Revenue from riders covers 10 percent of costs, according to calculations introduced by BART Director Debora Allen during the meeting.
“When you look at what it costs to operate the system … taxpayers are paying for about 90 percent of the cost,” Ms. Allen said.
Financial data shows the agency operating with significant deficits that continue to grow, with labor expenses exceeding what was budgeted for by about $43 million last fiscal year.
Fourth-quarter fiscal documents showed operating deficits of more than $680 million for the year. Additionally, capital deficits—related to infrastructure costs—surpassing a billion dollars annually further complicate the financial dilemma, Ms. Allen said during the meeting.
Revenue from riders totaled $188.3 million for the year, $34.3 million less than anticipated due to lower-than-projected ridership, according to the agency’s budget director Christopher Simi.
However, BART’s funding from sales and property taxes came in higher than expected, totaling $327 million and $62 million respectively.
Financial assistance from other sources also exceeded expectations, including more than $100 million from the state, the Valley Transit Authority—a Silicon Valley-based agency that partners with BART—and other sources.
Additionally, federal assistance for the year totaled about $316 million, according to BART.
Though the agency utilizes separate operating and budgets for capital infrastructure—including trains and tracks, among other things—no such documents for the latter were presented during the meeting, which some said only adds to the complexity in understanding the agency’s fiscal situation.
Directors questioned multiple line items on the documents presented, including labor and other expenses showing multimillion-dollar discrepancies, asking staff how such high levels of variance could occur.
“If we don’t control [these] expenditures, it will blow a hole in the fiscal year 2024 budget,” Robert Raburn, BART director, said during the meeting.
The agency’s budget director said that leadership and staff are aware of the issue and are focusing on finding solutions.
“We are investigating it,” Mr. Simi said. “It is a very serious issue, and one that we’re working on.”
Though not planned, discussion related to the budget occurred after two directors, Ms. Allen and Mr. Raburn, requested such. The items were previously assigned to the consent calendar—designed to shorten the length of meetings—where agenda items are grouped and passed together with no debate.
Some took exception to the attempt to rush through the proceedings without discussing the budgets.
“I really don’t think we should take something as important as our quarterly financial report ... and put it on the consent calendar with no presentation,” Ms. Allen told fellow directors during the meeting. “It’s very concerning.”
Formal discussion in open sessions—where the public can attend and view proceedings online—allows for greater transparency and is needed due to the complex nature of the spreadsheets, she said.
“If it’s on the consent agenda and there is no staff presentation and no discussion of these financial results, then the public doesn’t get to really understand it either,” Ms. Allen said. “When staff does a board presentation on the [quarterly financial report], we, and the public, get much more information with respect to the report and explanations.”
Some in the audience agreed that more budget discussions would be beneficial and urged directors to consider creating a committee to address the issue.
“Maybe we should go back to having finance committee meetings like we did years ago, and then we can talk about these items at length,” one public commenter said during the meeting. “They’re important.”
Seeking to clarify the matter, Janice Li, BART board president, said she placed the items on the consent calendar in an attempt to expedite the hearing—noting that some in the room had flights to catch.
“I want to be clear; it was my decision to have these items on consent,” Ms. Li said during the meeting. “It was not [staff] trying to obfuscate anything and certainly not me trying to do that.”
Discussions ultimately consumed about 30 minutes of the nearly seven-hour-long meeting, with several other budget items passed on consent with no debate.
With the agency facing hundreds of millions of dollars in annual operating deficits and about $16 billion in capital deficits anticipated over the next 10 years, some directors said more prudent fiscal management and increased transparency are needed.
Ms. Li did not respond to requests for comment on deadline.
