(April 2020) Fiscal Years 2021-2022 Consolidated Budget: Public Feedback FAQ
On January 28th, staff presented its first proposal for the FY 2021-2022 Consolidated Budget to the public and the SFMTA Board of Directors. Over the following three months, many of the proposals were amended in response to feedback from the SFMTA Board, community advocacy groups, business leaders, and hundreds of individuals who took the time to voice their opinions, ask questions, and make their concerns known.
Over the past month, COVID-19 hit our country and dramatically altered our City’s revenue projections. Although this sudden change had an impact on our budget proposal, we maintained as many of the policies and proposals developed with help from public input as we could.
We at the SFMTA want to thank you all for your invaluable input. You truly helped to shape the budget we will bring to our Board of Directors on April 21st. Due to such a high level of feedback, we apologize that we could not answer each of you individually. Instead, in the post below, we will answer the questions and address concerns we heard most frequently during this budget development process.
The budget will be presented to the SFMTA Board of Directors on April 21. We encourage you all to tune in to SFGovTV 2 to watch the meeting. You can also call in during the public comment portion of the meeting to share your opinions directly with the board. For information on viewing and participation visit the April 21, 2020, meeting page.
What We Heard Analysis
|Feedback Area||% Responding|
|Against towing and fee increases||18.20%|
|Support more Muni service||15.90%|
|Support extended meters||15.60%|
|Support for taxis||3.60%|
|Support fare enforcement||1.70%|
|Reduce citations for low-income individuals||1.70%|
|Oppose extended meters||1.70%|
|Support Tenderloin VZ||1.40%|
|Support congestion pricing||0.80%|
|Oppose cutting 83X||0.60%|
|Support seeking Federal funding||0.60%|
|Support for N Judah||0.60%|
You are welcome to view the entire FAQ page or jump directly to your topic of interest:
What do we know about our current economic prospects?
Before the pandemic, the SFMTA was already facing a structural deficit due to labor and other operating costs rising faster than fare and parking revenues. In other words, in recent years, the demand for and cost of our services has outpaced the revenues required to pay for them.
Now a month into Mayor London Breed’s Shelter in Place Order, we are seeing an 80 – 90% revenue loss in Transit Fare and Parking Revenues. Based on estimates from the Controller’s Office, we will lose about $40 million from the General Fund.
As a result of the strong advocacy of the City, SFMTA, and other transit agencies around the country, the federal economic relief plan (CARES Act) includes $1.3 billion projected to be distributed amongst the Bay Area transit agencies. This funding is absolutely critical in helping us get through this fiscal year. However, since we don’t know how long the revenue impacts of this pandemic will last, we must use these federal relief funds to help us balance the future budget as well.
During periods of economic growth, like we have been experiencing, the agency has been building up our fund balance so that if and when harder economic times fell on us, we would have some money in reserve to pay for maintaining our existing services and making key strategic investments.
The SFMTA has a $293 million fund balance of which $130 million is a contingency reserve fund:
- These dollars can reduce the economic downturn’s impacts
- The proposed budget uses some of this money to balance the budget but maintains the $130 million contingency reserve fund. However, the longer the downturn, the harder the decisions and trade-offs we will have to make.
Now is precisely the right time to use our fund balance to close the budget gap. These funds are available to be used to mitigate the effects of an economic downturn such as the one we are facing. We are committed to using those reserves prudently though so that they are available to support us through an entirety of the economic recovery period.
We will be monitoring both our revenues and our expenditures closely, and we are committed to staying within our means.
What do we know about the Federal relief we are going to receive, and how do we plan on using it?
As a result of the strong advocacy of the City, SFMTA, and transit agencies around the country, the federal economic relief plan (CARES Act) includes $1.3 billion projected to be distributed amongst the Bay Area transit agencies. This funding is absolutely critical in helping us get through this fiscal year. However, since we still don’t know how long the revenue impacts of this pandemic will last, we must use these relief funds to help us balance the future budget as well.
SFMTA is expected to receive $197M in Tranche 1. It is not known yet what level of funding the Agency will get in Tranches 2 and 3. The Metropolitan Transportation Commission (MTC) is currently working of the formula for those funds. However, preliminarily, we are expected to get an additional $160M to $200M.
We have been working with the Metropolitan Transportation Commission on the principles for the allocation of future federal relief funds. We believe it is critical, as we have through this budget process, to consider our values, especially equity. As Muni has the highest ridership and serves a transit dependent population, we feel it is critical that future tranches take this into consideration in addition to the financial sustainability of any recovery plan.
What internal steps will we take to address economic uncertainty in this budget?
First, we are taking immediate actions to reduce our spending this fiscal year:
- Reducing/eliminating all unscheduled overtime work;
- Reducing the purchasing of goods and services to just the immediately needed essentials; and
- Significantly slowing down hiring to just essential workers, like car cleaners;
Additionally, we are looking at shifting the financial burden of our maintenance work from the operating budget to the capital budget, where we have more immediately available resources.
Second, we are advancing the proposed budget through the approval process because we need a reference point for where the Agency intends to go. Our future financial picture is very different than it was just last month, but this does not change the transportation priorities that we have derived from stakeholders, members of the community, the Mayor, the Board of Supervisors and our Board. While we may no longer be in a position to expand our investments, our values guide where we reduce and where we maintain funding as well as how and when we choose to increase revenue.
Why are we increasing fares?
Our budget process began in January and over the past three months, we have worked hard to ensure an open discussion with the public about San Francisco’s needs, priorities and the trade-offs that would be required, and to gather feedback through multiple channels so they could be involved in, and influence, the outcome.
We launched a comprehensive, multilingual public outreach campaign at the beginning of the budget process to gather and consider public input on the budget and the proposed fare changes. We received over 300 questions, comments and concerns and ended up adjusting some of our proposals based on the feedback, including the fare proposal.
We began with the Automatic Indexing Policy, increasing all of our fares as a result of increases in both CPI and Labor Costs. The implementation of a fare indexing policy allows Muni to raise fares incrementally, rather than holding constant in good times, and increasing above cost of living to cover budget deficits in economic downturns. Allowing fare revenue to rise in relationship to increased operating costs also allows the SFMTA to invest in the system and increase service.
Fares represent a significant percentage of our budget (almost 20 percent). Not raising fares at all would mean a loss of $15 million dollars annually. While this seems like a relatively small amount in the context of our overall budget, it does mean that the agency would need to cut a program and/or service by that amount. For example, because our transit operating expenses are about 60% of the total budget, a revenue loss of $25 million, proportionally reducing all programs and services at the SFMTA, would mean a 3 to 5% transit service reduction and would remove up to 140 operators from service.
In order to create a more equitable system, we should instead prioritize better service and make it more accessible through our low- or no-fare programs, as we are doing with our proposed free Muni for all youth and for HSH-approved individuals experiencing homelessness. In order to create a more equitable system, we must prioritize better service while making the service more accessible through our low- or no-fare programs. Our goal is to create a budget that recognizes the trade-offs that we face and does the best to advance our values.
With this understanding of an equitable transit system in mind, let’s discuss our response to your calls to not raise, or eliminate, fares altogether.
While keeping an eye on our funding gap (and keeping our fare proposals revenue neutral to avoid service cuts),we developed two equity-driven proposals that ask San Franciscans who are able to pay, to pay a little more to help our more vulnerable populations who are reliant on transit for employment and other essential needs like healthcare and getting kids to school. We referred to these proposals as Equity Options.
- Provide free Muni for all youth under the age of 19 and individuals experiencing homelessness; and
Do not raise fares for:
- Full Fare Single Rides paying cash; and
- Reduced Fare Single Rides
The Equity Monthly Option placed the cost burden largely on monthly pass holders to avoid increases in the cash fare and adjusts our Lifeline Pass to be increased not by CPI but by SSI.
The Equity Clipper Option places the cost burden on the monthly pass holders as well as on Full Fare Single Riders that are paying electronically by reducing the discount between the electronic fare and the cash fare. (There will still be a minor discount).
We are recommending the Equity Clipper Option to our Board, as it shares the cost burden between a number of fare mediums and supports a more overall equitable fare policy. If this option is approved by our Board:
- About 72% of all riders would be impacted by fare increases, based on the 2017 on-board survey, but not all fares would be increased equally.
- All proposed fare increases would impact 55% of minority riders and 34% of low-income riders.
- All proposed fare decreases would benefit 63% of minority riders and 57% of low-income riders.
- Fares will remain the same for fare media used by a higher percentage of low-income riders – cash fares, for Adults, Seniors, and Disabled single rides. Cash fares are used by a higher percentage of low-income riders than electronic fares.
- Monthly Adult Passes also have fewer low-income riders. Only 28% are low income riders.
- Free Muni will also continue to be available for Seniors and People with Disabilities, for which we have set a much higher threshold to align with MOHCD at 100% of Bay Area Median Income ($123,150 for a family of four).
- Lifeline monthly passes are available for those riders who are at 200% of the federal poverty level. Fares are discounted at half off regular fares and are increased at the lower SSI rate: $1 for monthly passes and $0.10 for single rides per fiscal year, a smaller increase.
In addition, beginning this year, the SMTA will be offering a 50% discount on single ride fares to meet the needs of those who may not need a monthly pass as part of the regional pilot program, SMART. We will also be studying the option of moving from monthly passes to fare capping to enable those who cannot afford the up-front cost of a monthly pass to pay as they go.
Why are we charging fares during the pandemic?
While the pandemic is a serious issue in the short term, SFMTA is planning for the long-term sustainability of transit in San Francisco so that we can meet the current and future needs of our customers. The SFMTA has a structural deficit in which the growth of expenditures is outpacing revenues-- the pandemic will only exacerbate this issue. Increased fares are necessary for us to meet our obligations and improve the reliability of transit service. The SFMTA has for years been increasingly reliant on General Fund Revenues, while enterprise revenues (Transit Fares and Parking Revenues) have declined as a share of total revenue. While a boon in good economic times, increasing reliance on the General Fund exposes the agency to enhanced downside risk in the case of economic turbulence. We are now seeing that downside risk play out, and without fare increases, the future ability of SFMTA to deliver expected levels of service is at risk.
How will the potential reduction in revenues effect the Fare Enforcement budget?
Many of the people who responded to our requests for comments were concerned about fare enforcement. Some felt that enforcement fell unfairly on low-income riders who would have the most difficulty affording a fare evasion fine. Others were concerned that fare evasion is becoming a bigger issue and would like to see more measures in place to ensure safe and responsibly ridership.
In response, the SFMTA is proposing the following actions in the 2-year budget:
- We are not proposing an increase in enforcement staff;
- We are not proposing any increase in the fare evasion fine; and
- We are proposing funding the Muni Reliability Working Group recommended expansion of Muni Transit Assistant Program (MTAP).
Driven by overwhelmingly positive public feedback, the Agency is proposing to hire 20 more employees for the Muni Transit Assistance Program (MTAP). MTAP staff are community members who are trained in conflict resolution, and ride on specific transit lines with high incidences of graffiti and youth conflict. They focus on supporting our schools and young people, work to diffuse and deter any conflicts or acts of vandalism, and assist transit operators as needed. MTAP staff do not enforce fare payments, their purpose is to further the safety of youth and other Muni riders.
How is the SFMTA working to make fare enforcement more progressive?
The agency in in the process of evaluating its fare enforcement program. We expect to have an assessment this year.
How is the SFMTA addressing the burden towing and boot fees place on low income individuals and individuals experiencing homelessness?
When it comes to the proposed tow and boot fees, the FY 2021-2022 budget was significantly influenced by public feedback. Like fares, we have approached the analysis of this proposal through an equity lens. We heard your concerns and adjusted our proposals to help serve those most in need of relief, while still meeting state regulations and ensuring the safety of our streets.
Proposals incorporated into the budget include:
- New one-time $0 tow or boot fee for homeless people;
- Reduced low-income tow fee from $238 to $100;
- Reduced low-income boot fee from $100 to $75; and
- Increased first-time tow fee from $449 to $524 and the repeat tow fee from $537 to $574 to come closer to recovering Agency costs.
It is important to remember, the Agency policy on towing is to meet state regulations and ensure the safety of our streets. The Agency does not, and cannot, raise revenue from vehicle towing. The fees are intended to recover costs and discourage unsafe behavior.
How is the SFMTA going to improve MUNI service?
The people of San Francisco believe in a transit first policy for the City and rely heavily on Muni to provide that transit service. They have been generous in supporting proposals to fund Muni. In return they want and deserve a well-functioning, reliable system. Muni does some things very well and is the envy of other transit agencies for its public support, service levels and system and route distribution. At the same time, Muni must and can do better.
With that in mind, the Muni Reliability Working Group was formed. Sponsored by Mayor London Breed, Supervisor Aaron Peskin, and Supervisor Rafael Mandelman, the group met from July to December of 2019 to:
- Review Muni transit operations performance and improvement work;
- Reach a shared understanding of where Muni needs support; and
- Recommend priority actions to improve Muni performance for the use of policymakers and a new San Francisco Municipal Transportation Agency (SFMTA) Director over the next 18-24 months
In January 2020, the Muni Working Group delivered its recommendations to the SFMTA. They called for Muni to focus resources on two areas: stabilizing the current service; and developing and funding plans for growth to move towards a higher standard.
As we discussed in the Economic Climate section, the SFMTA was facing a structural deficit before we knew of COVID-19’s impact on the economy. With updated projections, it is even clearer now that the Agency cannot afford to grow service at this time. Instead, the current budget proposal includes stabilization of the current service only. That means the following is included in the budget:
- Approximately 88 FTE including maintenance, system management and planning positions;
- 30 operators to support Central Subway opening;
- Critical front-line employees to support transit operations and address operator shortage;
- Increased management support structure for training functions that increase reliability and support trainers and supervisors;
- Strategic vehicle maintenance positions; and
- Critical positions to support subway reliability and continue regular extended maintenance shutdowns and support Central Subway testing and start-up.
While the budget includes the above, initiation of these positions will be conditional upon the agency’s ability to hit planned revenue targets.
As for plans for future growth, we simply cannot afford to implement them without a new on-going source of funding. That means we won’t be able to fund some important improvements like:
- Transit Service Expansion: 6 – 6.5% service expansion by end of FY22;
- Transit Near-Term Improvements;
- Increased supervision, increased rail maintenance and subway maintenance, capitalized roadway worker protection;
- Transit Supervision Action Plan; and
- Increase staffing levels, build a service-oriented work culture, consolidate training functions and provide enhanced training, oversight team.
Why is the SFMTA cutting 83x service?
This is an example of where we’ve taken a look at our operations and figured out that we can use our limited funding differently. It allows us to spend this money in underserved neighborhoods where people are heavily reliant on transit.
Ridership on the 83X has remained flat since operations began in 2012, serving an average of 300 daily passenger trips. It is a line with one of the lowest ridership lines in Muni’s system.
Muni provides redundant service to the 83X Mid-Market Express, offering customers a number of alternate routes to get from Caltrain to mid-Market. During normal times, in addition to the 47 line, there is also the 19 Polk, the N Judah and the K/T Third.
Also, we conducted a capacity analysis of the 47, which showed in can absorb all of the 83X riders during the peak period.
In a rider survey conducted a little over a year ago, a majority of respondents noted the 47 was the most often used alternative to the 83x and many people said that they would take the first bus to show up not waiting specifically for the 83x.
Is the SFMTA planning on investing in the N Judah line?
A few Muni riders have raised questions and concerns about Muni service to the Parkside and Sunset areas of the city. They want to be sure the SFMTA will continue to invest in the lines that serve their communities: the N Judah and L Taraval.
The L Taraval Improvement project is ongoing. The project is included in the latest CIP, has a budget of almost $85m, and will include a package of transit reliability, pedestrian safety and infrastructure improvements along the L Taraval line between West Portal Station and the line’s western terminus. Transit reliability and pedestrian safety improvements will include transit stop placement optimization, transit boarding islands, pedestrian bulbs and other safety enhancements, traffic signals, transit lanes, and accessible boarding platforms.
There are multiple N Judah projects in the FY 2021-2025 CIP including the Muni Forward N Judah project which will implement transit priority improvements to reduce travel times and improve reliability for the N Judah on Judah Street between 9th Avenue and La Playa. Improvements will include new traffic signals, transit stop changes, new transit bulbs, extending or adding boarding islands, and other related elements such as curb ramps and utility relocations. There is also the $300m N Judah Surface Trackwork Replacement project which will replace 3.5 miles of worn tangent track, conduct special trackwork and upgrade trolley wire and poles along the surface alignment of the N Judah route between Carl Street and La Playa Street. Finally, there is a budget of $5m for N Judah Street Quick builds.
What low-cost measures is the SFMTA implementing to improve MUNI?
Considering our current economic situation, some riders would like to know if there are low cost actions Muni can take to improve service, despite a constrained budget. The answer is yes! This is why our Muni Forward Program exists. In 2014, the voters supported us prioritizing transit on our streets by approving a $500 million GO Bond – it passed with more than 70% of the vote. We are making signal priority improvements on Geary and Van Ness right now. We know these improvements make the system more reliable and speed it up. While congestion has been growing in the City, we know these improvements work. Congestion data shows that auto speeds have continued to worsen since 2017. In contrast, transit speeds and transit reliability have remained steady, meaning that transit is more competitive with autos than in past years.
How will extended meter hours effect low income individuals and local merchants?
In addition to fares, SFMTA is also recommending policy changes to parking pricing. This proposal arose from SFMTA Board and community feedback, supported by data on parking space availability.
Since 2011, the SFMTA has operated a demand-responsive parking pricing system: if demand is high, we raise prices to ensure a space or two is available when you go to your favorite restaurant (which hopefully will be soon when the Shelter in Place Order is lifted). When demand is low, we lower prices.
We recognize that increased parking prices could mean less demand from more price-sensitive drivers, many of whom are low income. As part of any proposal we will need to address equity concerns, including maintaining access by continuing to provide quality alternatives, like transit.
We have recently looked at our parking polices and realized that they are outdated when it comes to evening metering and Sunday metering. We know that the demand for parking in commercial corridors during the evenings is high. That’s why we are proposing extending the time that meters are enforced beyond the standard 6 pm end time.
We won’t be doing this city-wide immediately; we’ll partner with local merchant associations to determine where extended meter hours make the most sense and see how it works, particularly given the current economic challenges related to the pandemic.
We’re also considering enforcing meters on Sundays, where we’d follow a similar community- and data-driven process to make sure it works for our residents, businesses, and visitors. In 2014, San Francisco's meters charged on Sundays--as a result, parking availability increased significantly, which allowed folks visiting our commercial neighborhood to find parking.
How is the SFMTA investing in bike and pedestrian safety?
The City and County of San Francisco adopted Vision Zero in 2014, committing city agencies to build better and safer streets, educate the public on traffic safety, enforce traffic laws, and adopt policy changes that save lives. The goal of this collaborative, citywide effort is to create safer, more livable streets as we work to eliminate traffic fatalities.
Supporting the Capital Budget, voters approved the use of Prop D Ride-Share Business Tax as a revenue source, with $15 million estimated annually for street safety projects. Staff are proposing to build on existing programs by using:
- 50% of this funding for the new Quick-Build Program, especially protected bicycle facilities or projects on the High Injury Network; and
- 50% of this funding for signal hardware upgrades, especially signal modifications (new mast arms, poles, visibility) in Communities of Concern and/or on the High Injury Network.
Additionally, staff are recommending that the Agency ensures ongoing funding and support of the Vision Zero Education and Outreach Program and Safe Routes to School in the Operating Budget. These programs focus on encouraging behavior change through education, complementing engineering programs and enforcement efforts. They also support the City’s children and families by building a coordinated framework to provide safe and effective options for school transportation. Creating a consistent funding source will increase outreach and education campaigns on safe driving behaviors and maintain the importance of realizing our Vision Zero goal of eliminating traffic fatalities.
Will the SFMTA increase Vision Zero spending in the Tenderloin?
We are committed to Tenderloin neighborhood safety. We are fully funding the Taylor Street project, allocating money to create a new project for Signal Upgrades in the Tenderloin, and dedicating 25 percent of the quick build budget to be spent exclusively in the Tenderloin. The projects funded by this 25 percent allocation will be determined by working with the community, including the Tenderloin Taskforce.
Will the SFMTA increase crossing guard hours to 20 hours per week?
During the last budget cycle, we decided that it was more beneficial to increase the number of guards rather than fund more hours for existing guards because it meant that we can serve more schools. As a result of that decision, the crossing guard program was increased by $220,000 and resulted in hiring of additional 20 staff (a 20 percent increase).
We currently employ 200 crossing guards with several more applicants in pre-employment stage.
Our Crossing Guard Program manager finds that many of the crossing guards are not interested in extra work because she has trouble finding ‘takers’ for extra shifts when they are available. Additionally, many of our guards are seniors and/or retirees who just want to keep active, help out their community or earn a little extra to supplement their income and this job satisfies their needs. Many guards take care of their children, grandchildren or elderly parents and choose this job so they can work for a few hours and still fulfill their family obligations.
Given the above and our constrained budget resources, particularly at this time, increasing hours for crossing guards would not be appropriate.
Will the SFMTA implement congestion pricing?
The SFMTA is excited to be working with our sister agency, the San Francisco County Transportation Authority as they advance a study for congestion pricing.
What's most promising about this effort is its commitment to prioritizing equity; this is an opportunity to transform transportation into a more equitable system and tackle several agency and city goals including safety, sustainability, transit reliability and health.
We are in the midst of public engagement right now which is transitioning to efforts that can be completed remotely but will resume when appropriate. The study is scheduled to be complete in early 2021. Please check the Downtown Congestion Pricing website for opportunities to participate and sign-up for the listserv to receive project notifications.
How will the SFMTA provide relief to taxi drivers during these difficult economic times?
We believe that there should be a robust, regulated taxi industry in SF so it’s important that we do what we can to support the industry. We received many requests from taxi medallion owners to look at their situation with compassion and see what the Agency can do to help support the industry during this time of need.
We heard your concerns, and the SFMTA will recommend a budget that waives all taxi fees for the two-year budget cycle as well as the taxi driver renewal fees for the current fiscal year that have been deferred since the Shelter in Place order was instituted. This will require SFMTA Board approval and will be heard as part of the budget approval process.
In light of the pandemic, we are also:
- Instituting Essential Trip Card (ETC) – a discount program to help seniors and people with disabilities make essential trips in taxis during this crisis. We believe this will help support the taxi industry during this difficult time.
- Requesting SF Federal Credit Union establish a loan deferral plan for taxi medallion holders
- Deferring taxi driver A-Card renewal fees
- Working to increase taxi trips by requesting taxis be utilized for city-sponsored emergency related trips
- Requesting sanitizing and personal protective equipment for taxi drivers. Although cleaning products are scarce, we were able to secure cleaning supplies, hand disinfectant and face masks for drivers.
- Temporarily lowering insurance requirements. I carefully weighed this issue, and after consulting with the City Risk Manager’s Office, has approved a temporary decrease in the coverage amount to allow some relief to the industry
- Conducting weekly phone meeting with taxi regulators across the country to share best practices to support taxi industry
For all the most up-to-date information, please visit our web page on the Taxi Industry and COVID-19.