State auditor validates BART’s projections and reinvestment needs

Written by Jenifer Nunez, assistant editor
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A rigorous state audit validated Bay Area Rapid Transit's (BART) financial projection process and reaffirmed that BART is facing $9.6 billion in capital needs, potentially affecting the reliability of rail service if additional revenue isn't secured. The audit reports BART has taken recent steps to improve its process for planning capital improvements and has already begun work to secure funding and identify potential future funds.

 

“While we are heartened that the audit finds our financial projection process is well founded, it remains clear that we must continue our efforts to address BART’s unfunded need,” said General Manager Grace Crunican. “We have already made great strides in tackling approximately half of the overall need; our current unfunded need is estimated at $4.8 billion. We will continue our focus on securing federal, state and local money to help reinvest in our system. The Bay Area and our riders are owners of this system and we need to make sure their initial investment is preserved now that most of this infrastructure is at, or close to, the end of its useful life.”

The Joint Legislative Audit Committee, at the request of members of the Bay Area State Delegation, requested the audit during the 2013 labor contract negotiations. According to the State Auditor’s Office, the auditors compared BART’s operating projections from fiscal years 2007–08 through 2012–13 to its actual financial performance and reviewed significant components and the key assumptions underlying BART’s financial forecasts for fiscal years 2015–16 through 2018–19. The audit concluded BART’s projection methods yield valid results and that its financial projections are plausible.

Financial findings of the audit includes that BART will not be able to rely on its operating budget to pay for its capital needs; BART faces cash flow challenges for each of its Big Three capital projects: at least 775 new rail cars, a new train control system and an expanded maintenance facility; in addition to the Big Three projects, BART has identified more than $5.6 billion in capital projects needed to repair or replace infrastructure that is in poor or very poor condition, to maintain a state of good repair, and to expand the system; until BART is able to secure additional funding for capital projects, the backlog of unfunded capital needs would continue to grow, likely requiring more maintenance spending from future operating budgets and if no additional revenue measures are passed, BART will likely have to enact a number of cost-cutting measures that could result in less reliable rail service.

The audit notes that BART is considering several options for gaining additional revenues, including future bond measures.

The audit also addresses issues specific to the labor negotiations. Its findings in that regard include violence against BART employees did not continuously increase between fiscal years 2009-10 and 2013-14; the percentage of management relative to total workforce at BART is generally consistent with other transportation authorities with comparable average weekday ridership; no evidence was found that union employees were being replaced with contract labor and were not being allowed to return to their original positions following an injury when the employee was capable of resuming work;
an examination of the classifications of a selection of 40 BART employees showed that all 40 selected employees were paid appropriately according to their job classifications.

 

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