October 30, 2009

Golden Gate Bridge, Highway and Transportation District Discusses and Adopts Draft Financial Plan

 

In May 2009, the Golden Gate Bridge, Highway and Transportation District (District) Board of Directors (Board) established a Financial Planning Advisory Committee (Advisory Committee) to develop an action plan designed to eliminate the District's projected five-year shortfall of $132 million, which if not addressed soon would grow to over $400 million by the end of ten years.

The District is facing this $132 million shortfall due to several significant and recent changes in our current financial picture:

  1. The current economic recession has led to a downturn in toll and transit revenues as fewer people are traveling to/from San Francisco (see attachment on trends);
  2. Annual funding from the State has decreased significantly; and
  3. In partnership with Caltrans and others, the District is helping to fund the reconstruction of Doyle Drive ($75 million commitment made by the District).

Draft Financial Plan Developed

The Advisory Committee reviewed a range of options for addressing the financial shortfall that are focused on finding ways to continue to provide core services but to do so in a way that is less costly and more efficient, and they recognize that only by both generating additional revenue and lowering on-going expenses could the shortfall be fully addressed.

Out of this effort, the Advisory Committee developed a draft Financial Plan that is being presented to the Board at their October 30, 2009 meeting. The Financial Plan includes a range of proposals each of which requires additional analysis and development before that specific initiative can be approved for implementation. And, after additional evaluation by staff, the proposals will be brought to the appropriate Board Committee for further discussion, public input and decision.

The Financial Plan will be used to set the direction and timing of staff efforts to achieve financial sustainability over the next three to five years. The Financial Plan is a living document, subject to change year-to-year as proposals are brought forward and completed, and new ideas and concepts come along or as further analysis yields new information. It will be monitored, reviewed and updated at least yearly in the Board’s regular financial planning cycle that currently includes the yearly budget adoption as well as long-term financial projections.

REFER to the Summary of the Financial Plan proposals, and here are a few highlights

  1. Anticipates a toll increase in four years (2013) and continuation of small annual transit fare increases
  2. Assumes more automation of current tasks to reduce operating costs
  3. Anticipates reductions in staff levels over time and expansion of salary freezes and staff furloughs and further negotiated savings in employee expenses
  4. Raising revenue in new ways through more concessions, possible partnerships/more grants

Next Steps

Action was taken on October 30 and the Board adopted the draft Financial Plan. Staff will bring the various initiatives in the draft Financial Plan through the Board’s regular committee process when they are further developed. The draft Financial Plan will be updated for completed, dropped or added initiatives and will be compared to each year’s updated projection to monitor the progress of reducing the deficit.

Read the complete staff report from the October 30, 2009, Special Meeting of the Board of Directors.

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