Less than three months into the fiscal year, Muni is facing a $23 million annual budget deficit, and the agency’s new executive director said all options except fare increases will be explored to make up the shortfall.
Salaries and benefits are once again the largest contributors to agency budget woes. Payroll expenditures are expected to exceed projections by $14.5 million despite some savings from Muni’s new contract with transit operators.
Meanwhile, fewer projected parking citations and discontinuation of a surcharge for Clipper card purchases are yielding lower-than-expected revenues. Fines are trending $3.7 million lower than expected, and Clipper revenues have been revised down $2.8 million. Another $1 million will be lost due to changes in parking meter policies.
Ed Reiskin, who took over as the executive director of the San Francisco Municipal Transportation Agency on Aug. 15, said the public won’t stomach more fare increases, so that option will not be explored as a means to make up the $23 million shortfall.
But he said all other possibilities would be considered — although he declined to reveal what those methods might be. Reiskin did say he hoped the agency could avoid any service reductions. The agency cut service by 10 percent in May 2010, although it later restored some of those reductions.
“Given the overall state of the agency, this budget picture isn’t surprising,” Reiskin said. “We’ll do what we need to come in balanced by the end of this fiscal year. What that entails remains to be seen.”
The projected deficit represents only 3 percent of the operating costs of an agency with a total budget of $780.6 million for this fiscal year, which ends June 30.
When facing similar deficits last year, Muni officials planned to heed an unenforced city ordinance that prohibits daily discounts in downtown parking garages. That initiative had been expected to raise $7 million in additional revenue, but never materialized.
Officials also have touted the importance of speeding up Muni to make it more efficient. Increasing systemwide speeds by just 1 mph would save $76 million a year.
However, Muni has struggled to achieve those goals. It finished the last fiscal year with a 73 percent on-time performance rate — its lowest since 2008 and well below the voter-mandated threshold of 85 percent.
On Friday, officials will discuss plans to make up the budget shortfall at the agency’s Policy and Governance committee.
$7.5 million: Projected revenue shortfall
$15.5 million: Projected extra expenditures
$23 million: Total budget deficit
$780.6 million: Total SFMTA budget
3 percent: Deficit as a portion of agency’s total budget