TO: AC Transit Board of Directors
FROM: Salvador Llamas, General Manager/Chief Executive Officer
SUBJECT: Alternate Service Plan Framework
ACTION ITEM
AGENDA PLANNING REQUEST: ?
RECOMMENDED ACTION(S):
Title
Consider approving the Alternate Service Plan Framework to be implemented in Calendar Year 2027 if the District has a significant budget deficit.
Staff Contact:
Ramakrishna Pochiraju, Executive Director of Planning & Engineering
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
?This report details the Alternate Service Plan Framework that, if approved, staff will use to develop service reduction recommendations to possibly be implemented in June 2027 if a significant budget deficit is likely. The framework directly correlates with service quality and financial efficiency strategic goals. ?
BUDGETARY/FISCAL IMPACT:
The District is projecting annual deficits averaging $50 million, beginning in FY 2027-28 and continuing in subsequent years. To address the FY 2026-27 shortfall and maintain current service levels, the District will receive an operating loan from the State. However, starting in FY 2027-28, new revenue sources will be required to sustain operations.
If new revenues are not secured, the District will need to reduce expenses to align with available funding. Staff developed the Alternate Service Plan Framework with two scenarios that will reduce the District's operating costs and service level based on the current 85% of pre-pandemic level that the District is operating today:
* Scenario 1 estimates an expenditure reduction of about $35 million, plus $1.75 million in fare loss for a total of $36.75 million, resulting in an 11.4% service reduction
* Scenario 2 estimates an expenditure reduction of about $50 million, plus $3 million in fare loss for a total of $53 million, resulting in a 16.4% service reduction
The exact percentage reduction may var...
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