors have applied certain limited procedures, which consisted 
principally of inquiries of management regarding the methods of measurement and presentation of the required 
supplementary information. However, we and the other auditors did not audit the information and express no 
opinion on it. 


Certified Public Accountants 
Walnut Creek, California 

November 23, 2005 

4 

BART Annual Report 2005 


Management’s Discussion and Analysis (unaudited) 

Introduction 

The following discussion and analysis of the financial performance and activity of the San Francisco Bay Area Rapid 
Transit District (the “District”) provide an introduction and understanding of the basic financial statements of the 
District for the years ended June 30, 2005 and 2004. This discussion was prepared by management and should be read 
in conjunction with the financial statements and the notes thereto, which follow this section. 

The District is an independent agency created in 1957 by the legislature of the State of California for the purpose 
of providing an adequate, modern, interurban mass rapid transit system in the various portions of the metropolitan 
area surrounding the San Francisco Bay. The District started its revenue operations in September 1972. It presently 
owns a 104-mile, 43-station system serving the four counties of Alameda, Contra Costa, San Francisco and San Mateo. 
The government of the District is vested in a Board of Directors composed of nine members, each representing an 
election district within the District. 

The Financial Statements 

The basic financial statements provide information about the District’s enterprise fund and the Retiree Health Benefit 
Trust. The financial statements are prepared in accordance with accounting principles generally accepted in the 
United States of America as promulgated by the Governmental Accounting Standards Board (“GASB”) principles. 

Overview of the Enterprise Fund Financial Statements 

The Statement of Net Assets reports assets, liabilities and the difference as net assets. The entire equity section is 
combined to report total net assets and is displayed in three components — invested in capital assets, net of related 
debt; restricted net assets; and unrestricted net assets. 

The net asset component invested in capital assets, net of related debt, consists of capital assets, including 
restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any borrowings 
attributable to the acquisition, construction or improvements of those assets. 

Restricted net assets consist of assets where constraints on their use are either (a) externally imposed by creditors (such 
as debt covenants), grantors, contributors, or laws or regulations of other governments or (b) imposed by law through 
constitutional provisions or enabling legislation. 

Unrestricted net assets consist of net assets that do not meet the definition of restricted or invested in capital 
assets, net of related debt. This net asset component includes net assets that have been designated by management 
for specific purposes which in the case of the District include allocations to fund capital projects, and other liabilities, 
which indicate that management does not consider them to be available for general operations. 

The Statement of Revenues, Expenses and Changes in Net Assets consists of operating and nonoperating revenues 
and expenses based upon definitions provided by GASB Statement No. 33, Accounting and Financial Reporting 
for Nonexchange Transactions, as amended by GASB Statement No. 36, Recipient Reporting for Certain Shared 
Nonexchange Revenues, and GASB Statement No. 34, Basic Financial Statements — and Management’s Discussion 
and Analysis — for State and Local Governments, as amended by GASB Statement No. 37, Basic Financial Statements 

— and Management’s Discussion and Analysis for State and Local Governments: Omnibus. Accordingly, significant 
recurring sources of the District’s revenues, such as capital contributions, are reported separately, after nonoperating 
revenues and expenses. 
Statement of Cash Flows is presented using the direct method and includes a reconciliation of operating loss to 
net cash used in operating activities. 

BART Annual Report 2005 

5 


Management’s Discussion and Analysis (unaudited)


Financial Highlights 

Statements of Revenues, Expenses and Changes in Net Assets 

A summary of the District’s Statements of Revenues, Expenses and Changes in Net Assets for fiscal years 2005, 2004 
and 2003 is as follows: 

(dollar amounts in thousands) 2005 2004 2003 
Operating revenues $ 248,644 $ 234,546 $ 205,104 
Operating expenses, net (548,197) (498,503) (442,936) 
Operating loss (299,553) (263,957) (237,832) 
Nonoperating revenues, net 189,059 162,178 185,617 
Capital contributions 77,947 75,010 130,193 
Special item (36,222) – – 
Change in net assets (68,769) (26,769) 77,978 
Net assets, beginning of year 4,397,733 4,424,502 4,346,524 
Net assets, end of year $ 4,328,964 $4,397,733 $ 4,424,502 
Operating Revenues 

In fiscal year 2005, the operating revenues increased by $14,098,000. The increase can be attributed to (1) an increase 
of 4,148 (1.4%) on the average weekday ridership from 306,569 in 2004 to 310,717 in 2005, and (2) the full year 
effect on fiscal year 2005 of the 10% fare increase on January 1, 2004, as compared to six months only (January 2004 to 
June 2004) in fiscal year 2004. 

The increase of $29,442,000 in operating revenues in fiscal year 2004 is mainly credited to: (1) an increase of 11,411 
(4%) in the average weekday ridership from 295,158 in fiscal year 2003 to 306,569 in fiscal year 2004, which is all 
attributed to the first full year of revenue operations of the San Francisco International Airport Extension (SFO 
Extension); and (2) the cumulative effect of the two consecutive years of fare increases of 5% on January 1, 2003 and 
10% on January 1, 2004. 

Operating Expenses 

Net operating expenses increased by $49,694,000 in fiscal year 2005 which was mainly due to (1) an increase in 
depreciation expense, a non-cash item, of $12,129,000; (2) an increase of $24,550,000 in pension contributions to 
CalPERS due to the resumption in fiscal year 2005 of the employer contributions for the Miscellaneous Plan and the 
increase in the required employer contribution rate for the Safety Plan from 2.897% to 28.910%; (3) in fiscal year 
2005 the additional 3.5% money purchase pension plan contributions to employees was discontinued which resulted in 
an expense reduction of $7,120,000; (4) an increase in the expense accrual for workers’ compensation self-insurance 
reserve of $4,057,000; (5) increase in the employees salaries and benefits totaling an estimated amount of $19,000,000 
because of the 6% contractual salary increase in fiscal year 2005, accrual of arbitration settlements and severance 
payments due to position reductions. 

Net operating expenses increased by $55,567,000 in fiscal year 2004, which is mostly due to (1) an increase of 
$12,899,000 in depreciation expense, a non-cash item; (2) an increase of $22,479,000 in salaries and benefits which 
include the 5% contractual salary increase in 2004, a 45% increase in overtime hours, and a 19% increase in 
medical health insurance premiums; (3) a net decrease of $4,788,000 in labor reimbursements from capital projects; 
and (4) an increase of $13,000,000 in non-labor costs which include an increase of $4,163,000 in rent expense because 

BART Annual Report 2005 


Management’s Discussion and Analysis (unaudited)


of the first full year of rent charged to operations for the station facilities at the San Francisco International Airport and 
the accrual of rent at the District’s new administrative office location and an $8,883,000 increase in traction power, 
materials usage and other non-labor expenses. 

Nonoperating Revenues 

Net nonoperating revenues for fiscal year 2005 increased by $26,881,000. The increase is accounted for as follows: 

(1) increase of $7,826,000 in sales tax revenues; 
(2) an increase of $13,475,000 in investment income which is mainly due to (a) an increase of $12,234,000 in 
interest income recognized from the deposits for sublease obligation related to the lease/leaseback of rail traffic 
control equipment in 2002 and (b) an increase in the average investment earnings rate from 1.70% in 2004 to 
2.26% in 2005; 
(3) a decrease in interest expense of $6,902,000 mainly due to the prepayment of a portion of the FTA Capital Grant 
Bonds, 2001 Series A, with principal amounts totaling $88,995,000 due in fiscal years 2008 and 2009; and 
(4) the financial assistance received from San Mateo County Transit District (SamTrans) for the net operating expenses 
of the San Francisco International Airport Extension decreased by $3,137,000 due to the increase in fare revenues 
from increased ridership and from cost reduction due to reduced train service and shorter trains. 
The decrease of $23,439,000 in nonoperating revenues in fiscal year 2004 is mainly due to the net effect of increases 
and decreases in the following accounts: 

(1) An increase of $17,456,000 in local financial assistance which relates to the subsidy received from SamTrans to 
cover the operating deficit of the SFO Extension. The fiscal year 2004 subsidy covered the whole year of operations 
while the fiscal year 2003 subsidy covered less than half a month of operations, the SFO Extension having started 
its revenue operations only on June 22, 2003. 
(2) A decrease in investment income of $13,336,000 which is mainly due to the decrease in earned investment income 
related to certain portions of the proceeds from the lease/leaseback of some rail traffic equipment in 2002 which 
were earmarked for purchase option deposit and the prepayment of the sublease rent obligations. 
(3) Interest expenses increased by $31,665,000. The actual interest expenses incurred for fiscal year 2004 amounted 
to $74,475,000 and $77,379,000 for fiscal year 2003, or an actual decrease in interest expenses paid/incurred of 
$2,904,000. However, for accounting purposes, a portion of the interest expense on tax-free borrowings incurred 
during the construction of a project has to be capitalized as an additional cost of the project. The capitalization 
has the effect of reducing the interest expense for financial reporting purposes. In fiscal year 2003, the capitalized 
interest amounted to $36,877,000 as compared to only $2,308,000 in fiscal year 2004 or a difference of $34,569,000, 
which is due to the completion, in late fiscal year 2003, of the District’s two major capital projects, which are the 
SFO Extension and the A&B Car Rehabilitation. 
Capital Contributions 

The revenues from capital contributions relate to grants and other financial assistance received by the District from 
the federal, state and local agencies to fund capital projects. The District receives reimbursement-type grants where 
the District has to first incur eligible costs under the provider’s program before qualifying for the grant resources. 
Revenues from capital contributions are recognized at the time when the eligible project costs are incurred. The capital 
contributions in fiscal year 2005 showed only a small increase of $2,937,000 over fiscal year 2004. For the most part of 
fiscal year 2003, the District’s two major capital projects, the SFO Extension and the A&B Car Rehabilitation, were still 
under construction. The completion of these two major capital projects in late fiscal year 2003 account for most of the 
decrease of $55,183,000 in the revenues from capital contributions in fiscal year 2004. 

BART Annual Report 2005 


Management’s Discussion and Analysis (unaudited)


Statements of Net Assets 

A comparison of the District’s Statements of Net Assets as of June 30, 2005, 2004 and 2003 is as follows: 

(dollar amounts in thousands) 2005 2004 2003 
Current assets $ 525,254 $ 425,715 $ 438,877 
Noncurrent assets — capital assets, net 4,997,869 5,009,777 4,999,477 
Noncurrent assets — other 486,394 703,622 767,280 

Total assets 6,009,517 6,139,114 6,205,634 
Current liabilities 370,415 300,865 299,560 

Noncurrent liabilities 1,310,138 1,440,516 1,481,572 

Total liabilities 1,680,553 1,741,381 1,781,132 
Net assets 
Invested in capital assets, net of debt 4,037,420 3,884,807 3,869,281 
Restricted net assets 180,290 357,343 371,215 
Unrestricted net assets 111,254 155,583 184,006 

Total net assets $ 4,328,964 $4,397,733 $ 4,424,502 
The noncurrent assets — other decreased by $217,228,000 in 2005 and by $63,658,000 in 2004. The decrease is 
mainly attributed to (1) decrease in unrestricted investments of $35,952,000 in 2005 and $15,724,000 in 2004 due to 
the use of District funds for operating and capital expenditures; (2) decrease in restricted cash, cash equivalents and 
investments amounting to $23,472,000 in 2005 and $52,024,000 in 2004 due to the use of debt service reserve funds 
for the payment of long-term debt and the expenditure of bond proceeds for capital projects; and (3) decrease of 
$162,065,000 in 2005 in the receivable from the SFO Federal Full Funding Agreement because of the receipt of the 
funding allocations for both fiscal years 2004 and 2005. 

The current liabilities on June 30, 2005 increased by $69,550,000 to $370,415,000 from a balance of $300,865,000 on 
June 30, 2004. The increase is due to (1) increase in the current portion of long-term debt totaling $79,151,000 mainly 
from the 1998 Bonds, the construction loans and the lease/leaseback obligation; and (2) decrease of $10,100,000 in 
accounts payable and other liabilities due to the timing of payments to vendors and contractors. 

The current liabilities from fiscal year 2003 ($299,560,000) to fiscal year 2004 ($300,865,000) showed a slight increase 
of only $1,305,000. 

Capital Assets 

The District’s capital assets, before accumulated depreciation, increased by $110,693,000 in 2005 and by 
$112,252,000 in 2004. The major additions during the years included capital expenditures for the acquisition and/or 
major improvements on the following assets: 

¦ core system and extensions amounting to $70,797,000 in 2005 and $81,374,000 in 2004; 
¦ train control equipment totaling $25,038,000 in 2005 and $6,363,000 in 2004; 
¦ revenue transit vehicles in the amount of $9,494,000 in 2005 and $13,360,000 in 2004; 
¦ automatic fare collection equipment amounting to $11,488,000 in 2005 and $24,503,000 in 2004; and 
¦ Business Advancement Plan (BAP) which is a project to replace the information technology systems supporting 
the District’s administrative business totaling $10,458,000 in 2005. 
BART Annual Report 2005 


Management’s Discussion and Analysis (unaudited)


Details of the capital assets, net of accumulated depreciation, as of June 30, 2005, 2004 and 2003 are as follows: 

(dollar amounts in thousands) 2005 2004 2003 
Land $ 513,849 $ 481,466 $ 476,202 
Stations, track, structures and improvements 2,738,045 2,555,907 2,518,050 
Buildings 18,072 22,409 22,058 
Revenue transit vehicles 586,042 628,460 669,801 
Other 280,052 288,625 301,445 
Construction in progress 861,809 1,032,910 1,011,921 

Total capital assets $ 4,997,869 $5,009,777 $ 4,999,477 
The District has entered into contracts for the construction of various facilities and equipment totaling approximately 
$492,974,000 at June 30, 2005 and $548,306,000 at June 30, 2004. 

Long-Term Debt 

The outstanding balance of long-term debt showed decreases of $61,054,000 and $40,687,000 at the end of fiscal 
years 2005 and 2004, respectively. Below is a summary of long-term debt as of June 30, 2005, 2004 and 2003 
(including current portion but excluding unamortized balance of debt issue costs and bond premium/discounts): 

(dollar amounts in thousands) 2005 2004 2003 
Bonds payable from and collateralized by a pledge of sales tax revenues $ 714,820 $ 732,365 $ 748,802 
Bonds payable from and collateralized by the Federal 
Full Funding Grant Agreement for the SFO Extension 197,250 347,540 368,035 
Notes payable from bridge toll revenues 30,280 38,355 46,035 
Construction loans payable from the net operating surplus 
of the SFO Extension 88,500 88,500 88,500 
Construction loan for temporary cash flow requirements 
of the SFO Extension 35,400 27,325 19,645 
Lease/leaseback obligation, including option price, 
for rail traffic control equipment 197,433 190,652 194,407 
Bonds payable from the premium fare imposed on 
the passengers who board on or depart from 
the San Francisco International Airport Station 56,715 56,715 56,715 
General obligation bonds 100,000 – – 

Total long-term debt $ 1,420,398 $1,481,452 $ 1,522,139 
In fiscal year 2005 the principal payments of the bonds payable from the Federal Full Funding Grant Agreement for the 
SFO Extension include prepayments of bonds due in fiscal year 2008 amounting to $1,040,000 ($28,000,000 in fiscal 
year 2004) and $87,955,000 of the bonds due in fiscal year 2009. 

BART Annual Report 2005 


Management’s Discussion and Analysis (unaudited)


Addition to Long-Term Debt in Fiscal Year 2005 

On May 13, 2005, the District issued the General Obligation Bonds (Election of 2004), 2005 Series A (2005 GO Bonds) 
with an aggregate principal amount of $100,000,000. The 2005 GO Bonds constitute a portion of the total authorized 
amount of $980,000,000 of general obligation bonds of the District duly authorized by at least two-thirds of the 
qualified voters of the District voting on a ballot measure (“Measure AA”) at an election held on November 2, 2004. 
The 2005 GO Bonds were issued to finance earthquake safety improvements to BART facilities and structures. The 
2005 GO Bonds are general obligations of the District, payable from and secured solely by property taxes levied by 
the District, as authorized by Measure AA, upon all property subject to taxation within the three BART Counties of 
Alameda, Contra Costa and San Francisco. Three national rating agencies have assigned their municipal bond ratings 
of AAA, Aa1 and AA+ to the 2005 GO Bonds. 

Addition to Long-Term Debt in Fiscal Year 2004 

On June 14, 2004, the Association of Bay Area Governments (“ABAG”) issued BART SFO Extension Refunding Bonds, 
2004 Series A (Auction Rate Securities) (the “Series 2004 Bonds”) with an aggregate principal amount of $66,000,000, 
for the benefit of the District. The issuance of the Series 2004 Bonds had the effect of freeing up $14,600,000 from 
the debt service reserve fund of the BART SFO Extension Bonds (FTA Capital Grant), 2001 Series A, and making the 
amount available as an additional source of cash for the payment of the SFO Extension Project expenditures. The Series 
2004 Bonds are payable solely from amounts received by the District pursuant to a Full Funding Grant Agreement 
with the United States of America, acting through the Department of Transportation, Federal Transit Administration 
and revenues, if any, under an interest rate cap agreement executed by the District in connection with the Series 2004 
Bonds. The bonds were given ratings of Aaa and AAA by two national rating agencies. 

Statements of Cash Flows/Cash, Cash Equivalents and Investments 

A comparative presentation of the major sources and uses of cash for 2005, 2004 and 2003 is as follows: 
(dollar amounts in thousands) 2005 2004 2003 
Net cash used in operating activities $ (165,472) $ (148,899) $ (132,666) 
Net cash provided by noncapital financing activities 113,868 152,417 130,470 
Net cash provided by (used in) capital and related financing activities 64,898 (65,687) (132,045) 
Net cash provided by (used in) investing activities 107,877 10,157 (15,009) 
Net change in cash and cash equivalents 121,171 (52,012) (149,250) 
Cash and cash equivalents, beginning of year 230,751 282,763 432,013 
Cash and cash equivalents, end of year 351,922 230,751 282,763 

Investments, end of year 266,664 356,440 360,475 
Cash, cash equivalents and investments, end of year $ 618,586 $ 587,191 $ 643,238 
10 BART Annual Report 2005 


Management’s Discussion and Analysis (unaudited)


In fiscal year 2005, cash, cash equivalents and investments increased by $31,395,000 to a total amount of $618,586,000 
as of June 30, 2005 as compared to $587,191,000 on June 30, 2004. The increase can be mainly attributed to 

(1) $100,000,000 from the proceeds of the 2005 General Obligation Bonds received on May 26, 2005; (2) $36,222,000 
cash transferred to the Retiree Health Benefit Trust; (3) increase of $55,045,000 in principal and interest payments on 
long-term debt, particularly because of the prepayment of a portion of the FTA Capital Grant Bonds; and (4) increase 
of $26,716,000 in investment income, fiber optics revenue and other operating revenues. 
The total cash, cash equivalents and investments held by the District and trustee banks at the end of fiscal year 2004 
amounted to $587,191,000 which is a decrease of $56,047,000 compared to the balance of $643,238,000 on June 30, 
2003. The decrease in cash and investments is mainly attributed to (1) capital expenditures during the year amounting 
to $128,403,000 reduced by reimbursements received from federal, state and other local grants of $103,385,000 or a 
net disbursement for capital projects of $25,018,000, (2) the advance payment in fiscal year 2004, amounting to 
$28,000,000, of a portion of the FTA Capital Grant Bond due in fiscal year 2008. 

Contacting the District’s Financial Management 

The District’s financial report is designed to provide the District’s Board of Directors, management, investors, 
creditors, legislative and oversight agencies, citizens and customers with an overview of the District’s finances and to 
demonstrate its accountability for funds received. For additional information about this report, please contact Scott 
Schroeder, Controller-Treasurer, at 300 Lakeside Drive, P.O. Box 12688, Oakland, California 94604. 

BART Annual Report 2005 11 


Financial Statements — Proprietary Fund 
ENTERPRISE FUND — Statements of Net Assets 

June 30, 2005 and 2004 

(dollar amounts in thousands) 2005 2004 
Assets 
Current assets 
Unrestricted assets 
Cash and cash equivalents $ 162,404 $ 135,744 
Investments 61,048 80,717 
Capital grants receivable 29,712 28,320 
Receivables and other assets 30,517 24,938 
Current portion of capital lease receivable 3,154 3,154 
Materials and supplies 27,441 25,692 
Total unrestricted current assets 314,276 298,565 
Restricted assets 
Cash and cash equivalents 189,518 95,007 
Investments 21,460 32,143 
Total restricted current assets 210,978 127,150 
Total current assets 525,254 425,715 
Noncurrent assets 
Capital assets 
Nondepreciable 1,375,658 1,514,376 
Depreciable, net of accumulated depreciation 3,622,211 3,495,401 
Unrestricted assets 
Investments 17,793 53,745 
Long-term portion of capital lease receivable 14,195 17,350 
Receivables and other assets 1,113 1,704 
Restricted assets 
Investments 166,363 189,835 
Capital grants receivable 115,438 277,503 
Receivables and other assets 25,439 17,432 
Deposits for sublease obligation 146,053 146,053 
Total noncurrent assets 5,484,263 5,713,399 

Total assets 6,009,517 6,139,114 
Liabilities and Net Assets 

Liabilities 
Current liabilities 
Accounts payable and other liabilities 175,417 185,517 
Current portion of long-term debt, net 172,782 93,631 
Self-insurance liabilities 9,340 10,155 
Deferred revenue 9,722 8,408 
Current portion of capital lease liability 3,154 3,154 
Total current liabilities 370,415 300,865 
Noncurrent liabilities 
Long-term debt, net of current portion 1,233,287 1,372,429 
Self-insurance liabilities 19,300 16,852 
Deferred revenue 40,622 31,261 
Capital lease liability, net of current portion 14,195 17,350 
Other liabilities 2,734 2,624 
Total noncurrent liabilities 1,310,138 1,440,516 
Total liabilities 1,680,553 1,741,381 
Net assets 
Invested in capital assets, net of related debt 4,037,420 3,884,807 
Restricted net assets 
For debt service and other liabilities 180,290 333,745 
For retiree health benefits – 23,598 
Unrestricted net assets 111,254 155,583 

Total net assets $4,328,964 $4,397,733 
The accompanying notes are an integral part of these financial statements. 

12 BART Annual Report 2005 


ENTERPRISE FUND — Statements of Revenues, Expenses and Changes in Fund Net Assets 

For the years ended June 30, 2005 and 2004 

(dollar amounts in thousands) 2005 2004 
Operating revenues 

Fares $ 233,651 $ 220,391 

Other 14,993 14,155 

Total operating revenues 248,644 234,546 
Operating expenses 

Transportation 127,391 121,257 
Maintenance 163,051 145,683 
Police services 37,510 31,080 
Construction and engineering 16,030 15,824 
General and administrative 109,130 102,849 
Depreciation 128,697 116,568 
Total operating expenses 581,809 533,261 
Less — capitalized costs (33,612) (34,758) 

Net operating expenses 548,197 498,503 
Operating loss (299,553) (263,957) 
Nonoperating revenues (expenses) 
Transactions and use tax (sales tax) 178,392 170,566 
Property tax 22,412 21,372 
State and local financial assistance 16,680 19,875 
Investment income 36,415 22,940 
Interest expense (65,265) (72,167) 
Other income (expense), net 425 (408) 

Total nonoperating revenues, net 189,059 162,178 
Change in net assets before capital contributions and special item (110,494) (101,779) 
Capital contributions 77,947 75,010 
Special item: contributions to retiree health benefit trust (36,222) – 
Change in net assets (68,769) (26,769) 
Net assets, beginning of year 4,397,733 4,424,502 

Net assets, end of year $ 4,328,964 $ 4,397,733 
The accompanying notes are an integral part of these financial statements. 

BART Annual Report 2005 13 


Financial Statements — Proprietary Fund (continued) 
ENTERPRISE FUND — Statements of Cash Flows 

For the years ended June 30, 2005 and 2004 

(dollar amounts in thousands) 2005 2004 
Cash flows from operating activities 

Receipts from customers $234,559 $220,258 
Payments to suppliers (125,609) (108,404) 
Payments to employees (301,485) (273,854) 
Other operating cash receipts 27,063 13,101 

Net cash used in operating activities (165,472) (148,899 ) 
Cash flows from noncapital financing activities 

Transactions and use tax (sales tax) received 118,879 111,200 
Property tax received 22,280 22,150 
Financial assistance received 8,931 19,067 
Contributions to the Retiree Health Benefit Trust (36,222) – 

Net cash provided by noncapital financing activities 113,868 152,417 
Cash flows from capital and related financing activities 

Transactions and use tax (sales tax) received 59,513 59,366 
Capital grants received 237,225 103,385 
Proceeds from issuance of 2005 General Obligation Bonds 100,000 – 
Proceeds from issuance of 2004 SFO Extension Refunding Bonds – 66,000 
Proceeds from construction loans and advances 10,000 10,000 
Expenditures for capital assets (112,981) (128,403) 
Principal paid on long-term debt (175,910) (114,328) 
Payments of long-term debt issuance and service costs (2,161) (2,248) 
Premium received from issuance of long-term debt 2,717 – 
Interest paid on long-term debt (53,611) (60,148) 
Principal payments received from installment receivable 106 689 

Net cash provided by (used in) capital and related financing activities 64,898 (65,687 ) 
Cash flows from investing activities 

Proceeds from sale and maturity of investments 306,405 234,870 
Purchase of investments (217,403) (230,834) 
Investment income 18,875 6,121 

Net cash provided by investing activities 107,877 10,157 
Net change in cash and cash equivalents 121,171 (52,012 ) 

Cash and cash equivalents, beginning of year 230,751 282,763 

Cash and cash equivalents, end of year $351,922 $230,751 
Reconciliation of cash and cash equivalents to the Statements of Net Assets 

Current, unrestricted assets — cash and cash equivalents $162,404 $135,744 

Current, restricted assets — cash and cash equivalents 189,518 95,007 

Total cash and cash equivalents $351,922 $230,751 
The accompanying notes are an integral part of these financial statements. 

14 BART Annual Report 2005 


ENTERPRISE FUND — Statements of Cash Flows (continued) 

For the years ended June 30, 2005 and 2004 

(dollar amounts in thousands) 2005 2004 
Reconciliation of operating loss to net cash used in operating activities 

Operating loss $(299,553) $(263,957) 
Adjustments to reconcile operating loss to net cash used in operating activities 
Depreciation 128,697 116,568 
Amortization of deferred charges 83 126 
Net effect of changes in 
(Increase) decrease in receivables and other assets 1,414 (7,867) 
(Increase) in materials and supplies (1,749) (178) 
Increase (decrease) in accounts payable and other liabilities (8,211) 8,703 
Increase (decrease) in self-insurance liabilities 1,633 (2,018) 
Increase (decrease) in deferred revenue 12,214 (276) 

Net cash used in operating activities $ (165,472) $(148,899 ) 
Noncash transactions 

Capital assets acquired with a liability at year-end $ 39,437 $ 40,020 
Lease/leaseback obligation additions 10,837 10,847 
Lease/leaseback obligation amortization 6,716 14,114 
Increase in fair value of investments 8,582 2,077 
Amortization of long-term debt premium, discount and issue costs 548 232 
Amortization of deferred interest on early debt retirement 478 478 
Amortization of deferred gain on lease/leaseback transaction 1,482 1,482 

The accompanying notes are an integral part of these financial statements. 

BART Annual Report 2005 15 


Financial Statements — Fiduciary Fund 
RETIREE HEALTH BENEFIT TRUST — Statement of Trust Net Assets 

June 30, 2005 

(dollar amounts in thousands) 
Assets 

Interest receivable and other assets $ 187 
Pending trades receivable 5,764 
Investments 
Domestic common stocks 20,605 
U.S. Treasury obligations 9,361 
Money market mutual funds 5,770 
Corporate obligations 3,649 
Foreign obligations 205 
Total investments 39,590 
Total assets 45,541 
Liabilities 
Accounts payable 19 
Pending trades payable 8,317 
Total liabilities 8,336 

Net assets held in trust for retiree health benefits $37,205 
RETIREE HEALTH BENEFIT TRUST — Statement of Changes in Trust Net Assets 

For the year ended June 30, 2005 

(dollar amounts in thousands) 
Additions 

Employer contributions $36,222 
Investment income 
Interest income 593 
Net appreciation in fair value of investments 488 
Investment expense (54) 
Net investment income 1,027 
Total additions 37,249 
Deductions 
Legal fees 44 
Increase in trust net assets 37,205 
Net assets held in trust for retiree health benefits: 

Beginning of year – 

End of year $37,205 
The accompanying notes are an integral part of these financial statements. 

16 BART Annual Report 2005 


Notes to Financial Statements 

June 30, 2005 and 2004 

1. Reporting Entity and Summary of Significant Accounting Policies 
Description of Reporting Entity 

The San Francisco Bay Area Rapid Transit District (the “District”) is a public agency created by the legislature of the 
State of California in 1957 and regulated by the San Francisco Bay Area Rapid Transit District Act, as amended, and 
subject to transit district law as codified in the California Public Utilities Code. The disbursement of funds received by 
the District is controlled by statutes and by provisions of various grant contracts entered into with federal, state and 
local agencies. 

The District has defined its financial reporting entity in accordance with the Governmental Accounting Standards 
Board (“GASB”) Statement No. 14, The Financial Reporting Entity, which states that the financial reporting entity 
should consist of (a) the primary government, (b) the organizations for which the primary government is financially 
accountable, and (c) the other organizations for which the nature and significance of their relationship with the 
primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading 
or incomplete. Based on this definition, and the fact that the Transit Financing Authority (the “Authority”) provides 
services almost entirely to the District (the “primary government”), the Authority’s financial information is presented 
as a blended component unit of the District’s financial statements (See Note 15). 

Basis of Accounting and Presentation 

The basic financial statements provide information about the District’s Enterprise Fund and the Retiree Health 
Benefit Trust Fund. Separate statements for each fund category — proprietary and fiduciary — are presented. The 
basic financial statements are reported using the economic resources measurement focus and the accrual basis of 
accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless 
of the timing of the related cash flows. On an accrual basis, revenues from operating activities are recognized in the 
fiscal year that the operations were provided; revenues from property taxes and sales taxes are recognized in the 
fiscal year for which the taxes are levied; revenue from grants is recognized in the fiscal year in which all eligibility 
requirements have been satisfied; and revenue from investments is recognized when earned. 

The enterprise fund (a proprietary fund) distinguishes operating revenues and expenses from nonoperating items. 
The District’s operating revenues are generated directly from its transit operations and consist principally of 
passenger fares. Operating expenses for the transit operations include all costs related to providing transit services. 
These costs include labor, fringe benefits, materials, supplies, services, utilities, leases and rentals, and depreciation 
on capital assets. All other revenues and expenses not meeting these definitions are reported as nonoperating 
revenues and expenses. 

The District applies all applicable GASB pronouncements as well as Financial Accounting Standards Board (“FASB”) 
Statements and Interpretations, Accounting Principles Board (“APB”) Opinions and Accounting Research Bulletins 
(“ARBs”) of the Committee on Accounting Procedures issued on or before November 30, 1989, unless those 
pronouncements conflict with or contradict GASB pronouncements. The District has elected under GASB Statement 
No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use 
Proprietary Fund Accounting, not to apply FASB Statements and Interpretations issued after November 30, 1989, 
due to the nature of the District’s operations. 

Retiree Health Benefit Trust Fund (a fiduciary fund) — The Retiree Health Benefit Trust Fund is used to account for 
assets held by the District as a trustee to pay retiree health care premiums. The assets of the Trust cannot be used to 
support the District’s programs. 

BART Annual Report 2005 17 


Notes to Financial Statements


Cash Equivalents 

For purposes of the statements of cash flows, the District considers all highly liquid investments with a maturity of 
three months or less when purchased to be cash equivalents. 

Investments 

The District records investment transactions on the trade date. Investments in nonparticipating interest-earning 
investment contracts (certificates of deposits and guaranteed investment contracts) are reported at cost and all other 
investments are at fair value in accordance with GASB Statement No. 31, Accounting and Financial Reporting for 
Certain Investments and for External Investment Pools. Fair value is defined as the amount that the District could 
reasonably expect to receive for an investment in a current sale between a willing buyer and a willing seller and is 
generally measured by quoted market prices. As a matter of policy, the District usually holds investments until their 
maturity. 

Restricted Assets 

Certain assets are classified as restricted assets on the statement of net assets because their use is subject to externally 
imposed stipulations, either by certain bond covenants, laws or regulations or provisions of debt agreements. 

Capital Grants 

The District receives grants from the Federal Transit Administration (“FTA”) and other agencies of the U.S. Department 
of Transportation, the State of California, and local transportation funds for the acquisition of transit-related equipment 
and improvements. In accordance with GASB Statement No. 33, Accounting and Financial Reporting for Nonexchange 
Transactions, capital grants are required to be included in the determination of changes in net assets resulting in an 
increase in net revenue of $77,947,000 and $75,010,000 for the fiscal years 2005 and 2004, respectively. Capital grants 
receivable represent amounts expected from governmental agencies to reimburse the District for costs incurred for 
capital projects (see Notes 9 and 10). 

Materials and Supplies 

Materials and supplies consist primarily of replacement parts for the system and rail vehicles, which are stated at cost 
using the average-cost method. Materials and supplies are expensed as consumed. 

Bond Issuance Costs, Discounts, Premiums and Deferred Amounts on Refundings 

The bond issuance costs, discounts, premiums and deferred amounts on refundings, are deferred and amortized 
over the term of the bonds as a component of interest expense. The unamortized portion of these items except the 
deferred amounts on refundings, which are classified as part of receivables and other assets, are presented as a 
reduction of the face amount of bonds payable. 

Capital Assets 

Capital assets are stated at cost and depreciated using the straight-line method over the estimated useful lives of the 
assets ranging from 3 to 80 years. The District’s policy is to capitalize acquisitions of capital assets with a cost greater 
than $5,000 and a useful life of more than one year, and all costs related to capital projects, regardless of amounts. 

Major improvements and betterments to existing facilities and equipment are capitalized. Costs for maintenance and 
repairs that do not extend the useful life of the applicable assets are charged to expense as incurred. Upon disposition, 
costs and accumulated depreciation are removed from the accounts and resulting gains or losses are included in 
operations. 

The District capitalizes certain interest income and expense related to tax-free borrowings until the assets are ready 
for their intended use. The amount capitalized is the difference between the interest revenue and interest expense 
associated with the applicable tax-free borrowings. Net interest expense in the amount of $1,789,000 and $2,308,000 
was capitalized during the years ended June 30, 2005 and 2004, respectively. 

18 BART Annual Report 2005 


Notes to Financial Statements


Deferred Revenues 

Deferred revenues consists principally of the cash gain received by the District from the lease/leaseback of certain rail 
traffic control equipment in 2002 (see Note 7) and from the sale/leaseback of 25 C-2 rail cars in 1995 (see Note 4). 
Additionally, deferred revenues include prepayments of revenues related to license fees paid by telecommunication 
companies for the use of the District’s right of way for wireless accessibility to their customers and estimated passenger 
tickets sold but unused. 

Compensated Absences 

Compensated absences are reported and accrued as a liability in the period incurred. The entire balance of 
compensated absences in the amounts of $48,405,000 and $48,398,000 as of June 30, 2005 and 2004, respectively, is 
considered short-term and presented as part of accounts payable and other liabilities in the statements of net assets. 

Net Assets 

Net assets invested in capital assets, net of related debt include capital assets net of accumulated depreciation and 
outstanding principal balances of debt attributable to the acquisition, construction or improvement of those assets. 
Net assets are restricted when constraints are imposed by third parties or by law through constitutional provisions or 
enabling legislation and include amounts restricted for debt service, other liabilities and retiree health benefits (2004 
only). All other net assets are unrestricted. Generally, the District’s policy is to spend restricted resources first when an 
expense is incurred for purposes for which both restricted and unrestricted net assets are available. 

Transactions and Use Tax (Sales Tax) Revenues 

The State of California legislation authorizes the District to impose a 0.5% transaction and use tax within District 
boundaries, which is collected and administered by the State Board of Equalization. Of amounts available for 
distribution, 75% is paid directly to the District for the purpose of paying operating expenses, except for the portion 
that is paid directly to trustees to cover principal and interest payments of maturing sales tax revenue bonds and 
equity reserves. The remaining 25% is allocated by the Metropolitan Transportation Commission (“MTC”) to the 
District, the City and County of San Francisco, and the Alameda-Contra Costa Transit District for transit services. 
The District records the total transactions and use taxes earned (including amounts paid to the trustee) as revenue. 

Property Taxes, Collection and Maximum Rates 

The State of California Constitution Article XIII.A provides that the general purpose maximum property tax rate on any 
given property may not exceed 1% of its assessed value unless an additional amount for general obligation debt has 
been approved by voters. Assessed value is calculated at 100% of market value as defined by Article XIII.A and may be 
adjusted by no more than 2% per year, unless the property is sold or transferred. The State Legislature has determined 
the method of distribution of receipts from a 1% tax levy among the counties, cities, school districts and other districts, 
such as the District. 

The District receives an allocation of property tax revenues for transit operations. As required by the law of the State 
of California, the District utilizes the services of each of the three BART Counties of Alameda, Contra Costa and 
San Francisco for the assessment and collection of taxes for District purposes. District taxes are collected at the same 
time and on the same tax rolls as county, school district and other special district taxes. Property taxes are recorded as 
revenue in the fiscal year of levy. 

State and Local Financial Assistance 

Financial assistance grants for operations are reported as nonoperating revenue in the period to which the grant 
applies and, for cost reimbursement grants, to the period in which the related expenditures are incurred (see Note 10). 

BART Annual Report 2005 19 


Notes to Financial Statements


Collective Bargaining 

Approximately 87% of the District’s employees are subject to collective bargaining. The current bargaining units consist 
of the following: 

¦ American Federation of State, County and Municipal Employees (AFSCME), Local 3993 
¦ Amalgamated Transit Union (ATU), Local 1555 
¦ Service Employees International Union (SEIU), Local 790 
¦ BART Police Officers Association 
¦ BART Police Managers Association 
Special Item 

Special items are significant transactions or other events within the control of management that are either unusual in 
nature or infrequent in occurrence. The District normally finances its retiree health benefits on the pay-as-you-go basis. 
However, in anticipation of an upcoming GASB pronouncement that requires these benefits be accounted for on an 
accrual basis, the District’s Board and management decided to make contributions amounting to $36,222,000 to the 
Retiree Health Benefit Trust, in an effort to advance fund a portion of its retiree health benefits obligation. Additional 
discussion is provided at Note 13. 

Capitalized Costs 

The District initially charges employee salaries, wages and benefits to operating expenses by functional expense 
category. Labor costs included in those amounts that are associated with capital projects are subsequently reclassified 
to be included in the cost of the related capital asset. This reclassification is reflected in the statement of revenues, 
expenses and changes in net assets as a reduction of operating expenses. The amounts of $33,612,000 and 
$34,758,000 were capitalized during the years ended June 30, 2005 and 2004, respectively. 

Use of Estimates 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 
of America requires management to make estimates and assumptions that affect the reported amounts of assets and 
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported 
amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 

Recent Accounting Pronouncements 

The District implemented GASB Statement No. 40, Deposit and Investment Risk Disclosures, an Amendment of 
GASB Statement No. 3, during the year ended June 30, 2005. The implementation of this standard resulted in specific 
disclosures for credit risk, concentration of credit risk, interest rate risk, and foreign currency risk. 

In April of 2004, the GASB issued Statement No. 43, Financial Reporting for Postemployment Benefit Plans Other 
Than Pension Plans. This Statement establishes accounting and financial reporting standards for plans that provide 
postemployment benefits other than pension benefits (known as other postemployment benefits or OPEB). This 
standard will become effective for the District’s Retiree Health Benefit Trust on July 1, 2006. 

In June of 2004, the GASB issued Statement No. 45, Accounting and Financial Reporting by Employers for 
Postemployment Benefits Other Than Pensions. This statement establishes standards for the measurement, recognition, 
and display of OPEB expense and related liabilities (assets), note disclosures, and, if applicable, required supplementary 
information in the financial reports of state and local government employers. The District is in the process of analyzing 
the impact that adopting this statement will have on its financial position and results of operations. This standard 
becomes effective for the District beginning July 1, 2007. 

20 BART Annual Report 2005 


Notes to Financial Statements


In June of 2005, the GASB issued Statement No. 47, Accounting for Termination Benefits. This statement establishes 
measurement, recognition and disclosure requirements for all termination benefits. The requirements of this 
statement are effective in two parts. For termination benefits provided through an existing defined benefit OPEB 
plan, the provisions of this statement should be implemented simultaneously with the requirements of Statement 45. 
For all other termination benefits, this Statement is effective for financial statements for periods beginning after 
June 15, 2005. 

Reclassifications 

Certain prior year balances were reclassified to conform with the current year presentation. The reclassifications have no 
effect on the financial position or results of operations. 

2. Cash, Cash Equivalents and Investments 
Cash, Cash Equivalents and Investments of the Enterprise Fund 

Cash, cash equivalents and investments are reported in the Enterprise Fund as follows: 

2005 2004 
(dollar amounts in thousands) Unrestricted Restricted Total Unrestricted Restricted Total 
Current assets 

Cash and cash equivalents $ 162,404 $ 189,518 $ 351,922 $ 135,744 $ 95,007 $ 230,751 
Investments 61,048 21,460 82,508 80,717 32,143 112,860 
Noncurrent assets 
Investments 17,793 166,363 184,156 53,745 189,835 243,580 

Total $ 241,245 $ 377,341 $ 618,586 $ 270,206 $ 316,985 $ 587,191 
Investment Policy 

The California Public Utilities Code, Section 29100, and the California Government Code, Section 53601, provide the 
basis for the District’s investment policy. To meet the objectives of the investment policy — (1) preservation of capital, 

(2) liquidity, and (3) yield — the investment policy, approved by the Board of Directors, specifically identifies the types 
of permitted investments, as well as any maturity limits and other restrictions. The District’s investment policy, which is 
more restrictive than required by law, allows investments in the following: 
¦ Repurchase agreements, 
¦ Reverse repurchase agreements, 
¦ Collateralized time deposits, 
¦ Mutual funds, 
¦ California Local Agency Investment Fund, and 
¦ Securities of the U.S. Government and its agencies. 
The District’s investments include amounts invested in the State of California Local Agency Investment Fund (LAIF). 
The total amount invested by all public agencies in LAIF at June 30, 2005 was $18.6 billion. LAIF is part of the State 
of California Pooled Money Investment Account (PMIA), whose balance at June 30, 2005 was $60.5 billion. Of this 
amount, 100% was invested in non-derivative instruments. PMIA is not SEC-registered, but is required to invest 
according to the California Government Code. The average maturity of PMIA investments was 165 days as of 
June 30, 2005. The Local Investment Advisory Board (Board) has oversight responsibility for LAIF. The Board consists 
of five members as designated by state statute. The value of the pool shares in LAIF, which may be withdrawn, is 
determined on an amortized cost basis, which is different than the fair value of the pooled treasury’s portion in the 
pool. Withdrawals from LAIF are done on a dollar to dollar basis. 

BART Annual Report 2005 21 


Notes to Financial Statements


Interest Rate Risk 

Interest rate risk is the risk that changes in market rates will adversely affect the fair value of an investment. One of the 
District’s primary objectives is to provide sufficient liquidity to meet its cash outflow needs, however, the District does 
not have any policies specifically addressing interest rate risk. A summary of investments by type of investments and by 
segmented time distribution is as follows: 

Investment Maturities (in Years) 
(dollar amounts in thousands) Fair Value Less Than 1 1 – 5 6 – 10 More Than 10 
Money market mutual funds $232,646 $ 232,646 $ – $ – $ – 
U.S. government agencies 207,862 139,323 27,357 402 40,780 
Repurchase agreements 100,283 – 67,652 32,631 – 
Local Agency Investment Fund 23,758 23,758 – – – 
U.S. Treasury notes 15,133 – 15,133 – – 
U.S. Treasury bills 2,317 2,317 – – – 

Total investments 581,999 398,044 110,142 33,033 40,780 
Deposits with banks 35,407 35,407 – – – 
Certificates of deposit 800 – 800 – – 
Imprest funds 380 380 – – – 

Total cash and investments $618,586 $ 433,831 $110,942 $33,033 $40,780 
Credit Risk 

The District’s credit rating risk is governed by Section 53601 of the California Government Code which limits 
investments in money market mutual funds to those funds with the highest evaluations granted by the rating agencies, 
which is Aaam. The District has investments in U.S. government agencies, bank repurchase agreements (underlying 
of U.S. Treasury securities) and in money market mutual funds. There are no investment limits on the securities of 

U.S. Treasury or certain U.S. government agencies as these investments are backed by the full faith and credit of the 
United States government. The following is a summary of the credit quality distribution for securities with credit 
exposure as rated by national rating agencies: 
Credit Ratings 
(dollar amounts in thousands) Fair Value AAA AA A Not Rated 
Money market mutual funds $232,646 $232,646 $ – $ – $ – 
U.S. Government agencies 207,862 26,241 – 140,179 41,442 
Repurchase agreements 100,283 67,652 32,631 – – 
Local Agency Investment Fund 23,758 – – – 23,758 
U.S. Treasury notes 15,133 15,133 – – – 
U.S. Treasury bills 2,317 2,317 – – – 

Total investments 581,999 $ 343,989 $ 32,631 $140,179 $65,200 
Deposits with banks 35,407 
Certificates of deposit 800 
Imprest funds 380 

Total cash and investments $618,586 
22 BART Annual Report 2005 


Notes to Financial Statements


Concentration of credit risk 

The District’s investment policies mitigate exposure to concentration of credit risk by diversifying the portfolio and 
limiting investments in any one issuer to no more than 5% of the total portfolio. Investments issued by or explicitly 
guaranteed by the U.S. Government and investments in mutual funds, external investment pools, and other pooled 
investments are exempt from this requirement as they are normally diversified themselves. 

Custodial Credit Risk — Deposits 

For deposits, custodial credit risk is the risk that in the event of a bank failure, the District’s deposits may not be 
returned. The California Government Code Section 53652 requires California banks and savings and loan associations 
to secure governmental deposits by pledging government securities as collateral. The market value of pledged 
securities must equal at least 110% of the District’s deposits. California law also allows financial institutions to secure 
governmental deposits by pledging first trust deed mortgage notes having a value of 150% of the District’s total 
deposits. Such collateral is considered to be held in the District’s name. 

Custodial Credit Risk — Investments 

For investments, custodial credit risk is the risk that in the event of a failure of the counterparty, the District may not 
be able to recover the value of its investments. The exposure to the District is limited as the District’s investments are 
held in the District’s name by a third-party safe-keeping custodian that is separate from the counterparty or in the 
custody of a trust department, as required by bond covenants. 

Investments of the Retiree Health Benefit Trust (Trust) 

Investment Policy 

The investment objective of the Trust is to achieve consistent long-term growth for the Trust and to maximize income 
consistent with the preservation of capital for the sole and exclusive purpose of providing benefits to participants 
and their beneficiaries and defraying reasonable expenses of administering the Trust. The District’s Board of Directors 
establishes the general investment policy and guidelines for the Trust. Allowable investments under the Trust 
investment guidelines include: 

¦ Cash equivalents such as treasury bills, money market trusts, short-term interest fund (STIF) trusts, commercial paper 
rated A1/P1, banker’s acceptances, certificates of deposits and repurchase agreements; 
¦ Fixed income securities which include U.S., agency and corporation bonds (including Yankees) and preferred stock 
and Rule 144A issues, and mortgage-or-asset-backed securities; 
¦ Equity securities, including U.S. traded common, preferred stocks and convertible stocks and bonds, including 
American Depository Receipts. 
Interest rate risk 

The Trust’s investment policies mitigate exposure to changes in interest rates by requiring that the assets of the Trust be 
invested in accordance with the following asset allocation guidelines: 

Asset Class Minimum Maximum Preferred 
Equity securities 45% 70% 60% 
Fixed income securities 25% 45% 35% 
Cash equivalent 3% 10% 5% 

BART Annual Report 2005 23 


Notes to Financial Statements


A summary of investments by type of investments and by segmented time distribution is as follows: 

Investment Maturities (in Years) 
(dollar amounts in thousands) Fair Value Less Than 1 1 – 5 6 – 10 More Than 10 
U.S. Treasury obligations $ 9,361 $ 347 $ 1,161 $ 1,317 $ 6,536 
Money market mutual funds 5,770 5,770 – – – 
Corporate obligations 3,649 247 1,465 559 1,378 

Foreign obligations 205 – 107 69 29 
Investments subject to interest rate risk 18,985 $ 6,364 $ 2,733 $ 1,945 $ 7,943 
Domestic common stocks 20,605 

Total investments $ 39,590 
Credit Risk 

The Trust’s credit risk policy is defined in its Statement of Investment Policy approved by the District’s Board of 
Directors. The policy states that the Board recognizes that some risk is necessary to produce long-term investment 
results that are sufficient to meet the Trust’s objectives and that the Trust’s investment managers are expected to 
make reasonable efforts to control risk. The investment policy requires that all of the Trust’s assets be invested in liquid 
securities, defined as securities that can be transacted quickly and efficiently for the Trust, with minimal impact on 
market prices. The investment policy also demands that no single investment shall exceed five percent of the total 
Trust assets, at market value, except obligations of the U.S. Government, short-term money market funds, index funds 
and other diversified commingled accounts; and for actively managed equity accounts, where, for issues that comprise 
more than 4% of the account’s stated benchmark, the limit shall be 125% of the weight of the common stock 
benchmark. The following is a summary of the credit quality distribution for securities with credit exposure as rated by 
national rating agencies: 

Credit Ratings 
(dollar amounts in thousands) Fair Value AAA AA A BBB BB Not Rated 
US Treasury obligations $ 9,361 $ 9,361 $ – $ – $ – $ – $ – 
Money market mutual funds 5,770 – – – – – 5,770 
Corporate obligations 3,649 2,028 218 532 775 96 – 

Foreign obligations 205 28 – 42 135 – – 
Investments subject 18,985 $11,417 $218 $574 $ 910 $ 96 $ 5,770 
to credit risk 
Domestic common stocks 20,605 

Total investments $39,590 
Custodial Credit Risk — Investments 

For investments, custodial credit risk is the risk that in the event of a failure of the counterparty, the Trust may not be 
able to recover the value of its investments. The exposure to the Trust is limited as the Trust’s investments are in the 
custody of a third-party custodian that is separate from the counterparty. 

24 BART Annual Report 2005 


Notes to Financial Statements


Cash and Investment Disclosures as of June 30, 2004 

The District implemented the requirements of GASB Statement No. 40 for the year ended June 30, 2005 and, 
accordingly, has elected to disclose its cash and investments using the new standards as described above. However, 
the District elected not to retroactively apply those disclosures. Accordingly, the following disclosures related to cash 
and investments held as of June 30, 2004 do not include the disclosures required under GASB Statement No. 40. 

Deposits 

The carrying amount of the District’s deposits with banks and cash on hand was $67,663,000 at June 30, 2004, with a 
corresponding bank balance of $65,828,000. The difference between the carrying amount and the bank balance is 
due to outstanding checks and deposits in transit. Of the bank balance, $1,882,000 was covered by federal depository 
insurance, and $63,946,000 was collateralized in accordance with Section 53652 of the California Government Code. 

Investments 

The District’s investments are categorized below to give an indication of the custodial credit risk assumed by the District 
at June 30, 2004. Category 1 includes investments that are insured or registered or for which the securities are held by 
the District or its agent in the District’s name. Category 2 includes uninsured and unregistered investments for which the 
securities are held by the counterparty’s trust department or agent in the District’s name. The District’s investments are 
reported at fair value, as follows: 

2004 
Category (at cost) 
(dollar amounts in thousands) 1 2 Fair Value 
Money Market $ 5,000 $ 3,826 $ 8,826 
U.S. Tresury securities 55,520 97,011 152,923 
Federal agency obligations 130,161 35,915 165,466 
Repurchase agreements 40,019 92,995 133,014 
Local agency investment fund 20,000 3,688 23,688 

Corporate obligations/shares – 35,611 35,611 
Total $ 250,700 $269,046 $ 519,528 
Cash on hand 2,535 

Time and demand deposits 65,128 

Total $587,191 
BART Annual Report 2005 25 


Notes to Financial Statements


3. Receivables and Other Assets 
The District reports the following aggregated accounts as receivables and other assets in the statements of net assets 
as of June 30, 2005 and 2004: 

(dollar amounts in thousands) 2005 2004 
Interest receivable $ 25,849 $18,338 
Local financial assistance 13,092 2,858 
Capitol Corridor Joint Powers Authority 8,262 10,072 
Notes receivable 4,236 4,276 
Ticket vendors 3,309 3,252 
Prepaid expenses 2,408 678 
Deferred charges 1,225 1,824 
Imprest deposits for self-insurance liabilities 1,009 1,009 
Property taxes 734 602 
Other 1,945 3,665 
Allowance for doubtful accounts (5,000) (2,500) 

Total receivables and other assets $57,069 $44,074 
Current, unrestricted portion $30,517 $24,938 
Noncurrent, unrestricted portion 1,113 1,704 
Noncurrent, restricted portion 25,439 17,432 

Total receivables and other assets, as presented in the basic financial statements $57,069 $44,074 
4. Capital Lease Receivable and Liability (Sale/Leaseback – Revenue Transit Vehicles) 
On March 30, 1995, the District entered into an agreement with a Swedish corporation to sell 25 newly manufactured 
C-2 rail cars for $50,383,000 and simultaneously entered into an agreement to lease them back. The lease agreement 
was effective on the closing date of September 15, 1995, and continues through January 15, 2011. 

The District recorded a gain on the sale of approximately $2,015,000, which is equal to the amount of cash received 
on the sale. The gain was deferred and is being amortized over 30 years. In addition, the District recorded a receivable 
of $48,368,000 and a capital lease obligation of the same amount. The receivable and the liability will be reduced by 
a corresponding amount over the term of the lease. At June 30, 2005 and 2004, the balance of the deferred gain was 
$1,107,000 and $1,162,000, respectively. The balance of both the receivable and the liability was $17,349,000 and 
$20,504,000 as of June 30, 2005 and 2004, respectively and is reflected in the statements of net assets as a capital 
lease receivable and capital lease liability, respectively. Other than the cash received upon the sale, no cash will be 
exchanged between the parties in settlement of the receivable and liability. 

At June 30, 2005 and 2004 the balances of the capital lease receivable and of the capital lease liability related to the 
sale/leaseback are summarized as follows: 

(dollar amounts in thousands) 2005 2004 
Amounts at beginning of year $ 20,504 $23,658 
Amounts collected/repaid during the year (3,155) (3,154) 
Balance at end of year 17,349 20,504 
Less — current portion (3,154) (3,154) 

Net noncurrent portion $ 14,195 $17,350 
26 BART Annual Report 2005 


Notes to Financial Statements


The District’s capital lease receivable and capital lease liability have the following maturities for each of the next five 
fiscal years and thereafter, which are summarized as follows: 

(dollar amounts in thousands) 
Fiscal Year Ending June 30 Annual Installments 
2006 $ 3,154 
2007 3,154 
2008 3,154 
2009 3,154 
2010 3,154 
2011 1,579 

$ 17,349 
Accumulated depreciation related to the C-2 rail cars covered by the sale/leaseback agreement totaled $18,673,000 
and $16,820,000 as of June 30, 2005 and 2004, respectively. 

5. Capital Assets 
Changes to capital assets during the year ended June 30, 2005 were as follows: 

Lives Additions Retirements 
(dollar amounts in thousands) (Years) 2004 and Transfers and Transfers 2005 
Capital assets, not being depreciated 

Land N/A $ 481,466 $ 32,720 $ (337) $ 513,849 

Construction in progress N/A 1,032,910 114,511 (285,612) 861,809 

Total capital assets, not being depreciated 1,514,376 147,231 (285,949) 1,375,658 
Capital assets, being depreciated 

Stations, track, structures and improvements 80 3,079,442 232,862 (672) 3,311,632 
Buildings 80 27,333 – (5,462) 21,871 
System-wide operation and control 20 501,409 9,004 (127) 510,286 
Revenue transit vehicles 30 1,037,986 4,364 (4) 1,042,346 
Revenue transit vehicles under captial lease 30 55,593 – – 55,593 
Service and miscellaneous equipment 3–20 52,017 13,868 (4,469) 61,416 
Capitalized construction and start-up costs 30 98,305 – – 98,305 
Repairable property items 30 16,114 47 – 16,161 
Total capital assets, being depreciated 4,868,199 260,145 (10,734) 5,117,610 
Less accumulated depreciation (1,372,798) (128,697) 6,096 (1,495,399) 

Total capital assets, being depreciated, net 3,495,401 131,448 (4,638) 3,622,211 
Total capital assets, net $ 5,009,777 $ 278,679 $(290,587) $ 4,997,869 
BART Annual Report 2005 27 


Notes to Financial Statements


Changes to capital assets during the year ended June 30, 2004 were as follows: 

Lives Additions Retirements 
(dollar amounts in thousands) (Years) 2003 and Transfers and Transfers 2004 
Capital assets, not being depreciated 

Land N/A $ 476,202 $ 5,854 $ (590) $ 481,466 

Construction in progress N/A 1,011,921 126,827 (105,838) 1,032,910 

Total capital assets, not being depreciated 1,488,123 132,681 (106,428) 1,514,376 
Capital assets, being depreciated 

Stations, track, structures and improvements 80 3,001,233 78,390 (181) 3,079,442 
Buildings 80 26,632 701 – 27,333 
System-wide operation and control 20 502,195 10,830 (11,616) 501,409 
Revenue transit vehicles 30 1,029,729 8,257 – 1,037,986 
Revenue transit vehicles under captial lease 30 55,593 – – 55,593 
Service and miscellaneous equipment 3–20 52,264 1,923 (2,170) 52,017 
Capitalized construction and start-up costs 30 98,305 – – 98,305 
Repairable property items 30 16,249 (17) (118) 16,114 
Total capital assets, being depreciated 4,782,200 100,084 (14,085) 4,868,199 
Less accumulated depreciation (1,270,846) (116,568) 14,616 (1,372,798) 
Total capital assets, being depreciated, net 3,511,354 (16,484) 531 3,495,401 

Total capital assets, net $ 4,999,477 $ 116,197 $ (105,897) $ 5,009,777 
The District is currently involved in construction of Phase 1 of an extension program that will add 38 miles of track and 
10 new stations to the system at a total cost of approximately $3,477,127,000. Of these 10 new stations included in 
Phase 1, the stations at the Dublin/Pleasanton, Pittsburg/Bay Point, Colma and San Francisco International Airport 
extensions are open and in service. The funding for Phase 1 comes from the federal government ($877,634,000), State 
of California ($741,770,000), San Mateo County ($502,719,000), Alameda and Contra Costa Counties ($505,000,000), 
bridge tolls ($279,811,000), San Francisco International Airport ($200,000,000), and the District ($370,193,000). 

The District has entered into contracts for the construction of various facilities and equipment totaling approximately 
$492,974,000 at June 30, 2005, ($548,306,000 in 2004). 

Under the Federal Full Funding Grant Agreement, $1,347,230,000 was approved for project costs associated with the 
San Francisco International Airport Extension (“SFO Extension project”) with funding participation from the federal 
government, State of California and certain local agencies. As a local funding participant, the San Francisco 
International Airport Commission (“SFIA”) pledged to contribute funds to the federally approved project of up to 
$77,000,000. The District entered into various agreements with the City and County of San Francisco, acting by and 
through SFIA, which defined the specific project costs that could be funded from the $77,000,000 contribution. The 
agreement stated that the contribution would be used for the eligible BART Operating Systems Work on the portion 
of the project related to the San Francisco International Airport station (“On Airport project”). Eligible project costs 
include the design, construction, construction support, management and oversight, general and administrative costs 
and other associated costs of the On Airport project. Based on the agreements between SFIA and the District, 
SFIA shall own all rights, titles and interest associated with the assets paid from the $77,000,000 until the end of the 
projected useful life of each asset at which time, all of SFIA’s rights, titles and interest associated with the assets 
shall transfer to the District, without payment by the District. The risk of loss on all assets acquired from the SFIA 
contributions are, at all times, assumed by the District. 

28 BART Annual Report 2005 


Notes to Financial Statements


The construction of the SFO Extension project was substantially completed in 2003 and revenue operations started 
on June 22, 2003. All costs incurred as of June 30, 2005, including those paid from and/or incurred against the SFIA 
contribution, have been capitalized to capital assets and accordingly are subject to depreciation. As of June 30, 2005, 
the capital assets related to the SFIA contribution amounted to $61,186,000 with an accumulated depreciation of 
$1,777,000. 

6. Accounts Payable and Other Liabilities 
The District reports the following aggregated payables as accounts payable and other liabilities in the statements of 
net assets as of June 30, 2005 and 2004: 

(dollars amounts in thousands 2005 2004 
Payable to vendors and contractors $ 71,401 $ 88,639 
Employee salaries and benefits 70,152 62,642 
Accrued interest payable 22,542 24,139 
MTC advance for debt service 11,979 10,866 
Liabilities at the end of year 176,074 186,286 
Less noncurrent portion, reported as other liabilities (657) (769) 

Net current portion $175,417 $ 185,517 
7. Long-Term Debt 
Long-term debt activity for the years ended June 30, 2005 and 2004 is summarized as follows: 

Additions/ Payments/ 
(dollar amounts in thousands) 2004 Accretion Amortization 2005 
1990 Sales Tax Revenue Refunding Bonds $ 38,390 $ – $ (9,615) $ 28,775 
1995 Sales Tax Revenue Bonds 49,800 – (2,210) 47,590 
1998 Sales Tax Revenue Bonds 345,050 – (3,860) 341,190 
1999 Sales Tax Revenue Bonds 133,160 – (1,860) 131,300 
2001 Sales Tax Revenue Bonds 165,965 – – 165,965 
TFA Bridge Toll Notes 38,355 – (8,075) 30,280 
Construction Loans 115,825 8,075 – 123,900 
FTA Capital Grant Bonds 281,540 – (150,290) 131,250 
Lease/Leaseback Obligation 190,652 13,497 (6,716) 197,433 
2002 SFO Extension Premium Fare Bonds 56,715 – – 56,715 
2004 SFO Extension Refunding Bonds 66,000 – – 66,000 
2005 General Obligation Bonds – 100,000 – 100,000 

1,481,452 121,572 (182,626) 1,420,398 
Less: debt related items* (15,392) 789 274 (14,329) 
Long-term debt net of debt related items 1,466,060 $122,361 $ (182,352) 1,406,069 
Less: current portion of long-term debt (93,631) (172,782) 

Net long-term debt $1,372,429 $1,233,287 
* Debt related items consist of deferred bond issuance costs, discounts and premiums. 
BART Annual Report 2005 29 


Notes to Financial Statements


Payments/ 
Additions/ Defeasance and 
(dollar amounts in thousands) 2003 Accretion Amortization 2004 
1990 Sales Tax Revenue Refunding Bonds $ 47,322 $ 618 $ (9,550) $ 38,390 
1995 Sales Tax Revenue Bonds 51,920 – (2,120) 49,800 
1998 Sales Tax Revenue Bonds 345,965 – (915) 345,050 
1999 Sales Tax Revenue Bonds 134,945 – (1,785) 133,160 
2001 Sales Tax Revenue Bonds 168,650 – (2,685) 165,965 
TFA Bridge Toll Notes 46,035 – (7,680) 38,355 
Construction Loans 108,145 7,680 – 115,825 
FTA Capital Grant Bonds 368,035 – (86,495) 281,540 
Lease/Leaseback Obligation 194,407 13,457 (17,212) 190,652 
2002 SFO Extension Premium Fare Bonds 56,715 – – 56,715 
2004 SFO Extension Refunding Bonds – 66,000 – 66,000 

1,522,139 87,755 (128,442) 1,481,452 
Less: debt related items (13,190) (2,086) (116) (15,392) 
Long-term debt net of debt related items 1,508,949 $ 85,669 $(128,558) 1,466,060 
Less: current portion of long-term debt (100,442) (93,631) 

Net long-term debt $1,408,507 $1,372,429 
* Debt related items consist of deferred bond issuance costs, discounts and premiums. 
1990 Sales Tax Revenue Refunding Bonds (the 1990 Bonds) 

In July 1990, the District issued sales tax revenue refunding bonds totaling $158,478,000 to refund and defease 
$141,045,000 outstanding principal amount of the District’s Sales Tax Revenue Bonds, Series 1985. The 1990 Bonds 
are special obligations of the District payable from and collateralized by a pledge of the sales tax revenues. At June 30, 
2005, the 1990 Bonds consist of $28,775,000 in current interest serial bonds due from 2010 to 2011 with an interest 
rate of 6.75%. The 1990 Bonds included capital appreciation bonds with an accreted value of $21,252,000 and which 
matured and were fully paid on July 1, 2004. 

1995 Sales Tax Revenue Bonds (the 1995 Bonds) 

In June 1995, the District issued sales tax revenue bonds totaling $135,000,000 to provide funds for certain capital 
improvements including rehabilitation of District vehicles and facilities and energy conservation measures. The 1995 
Bonds are special obligations of the District payable from and collateralized by a pledge of sales tax revenues. In 
July 2001, the District used part of the proceeds from the 2001 Sales Tax Revenue Bonds to defease $18,585,000 in 
serial bonds due from 2002 to 2010 and $19,915,000 in term bonds due from 2012 to 2015. At June 30, 2005, the 
1995 Bonds consist of $17,230,000 in serial bonds due from 2005 to 2011 with interest rates ranging from 5.15% to 
5.7% and $30,360,000 in term bonds due from 2012 to 2020 with an interest rate of 5.5%. The District is required to 
make sinking fund payments on the term bonds beginning on July 1, 2012. In addition, the 1995 Bonds maturing after 
June 30, 2006 may be redeemed prior to their respective maturities after July 1, 2005 at the option of the District 
at prices ranging from 100% to 101%. 

30 BART Annual Report 2005 


Notes to Financial Statements


1998 Sales Tax Revenue Bonds (the 1998 Bonds) 

In March 1998, the District issued sales tax revenue bonds totaling $348,510,000 to provide funds for certain capital 
improvements, including rehabilitation of the District’s vehicles and facilities, to repay obligations of approximately 
$49,645,000 related to a lease of certain telecommunications equipment, and to refund certain outstanding bonds with 
principal amounts of $155,115,000 to achieve debt service savings. The 1998 Bonds are special obligations of the 
District payable from and collateralized by a pledge of sales tax revenues. At June 30, 2005, the 1998 Bonds consist of 
$148,820,000 in serial bonds due from 2005 to 2018 with interest rates ranging from 4.13% to 5.50%, a $79,105,000 
term bond due July 1, 2023 with an interest rate of 4.75% and a $113,265,000 term bond due July 1, 2028 with an 
interest rate of 5%. The District is required to make sinking fund payments on the term bond due July 1, 2023 
beginning on July 1, 2019 and on the term bond due July 1, 2028 beginning on July 1, 2024. In addition, the 1998 
bonds maturing after June 30, 2009 may be redeemed prior to their respective maturities after June 30, 2008 at the 
option of the District at prices ranging from 100% to 101%. 

1999 Sales Tax Revenue Bonds (the 1999 Bonds) 

In October 1999, the District issued sales tax revenue bonds totaling $134,945,000 to provide funds for certain capital 
improvements including rehabilitation of the District’s vehicles, initial deposit to a capital reserve account for the SFO 
Extension project and rehabilitation of the District’s maintenance facility. The 1999 Bonds are special obligations of the 
District, payable from and collateralized by a pledge of sales tax revenues. At June 30, 2005, the 1999 Bonds consist of 
$41,285,000 in serial bonds due from 2005 to 2019 with interest rates ranging from 4.40% to 5.25% and three 5.5% 
term bonds in the amounts of $33,210,000, $18,515,000 and $38,290,000 due in 2026, 2029 and 2034, respectively. 
The District is required to make sinking fund payments on the term bond due July 1, 2026 beginning on July 1, 2020, 
on the term bond due July 1, 2029 beginning on July 1, 2027, and on the term bond due July 1, 2034 beginning on 
July 1, 2030. In addition, the 1999 Bonds maturing on or after July 1, 2010 may be redeemed prior to their respective 
maturities on or after July 1, 2009 at the option of the District at prices ranging from 100% to 101%. 

2001 Sales Tax Revenue Bonds (the 2001 Bonds) 

In July 2001, the District issued sales tax revenue bonds totaling $168,650,000 to fund the rehabilitation of District 
rail cars and certain other capital improvements, to fund capital reserves to be utilized in connection with the SFO 
Extension project and to refund certain outstanding bonds with principal amounts of $41,175,000 to achieve cash flow 
savings by extending the debt service requirements further into the future and to take advantage of lower interest 
rates. At June 30, 2005, the 2001 Bonds consist of $57,990,000 in serial bonds due from 2012 to 2021 with interest 
rates ranging from 4.375% to 5.25%, a $27,420,000 term bond due July 1, 2026 with an interest rate of 5%, a 
$35,205,000 term bond due July 1, 2031 with an interest rate of 5%, and a $45,350,000 term bond due July 1, 2036 
with an interest rate of 5.125%. The District is required to make sinking fund payments on the term bond due July 1, 
2026 beginning on July 1, 2022, on the term bond due July 1, 2031 beginning July 1, 2027, and on the term bond 
due on July 1, 2036 beginning on July 1, 2032. In addition, the 2001 Bonds maturing on or after July 1, 2012 may be 
redeemed prior to their respective stated maturities, at the option of the District, as a whole or in part, on any date on 
or after July 1, 2011, at the principal amount called for redemption plus interest accrued thereon to the date fixed for 
redemption without premium. 

Transit Financing Authority (Authority) Bridge Toll Notes 

In order to fund a portion of the costs of the extension project at the San Francisco International Airport (SFO Extension 
project), in September 1999, the Authority issued a limited liability note (the “Bridge Toll Note”) in the amount of 
$65,680,000, payable from and collateralized solely by a pledge of certain bridge toll revenues allocated to the District 
by MTC. At June 30, 2005, the notes outstanding amount to $30,280,000 with interest rates ranging from 5.00% to 
5.75% and mature from August 2005 through February 2007. (For information on the Authority, see Notes 1 and 15.) 

BART Annual Report 2005 31 


Notes to Financial Statements


Construction Loans 

In March 1999, the District, MTC and San Mateo County Transit District (“SamTrans”) entered into a Memorandum of 
Understanding (“MOU”), which provided additional funds for the SFO Extension project. 

Pursuant to the MOU, the construction loans as of June 30, 2005, consist of funds received for the SFO Extension 
project costs from SamTrans for $72,000,000 and MTC for $16,500,000 and $35,400,000 from MTC for the SFO 
Extension project’s temporary cash requirements. The District provided $50,000,000 of its own funds to assist with the 
financing of the SFO Extension project costs. The terms and conditions of the MOU provide that the loans for project 
costs will be repaid, without interest, from the future net operating surplus generated by the SFO Extension. Such 
repayments of the project cost loans from SamTrans and MTC totaling $88,500,000 plus the District’s $50,000,000, 
will commence after SamTrans’ capital contribution to the District’s Warm Springs Extension project is fully paid from 
future net operating surplus. MTC’s loan for the project’s temporary cash requirements of $35,400,000 will be repaid, 
without interest, when the District receives the last Federal Full Funding Grant allocation for the SFO Extension project, 
currently expected to be in fiscal year 2006. 

FTA Capital Grant Bonds 

On February 15, 2001, the Association of Bay Area Governments (“ABAG”) issued BART SFO Extension Bonds (FTA 
Capital Grant), 2001 Series A, in the amount of $485,350,000. The FTA Capital Grant bonds were issued for the benefit 
of the District’s SFO Extension project. The proceeds were used mainly to provide additional financing for the SFO 
Extension and to refund and defease $300,000,000 aggregate principal amount of the San Francisco Bay Area Transit 
Financing Authority Commercial Paper Notes, Series A, B, C, D, E and F. The bonds are limited obligations of ABAG 
and are payable from the monies coming from the Federal Full Funding Grant Agreement between the United States 
Department of Transportation, Federal Transit Administration and the District for the District’s SFO Extension project. 
The District’s obligation to make bond payments is not a general obligation of the District. Payment of the principal 
and interest on the bonds when due are insured by a financial guaranty insurance policy issued by an insurance 
company. In fiscal year 2005, $1,040,000 ($28,000,000 in fiscal year 2004) of the bonds due in fiscal year 2008 and 
$87,955,000 of the bonds due in fiscal year 2009 were paid in advance. At June 30, 2005, the bonds outstanding 
amount to $131,250,000 in serial bonds, with interest rates ranging from 3.625% to 5.0% with maturities from 
June 15, 2006 to June 15, 2009. 

Lease/Leaseback Obligation 

On March 19, 2002, the District entered into a transaction to lease rail traffic control equipment (the “Network”) 
to investors through March 19, 2042 (the “head lease”) and simultaneously sublease the Network back through 
January 2, 2018 (the “sublease”). At the expiration of the sublease term the District has the option to purchase back 
the remaining head lease interest. 

At closing, the Network had a fair market value of approximately $206,000,000 and a book value of $203,000,000. 
Under the terms of the head lease, the District received a prepayment equivalent to the net present value of the head 
lease obligation totaling approximately $206,000,000, of which the District paid approximately $146,000,000 to a 
Payment Undertaker. Under the terms of the agreement, the Payment Undertaker committed to pay the debt portion 
of the District’s sublease obligation and to set aside funds to enable the District to exercise its purchase option of the 
head lease interest, if it chooses to do so. Of the remaining head lease proceeds, approximately $37,000,000 was 
deposited to a trust account to be used to pay the remaining equity portion of the District’s sublease obligation and to 
set aside additional funds to enable the District to exercise its purchase option of the head lease interest, if it chooses 
to do so. The District received cash from the lease/leaseback transaction amounting to approximately $23,000,000. The 
cash gain was deferred and is being amortized over a period of 15.75 years through January 2, 2018. In accordance 
with generally accepted accounting principles in the United States of America, the District has reflected this transaction 
as a financing transaction. The District has recorded the payment to the Payment Undertaker as a deposit for sublease 

32 BART Annual Report 2005 


Notes to Financial Statements


obligation and the deposit to the trust account as investments, and the net present value of the future sublease 
payments and exercise price of the purchase option as long-term debt. 

Under this transaction, the District maintains the right to continued use and control of the Network through the end of 
the sublease term. 

The details of the lease/leaseback obligation are as follows: 

(dollar amounts in thousands) 2005 2004 
Long-term debt at beginning of year $190,652 $ 194,407 
Interest expense incurred during the year 13,497 13,457 
Payments made during the year (6,716) (17,212) 

197,433 190,652 
Lease payments due in one year (46,647) (6,716) 

Net long-term debt at end of year $150,786 $ 183,936 
2002 SFO Extension Premium Fare Bonds (the Airport Premium Fare Bonds) 

On October 1, 2002, the Association of Bay Area Governments (“ABAG”) issued BART SFO Extension Bonds (“Airport 
Premium Fare Bonds”), 2002 Series, in the amount of $56,715,000. The Airport Premium Fare Bonds were issued for 
the benefit of the District’s SFO Extension project. The proceeds were used to finance a portion of the costs of the SFO 
Extension project, including all system-wide and associated improvements and expenditures related to the extension. 
The Airport Premium Fare Bonds are limited obligations of ABAG payable solely from and collateralized solely by 
amounts received from the District pursuant to a Pledge and Contribution Agreement, dated October 1, 2002, 
between ABAG and the District. The Airport Premium Fare Bonds are not a general obligation of ABAG. The District’s 
obligation to make payments under the Pledge and Contribution Agreement is limited to and payable solely from and 
collateralized solely by a pledge of the premium fare imposed and collected by the District from passengers who board 
or depart the District’s rapid transit system at the San Francisco International Airport station. The District’s obligation 
to make such payments under the Pledge and Contribution Agreement is not a general obligation of the District. 
The payment of the principal and interest when due are insured by a financial guaranty insurance policy issued by an 
insurance company. At June 30, 2005, the 2002 Airport Premium Fare Bonds consist of $21,515,000 in serial bonds due 
from 2006 to 2022 with interest rates ranging from 2.25% to 5.0%, a $11,230,000 term bond due August 1, 2026 with 
an interest rate of 5.0%, and a $23,970,000 term bond due August 1, 2032 with an interest rate of 5%. The District is 
required to make sinking fund payments on the term bond due August 1, 2026 beginning on August 1, 2023 and on 
the term bond due August 1, 2032 beginning on August 1, 2027. 

2004 SFO Extension Refunding Bonds (the Airport Refunding Bonds) 

On June 14, 2004, ABAG issued BART SFO Extension Refunding Bonds (FTA Capital Grant), 2004 Series A (Auction 
Rate Securities) with an aggregate principal amount of $66,000,000 for the benefit of the District. The Airport 
Refunding Bonds were issued in order to refund a portion of the ABAG BART SFO Extension Bonds (FTA Capital 
Grant), 2001 Series A, to fund the reserve fund deposit with respect to the Airport Refunding Bonds, and to pay certain 
costs of issuance of the bonds. The issuance of the Airport Refunding Bonds had the effect of freeing up $14,600,000 
from the debt service reserve fund of the BART SFO Extension Bonds (FTA Capital Grant), 2001 Series A, and making 
the amount available as an additional source of cash for the payment of the SFO Extension Project expenditures. The 
Airport Refunding Bonds are limited obligations of ABAG payable solely from and collateralized by amounts received 
from the District pursuant to the Pledge Agreement dated February 1, 2001 between ABAG and the District, amounts 
on deposit in the funds and accounts established under the Indenture (except the Rebate Fund and any Bond Purchase 
Fund), and investment earnings thereon. Amounts payable by the District pursuant to the Pledge Agreement are 

BART Annual Report 2005 33 


Notes to Financial Statements


payable solely from and collateralized by amounts received by the District pursuant to a Full Funding Grant Agreement 
with the United States of America, acting through the Department of Transportation, Federal Transit Administration 
(the “Grant Agreement”) and revenues, if any, under an interest rate cap agreement executed by the District in 
connection with the Airport Refunding Bonds. The financial obligation of the District under the Pledge Agreement is 
solely to transfer all receipts under the Grant Agreement to the Trustee. The Airport Refunding Bonds are not a general 
obligation of ABAG. The Airport Refunding Bonds were issued initially as Auction Rate Securities at an interest rate of 
1.05%. Thereafter, the Airport Refunding Bonds will bear interest at the Auction Rate for the Auction Period, until a 
conversion to a daily, weekly, bond interest term or long-term interest rate period occurs. The initial auction period 
was on June 21, 2004, with the subsequent auction dates generally scheduled on each Monday of each week. The 
last auction date in fiscal year 2005 was on June 27, 2005 and the winning interest rate was 1.950%. An auction 
period generally consists of seven days. Interest payments are payable on the day following the end of each auction 
period. Payment of the principal and interest when due is insured by a financial guaranty insurance policy issued by 
an insurance company. At June 30, 2005, the balance of bonds outstanding is $66,000,000 due from 2008 to 2009. 
The Airport Refunding Bonds are not subject to optional tender for purchase, nor does the District have a commitment 
to purchase them in the event of a “failed” auction. However, the bonds would be subject to mandatory tender if 
the District elects to convert the bonds to a different interest rate mode, provided certain conditions regarding the 
conversion are satisfied. 

The interest rate cap effectively limits the amount the District may be required to pay pursuant to the Pledge 
Agreement. Since the interest rate on the Airport Refunding Bonds is reset weekly, the District chose to hedge its 
exposure to high interest rates by the purchase of the interest rate cap. 

Terms 

Under the interest rate cap agreement, the District will receive, on an annual basis, payments from Citibank N.A. 
should the BMA Municipal Swap Index TM (“BMA”), or any successor index, exceed 7.00%. The District paid $248,000 
upfront to Citibank N.A. for the interest rate cap for the full term of the agreement. As of June 30, 2005, the notional 
amount of the rate cap was $66,000,000, which was equivalent to the amount of outstanding Airport Refunding Bonds 
as of that date; the notional amount will be reduced to $19,975,000 on June 15, 2008 corresponding to a scheduled 
principal reduction on the Airport Refunding Bonds as of that date. The agreement terminates on June 15, 2009, 
which is the final maturity of the Airport Refunding Bonds. 

Credit Risk 

As of June 30, 2005, the interest rate cap agreement had a fair market value of $2,000. Citibank N.A. is rated Aa1 by 
Moody’s Investors Service, AA by Standard & Poor’s, and AA+ by Fitch Ratings. 

Basis Risk 

The interest rate cap agreement exposes the District to basis risk due to any difference between the actual variable 
interest rate on the Airport Refunding Bonds and BMA. While BMA is a national tax-exempt index commonly used 
as a proxy for variable rate transactions, there is no guarantee that BMA will perform exactly as the District’s variable 
interest rate. While the District believes BMA is a reasonable proxy for the District’s expected variable interest rate, 
it is possible that the District’s variable interest rate could exceed 7.00% while BMA does not. In this case the District 
would pay interest costs in excess of 7.00%. 

Termination Risk 

The District retains the right to terminate the interest rate cap prior to maturity. If the interest rate cap agreement is 
terminated, the interest rate on the Airport Refunding Bonds would no longer be effectively capped at 7.00%. 

34 BART Annual Report 2005 


Notes to Financial Statements


2005 General Obligation Bonds (the 2005 GO Bonds) 

In May 2005, the District issued the General Obligation Bonds (Elections 2004), 2005 Series A (2005 GO Bonds) with an 
aggregate principal amount of $100,000,000. The 2005 GO Bonds constitute a portion of the total authorized amount 
of $980,000,000 of general obligation bonds of the District duly authorized by at least two-thirds of the qualified voters 
of the District voting on a ballot measure (“Measure AA”) at an election held on November 2, 2004. The 2005 GO 
Bonds constitute the first issue of general obligation bonds being issued pursuant to the Measure AA authorization. 
The 2005 GO Bonds were issued to finance earthquake safety improvements to BART facilities, including aerial trackway structures, underground trackway structures, including the Transbay Tube, and at-grade trackway structures, stations, and administrative, maintenance, and operations facilities and to finance additional retrofits to facilitate a rapid 
return to service after an earthquake or other disasters. The 2005 GO Bonds are general obligations of the District, 
payable from and secured solely by ad valorem taxes upon all property subject to taxation by the District, without 
limitation as to rate or amount (except for certain personal property which is taxable at limited rates) levied in Alameda 
and Contra Costa Counties and the City and County of San Francisco. No other revenues of the District are pledged 
to the payment of the 2005 GO Bonds. At June 30, 2005, the 2005 GO Bonds consist of $80,385,000 in serial bonds 
due from 2006 to 2026 with interest ranging from 2.75% to 5.0%, a $7,720,000 term bond at 4.50% due in 2030 and a 
$11,895,000 term bond at 5.00% due in 2035. The District is required to make sinking fund payments on the term 
bond due in 2030 beginning in 2027 and on the term bond due in 2035 beginning in 2031. 

Defeased Bonds 

In March 1998, the District defeased several bonds amounting to $155,115,000 by placing part of the proceeds of the 
1998 Sales Tax Revenue Bonds in an irrevocable trust to provide for future debt service payments on these bonds. 
The advance refunding met the requirement of an in-substance debt defeasance, and the term bonds were removed 
from the District’s long-term debt. Accordingly, the trust account assets and liabilities for the defeased bonds are 
not included in the District’s financial statements. The amount outstanding on these defeased bonds was $23,615,000 
at June 30, 2005. 

In July 2001, the District defeased a portion of the 1991 and 1995 Sales Tax Revenue Bonds amounting to $41,175,000 
by placing part of the proceeds of the 2001 Sales Tax Revenue Bonds in an irrevocable trust to provide for future debt 
service payments on these bonds. The advance refunding met the requirement of an in-substance debt defeasance, 
and the defeased bonds were removed from the District’s long-term debt. Accordingly, the trust account assets and 
liabilities for the defeased bonds are not included in the District’s financial statements. The amount outstanding on 
these defeased bonds was $33,295,000 at June 30, 2005. 

The District deferred and amortized as a component of interest the difference between the reacquisition price and the 
net carrying amount of the old debt of $9,143,000 related to the defeasance from the proceeds of the 1998 and 2001 
Sales Tax Revenue Bonds. These deferred charges are amortized over the life of the defeased bonds. Amortization 
expense on these deferred charges was $478,000 in fiscal years 2005 and 2004. 

Arbitrage Bonds 

The District is subject to certain bond covenants, including the rules set forth by IRS Code Section 148a, which requires 
that interest earned on the proceeds of a tax exempt bond issuance does not exceed the interest expense related to 
those bonds, which qualifies those bonds as arbitrage bonds. Any excess interest income is subject to a 100% tax and 
is payable to the federal government. As of June 30, 2005, the District has recorded an estimated arbitrage liability 
amounting to $1,582,000 ($2,820,000 in 2004), which is included in other liabilities in the statements of net assets. 

BART Annual Report 2005 35 


Notes to Financial Statements


Debt Repayments 

The following is a schedule of long-term debt principal and interest payments required as of June 30, 2005: 

(dollar amounts in thousands) Sales Tax Revenue Bonds 
Year ending 1990 Bonds 1995 Bonds 1998 Bonds 1999 Bonds 2001 Bonds 
June 30: Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 
2006 $ – $ 1,942 $ 2,315 $ 2,488 $ 13,775 $ 16,271 $ 1,940 $ 6,945 $ – $ 8,341 
2007 – 1,942 2,435 2,360 14,675 15,666 2,025 6,854 – 8,341 
2008 – 1,942 2,555 2,223 15,415 14,818 2,115 6,756 – 8,341 
2009 – 1,942 2,685 2,077 16,405 14,113 2,215 6,652 – 8,341 
2010 – 1,942 2,830 1,920 17,265 13,163 2,315 6,541 – 8,341 
2011-2015 28,775 1,006 9,435 7,888 34,915 60,224 13,405 30,746 24,125 39,469 
2016-2020 – – 20,125 4,011 47,610 49,825 17,270 26,660 24,680 31,627 
2021-2025 – – 5,210 – 88,365 32,702 22,420 21,187 24,810 25,976 
2026-2030 – – – – 92,765 7,240 29,305 13,926 31,860 18,751 
2031-2035 – – – – – – 38,290 4,437 40,945 9,409 
2036-2040 – – – – – – – – 19,545 514 

$ 28,775 $10,716 $ 47,590 $22,967 $341,190 $224,022 $131,300 $130,704 $165,965 $167,451 
(dollar amounts in thousands) Lease/Leaseback 
TFA Bridge Toll Notes Construction Loans FTA Capital Grant Bonds Obligation 
Year ending June 30: Principal Interest Principal Interest Principal Interest Principal Interest 
2006 $ 8,495 $1,317 $ 35,400 $ – $ 64,210 $ 6,028 $ 46,647 $ 12,094 
2007 21,785 560 – – 46,330 3,082 30,230 10,040 
2008 – – – – 5,000 914 7,004 8,739 
2009 – – – – 15,710 692 2,041 8,550 
2010 – – – – – – 21,239 7,900 
2011-2015 – – – – – – 7,157 40,142 
2016-2020 – – – – – – 83,115 28,160 
2021-2025 – – – – – – – – 
2026-2030 – – – – – – – – 
2031-2035 – – – – – – – – 
2036-2040 – – – – – – – – 
Thereafter – – 88,500 – – – – – 

$ 30,280 $1,877 $123,900 $ – $131,250 $10,716 $197,433 $115,625 
36 BART Annual Report 2005 


Notes to Financial Statements


(dollar amounts in thousands) 2002 SFO Extension 2004 SFO Extension 2005 General 
Premium Fare Bonds Refunding Bonds* Obligation Bonds Total 
Year ending June 30: Principal Interest Principal Interest Principal Interest Principal Interest 
2006 $ – $ 2,737 $ – $1,287 $ – $ 4,011 $ 172,782 $ 63,461 
2007 550 2,722 – 1,287 12,815 3,660 130,845 56,514 
2008 570 2,709 46,025 1,287 19,865 2,854 98,549 50,583 
2009 640 2,693 19,975 390 25,960 1,955 85,631 47,405 
2010 715 2,672 – – 870 1,856 45,234 44,335 
2011-2015 4,855 12,852 – – 4,760 8,838 127,427 201,165 
2016-2020 7,740 11,285 – – 5,665 7,859 206,205 159,427 
2021-2025 11,650 8,802 – – 7,090 6,324 159,545 94,991 
2026-2030 16,805 5,165 – – 3,360 4,330 174,095 49,412 
2031-2035 13,190 743 – – 7,720 1,888 100,145 16,477 
2036-2040 – – – – 11,895 11 31,440 525 
Thereafter – – – – – 88,500 – 

$56,715 $52,380 $66,000 $4,251 $100,000 $43,586 $1,420,398 $ 784,295 
*A rate of 1.950%, which was the actual rate as of June 30, 2005, was used for the purposes of calculating the annual interest 
payment requirements for the 2004 SFO Extension Refunding Bonds. 
8. Risk Management 
The District is partially self-insured for workers’ compensation, public liability and property damage claims. Beginning 
July 2004, the self-insured retention for workers’ compensation was increased from $2,500,000 to $4,000,000. The 
self-insured maximum for public liability and property damage remains at $2,000,000 for any one occurrence. Claims in 
excess of self-insured retentions are covered up to a total of $98,000,000 by insurance policies. There have been no 
settlement amounts during the past three years that have exceeded the District’s insurance coverage. 

The self-insurance programs are administered by independent claims adjustment firms. Claim expenses and liabilities 
are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. 
Liabilities are discounted at a 5% rate and are based, in part, upon the independent adjustment firms’ estimate of 
reserves necessary for the settlement of outstanding claims and related administrative costs, and include estimates of 
claims that have been incurred but not yet reported, including loss adjustment expenses. Such reserves are reviewed 
by professional actuaries and are subject to periodic adjustments as conditions warrant. 

The estimated liability for insurance claims at June 30, 2005 is believed to be sufficient to cover any costs arising out of 
claims filed or to be filed for accidents occurring through that date. At June 30, 2005 and 2004, the amount of these 
liabilities was $28,640,000 and $27,007,000, respectively. Changes in the reported liabilities since the beginning of the 
respective fiscal year are as follows: 

(dollar amounts in thousands) 2005 2004 
Liabilities at beginning of year $27,007 $ 29,025 
Current year claims and changes in estimates 11,953 7,910 
Payments of claims (10,320) (9,928) 
Liabilities at the end of year 28,640 27,007 
Less current portion (9,340) (10,155) 

Net noncurrent portion $19,300 $ 16,852 
BART Annual Report 2005 37 


Notes to Financial Statements


9. Federal Financial Assistance 
The U.S. Department of Transportation provides financial assistance to the District for capital projects, planning and 
technical assistance. Cumulative information for grants which were active during the year ended June 30, 2005 are 
summarized as follows: 

(dollar amounts in thousands) SFO Extension Project 
Total approved project costs $1,347,230 
Total approved federal allocations received 635,312 
Less: cumulative amounts of project costs incurred and earned (750,750) 
Capital grants receivable $ (115,438) 
(dollar amounts in thousands) Other Capital Projects 
Total approved project costs $ 762,832 
Total approved federal allocations 618,116 
Less: cumulative amounts of project costs incurred and earned (492,404) 
Remaining approved federal allocation $ 125,712 
The SFO Extension Project is mainly covered by a Federal Full Funding Grant Agreement in the amount of 
$750,000,000, which authorizes the District to incur costs or expend local funds prior to an award of federal funding 
assistance without prejudice to possible future federal participation. 

10. State and Local Financial Assistance 
Capital Assistance 

The District is eligible to receive local operating and capital assistance from the Transportation Development Act 
Funds (“TDA”). There was no TDA operating or capital assistance received in fiscal years 2005 or 2004. 

The District may be entitled to receive state operating and capital assistance from the State Transit Assistance 
Funds (“STA”). These funds are allocated by MTC based on the ratio of the District’s transit operation revenue and 
local support to the revenue and local support of all state transit agencies. The District received an STA capital 
allocation amounting to $1,170,000 in October 2003, of which $837,000 was earned during fiscal year 2005 (zero in 
fiscal year 2004). 

Operating Assistance 

The District receives Paratransit funds provided to cities and transit operators from Alameda County Measure B funds 
to be used for services aimed at improving mobility for seniors and persons with disabilities. The Alameda County 
Transportation Improvement Authority (“ACTIA”) is the administrator of Measure B funds. A summary of the 
transactions related to the Measure B funds allocated to the District for fiscal years 2005 and 2004 are as follows: 

(dollar amounts in thousands) 2005 2004 
Prior year allocation received as revenue in the current year $ 8 $ 209 
Current year allocation received as revenue in the current year 1,211 1,054 
Current year allocation accrued as revenue in the current year 240 344 

$1,459 $ 1,607 
38 BART Annual Report 2005 


Notes to Financial Statements


The District’s revenues in fiscal 2005 and 2004 that relate to the Measure B funds were $1,459,000 and $1,607,000, 
respectively. 

The financial assistance from San Mateo County Transit District (“SamTrans”) relates to the reimbursement of a portion 
of the operating costs in excess of fare revenues identified to the SFO Extension, which covers the Colma, South 
San Francisco, San Bruno, San Francisco International Airport and Millbrae stations. For fiscal year ended June 30, 
2005, the District recognized $14,730,000 ($18,268,000 in 2004) in operating financial assistance from SamTrans. 

11. Employees’ Retirement Benefits 
Plan Description 

All employees are eligible to participate in the Public Employees’ Retirement Fund (the “Fund”) of the State of 
California’s Public Employees’ Retirement System (“CalPERS”) under the Miscellaneous Plan and the Safety Plan of the 
San Francisco Bay Area Rapid Transit District. The Fund is an agent multiple-employer defined-benefit retirement plan 
that acts as a common investment and administrative agent for 2,582 local public agencies and school districts within 
the State of California. The Fund provides retirement, disability, and death benefits based on the employee’s years 
of service, age and compensation. Employees vest after five years of service and may receive retirement benefits at 
age 50. These benefit provisions and all other requirements are established by State statute and District contractual 
agreements. 

Copies of CalPERS’ annual financial report may be obtained from their Executive Office — by writing or calling the 
Plan: California PERS, P.O. Box 942709, Sacramento, CA 94229-2709, (916) 326-3420. A separate report for the 
District’s plan is not available. 

Funding Policy and Annual Pension Cost 

The Plan’s funding policy provides for periodic District contributions at actuarially-determined amounts sufficient to 
accumulate the necessary assets to pay benefits when due as specified by contractual agreements. The individual entry 
age normal cost method is used to determine the normal cost. Under this method, projected benefits are determined 
for all members and the associated liabilities are spread in a manner that produces level annual cost as a percent of pay 
in each year from the age of hire (entry age) to the assumed retirement age. Beginning on July 1, 1997, the unfunded 
actuarial accrued surplus or liability (past service liability) is amortized as a level percentage of future covered payroll 
over 13 years for the Miscellaneous Plan and the Safety Plan. 

The District’s covered payroll for employees participating in the Fund for the years ended June 30, 2005 and 2004 was 
$234,793,000 and $222,678,000, respectively. The District’s 2005 and 2004 payroll for all employees was $261,269,000 
and $245,589,000, respectively. The District, due to Collective Bargaining Agreements, also reimburses the employees 
for their contributions, which are 9% for public safety personnel and 7% for miscellaneous covered employees. Effective 
October 1, 2001 and through June 30, 2004, due to the 2001 Collective Bargaining Agreements and because of the 
superfunded status of the Miscellaneous Plan, all employees, except sworn police officers, were not required to make 
contributions to the Fund. 

Through fiscal year 2004, the Miscellaneous Plan was considered superfunded which means that the actuarial value 
of assets exceeds the present value of benefits. Because of the superfunded status, the District was not required to 
make contributions to the Miscellaneous Plan for covered employees. Instead, the District was allowed to cover the 
Miscellaneous employees’ member contributions using the employer assets in the Miscellaneous Plan. Beginning in 
fiscal year 2005, the Miscellaneous Plan was no longer superfunded. Hence, the District resumed its contributions to 
the Miscellaneous Plan for covered employees. 

The annual required contribution for fiscal year 2005 was determined by an actuarial valuation of the Plans as of June 
30, 2002. The contribution rates for fiscal year 2005 were 2.615% (0% in 2004) of covered payroll for the Miscellaneous 
Plan and 28.910% (2.897% in 2004) for the Safety Plan. The significant actuarial assumptions used in the 2002 valuation 

BART Annual Report 2005 39 


Notes to Financial Statements


to determine the annual required contribution were an investment rate of return of 8.25%, projected salary increases 
from 5.75% to 14.20% depending on age, service and type of employment, and annual payroll increases of 3.50% 
attributable to inflation and 0.25% due to production growth. 

Since the District has made the actuarially-determined required contributions since 1988, the pension liability or asset 
was zero at June 30, 2005, in accordance with GASB Statement No. 27, Accounting for Pensions by State and Local 
Governmental Employers. 

The three-year trend information for the Fund of the actuarially required employer contribution is as follows: 

Annual Pension Percentage of Net Pension 
(dollar amounts in thousands) Fiscal Year Ending Cost (APC) APC Contribution Obligation 
Miscellaneous Plan: June 30, 2003 $ – – $ – 
June 30, 2004 $ – – $ – 
June 30, 2005 $ 5,586 100% $ – 
Safety Plan: June 30, 2003 $ 221 100% $ – 
June 30, 2004 $ 465 100% $ – 
June 30, 2005 $ 4,534 100% $ – 

Funded Status 

The funding status applicable to the District’s employee group at June 30, 2004 (the latest available for the Fund) is 
summarized as follows: 

Funded Status of the Miscellaneous Plan 

(dollar amounts in thousands) Entry Age Unfunded UAAL as a 
Normal Actuarial Value Liability Funded Annual Percentage 
Valuation Date Accrued Liability of Assets (Excess Assets) Status (%) Covered Payroll of Payroll (%) 
6/30/02 $ 801,662 $944,685 $(143,023) 117.8 $196,260 (72.9) 
6/30/03 939,072 950,571 (11,499) 101.2 202,170 (5.7) 
6/30/04 1,023,593 992,217 31,376 96.9 209,675 15.0 

Funded Status of the Safety Plan


(dollar amounts in thousands) Entry Age Unfunded UAAL as a 
Normal Actuarial Value Liability Funded Annual Percentage 
Valuation Date Accrued Liability of Assets (Excess Assets) Status (%) Covered Payroll of Payroll (%) 
6/30/02 $ 78,154 $ 80,207 $ (2,053) 102.6 $12,753 (16.1) 
6/30/03 100,960 82,329 18,631 81.5 14,277 130.5 
6/30/04 113,237 87,575 25,662 77.3 16,040 160.0 

12. Money Purchase Pension Plan 
Most District employees participate in the Money Purchase Pension Plan, which is a supplemental retirement defined 
contribution plan. In January 1981, the District’s employees elected to withdraw from the Federal Social Security System 
(“FICA”) and established the Money Purchase Pension Plan. The District contributes an amount equal to 6.65% of 
eligible employees’ annual compensation (up to $29,700 after deducting the first $133 paid during each month) up to 
a maximum annual contribution of $1,868. Non-represented employees receive an additional 1.627% of annual regular 
earnings up to $160,000. Additionally, effective October 1, 2001 and through June 30, 2004, most employees received 
3.5% of their wages subject to certain funding thresholds in the CalPERS Retirement Plan. Each employee’s account is 
available for distribution upon such employee’s termination. 

40 BART Annual Report 2005 


Notes to Financial Statements


The District’s total expense and funded contribution for this plan for the years ended June 30, 2005 and 2004 
were $7,050,000 and $6,947,000, respectively. The Money Purchase Pension Plan assets at June 30, 2005 and 
2004 (excluded from the accompanying financial statements) per the plan administrator’s unaudited report were 
$258,846,000 and $260,656,000, respectively. At June 30, 2005, there were approximately 274 (251 in 2004) 
participants receiving benefits under this plan. 

The plan issues a publicly available financial report that includes financial statements and required supplementary 
information. This report may be obtained by writing or calling: BART Investments Plans Committee, 300 Lakeside 
Drive, Oakland, California 94612, (510) 464-6238. 

13. Other Postemployment Benefits 
Postemployment Health Care Cost 

In addition to the retirement benefits described in Notes 11 and 12, and specified in the District’s contractual 
agreements, the District provides postemployment health care benefits assistance to employees. Most employees who 
retire directly from the District or their surviving spouses are eligible if the employee retires at or after age 50 with a 
minimum of 5 years of service with the District, elects to take an annuity from CalPERS and makes a timely election of 
retiree medical. Currently, 1,061 retirees and surviving spouses (915 in 2004) are provided this benefit. The District paid 
up to $655,000 and $508,000 per month for health insurance premiums for the retirees and surviving spouses during 
fiscal years 2005 and 2004, respectively. These benefits, less a modest premium contribution, are fully paid by the 
District and accounted for on a pay-as-you-go basis. Cash reimbursements of these benefits totaled $7,124,000 in 
2005 ($5,525,000 in 2004). 

Retiree Health Benefit Trust 

In 2004, GASB issued Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment 
Benefits Other Than Pensions. The new GASB statement will require the District to change its accounting for OPEB 
from pay-as-you-go to an accrual basis. If an employer elects to fund its OPEB liability, GASB 45 requires that for 
contributions to be recognized as an offset to the employer’s actuarial required contribution, the contributions must 
be paid out in benefits or irrevocably transferred to a trust or an equivalent arrangement, and legally protected from 
creditors of the employer. The District will be required to implement the requirements of Statement No. 45 beginning 
in fiscal year 2008. 

On May 18, 2004, the District created the Retiree Health Benefit Trust for the San Francisco Bay Area Rapid Transit 
District (the “Trust”). The purpose of establishing the Trust is to facilitate the provision of medical benefits and other 
health and welfare benefits for the qualifying retirees of the District; to provide the means for financing the costs 
and expenses of operating and administering such benefits; to hold Trust assets for the sole and exclusive purpose of 
providing benefits to participants and beneficiaries; and to defray the reasonable expenses of administering the Trust 
and designated plans. Assets placed into the Trust cannot be used for any other purposes and are not available to 
satisfy general creditors of the District. Under California state law, the restrictions on the use of any proceeds from 
liquidation of the Trust are significant enough to render the Trust effectively irrevocable. The Trust is administered by 
one or more Trustees appointed by the District’s Board of Directors. Currently, the Board has appointed the District’s 
Controller-Treasurer as the Trustee. 

In fiscal year 2004, the District sold shares it had received in a transaction involving the demutualization of Principal 
Life Insurance Company. The demutualization-related cash received was transferred to the Trust in recognition of the 
District’s desire to set aside funds that can be used to satisfy its retiree health benefits funding obligation. In addition to 
the demutualization-related cash, the District had also contributed in fiscal year 2005 cash proceeds from operations, 
which brought the total District contributions to the Trust as of June 30, 2005 to $36,222,000, which is shown as a 
special item (expense) in the statements of revenues, expenses and changes in net assets. At June 30, 2005, assets 
held in the Trust included investment in money market, U.S. Treasury obligations, corporate obligations, foreign 
obligations and domestic common stock with an aggregate fair value of $39,590,000. These investments are included 

BART Annual Report 2005 41 


Notes to Financial Statements


in the District’s financial statements and are restricted to use for payment of retiree benefit liabilities that will be 
recorded when GASB 45 is adopted. 

14. Board of Directors’ Expenses 
Total Directors’ expenses, consisting of travel and other business related expenses for the years ended June 30, 2005 
and 2004 amounted to $28,000 and $22,000, respectively. 

15. Transit Financing Authority 
The Joint Exercise of Powers Agreement (the “Agreement”), dated August 1, 1991, between the District and MTC 
provided for the creation of the Transit Financing Authority (the “Authority”), a public instrumentality of the State of 
California. The initial term of the Agreement was for ten years, unless extended or earlier terminated. On May 1, 1998, 
the term of the Agreement was extended to August 1, 2010. The Authority was formed for the purpose of providing 
financing and contracting for public transit improvements, including the refinancing of prior indebtedness and 
acquiring, selling and financing public capital improvements, working capital, liability and other insurance needs, 
and for the specific purpose of assisting in financing the District’s East-Bay and West-Bay extensions. The Authority’s 
financial information is presented as a blended component unit of the District’s financial statements because the 
Authority provides services almost exclusively to the District. 

The governing board of the Authority consists of two members each from the District and MTC. Neither the District 
nor MTC is responsible for any debt, liabilities or obligations of the Authority. 

At the end of the term or upon the earlier termination of the Agreement, all assets of the Authority shall be distributed 
to the two participants, and any surplus money on hand shall be returned to these participants in proportion to their 
respective contributions to the Authority. 

A summary of the amount and percentage of the Authority’s total assets, total liabilities and total net assets as 
compared with the District is as follows: 

(dollar amounts in thousands) 2005 2004 
Authority’s total assets 

Amount $ 94,686 $ 94,258 
As a % of District's total assets 1.6% 1.5% 
Authority’s total liabilities 
Amount $ 94,686 $ 94,258 
As a % of District's total liabilties 5.6% 5.4% 
Authority’s total net assets 
Amount $ – $ – 

The Authority issues a financial report that includes financial statements and required supplementary information. 
This report may be obtained by contacting the District’s Controller-Treasurer at 300 Lakeside Drive, P.O. Box 12688, 
Oakland, California 94604. 

42 BART Annual Report 2005 


Notes to Financial Statements


16. Related Organizations and Projects 
Capitol Corridor Joint Powers Authority 

The Joint Exercise of Powers Agreement dated December 31, 1996, between the District and five other transportation 
authorities in surrounding counties (“Agencies”) provided for the creation of the Capitol Corridor Joint Powers 
Authority (“Capitol Corridor”), a public instrumentality of the State of California. Capitol Corridor was formed for the 
purpose of administering and managing the operation of the Capitol Corridor Rail Service as part of the California 
intercity passenger rail system. The District is the managing agency of Capitol Corridor and in that capacity shall 
provide all necessary administrative support to Capitol Corridor. Capitol Corridor entered into an Interagency Transfer 
Agreement with the State of California and assumed administration and operation commencing on July 1, 1998. 
The initial term of the Interagency Transfer Agreement was for three years beginning July 1, 1998, and was extended 
for three additional years effective July 1, 2001. In 2004, State legislation was enacted that eliminated the sunset date 
of the Interagency Transfer Agreement, which now exists indefinitely. 

The governing board of Capitol Corridor consists of six members from the District and two members from each of the 
five other Agencies. Neither the District nor the other Agencies are responsible for any debt, liabilities and obligations 
of Capitol Corridor and the District would not be entitled to any of Capitol Corridor’s net assets should it terminate. 

The District charged Capitol Corridor a total of $2,982,000 for marketing and administrative services during 2005 
($2,858,000 during 2004). In addition, Capitol Corridor reimburses the District for its advances for capital project 
expenditures and other operating expenses. Reimbursements for expenses incurred by the District on behalf of and in 
providing services to Capitol Corridor are netted against the corresponding expense in the statements of revenues, 
expenses and changes in net assets. At June 30, 2005, unreimbursed expenses from Capitol Corridor amount to 
$8,262,000 ($10,072,000 as of June 30, 2004). All unreimbursed expenses are included as current receivables and 
other assets in the statements of net assets. As the District has no ownership involvement or ongoing financial interest 
or responsibility in Capitol Corridor, its financial statements include only amounts related to the services it provides to 
Capitol Corridor. 

Technology Reinvestment Project 

In 1994, the District and the joint venture of Hughes Transportation Control Systems, Inc. (“Hughes”), and Morrison 
Knudsen Train Control, Inc. (“HMK”) entered into a memorandum of understanding (“MOU”) to form an alliance 
(“Alliance”) to develop a cost-effective, highly reliable and safe train control system for passenger and freight-carrying 
trains. The project is partially funded under the Technology Reinvestment Project managed by the Advanced Research 
Projects Agency (“ARPA”). The Federal Transit Administration (“FTA”) has agreed to manage and oversee the project 
on behalf of ARPA. 

During fiscal year 1998, the Alliance was reorganized. Hughes and HMK withdrew and were replaced by Harmon 
Industries, Inc. (“Harmon”). In August 1998, a MOU was executed between the District and Harmon which replaced the 
1994 MOU between the District and the joint venture of Hughes and HMK. In 2000, Harmon Industries was purchased 
by GE Transportations Systems, and Harmon became known as GE Transportation Systems, Global Signaling. 

The District’s participation in this project was in the form of in-kind contributions which consist primarily of labor costs 
and direct costs that are partially reimbursable by the Alliance. As of June 30, 2005, the District had provided the 
Alliance with approximately $12,758,000 in cumulative in-kind contributions. In addition, the District incurred 
$26,200,000 of direct costs during fiscal year 2005 and 2004, of which $948,000 was reimbursed by the Alliance. 
A majority of the direct costs have been capitalized as construction-in-progress on the District’s financial statements. 
The District has no equity interest in this project. 

BART Annual Report 2005 43 


Notes to Financial Statements


East Bay Paratransit Consortium 

In 1994, the District and the Alameda-Contra Costa Transit District (“AC Transit”) executed an agreement establishing 
the East Bay Paratransit Consortium (the “Consortium”). The purpose of the Consortium is to enable the District and 
AC Transit to jointly provide paratransit services in the overlapping service area of the District and AC Transit. Revenues 
and expenditures for the Consortium are split 31% and 69% between the District and AC Transit, respectively, and 
the District’s financial statements reflect its portion of revenues and expenditures as operating activities. The District 
supported the project primarily through its own operating funds, with some financial assistance from Alameda County 
Measure B funds (see Note 10). The District has no equity interest in the Consortium. 

17. Commitments and Contingencies 
Litigation 

The District is involved in various lawsuits, claims and disputes, which for the most part are normal to the District’s 
operations. It is the opinion of the District’s management that the costs that might be incurred in the disposition of 
these matters, if any, would not materially affect the District’s financial position. 

Lease Commitments 

The District leases certain facilities under operating leases with original terms ranging from one to 50 years with 
options to renew. 

Future minimum rental payments under noncancelable operating leases with initial or remaining lease terms of over 
one year at June 30, 2005 are as follows: 

(dollar amounts in thousands) Operating Leases 
2006 $ 7,176 

2007 10,113 

2008 10,846 

2009 10,767 

2010 10,668 

2011-2015 44,541 

2016-2020 12,500 

2021-2025 12,500 

2026-2030 12,500 

2031-2035 12,500 

2036-2040 12,500 

2041-2045 12,500 

2046-2050 12,500 

2051-2055 2,500 

Total minimum payments $ 184,111 
Rent expense under all operating leases was $9,127,000 and $7,881,000 for the years ended June 30, 2005 and 2004, 
respectively. 

44 BART Annual Report 2005 


Notes to Financial Statements


Fruitvale Development Corp. 

On October 1, 2001, the District entered into a ground lease agreement with Fruitvale Development Corp (“FDC”) 
pertaining to 1.8 acres of land for the purpose of constructing thereon portions of a mixed-use development project 
commonly known as the Fruitvale Transit Village, which was planned to consist of approximately 250,000 square feet of 
commercial, community service and residential improvements. The lease agreement was effective December 9, 2003, 
the regular term date, which was also the opening date, and continues through January 31, 2077. 

The terms of the lease require FDC to pay the District a Base Rent and a Percentage Rent. The Base Rent is a fixed 
amount determined at the inception of the lease subject to periodic CPI adjustments. Percentage Rent is calculated 
equal to 15% of annual net revenues, as defined in the ground lease agreement. 

The District provided FDC a Rent Credit with an initial amount of $7,247,000, to acknowledge its assistance in obtaining 
grants for the construction of a Replacement BART Commuter Parking Garage near the Fruitvale Transit Village. 
The Rent Credit earns interest on the outstanding balance at simple interest based on the prime rate and can only be 
applied to satisfy the Base Rent. Based on the agreement, FDC shall not be under any obligation to make any cash 
payment to the District for Base Rent at any time that Rent Credit still has a positive balance. Changes in the Rent 
Credit for fiscal years 2005 and 2004 are summarized as follows (dollar amounts in thousands): 

2005 2004 
Rent Credit at beginning of year $ 7,316 $ 7,247 
Annual base rent applied against the credit (98) (98) 
Interest earned during the year 363 167 

Rent Credit at end of year $ 7,581 $ 7,316 
18. Subsequent Event 
Issuance of Sales Tax Revenue Bonds, Refunding Series 2005 A 

On August 10, 2005, the District issued the Sales Tax Revenue Bonds, Refunding Series 2005 A (2005 Bonds) totaling 
$352,095,000. The proceeds of the 2005 Bonds, including the net original issue premium of $17,151,000, were 
1) placed into an irrevocable escrow account to advance refund $349,925,000 in aggregate principal amount of sales 
tax revenue bonds related to the Sales Tax Revenue Bonds, Series 1995, 1998, 1999, and 2001 to achieve cash flow 
savings and 2) to pay costs of issuance of the 2005 Bonds. The 2005 Bonds are special obligations of the District, 
payable from and collateralized by a pledge of sales tax revenues. The 2005 Bonds consist of $264,625,000 in serial 
bonds due from 2006 to 2030 with interest rates ranging from 3.00% to 5.00% and two 5.00% term bonds in the 
amounts of $55,685,000 and $31,785,000 due in 2030 and 2034, respectively. 

BART Annual Report 2005 45 


Sources and Uses of Funds 
Sources and Uses of Operating Funds


2005 2004 
(dollar amounts in thousands) Amount Percent Amount Percent 
Sources of Operating Funds 

Transaction and Use Sales Tax $ 118,879 27% $ 111,200 26% 
(Net of transfers to nonoperating activities) 
Passenger Fares 233,651 53% 220,391 52% 
Property Tax 22,412 5% 21,372 5% 
Other: 
Investment Income and Other Operating Revenues 17,113 4% 15,478 4% 
Construction Funds (Capitalized Costs) 33,612 7% 34,758 8% 
Local Financial Assistance 16,680 4% 19,875 5% 

Total — Other 67,405 15% 70,111 17% 
Total Sources of Operating Funds $ 442,347 100% $ 423,074 100% 
Uses of Operating Funds 

Maintenance $ 163,051 37% $ 145,683 34% 
Transportation 127,391 29% 121,257 29% 
General Administration 109,130 24% 102,849 24% 
Police Services 37,510 8% 31,080 7% 
Construction and Engineering 16,030 4% 15,824 4% 
Other: 
Capital Designation (6,460) –1% 8,043 2% 
Decrease in Net Assets — Operating Fund (4,305) –1% (1,662) 0% 

Total — Other (10,765) –2% 6,381 2% 
Total Uses of Operating Funds $ 442,347 100% $ 423,074 100% 
Sources and Uses of Capital Funds 


2005 2004 
(dollar amounts in thousands) Amount Percent Amount Percent 
Sources of Capital Funds 

District $ 36,564 32% $ 51,640 41% 
Federal 35,951 31% 43,377 34% 
State 14,591 13% 16,254 13% 
Local 27,405 24% 15,378 12% 

Total Sources of Capital Funds $114,511 100% $ 126,649 100% 
Uses of Capital Funds 

Construction: 

Line $ 54,388 48% $ 60,471 48% 
Systemwide 16,183 14% 17,015 13% 
Support Facilities 365 0% 626 0% 
Total — Construction 70,936 62% 78,112 61% 
Equipment: 
Train Control 7,128 6% 6,363 5% 
Transit Vehicles 9,494 8% 13,360 11% 
Automatic Fare Collections 11,488 10% 24,503 19% 
Management Information Systems 10,457 9% 2,878 2% 
Other Equipment 3,215 3% 599 1% 
Total — Equipment 41,782 36% 47,703 38% 

Studies and Other 1,793 2% 834 1% 
Total Uses of Capital Funds $114,511 100% $ 126,649 100% 
46 BART Annual Report 2005 


BART Annual Report 2005 47 
Performance Highlights 
2005 2004 
Rail Ridership 
Annual passenger trips 92,756,099.00 91,042,192.00 
Average weekday trips 310,716.58 306,569.51 
Average trip length 13.54 13.49 
Annual passenger miles 1,255,540,963.80 1,228,433,264.37 
Daily train on-time performance 91% 93% 
System utilization 31% 29% 
End-of-period ratios 1: 
Peak patronage 57% 57% 
Off-peak patronage 43% 43% 
Operations 
Passenger accidents/million passenger trips 5.93 Data Not Available 
Passenger crimes/million passenger trips 28.08 Data Not Available 
Financial 
Net passenger revenue $233,651,427 $220,391,194 
Other operating revenue $17,112,605 $15,478,739 
Total operating revenue $250,764,032 $235,869,933 
Net operating expense, excluding depreciation $419,499,394 $381,935,762 
System farebox ratio: Net passenger revenue/net operating expense 56% 58% 
System operating ratio: Total operating revenue/total operating expense 60% 62% 
Net rail passenger revenue/passenger mile $0.19 $0.18 
Rail operating cost/passenger mile 32.3¢ 29.9¢ 
Net average rail passenger fare including FastPass $2.51 $2.42 
Note: 1. Six hour peak period (three hours a.m. and three hours p.m.) 
Daily Train On-Time Percent 
JUL 
100 
80 
60 
40 
20
1 
Average Weekday Trips 
JUL 
350000 
300000 
250000 
200000 
150000 
100000 
50000
0 
AUG 
AUG 
SEP 
SEP 
OCT 
OCT 
NOV 
NOV 
DEC 
DEC 
JAN 
JAN 
FEB 
FEB 
MAR 
MAR 
APR 
APR 
MAY 
MAY 
JUN 
JUN 
FY05 FY04

48 BART Annual Report 2005 
¦Established in 1957 by the California State Legislature. 
¦Authorized to plan, finance, construct, and operate a 
rapid transit system. 
¦Governed by the Board of Directors elected for four-
year terms by voters in nine election districts within the 
counties of Alameda, Contra Costa and San Francisco. 
BART Board of Directors — Fiscal Year 2005 
Joel Keller President — Antioch 
Carole Ward Allen Vice President — Oakland 
Members of the Board 
Gail Murray* District 1 Orinda 
Joel Keller District 2 Antioch 
Bob Franklin* District 3 Berkeley 
Carole Ward Allen District 4 Oakland 
Zoyd Luce* District 5 Dublin 
Thomas M. Blalock District 6 Fremont 
Lynette Sweet District 7 San Francisco 
James Fang District 8 San Francisco 
Tom Radulovich District 9 San Francisco 
*elected on Nov. 2, 2004 
Board Appointed Officers 
Thomas E. Margro General Manager 
Sherwood Wakeman General Counsel 
Scott Schroeder Controller/Treasurer 
Ken Duron District Secretary 
The annual report is published by the District pursuant to 
Section 28770, Public Utilities Code of the State of California. 
© 2006 BART 
BART Governance 

connect

www .bart.gov 
San Francisco Bay Area Rapid Transit District (BART) 
Headquarters in Oakland, California 

P.O. Box 12688 
Oakland, CA 94604-2688 
510/464-6000