BART’s Budgeting

BART’s Budget: Executive Waste and Mismanagement

Once again BART executives have mismanaged the budget for one of the nation’s premier public transit systems and are looking for BART riders and workers to bail them out. In an April 22, 2009 press release, BART brass warned that the system they manage faces a “grim budget shortfall” despite years of increasing ridership.

Coincidentally, BART’s last budget mess occurred in a year when it faced union contract negotiations – 2005. Contract negotiations that year led to no raises for front line workers, and as much as 300% percent increase in workers’ health care premiums. BART executives then gave raises and bonuses to themselves. For 2008, the year the U.S. and Bay Area economies melted down, top BART executives received bonuses totaling nearly $400,000 http://www.bartbudgetwaste.org/ from public monies.

Riders and Workers Pay

To plug their projected shortfall, BART executives have imposed a fare increase for BART riders that takes effect July 1, higher parking fees and possible higher fares to SFO. At the same time, they’re demanding $100 million in wage and benefit cuts from BART’s frontline workers, and want to dismiss more than 70 front line system workers – 49 station agents and 22 train operators. 

What will this mean for riders? Response times in stations for emergencies and support – medical crises, assaults, problems with tickets, directions, and disabled patrons in need of help – will increase.  And fewer train operators means fewer trains (BART executives want to run trains every 20 minutes instead of 15). 

So for more money, BART patrons will get less service:

- Less help at stations
- Unsafe stations
- Longer waits on platforms
- Dirtier stations and trains
- More riders crammed into fewer cars

Is this any way to run a railroad? Not on our watch.

The Accounting Shell Game

BART’s Operations budget, which includes fares and parking fees, pays for the operation and maintenance of BART’s core system – the salaries and benefits of the front line workers who run the system day-in, day-out, including the men and women who clean trains and stations, do track repair, car repair and maintenance, maintain fare machines – in other words, money for maintaining a safe and reliable transit system that gets people safely and swiftly to their jobs, schools, doctors’ appointments and other destinations.

BART Management routinely moves money out of the Operations budget into their Capital budget, which is used for expanding the system. BART also receives Federal funding for expansion. After 2005 contract negotiations, BART’s projected shortfall seemed to disappear. They moved the following amounts during subsequent years:

See a pattern here? Since 1995, $245 million has been moved from Operations to Capital. Even a modest investment return rate of 7% would make this total $400 million today and the system would be flush. Management’s justification for moving these funds in times of plenty is murky at best. There never seems to be any money in Operations around contract time, and money never comes back from the Capital budget during these times of need. We believe it should.

A Time to Expand…and a Time to Improve

There is a time for expanding BART’s system. In the midst of the greatest economic crisis since the Great Depression isn’t one of them. Nevertheless, the BART Board has chosen to fund a $522 million people mover to the Oakland Airport, and rejected a far more sensible proposal for a $45 million state-of-the-art RapidBART bus [http://www.transformca.org/files/TransForm-Oakland-Airport-Connection.pdf] bus system that would be just as fast and convenient as BART’s half billion dollar boondoggle. The cost to riders? For BART’s people mover, $12 round-trip, which does not include the price of their BART ticket. For RapidBART? Nothing – it’s free.

Experts predict that this new burden of debt and huge expenditure of public money will result in even higher fares, more reduced service and larger BART budget deficits in the future. Yet BART executives chose to go with it anyway, rejecting a sensible, affordable solution that would save the system – and taxpayers – half a billion dollars.

Safety and Service First

As front line workers for BART, we believe that what the public overwhelmingly wants is on-time service, more frequent trains, and safer, cleaner trains and stations.  That is, better service in BART’s “core” system – something that requires a strong workforce. Yet BART executives are proposing to solve their unbalanced budget by going below minimum staffing. So who will clean the trains and stations? Repair the tracks? Staff the station booths? Operate the trains, repair fare machines, etc.?

Help us fight BART’s mismanagement and correct their misguided priorities.

And what about those disappearing riders? 
Once again, BART is blaming decreasing rider ship as a reason for their projected budget deficit. Interestingly, in a presentation to the BART Board of Directors on May 7th regarding new train cars, a BART chart (see below) showed a slight dip in FY09 – coincidentally a contract negotiations year – then a steady increase in every year thereafter. BART spokesman Linton Johnson went so far as to tell local news media that the increase in ridership was the main reason for needing more train cars – at a projected cost of $3.2 billion. Now, where’s that money going to come from?

Sacrifice by All…except BART Executives

BART executives keep calling on BART workers and riders to pony up and bail out the budget mess they’ve created. We know that BART riders have done that. So have BART workers.

* On April 1st, ATU 1555 proposed an unprecedented freeze to workers wages and benefits set during the 2005 negotiations. BART executives, at the advice of their $1.5 million a year lead negotiator, Carol Stevens, rejected that offer. Carol Stevens has historically negotiated against firefighters, teachers and police departments.

* Back in 1991 BART’s frontline union employees agreed to surrender a percentage of their payroll (1.627%) for a period of 20 years to offset the cost of a better pension benefit for everyone at BART. We have recently found out that the 440 non-union employees at BART (managing director, executive deputy director, press spokesperson, etc.) never surrendered this money to this day, but have always received this benefit.

* In 2005, BART’s unions realized the severity of the rising cost of healthcare for BART and 80% of negotiations centered around this issue. In the end, it was ATU’s legal team that crafted a plan to deal with this problem system wide. The unions agreed to triple our monthly premiums, with annual 3% increases until 2034, as well as very modest pay increases (including 0% in 2005) for four years. This contract was also settled on time, due in no small part to ATU 1555’s efforts.

In contrast, BART management has never taken a pay cut to resolve its self-made crises or reduced their benefits. Like so many CEOs and high-paid executives today, BART’s executive class always looks to others to pay for their mismanagement and misguided priorities and get a free ride, often at taxpayers’ expense.