Board Action Leads to Balanced Budget

News Articles
05/24/2011

  “Fiscal Emergency” Averted By Tough Decisions

A series of moves by the AC Transit Board of Directors to streamline and re-organize the agency have resulted in a balanced budget and staved off the immediate potential for a financial crisis.   

The Board’s decisions have enabled the District to refine its financial projections and avert the need for a public hearing this week to consider declaring a “fiscal emergency.”

“It has been extremely difficult to balance this budget and it is a tentative balance at best,” said Interim General Manager Mary King. “Without cuts in expenditures and increases in revenue there is no way we would have been able to balance the budget at this time and stave off further cuts to service. Thankfully our Board has demonstrated the intelligence and the courage to make difficult business decisions in these unpredictable economic times.”

 In recent weeks, action by the Board to reduce overall expenses and/or increase potential revenues include the closure of the Division 3 bus yard in Richmond and the Paratransit Unit at Division 8 in Oakland; the outsourcing of the Dumbarton Bridge services and the PBX call center; elimination of 54 employee positions, including 20 management slots; and a 10-year fare policy that begins in August with 10-cent increase in the basic adult fare.

In addition, the District had already:

-         Eliminated another 90 positions including a third of its executive management staff

-         Curtailed the use of district vehicles

-         Canceled management leave benefits.

-         Gotten concessions from the bus operators’ Amalgamated Transit Union.

-         Adopted a fare increase

-         Scrutinized all expenditures and eliminated all but those deemed to be essential

-         Instituted a hiring freeze for all positions unless critical to maintaining operations

-         Mandated staff to achieve operating/service efficiencies of 15 percent of the budget

-         Adjusted service, reducing operational bus hours by 13 percent as of October last year.

The Board has also cut its salary by 5%, cut its travel by 50%, and eliminated a special travel account for transit advocacy.

These actions have allowed the District to develop a balanced budget for fiscal years 2011-12 and 2012-13, although some further adjustments may occur before it is finalized and presented to the Board of Directors on June 8.  At any rate, if the agency is to remain solvent more tough decisions are ahead.

 “We are doing things right, but our status is still tenuous,” King said. “The cost of fuel is volatile and revenue from sales taxes is unpredictable. We still need to deal with deferred bus maintenance and capital improvement issues. So, it is now critical for us to get some concessions from the unions representing our other employees.”