TO: AC Transit Board of Directors
FROM: Michael A. Hursh, General Manager/Chief Executive Officer
SUBJECT: Financial Projections
BRIEFING ITEM
AGENDA PLANNING REQUEST: ?
RECOMMENDED ACTION(S):
Title
Consider receiving a report on updated operating financial projections.
Staff Contact:
Chris Andrichak, Chief Financial Officer
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
This report presents updated financial projections to inform the Board, staff, and the public of the District's financial future.
BUDGETARY/FISCAL IMPACT:
There is no budgetary impact from this informational report. The implementation of initiatives to reduce deficits will have budgetary impacts.
BACKGROUND/RATIONALE:
The COVID pandemic is winding down and California has ended the state of emergency that was in place since March 2020. As AC Transit takes steps to adapt to a new normal, it also must deal with COVID's economic impact. The turmoil of the pandemic has not only resulted in a massive cultural change in the workplace, but also massive changes to the economic environment as well.
Many economic issues that impacted the District during the last financial presentation to the Board in September 2022 continue to affect the District's finances. The economy is taking longer to improve, and the likelihood of a recession has increased. Inflation has not reduced as quickly as the Federal Reserve hoped and so they have continued to increase interest rates, which may lead to a harder economic landing. Recent stress in the banking sector and commercial real estate could act as potential leading indicators of further economic downturn.
Fortunately, a significant amount of federal emergency operating funding has continued to support the District and allowed for the continuation of bus service, albeit at a lower level compared to pre-pandemic conditions. Unfortunately, California's prev...
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