BART’s new Warm Springs Station in Fremont will cost the transit agency millions of dollars a year in operating expenses.
Over the years, the transit agency has spent huge sums on expanding to the suburbs, and now it’s facing serious financial challenges.
In March 2016, a mysterious electrical problem between North Concord and Pittsburg/Bay Point damaged certain BART cars and forced them out of service. In response, BART shortened its trains, thereby making them even more crowded. The problem persisted for weeks. Under a deluge of criticism, BART spokesperson Taylor Huckaby wrote on Twitter, “BART was built to transport far fewer people, and much of our system has reached the end of its useful life. This is our reality.”
Many were thrilled by the frank response, and Huckaby’s tweets became national news. The next morning, Huckaby wrote to a different user, “It’s like roof repair. Can patch here and there but eventually it must be replaced. BART is considering a $3.5Bn bond.” The tweet effectively started the campaign for Measure RR, BART’s bond measure for infrastructure repair. It passed with 70 percent of the vote in November.
Even as the Pittsburg/Bay Point station was effectively shut down, construction was underway on eBART, a new 10-mile diesel-powered train from Pittsburg to Antioch slated to open next year. Not a traditional extension, it will be a largely separate system requiring a transfer at Pittsburg. The eBART line is one of two major expansion projects underway, the other being a long-awaited extension to San Jose.
But after focusing on expansion for years, BART realized by 2015 that its aging core system required an estimated $9.5 billion in infrastructure repairs. That includes replacing its fleet of 669 railcars, 439 of which have been in use since the district opened in 1972. Measure RR was intended to replace trackway, upgrade electrical infrastructure, and make other badly needed repairs.
The emphasis on expansion has depleted BART’s finances as well: The operating costs to maintain the new stations have contributed to a projected $30 million budget deficit. The shortfall nearly led to fare hikes and service cuts earlier this year, but BART got some last-minute relief when Gov. Jerry Brown signed a new gas tax in April, sending BART an extra $16 million. The agency’s board is expected to approve its $1.9 billion budget in June for the fiscal year starting in July. But BART’s deficit exposed financial challenges that could afflict it for years to come.
Expansion is “a big reason for our budget shortfall this year,” said BART board President Rebecca Saltzman, who lives in Oakland and represents eight stations in Alameda and Contra Costa counties. She pointed out that the Warm Springs extension in Fremont, which opened in March, and eBART combined will generate a net operating expense of $9 million per year.
BART’s approach to expansion, however, has changed dramatically in recent years. As of 2013, 46 percent of BART’s capital budget for infrastructure improvements was devoted to expansion while only 31 percent was devoted to system reinvestment. Next year, BART is planning to devote 68 percent to reinvestment and only 7 percent to expansion.
In recent years, BART has also been making substantially larger contributions from its $900 million day-to-day operations budget to its capital budget. In fact, that allocation has been historically high, going from $79 million in 2013 to $140 million last year. Board members are planning to reduce the contribution by up to $16 million next year in order shore up the system’s day-to-day operations.
But Debora Allen, a chief financial officer for a construction firm who was elected to BART’s board of directors in November, opposes plans to reduce the amount of money taken from day-to-day operations for capital funds. In an interview, she argued that BART failed for years to adequately fund capital improvements, a decision that deepened the agency’s maintenance problems.
On April 26, Allen spoke at a state Assembly committee meeting in Sacramento in support of legislation by Republican state Assemblymember Catharine Baker that would prohibit BART from redirecting funds for infrastructure back to operating expenses. The legislation, AB 1509, passed the committee 5-3.
Other BART directors and the agency’s employee unions oppose the legislation; they call it an intrusion on local control.
Some of BART’s fiercest critics, like Baker and Allen, represent districts in Contra Costa and Alameda counties that have long favored system expansions and questioned the agency’s priorities. Allen represents areas around the Concord, Lafayette, Pleasant Hill, and Walnut Creek stations while Baker’s district includes five BART stations, including the end-of-the-line station at West Dublin/Pleasanton, which opened in 2011.
The BART board is expected to receive a draft Environmental Impact Report for another expansion to Livermore later this year. Baker argues that the extension could help bring in new riders by connecting BART to the ACE train that runs from Stockton to San Jose, and is even seeking to wrest the issue away from the BART board and appoint a Joint Powers Authority to take over construction of the extension.
Not only is BART dealing with increased expenses from new extensions but also declining ridership, particularly on weekends, and increased employee pension costs in the years ahead. Last year, the agency projected a $326.5 million shortfall over 10 years, not even counting the current uncertainty around federal funding.
Finding ways to increase ridership will be a key challenge for BART in the coming years, particularly on weekends, because during commute hours, trains are nearly at capacity. BART has been taking some steps to alleviate crowding, including removing some seats from 380 cars.
On weekends, however, BART trains are increasingly empty. “We suspect that Uber and Lyft have something to do with the decline in weekend ridership, but there’s no way for us to know, because we don’t have the data from Uber and Lyft,” Saltzman said.
Data is available, however, for Uber and Lyft usage at the Oakland and San Francisco airports, and it appears to show a substantial impact. BART traffic to San Francisco airport dropped 9.6 percent from 2015 to 2016 as of October, much more than the total ridership drop of 5.4 percent. Meanwhile, Uber and Lyft usage has soared from 97,779 rides in October 2014 to 628,447 rides in March.
In Oakland, BART traffic hasn’t declined quite as much—average weekday ridership for the airport extension has gone from 3,119 rides on an average weekday in the 2016-17 fiscal year to 3,017 through April of this fiscal year. Before it opened in 2014, BART had projected the Oakland airport connector would attract 3,225 daily riders by 2016. Meanwhile, use of Uber and Lyft has exploded since the services were first permitted to operate at Oakland airport in July 2015. They accounted for more than 100,000 rides in January and 11.5 percent of all ground transportation at the airport.
The board is hoping some steps, like group fares for weekend trips, can help make BART more competitive. BART also estimates it can save up to $11 million per year by cracking down on fare evasion, an issue that took on particular urgency in April when 50 to 60 teens jumped turnstiles at the Oakland Coliseum station and robbed passengers on a train.
BART is examining longer-term solutions as well. Nick Josefowitz, a solar energy entrepreneur who was elected to the BART board in 2014, advocates for building more housing and retail around stations and otherwise adding value to them as a destination.
“If we build more communities around our stations, if we build housing on our parking lots, if we work with cities to build transit-oriented development on top of our properties, we’re going to have more and more people living around BART because they want to take BART regularly,” Josefowitz said. “I think those are the folks that are going to be regular weekend riders.”
The agency’s property at the MacArthur BART station is currently undergoing a major transformation with the addition of hundreds of new housing units, including a 25-story apartment tower.
Published online on May 30, 2017 at 8:00 a.m.