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Agenda Item No. 5

To: Finance-Auditing Committee/Committee of the Whole
  Meeting of April 25, 2002
From: Alan R. Zahradnik, Director of Planning
  Joseph M. Wire, Auditor-Controller
Celia G. Kupersmith, General Manager

There is no recommendation associated with this informational report.

On February 8, 2002, the Board of Directors authorized staff development of a technical study examining options and impacts of raising bridge tolls to fund on-going District services and projects, and a following study of further bus and ferry fare increases. Board also authorized a series of informational Open Houses to provide opportunities for public input to development of staff recommendations regarding any potential toll increase.

At the March 7, 2002 Finance-Auditing Committee meeting, staff presented a review of the operating and capital needs of the District over the next 10 years and described a process to transform the needs assessment into a financial plan. The needs of the District are great. Our fund deficit increases to $182 million in three years, $428 million in 5 years, and over $1 billion by the end of 10 years. This projection of a growing deficit assumes continued operation, maintenance, and rehabilitation of the Golden Gate Bridge and continued operation of Golden Gate Transit bus and ferry services at current service levels. The needs assessment assumes that toll and fare rates remain at July 2002 levels while expenses increase by inflation. A series of toll increase options are under study as the first step in the process of creating a financial plan for the future. Analysis of other sources for additional increased revenue as well as transit service and cost reductions will follow.

Toll Increase Options Planning Analysis
Staff has prepared a preliminary draft of a planning analysis for the twelve toll increase options identified at the March 7 meeting of this committee. The options range from a $4.00 cash toll with FasTrak discounts to a $5.00 toll for all users. There is also a baseline option that assumes continuation of the $3.00 toll with initial analysis of non-toll options for addressing the financial shortfall.

In general, the results are:

  • The $4.00 toll options are projected to generate between $10 and $15 million of revenue per year, $100 to $165 million over 10 years.
  • The $5.00 toll options could generate $25 to $30 million per year, $250 to $310 million over 10 years.
  • The various toll increase options result in positive environmental impacts resulting from diversion of auto travel to transit and carpooling.
  • The option of continuing a $3.00 toll would necessitate addressing financial objectives by reducing transit services, raising transit fares, and delay of needed capital projects. There would also be cost reduction and revenue enhancement programs within the District but there are not enough to solve the financial crisis without transit service reductions and capital project deferral. Reduced transit service results in negative environmental impacts from diversion of transit travel to auto travel. It also has possible economic impacts on minorities and persons with low incomes with more severe impacts than those associated with the toll increase options. The significance of these impacts would depend on the magnitude of service affected.
A brief PowerPoint presentation has been prepared for this meeting to summarize the preliminary findings of the planning analysis. Work on this report is still in progress. It is staff¹s intent to finalize the report at the end of this month for distribution to the committee at the May 9 meeting. The report would also be made available to the public as supporting documentation for the Public Hearing in June, the date of which will be set by the Board at the May 10 meeting.

Staff is considering the findings of the analysis and will utilize the financial impact information to prepare a complementary financial analysis for presentation to this committee on May 23 along with a recommendation regarding a potential toll increase in the context of a more comprehensive financial plan. Note that the original timeline for the project had a staff recommendation occurring at the May 9 meeting.

Summary of Public Comments Received
As of April 17, 2002, a total of 2,218 public comments have been received. These include public comments received at the first round of Open House meetings as well as on-line comments, facsimile and standard mail comments. The Office of the District Secretary has summarized the comments. For example, of the 1,385 comments received on-line, 263 noted support for a toll option; 294 expressed possible support if something other than the current options were considered; and 500 expressed no support for a toll increase. Attachment A lists the various comments clearly pertaining to the toll increase options.

Project Calendar Update

  • May 9 ­ Provide final Planning Analysis report to Finance-Auditing Committee and recommend setting formal public hearing on toll increase options.
  • May 10 ­ Board action regarding setting a public hearing.
  • May 23 - Present Financial Analysis identifying toll and other revenue enhancement and cost reduction ideas to be considered in the development of a Comprehensive Financial Plan. Present staff recommendation regarding potential toll increase to Finance-Auditing Committee.
  • June 3, 4, 5 ­ Hold round #2 Open Houses to view findings of staff analyses and staff recommendation. Present planning analysis, financial plan, and staff recommendation.
  • June 13 ­ Present final staff recommendation to Finance-Auditing Committee. Hold public hearing.
  • June 27 ­ Finance-Auditing Committee to consider action regarding staff recommendation.
  • June 28 ­ Board to consider action regarding staff recommendation.
A second study of a possible toll for pedestrian and bicycle access to the Bridge is also underway. The range of tolls under study is 25 cents to $1.00 per person. Options for toll collection are under study as well. An initial report is expected in late summer.

Fiscal Impact
There is no fiscal impact associated with this informational report. The financial analysis will be completed and a staff recommendation presented to the Committee on May 23.



Higher Tolls

  • Raise toll higher than $5.00
  • Eliminate toll-free crossings (for employees, government vehicles and carpools)
  • Eliminate discount for disabled persons
  • Higher toll for commercial vehicles
  • Higher toll for single occupant vehicles
  • Higher peak and lower off-peak toll
  • Higher off-peak and lower peak toll

Lower Tolls

  • Extend free carpool hours
  • Lower toll for non-commute carpools and motorcycles
  • Lower toll for alternative fuel vehicles
  • Provide discount for low income persons
  • Provide discount for frequent users
  • Provide discount for ³local² residents

Reduce Costs

  • Overall reduction of District expenses
  • Lower transit deficit through service reductions
  • Lower transit deficit through fare increases, commuter parking fee and new revenue sources
  • Lower transit deficit through service improvements that add riders

Increase Revenue

  • Increase visitor parking fee
  • Solicit contributions
  • Increase retail sales

Change the Institutional Structure

  • Dissolve the District and transfer the bridge and transit system to other public or private agencies.

These suggestions will be addressed in the May 23 Financial Analysis report.