BART Sees $4 Million Budget Surplus at End of This Fiscal Year

BART_pic_small.jpgFlickr Photo: David

BART has once again bucked the trend of financial pain among other Bay Area transit operators by realizing a budget surplus at the end of fiscal year 2010, in large part due to strong sales tax receipts in the fourth quarter. In a letter to the BART Board yesterday [PDF], General Manager Dorothy Dugger outlined the projected $4 million surplus, though she offered no recommendation for how to spend it or whether to save it.

"It appears we will finish with a positive result for the year in the
range of approximately $4 million. We had been forecasting a small
deficit, but very strong numbers for the month of June appear to have
produced small positive variances in the major categories of the
budget," Dugger wrote. "One of the primary reasons for the better than expected result was that
4th quarter sales tax (after seven straight negative quarters) grew by
3.4 percent."

Dugger also tempered her optimism by suggesting this could have been merely a fortunate aberration: "These results are not an indication that the economy has turned around
and that sales tax and ridership will resume growth. FY10 average
weekday ridership ended down 6.4 percent from FY09 and sales tax dropped
9.6 percent. Although the economy appears to be recovering, job
creation is still slow, and the 4th quarter sales tax growth may have
been a one-time fluctuation."

This $4 million surplus is in addition to $2.3 million from earlier unexpectedly good fiduciary news, money BART Board President James Fang has wanted to put toward a temporary fare rollback. Fang tried to get enough votes to pass his rollback plan at two previous BART Board meetings, but he has been unable as other directors have reacted to polls showing overwhelming public support for saving the money or spending it on train car renovations. Directors should vote on what to do with the $2.3 million at tomorrow’s monthly board meeting, but the fate of the additional $4 million is not likely to be decided then.

BART spokesperson Linton Johnson was blunt in his assessment of the news. "Nobody’s cracking open the champagne bottles by any stretch of the imagination," he said, comparing it to getting a small tax cut check during the George W. Bush presidency. "It kind of feels like a $300 check you got from the government. It’s not
enough to do anything with. It’s less than 1 percent of our budget. It’s almost a rounding error."

Johnson said he assumed the money would go to the BART general fund and would not be spent on a particular project, though he deferred to the board of directors and said they were ultimately responsible for steering BART’s financial ship.

"It’s a great problem to have, to have a $4 million surplus. I’d like to see what options staff brings," said BART Board Vice President Bob Franklin, though he said he pointed to BART’s enormous unfunded capital needs over the next twenty years as motivation for saving the funds. If the sentiment was toward spending the money, he said he would like to see improvements to train cars. "Our cars are dirty and people have wanted a cleaner vehicle. It may be wise to invest the money in that."

BART Director Tom Radulovich echoed Franklin’s feeling that the money should be saved. "I’m nervous about the economy, so part of me says hold on to the money until we see how things settle out."

If the board was leaning toward investing the money now, Radulovich also wanted train care improvements to be a priority. He said he preferred "getting rid of the last of the carpeted cars or doing those car interior modifications to create the bike space, doing more bike parking," which are "really low cost things that have lasting benefit" by bringing BART more riders and by lowering maintenance costs.

Both Radulovich and Franklin assumed there would be a significant discussion about this at tomorrow’s meeting, just as there has been for the previous surplus.

  • Scott

    BART follows a predictable pattern. Every four years, for negotiations, they’re broke (even in good years).

    Then, a few months later, extra money is found and executives, managers, and the Board receive raises and bonuses.

    Next, a whole bunch of new projects are started.

    Finally, six months before contract negotiations, BART begins issuing the press releases about their dire financial situation.

  • Give it Caltrain?

  • icarus12

    Scott, BART was and is indeed in a difficult fiscal/financial environment. The salary negotiations were in good faith. This 4 million is a pittance, but a welcome one. I hope they can use it toward cleaning up the cars and putting in more bike infrastructure. I don’t ride BART that often, but the other day I did and I felt queasy about sitting down on some of those seats. How women in skirts or anyone in shorts sits down is a mystery to me. That experience alone was enough for me to vote for more transportation funding.

  • PaulCJr

    BART should save this money in a rainy day account incase the economy takes another dive. Even though that wouldn’t provide a lot of operations money, at least they would have this surplus to go towards operations encase it experience another loss in revenue. I’d rather have dirtier trains that at least run often then cleaner less frequent trains.

  • I also agree that it needs to be put in a rainy day fund (a fund which bares interest).

  • Alex

    Hey Streetsblog! Let’s see some followup on this. Will BART execs get raises (COLA or otherwise)? I agree with the rainy day fund idea, sinking it into converting a few more cars to the plastic floors + standee friendly layout, or even a maintenance fund (maybe greasing or grinding the tracks). Or they could throw the money at something really insane like infill stations… or extra SamTrans service.

    I bet, however, that this money will end up going to cover labor costs (exec or otherwise) or going to the OAC (shudder).

    I had opportunity to take BART a few times this week and forgot how civilized it is compared to MUNI or Caltrain. My EZ-Rider read so quickly I didn’t even have to slow down for the turnstiles. All of the TOs announced ALL of the stops. One even announced, upon opening the doors, “GOOD MORNING” at every stop. The trains even glided over the track imperfections unlike the Bredas which often feel like they’re coming apart at the seams (and seconds away from a derailment… I’m looking at you car 1450 or 1550) b/t Castro and Van Ness.

  • Andy Chow

    There’s a better way to spend that “surplus”: Upgrading/replacing station signage (inside and outside). Much of the signage now are crappy, outdated, if not broken.

  • Winston

    This seems like a good opportunity to spend some more money updating car interiors or taking care of some of the vast maintenance backlog that BART faces. This is a way better use of the money than reducing fares.


BART Transit Blogger Roundtable, Part II

Flickr Photo: pbo31 Last week regional transit bloggers sat down with BART management and asked questions of General Manager Dorothy Dugger about her transit operation.  This is part two of that roundtable: Impact of economy on operating budget The biggest challenge that I’m focused on right now is certainly the effects of the economic reality […]