BART's own data show the agency will lose millions on Oakland Airport Connector project

Back in 2009, BART’s management claimed the Oakland Airport Connector (OAC) would cover all of its own costs. TransForm and many of our allies didn’t believe it then, and now we have new evidence proving just how wrong BART’s claim was. This Thursday’s BART meeting has a pair of presentations on the OAC Financial Outlook and Fiscal Year (FY) 2015 Preliminary Budget.

According to these documents, BART expects to lose $7–8 million on the OAC during FY2015, its first year of operations, and the project will continue losing money through at least 2040. In part because of these losses, BART can’t afford important initiatives to repair aging parts of the system, plan for the future, and even pay part of its garbage bill!

BART must take aggressive steps now to reduce its losses and learn painful lessons for the future.

Don’t make a bad situation worse.

BART should set the OAC fare to maximize revenue. When it was deciding on the project several years ago, BART planned on a $6 fare, which it thought would cover the project’s costs. Now the just-released OAC Financial Outlook shows that BART thinks a $6 fare would cause a $6.8 million loss in FY2015 (see slide 12). What’s worse, BART is considering opening the OAC with only a $4 fare, for a $7.9 million loss. The lower fare would cost BART an extra $1.1 million next year, for only an extra 110 passengers per day.

That means the lower fare would cost BART $10,000 per airport passenger.

The BART Board should not spend $10,000 per airport passenger. That would make a bad situation much worse.

BART should set the OAC fare no lower than $6, and BART should look at how much revenue they would get with an even higher fare. At some point, a higher fare would deter enough passengers that it would bring in less revenue. But BART’s own analysis suggests that they haven’t hit that point yet, even with a $6 fare.

Why should BART charge a higher OAC fare?

It’s simple: fairness.

Two months ago, just before BART held hearings to get public input on the OAC fares, TransForm argued that BART must make sure that airline passengers are the ones who pay the project’s price tag. BART must avoid pushing the construction price tag and operating costs onto the backs of everyday riders.

Now the OAC will cost us at least $6,800,000, even with a $6 fare. And when we say “us,” we mean the rest of BART’s passengers will have to pick up the tab for the OAC losses, one way or another.

What is the OAC costing us?

The rest of BART’s budget shows some of the ways BART passengers are losing out. The preliminary 2015 budget memo shows a lot of tough choices. Here are a few of the things BART can’t afford in the FY2015 budget:

  • $1,650,000 to repair 2–3 wrecked cars
  • $1,100,000 to start implementing the BART Metro project, a project BART desperately needs to cut crowding and maintain the aging system
  • $600,000 to replace aging computer servers that are “at end-of-life and/or causing negative impacts on operations due to deterioration and insufficient capacity”
  • $446,629 to cover shortfalls in the garbage budget
  • $154,524 for a staff position to advocate for funding for BART’s capital reinvestment needs and further community outreach
  • $150,000 to carry out an FTA-funded Climate Change Vulnerability Assessment

These are just a few examples of over 30 initiatives BART cannot afford in the FY2015 budget. There are lots of reasons for those tough choices. But if BART weren’t going to lose $7–8 million next year on the OAC, it could afford all of those examples and more.

Painful Lessons

BART’s new management deserves credit for putting together budget documents that make the Board’s choices much clearer than before. The budget picture is not pretty, with a 10-year cumulative shortfall of $428 million, of which over $50 million is due to the OAC losses.

BART chose an expensive OAC project that will take decades to cover its costs. We can’t undo that decision. But BART can limit the damage to everyday riders by making sure airline passengers pay for the expensive OAC they use.

Before embarking on any new expansions, BART needs to take a long look at how it plans for expansions to make sure it does not make this mistake again.

BART will discuss these issues at upcoming meetings, including:

  • April 24: Preliminary Budget discussion and OAC Financial Outlook
  • May 8: Second Budget discussion and OAC Fare Equity Analysis 
  • May 22: Public hearings on FY2015 budget and OAC Fares
  • June 12: Resolution to adopt FY2015 budget and Board asked to approve OAC fares

For more information, contact Jeff Hobson.

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TransForum is the blog of TransForm, California's leading transportation advocate. For more about our work, including ways you can take action and contribute, visit TransFormCA.org.