BART Board passes interim budget with $24M deficit


BART Board passes interim budget with $24M deficit

Budget preserves train service and safety levels, establishes parking fees, eliminates positions and freezes top managers' salaries

Today BART's Board of Directors passed the Fiscal Year 2006 (FY06) Interim Operating Budget, which for the fourth year in a row, deals with the effects of a struggling economy, lackluster ridership levels and skyrocketing health care and benefits costs.

These factors have caused expenses to greatly outpace revenues. As a result, the $523.8 million Interim Operating Budget cuts costs through expense reductions and the elimination of 115.5 positions, half of which are already vacant.  

LAYOFFS AND FREEZING TOP MANAGERS SALARIES
While the Board approved the number of position cuts, board members requested staff to bring back further details on the cuts.  The Board also froze the salaries of the District's Executive Management for one year.

PASSENGER IMPACTS
The budget not only preserves the train service and safety levels that BART passengers currently enjoy, it will also add more trains to the morning commute and improve upon BART's 94% average passenger on-time performance record.

"Although these last four years have been very difficult financially, I am proud that we have been able to deal with the severe economic downturn without ever having to make cuts to train service frequency, or on-time performance," said BART General Manager Tom Margro. "Time and time again, passengers tell us train service frequency and on-time performance are the most important factors in their decision to ride BART. Since passenger fares account for 60% of BART's operating revenue source, it's crucial we do everything we can to give the customers the service they want so they'll keep riding."

That said, the budget will still have impacts on BART passengers because it also deals with a $24 million deficit by:

  • ELIMINATION OF 115.5 POSITIONS (nearly half of which are already vacant): Position reductions include some Station Agents ? But all stations will be scheduled to be staffed during all hours of operation
  • PARKING CHARGES AT 10 EAST BAY STATIONS: $1.00/day at MacArthur, Lake Merritt, Rockridge, Orinda, Lafayette, Walnut Creek, Dublin/Pleasanton, North Berkeley & Ashby Stations and $5.00/day at West Oakland
  • $0.10 TICKET SURCHARGE: BART will use these revenues to fund capital projects like keeping the new fare gates, ticket machines and refurbished BART cars in working order. SamTrans would use its portion of the revenues to offset the operating costs of the new extension to San Francisco Int'l Airport and Millbrae.
  • REDUCTION TO THE SENIOR, DISABLED AND CHILD (5 years to 12 years) DISCOUNT: BART currently offers 75% off a full fare ticket, which is the most generous discount in the Bay Area. The discount will now be reduced to 62.5%.
  • SHORTENING SOME PEAK PERIOD TRAINS IN ORDER TO MORE CLOSELY MATCH DEMAND: This may result in slightly more crowded trains during the peak period on some lines

BUDGET UNBALANCED: $24 MILLION DEFICIT
Even with these measures, the FY06 Interim Operating Budget is unbalanced and carries a $24 million deficit. Margro said that's in large part due to the increase in health care and benefit costs over the next fiscal year and beyond.

"Virtually every business and public agency has been slammed with these skyrocketing health care benefit costs and BART is no exception," Margro said.  "Over the next four years these costs will increase another 70%."

In order to achieve a balanced budget, BART's Board directed staff to find savings in the on-going contract negotiations with BART's five labor unions.