TO: AC Transit Board of Directors
FROM: Michael A. Hursh, General Manager
SUBJECT: 2020-21 Service Plans
ACTION ITEM
RECOMMENDED ACTION(S):
Title
Consider approving staff's plans for bus service over the next 12 months as a result of the Coronavirus (COVID-19) pandemic and its lasting impacts. In addition, consider adopting staff's proposed Guiding Principles document for potential service reductions in FY 2020-21.
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
Though staff did not consider a significant service reduction as part of the short-term outcomes of the Strategic Plan, implementing reductions over the next 12 months will help achieve financial stability for the District as it deals with expected financial revenue shortfalls resulting from the COVID-19 pandemic.
BUDGETARY/FISCAL IMPACT:
At this time, staff is preparing plans to operate reduced service at 80% of pre-pandemic levels compared to the 65% service level of the Emergency Service Plan (ESP) in place today. This equates to a decrease in service by nearly 390,000 annual revenue hours based on pre-pandemic service levels of 1.95 million revenue hours annually. Assuming a reduction rate of $140 per hour, which is close to District's marginal rate but takes into consideration some overhead costs, the proposed reduction in hours equates to an annual savings of $54.6 million. Staff intends to capture financial savings through workforce attrition and estimates that these annual savings may not be realized until after the March 2021 Sign-up. Staff is prepared to increase or decrease the service levels as additional financial information and projections become available to the District.
BACKGROUND/RATIONALE:
Current Service Reductions due to the COVID-19 Pandemic
The current COVID-19 pandemic has forced AC Transit to implement the ESP, which significantly reduced bus service due to a number of factors inclu...
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