May 6, 2009 > AC Transit Facing Possible 'State of Emergency'
AC Transit Facing Possible 'State of Emergency'
Submitted By Clarence Johnson
Faced with rising costs and dwindling financial resources, the AC Transit Board of Directors called for a public hearing on May 27, 2009, as a prelude to possibly declaring "fiscal emergency." A declared "fiscal emergency" would provide the District with the ability to make ongoing adjustments in service and operations to counter what is predicted to be a debilitating financial crisis.
Based on the forecasted economic environment over the next two years, the District is expected to suffer significant declines in its main revenue sources. There has been a steady decline in revenues from sales taxes. But especially aggravating has been Governor Schwarzenegger's decision to eliminate State Transit Assistance (STA) funding for the next five years, redirecting more than $100 million that could be used to help balance the District's budget.
The projected drop in resources will force the District to deplete its financial reserves, leaving the District with a shortfall in "net working capital" of $9.74 million during the next fiscal year (2009-2010.) The deficit is expected to worsen by the end of fiscal year 2010, ballooning to as much as $57 million.
Despite the recent passage of Measure VV, the ongoing weakening of the local economy and the catastrophic loss of STA funding is causing AC Transit to:
Adopt a fare increase, effective July 1, 2009;
Scrutinize all expenditures;
Institute a hiring freeze for all but essential positions;
Direct staff to achieve operating/service efficiencies of 15 percent of the budget;
Outline possible service adjustments which would be enacted later this year, pending a future public hearing and approval by the Board.
The public is encouraged to attend the hearing on the fiscal emergency which will be at 5 p.m..,Wednesday May 27, 2009 in the second floor Board Room, 1600 Franklin Street, Oakland,