Federal relief funding is expected to cover BART's previously projected budget deficit, preventing the transit agency from having to lay off staff or reduce service, the agency's budget officials said at BART's Board of Directors meeting Thursday.
The agency is expected to receive in excess of $55 million from the federal stimulus bill passed in December, which will make up for BART's loss of roughly 90% of its ridership revenue as a result of the COVID-19 pandemic.
BART budget officials had, in October, projected a deficit in upwards of $33 million by the time fiscal year 2021 ends on June 30, even when taking into account more than $250 million in pandemic relief funding from the Coronavirus Aid, Relief and Economic Security Act, a hiring freeze and an incentivized retirement program.
"The takeaway from (fiscal year 2021) is that while it remains a challenge, we know we can close the year balanced," BART budget director Christopher Simi said. "And with most of our cost structure in place for the remainder of the year, we need to shift our focus to '22 and '23, which present much greater challenges."
Without taking future federal relief funding into account, BART's projected budget deficit by the end of fiscal year 2023 will total nearly $500 million, even when accounting for a projected 465% increase in ridership revenue between now and then.
Simi cautioned that while ridership should eventually rebound as more Bay Area transit riders get vaccinated against the coronavirus and return to work, the timeline and extent of that ridership recovery remains volatile.
Board Director Janice Li expressed gratitude that the board did not make reactionary budget choices toward the end of the 2020 calendar year, when board members floated the possibility of limiting or temporarily stopping weekend service or laying off workers amid concerns that more relief funding wouldn't be approved.
"We made the right decision, and the numbers here show that," Li said.
The agency could also see another windfall of relief funding in the coming weeks once President-elect Joe Biden takes office.
Biden's proposed $1.9 trillion stimulus bill would include $20 billion for beleaguered transit agencies across the country, a portion of which would likely trickle to the Bay Area.
"Clearly it will change in two weeks and two weeks after that and two weeks after that and two weeks after that," Board Director Rebecca Saltzman said of the budget update.
Board Director Liz Ames noted that the pandemic has led some of the Bay Area's largest technology companies to allow their employees to work from home permanently, potentially hampering BART's hopes of ever reaching its pre-pandemic ridership again.
Ames went on to suggest the agency may have to rethink its place in the Bay Area's transit ecosystem post-pandemic if that work-from-home shift remains permanent.
"There's going to be a shift, I think, in the way people live, how they commute and then the efficacy of the vaccine," Ames said.
Board Director Bevan Dufty argued the agency is on the right path by turning its focus to the next two fiscal years and balancing its current budget.
"We'll have challenges but I'm confident going forward," he said. "I think everything that we hoped would happen has been happening and hopefully will continue to happen."