BART Board delays next fare increase by six months

Today the BART Board of Directors put the brakes on the next regularly scheduled fare increase.  Instead of ticket prices going up on January 1, 2012 as originally planned, they won’t increase until six months later – on July 1, 2012.  This was the last piece of the Board’s overall plan to thank riders for their loyalty during these tough economic times.

“I am delighted we are able to show our appreciation to our customers while at the same time create jobs for our economy and the working families in the BART District” BART Board President James Fang said. 
 
At today’s Board meeting, Fang said the six-month delay on a fare increase, which is about $2.2 million in savings to the BART riders, would have the additional benefit of being ploughed back into the local economy and creating jobs for Bay Area residents. 
 
“Instead of the money going directly to BART, our customers can then use their savings to purchase, for example, clothes,” Fang said. “That in turn creates more job opportunities in the economy because these clothing stores will then need to purchase clothing from their suppliers, which must employ people to fulfill those orders. Of course, once the clothes come into the stores, the retailers will need to employ people to restock their shelves. If you apply a multiplier effect, the financial impact and job creation of these savings could double or triple in scope. BART has worked mightily to not only maintain a 96 percent on time transit system but to continue to find ways to create jobs for our residents.”

In May 2003, the Board implemented a policy to raise fares every two years by the cost of inflation minus 0.5% to ensure the agency doesn’t rely on inflationary increases alone but also tightens its belt on expenditures.

Delay to Fare Increase Completes Board’s $4.5M  “Customer Appreciation Package”
Today’s decision to delay the fare increase by six months is the final piece in the Board’s $4.5 million “Customer Appreciation Package.”  Earlier this year, BART projected it would have an additional $4.5 million to spend in the current fiscal year’s budget.

On Thursday, July 22, the board voted to use about half the additional funds on the following:

• $1 million for BART’s rainy-day reserves, bringing total reserves to $25 million
• $750,000 for replacement of seats and deep-cleaning of 50 rail cars
• $200,000 to defer increase in East Bay paratransit fares for 4 months
• $150,000 for emergency operations and BART Police facility
• $100,000 to solicit input from frontline employees in order to improve customer service
• $75,000 on monitors displaying real-time train departure information placed at venues near BART
• $62,500 to convert four part-time utility workers to full-time

BART COST-CUTTING & STATE FUNDING HELPED TO CREATE $4.5M IN PROJECTED ADDITIONAL REVENUES
One major factor contributing to BART’s projected $4.5 million in additional revenues for the current fiscal year (FY11) is the agency’s management has been carefully cutting labor and non-labor costs over the past several years to match lower ridership and sales tax revenues.  The ailing economy has caused these two income sources to suffer.  Together they account for about 85% of BART’s operating revenues. 

Another significant factor contributing to the surplus is the court-ordered, partial restoration of public transit funding.  During the past two budget cycles, the State of California diverted all public transit funding, called the State Transit Assistance (STA), into its general fund.  That diversion left agencies like BART with huge holes in their budgets.  However the recent court ruling, coupled with new legislation to fund public transit, means BART will have $26 million in STA funds for the current budget year and will hopefully continue to receive approximately $23 million in the budget years to follow.

“While the newly approved STA legislation appears to provide BART with an on-going revenue stream, the funding is more vulnerable to state budget diversions than previous STA revenues that were specifically directed to public transit by a voter-approved constitutional amendment, Proposition 42,” BART General Manager Dorothy Dugger said.  “Given the transit industry’s experience with STA funding and the State of California’s ongoing budget problems, future STA revenues are not a guarantee. The Metropolitan Transportation Commission has cautioned transit operators that the law is subject to change and we should treat the funding accordingly. Due to the uncertainty surrounding future STA funds and the economic recovery, we will continue to emphasize controlling expenses.”

 

Updated: August 26, 2010 5:36 pm