The BART Board of Directors approved a $2.44 billion budget Thursday, with board members expressing optimism about the agency's potential to rebound as the pandemic recedes.
The balanced fiscal year 2022 budget includes $1.019 billion in operating costs and $1.42 billion in spending on capital projects. The operating budget is $104 million more than the one the agency approved for fiscal year 2021, which spans from July 1, 2020, to June 30, 2021.
It's also buoyed by $386 million in federal relief funding, according to BART budget officials, $75 million more than the federal funding total in the FY 2021 budget.
"It's been an extremely challenging 15 months to get us to this balanced budget," Pamela Herhold, BART assistant general manager for performance and budget, said to the board Thursday morning.
"We are extremely grateful for our federal emergency assistance, but we also want to acknowledge the very hard work of all of our employees that helped us reduce expenses and make the smart decisions that bring us to you today," she said.
BART budget officials expect ridership revenue to tick up $18 million, from $148 million in the adopted FY 2021 budget to $166 million in the FY 2022 budget, as more offices in San Francisco reopen and more residents feel comfortable using public transit.
BART's ridership has increased somewhat from last year's nadir, when it was roughly 10% of pre-pandemic ridership for much of the year after the pandemic began in earnest in March.
In the last two months, ridership has crept up to 15-20% of pre-pandemic numbers on weekdays and as high as 33% of pre-pandemic ridership on some weekends.
"There's so much work to do," Board Director Lateefah Simon said. "But for those of us who have been on BART this week, you actually see that it's hard to find a seat."
Board Director Bevan Dufty argued that the higher ridership on weekends was a positive indicator of the agency's ability to rebound, as pre-pandemic ridership was directly tied to people commuting to and from work during the week.
"I think that was a real challenge for us pre-pandemic," Dufty said. "Because our work commuting was very strong, but evenings and weekends had gotten weaker, and I think that there is some hope that if we do it right, that we will build back stronger ridership on those times when we do have more capacity and room."
The budget increased labor spending by $26 million, from $624 million in the adopted FY 2021 budget to $650 million in the FY 2022 budget.
That spending, however, is $20 million to $25 million less than what BART could have spent on labor before the agency approved an incentivized retirement program last year.
The program ultimately enticed 287 BART employees -- about 7% of the agency's workforce -- to accept an early retirement package.
Two of the board's nine members, directors Liz Ames and Debora Allen, voted against approving the budget because of concerns over the agency's projected deficits in future fiscal years, when they argued the well of pandemic-era federal relief funding will dry up and standard revenue sources are unlikely to bridge that gap.
Allen also argued that the agency's initial expectations for a ridership increase toward the end of the 2020 calendar year were always too optimistic, and that projected ridership increases later this year could prove the same.
"I believe we're spending far more than what is needed to operate the system, particularly in relationship to the substantially diminished ridership that's being served now," Allen said. "That will ultimately hurt us when we run out of the taxpayer subsidies in fiscal year '23."
The budget includes an increase in weekday and weekend service in August in anticipation of workers returning to offices and children returning to in-person classes.
Since March of last year, the agency stopped both weekday and weekend train service at 9 p.m. in an effort to cut costs.
Pre-pandemic, the agency had operated between 5 a.m. and midnight on weekdays and 6 a.m. to 9 p.m. on weekends.
Since then, the agency has operated from 5 a.m. to 8 p.m. on weekdays and 8 p.m. to 9 p.m. on weekends, with 30-minute gaps between trains during off-peak hours.
BART further modified its schedule in June and September of 2020, as well as last week, to better suit its pandemic-era ridership, but the budget approved Thursday includes a planned expansion of weekday and Saturday service back to midnight on Aug. 30.
The service expansion will also add more trains to the system, reducing time between trains during both peak and off-peak hours.
Coinciding with the service expansion, BART will also offer 50% off ride fares throughout September when riders use a Clipper card.
Board Director Rebecca Saltzman said she was confident the agency would "far surpass" its ridership projections in the coming months, as BART is already meeting its June projection of 17% of pre-pandemic ridership.
"We are really welcoming people back to BART," she said. "And as they have to go back to work and as they want to go back out into the community, I think they're going to return to BART."