TO: AC Transit Board of Directors
FROM: Salvador Llamas, General Manager/Chief Executive Officer
SUBJECT: State Operating Loan
ACTION ITEM
AGENDA PLANNING REQUEST: ?
RECOMMENDED ACTION(S):
Title
Consider authorizing the General Manager and staff to continue negotiations with the Metropolitan Transportation Commission (MTC), the California Department of Finance (DOF), and the California State Transportation Agency (CalSTA) for a loan with a maximum amount of $55 million for operations for the fiscal year starting July 1, 2026.
Staff Contact:
Chris Andrichak, Chief Financial Officer
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
The $55 million loan from the State is crucial for the District to be able to continue operating in FY 26-27 at current service levels.
BUDGETARY/FISCAL IMPACT:
This report is not final approval of the loan, so it does not have a fiscal impact. The proposed loan parameters and costs are discussed in the next section. The loan interest would be included in the Operating budget starting next fiscal year, and the principal included after the initial interest-only period.
BACKGROUND/RATIONALE:
The District is facing a projected operating deficit of $74 million in the coming FY 2026-27. The District was able to use reserves to fill in the $42 million deficit for this current fiscal year but will not be able to do so again for next fiscal year - another source of funding will be required. MTC along with the District and three other operators (Muni, Caltrain, and BART) requested funding from the State to fill in deficits this coming fiscal year until new funding could be obtained from a proposed regional measure.
MTC and the four operators have been negotiating a loan of State funds over the past few months. On January 30, MTC announced that a preliminary loan framework had been agreed to with Department of Finance (DOF). This report is to in...
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