Operations Funding and Accountability

Legislators and the Association negotiate operations funding and a framework for public accountability and transparency.

By Arianna Smith
Managing Editor
Transit California

When it comes to addressing the operating deficits faced by California’s transit agencies, the California Legislature is sending a loud and clear message to transit agencies: operations failure isn’t an option – but operations funding accountability is necessary, too.  The Association is answering that call with a $5.15 billion budget ask paired with an accountability framework proposal that eligible agencies would be required to adopt in order to receive allocated funds. 

Longtime transit champion Senator Scott Weiner (D-San Francisco) explained that the stakes of the budget negotiations are higher than ever before for people who use transit in California: “This is about whether we’re going to continue to have viable public transportation in the state of California. . . . These are not just cuts. . . This is about potentially the destruction of public transportation and systems that people rely on.” Weiner has spearheaded the legislative effort to honor the 2022-23 Transportation Funding Package against cuts proposed by Governor Newsom and has led the fight to secure funding for transit operations and extend the statutory relief in the Fiscal Year 2023-24 budget.

Weiner acknowledged that his legislative colleagues expect transit agencies to use any allocated state funds with transparency, efficiency, and an eye toward structural and operational improvement, but that agencies struggling under the strain of fiscal deficits can’t improve systems without critical investments: “We should always be looking for reform and for ways of the systems to operate more safely and more effectively, but you can’t reform a system that no longer exists.  We have a short window to start dealing with this” before the fiscal cliff crisis starts gutting agency operations around the state.

Christy Wegener, Executive Director of the Livermore-Amador Valley Transit Authority (LAVTA), explained how the failure of one system would affect many systems in the surrounding area:  “From a small suburban operator’s perspective, if the major Bay Area transit agencies peel back service due to funding shortfalls, it will inevitably impact the relevancy and utility of all the feeder bus operators and potentially further fracture an already-fragmented Bay Area transit network.”  She added, “While LAVTA and our Wheels bus system doesn’t have the imminent and near-term fiscal cliff that our sister agencies like BART and Muni are facing, we have to stand together for transit and find the necessary funding to keep all transit systems operating in a healthy way. If one of us falls, we all fall.”

State budget negotiations are ongoing amongst the Legislature, the Governor’s Administration, the Association, and other stakeholders, and state law requires the Governor to sign the 2023-24 budget by June 15.  Additional budget updates may continue through August.

Michael Pimentel, Executive Director of the Association and an architect for the Association’s accountability framework and budget ask, explained where budget negotiations currently stand and how individual Association members can play an important part in securing both funding and trust from decisionmakers: “We are at a critical point in time, and we cannot lose our momentum. . . . It’s imperative [transit agencies] emphasize how we are revamping the industry to support ridership recovery, the importance of our $5.15 billion budget ask, and the importance of securing the funding this year.”

“We’ve had our challenges over the years, but this year is going to be a really, really important year for us,” said Karen King, CEO of Bakersfield’s Golden Empire Transit District and the Chair of the Association, echoing Pimentel’s sentiments at the annual Spring Legislative Conference on May 16.  She urged Association members to contact legislators and help them understand how critical and essential transit is to constituents in their districts – and why these constituents will expect legislators to do their part to stabilize transit operations funding: “Put a local face to transit and share these important messages with policymakers, and highlight how we as an industry are meeting the moment.”

A key way that Association members are meeting the moment is through the proposed accountability framework, developed by the Association’s Transit Operations Funding Subcommittee. The proposal emphasizes transparency to the public – both about past and current operations and ridership recovery efforts, as well as regarding future planned uses for any funds received. Eligible transit agency governing boards would have to pass a resolution at a public meeting in order to receive new operations fundings. The resolution would be required to identify estimated operations funding needs through fiscal year 2027-28 to mitigate cuts and layoffs, as well as to implement service, fare, and strategies to retain and recover ridership. The resolution would also have to identify the steps the agency has already taken since the beginning of the pandemic to address issues, and it would have to explain how the agency will use the funding to address operating deficits and recover ridership during the first year of receiving funding.  

Transit agencies that receive funding would be required to submit a transit recovery plan within 18 months detailing planned reforms for a specified period, which would be scaled based on the number of years that the state provides funding.  Such reforms could include a wide range of strategies to improve the customer experience; develop the workforce; increase accessibility, reliability, speed and on-time performance; enhance safety for riders and operators; and ensure station and system cleanliness.  The plan could further describe an agency’s efforts to increase local revenue or achieve operational savings.

Liane Randolph, Chair of the California Air Resources Board (CARB), acknowledged at the Spring Legislative Conference that the state has significant expectations of transit agencies to simultaneously operate under the constraints of the looming fiscal cliff while also leading the way for the state to meet ambitious climate goals – but that CARB is invested in collaborating with Association agency members.  “Given the challenging financial circumstances facing many transit agencies, we’ve initiated numerous efforts at the state level to support the deployment of zero emission transit” including the Transit and Intercity Rail Capital Program (TIRCP), the Low Carbon Transit Operations Program, the Hybrid and Zero Emissions Truck and Bus Voucher Incentive Project, statewide procurement contracts for zero emissions investments and hydrogen, and more.  “As we navigate the post pandemic world and what it means for transit, we’re absolutely committed to working with the Association to address the challenges and chart a path forward.  We want to collaborate to find solutions and build a thriving transit system that serves our communities and supports those critical climate goals.”

Senator Maria Elena Durazo, Chair of the Senate Budget Subcommittee 5 on Corrections, Public Safety, Judiciary, Labor and Transportation, articulated that as the state faces a multibillion dollar budget shortfall, the Legislature is prioritizing funds to address interconnected issues faced by the most vulnerable Californians – issues that also directly affect transit services, operations budgets, and ridership levels:  “As we look at the budget that’s going to be short tens of billions of dollars, what do we really want to protect?  We have certain values that we’ve been working on to make sure we protect, especially health and human services, homelessness, and housing.”  Durazo described how legislators like her are especially interested in seeing how dollars for transit connect to district and state priorities.  “We want to move forward in a way that protects the [budget] reserve and still protects the core issues that I believe in and have worked on for many years of my life, and that is combining climate issues with creating jobs with moving people and moving goods.”

At the May 23 Senate Budget Subcommittee and May 25 Assembly Budget Committee hearings, the Association and individual member transit agency representatives called on the Senate and Assembly to approve the Senate Budget Plan and Assembly Budget Plan, respectively.  The plans included actions to restore TIRCP funds to 2022 levels, establish new flexibility in the TIRCP to fund transit operations, continue statutory relief, and restore Zero-Emission Buses and Infrastructure Investments.  The Association and agency members also stressed that the Legislature must take steps to provide additional funding to transit operations to more fully address the operating deficits our industry faces. This call was further amplified in a press conference held by Senator Wiener on May 30, with support from the Association. 

In California budget negotiations, major changes and funding announcements can happen quickly.  The Association is at the center of public transit negotiations, and it relies on its members to get involved, be present, and emphasize to lawmakers that transit agencies are ready to be accountable for much-needed operations funds.  Ultimately, as Pimentel said, “Coordinated action yields meaningful results. We have great opportunities in front of us, but for our industry to continue to grow and expand, we must work together.”

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