September 8, 2006, Discussion on District’s
Strategic Plan for Achieving Long-Term Financial Stability

At its regularly scheduled meeting on September 8, 2006, the Board of Directors (Board) of the Golden Gate Bridge, Highway and Transportation District (District) discussed the District’s current financial status as a means to begin to update the Strategic Plan for Achieving Long-Term Financial Stability which was first developed in 2002 in response to the District’s then $454 million 5-year shortfall. The five-year deficit has since been reduced to $87 million for the coming 5-year period.

The District has four funding sources available to fund its services and to address shortfalls: tolls, transit fares, government grants, and revenues from programs including concession, advertising, and leases.

Several strategies are underway now to generate $9 million (see list below) of the projected $87 million 5-year shortfall, leaving a $78 million 5-year shortfall still to be addressed.

To assist in addressing the $78 million 5-year shortfall, the Board agreed that in January 2007, it would ask staff to initiate holding a series of public workshops in early 2007 to inform the public about the District’s current and projected financial status and about the need for a future toll increase to help in addressing the $78 million 5-year shortfall. No decision was made to raise tolls, no decision was made as to the amount of a toll increase, and no specific implementation time-line was decided on. When discussing possible conceptual scenarios for increasing tolls to address the $78 million 5-year shortfall, the highest possible tolls discussed conceptually were $5 for FasTak and $6 for cash.

Strategies underway right now to generate $9 million of the $87 million 5-year shortfall (leaving a $78 million shortfall) include:

  • Corporate Sponsorship Program: Staff is seeking a consultant to develop a corporate sponsorship program that would raise additional revenues of about $4 million over 5 years.
  • Property Leases:  Staff is seeking to lease under utilized District properties with a target of raising an additional $1 million in revenue over five years.
  • District Deficit Reduction: The District has been very successful in internal deficit reduction and will identify another $3 million in savings over 5 years.
  • Transit Revenue from Increased Ridership: $1 million from increased revenue generated over the next 5 years by growing ridership on existing service.

The 5-year shortfall reflects inflationary factors for all services provided by the District (fuel, tires, parts, insurance, security, salaries, and benefits). It also includes the implementation of a program of annually adding to reserves to assist in funding much-need capital projects (e.g. Golden Gate Bridge Main Cable restoration estimated at approx. $30 million).

Past Actions taken to Reduce 5-year Shortfall
Bridge tolls were raised in September 2002 from $3 (FasTrak and cash) to $4 FasTrak and $5 cash. In the four years since the last toll increase, total District staffing has been reduced by 21% and employee wages and benefits have been either frozen for a period of time or reduced. Bus and ferry services were restructured and reduced in November 2003 to focus on higher productivity for each dollar spent. The District also began a new era in its relationship with the Marin County Transit District (MCTD). MCTD now owns all local Marin County service routes and pays the District for the cost of providing those services. District transit services are now exclusively focused on providing regional services that reduce congestion in the U.S. Highway 101/Golden Gate Bridge corridor. The Distinct has also substantially increased revenues from grants from both federal and state sources. Recent labor negotiations with most of the District’s unions have focused on attaining further cost containment in the area of medical benefits.

NO DECISION WAS MADE TO INCREASE TOLLS

To address  the $78 million 5-year shortfall,  a number of conceptual ideas were

made available at the meeting. Here are just a few of them:

A. FasTrak
Increase by $0.50 on July 1, 2007, and by $0.50 on July 1, 2008, for an increase in the FasTrak toll to $5.00
Raises $76 million in additional revenues over a 5-year period
Cash Toll Increase by $1.00 on July 1, 2008, bringing the cash toll to $6.00
B. FasTrak Increase by $.75 on July 1, 2007, and by $0.25 on July 1, 2008, for an increase in the FasTrak toll to $5.00
Raises $78 million in additional revenues over a 5-year period
Cash Toll Increase by $1.00 on July 1, 2008, for an increase in the cash toll to $6.00
C. FasTrak Increase by $1.00 on January 1, 2008, for an increase in the FasTrak toll to $5.00
Raises $80 million in additional revenues over a 5-year period
Cash Toll Increase by $1.00 Cash on January 1, 2008, bringing the cash toll to $6.00