Summary of Financial Information
Presented at GGBHTD Board of Directors Meeting

April 10, 2009, 9:30 am, Golden Gate Club, The Presidio

 

To read the full report (Parts 1 and 2) presented today, click here.

 

Key Points

TWO NEW THINGS OCCURRED AFTER SEPTEMBER 2008, TOLL INCREASE

  1. World-wide economic recession which reduced revenues and increased expenses
  2. District is committed to contributing $75 million to Doyle Drive project

 

WHAT IS THE IMMEDIATE IMPACT?

REVENUE IMPACTS

Bridge traffic down 5% = $4 million less annual revenues

Loss of State Operating funding = $4 million less annual operating grants

This equals an $8 million annual loss which translates to a 5% reduction in revenues.

EXPENSE IMPACTS

$75 million required for Doyle Drive; if spread over 10 years, this translates to increase in expenses of $7.5 million/year.

$3.5 million annual increase in pension funds

FIVE-YEAR DEFICIT UPDATE

Newly projected Five-Year deficit is $102 million

 

Additional Information

  • The District has $100 million in capital reserves towards achieving long-term capital plan.
  • The projections are a baseline and assume that expenses go up with inflation, but assume no policy decisions that would reduce expenses or increase revenues. This baseline is used to guide the type and magnitude of policy changes that need to be made in the coming years to eliminate the deficit.
  • First opportunity to reduce the projected deficit is next year’s budget (FY 2009/2010) which will be presented to the Board for review in May 2009. A baseline budget is being generated that continues current services while targeting a reduction from the $11 million projected deficit for FY 2009/2010.
  • Retaining current services for the FY 2009/2010 budget development is a starting point to keep operations running the nature, magnitude and timing of the actions that need to be taken to reduce the $102 million 5-year deficit are developed.
  • Before considering elimination of any customer services, expense reduction proposals will focus on internal savings and the elimination of choices where the same service is provided in multiple ways.
  • Given the 2008 toll increase, revenue enhancement proposals will focus on new sources of revenue and existing services where value to the customer may exceed price.
  • In the coming months, staff will work with the Board to formalize a series of proposals and actions that will, over time, lead to eliminating the $102 million 5-year deficit.