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June 3, 2009 > AC Transit Closer to Declaring 2009-10 Fiscal Emergency

AC Transit Closer to Declaring 2009-10 Fiscal Emergency

By Simon Wong

AC Transit's Board of Directors held a public hearing on May 27 to receive testimony on the District's intention to declare a fiscal emergency for FY 2009-10 and possible suggestions on how the Board might meet its needs and objectives without declaring a fiscal emergency.

Transit agencies' actions arising from "the failure of agency revenues to adequately fund agency programs and facilities" are exempt from the California Environmental Quality Act (CEQA), as per the California Public Resources Code and CEQA guidelines. This means that agencies can bypass environmental review to implement service cuts.

To invoke the exemption, the Board must specifically find that there is a fiscal emergency or negative working capital within one year of a declaration of a fiscal emergency.

AC Transit's Finance Department projects a $9.74 million shortfall of working capital by the end of FY 2009-10. This is expected to reach $57 million by the end of FY 2010-11.

The District must, however, follow proscribed procedures before declaring a fiscal emergency, viz. a noticed public hearing to receive public comments, followed by responses at a regular board meeting scheduled within 30 days of the close of the public hearing.

The public hearing notice, including staff analysis of the $9.74 million shortfall in working capital, appeared in the Tri-City Voice and other newspapers and was emailed to every Bay Area media outlet (television, newspaper and radio), as required by Board Policy. The notice was also posted on the District's website.

Three public speakers addressed the Board.

"I own a small business and ensure I can cover basic services before adding other services. I recommend AC Transit follows the same model. AC Transit District's voters approved Measure VV in Nov 2008 to preserve services for youth, the elderly and disabled. Now, you receive twice as much parcel tax-revenue, still aren't in the black and wish to reduce services. As an alternative, I recommend you focus on the basic services you already provide rather than introduce expensive duplicate services such as the Bus Rapid Transit (BRT) system that would replace lines 1 and 1R," said Berkeley resident Mary Orum.

"Running basic services isn't glamorous but riders need them. Much of the money earmarked for BRT can fund service in other parts of your service area. Substituting BRT for routes 1 and 1R won't increase geographic coverage but, if you sacrifice other routes to implement the more expensive BRT system, your geographic coverage will shrink and ridership will fall. This isn't the way to serve the community," she concluded.

"I wish to speak about 'the process.' How do you expect people to know of the opportunity to comment? There have been well-attended community workshops with flyers and play cards but no mention of today's public hearing. Notice wasn't even posted to your website until I reminded [board president] Rocky Fernandez. Few bus riders visit the AC Transit website to check meeting schedules and agendas. Although you're complying with CEQA, the Brown Act is what counts; 72 hours' notice, posted at a readily accessible location for the public, is required. A website is not freely accessible to the people you supposedly serve, viz. bus riders. I really consider this a secret public hearing," complained Joyce Roy.

Hayward resident Charlie Cameron reminded the Board that he had submitted a four-page document with revisions for consideration and took the opportunity to remind staff of two points relating to drivers' remuneration.

"State law requires we issue a public notice but does not stipulate when it must be issued. We've complied with our own procedures directing how and where the notice should be sent. Declaring a fiscal emergency is a procedural issue that saves us time by exempting us from a negative declaration [which is normally required by CEQA if an environmental impact report is not necessary]. The substantive issues are service cutbacks and their effects. They've been examined with ample public involvement at four workshops. Staff will plan accordingly and there will be a public hearing of their proposals. Discussing how much notice was given for this hearing is a red herring; nor does this hearing deal with if, how or why we might cut service. This hearing only concerns the calculations of our finances. We should not confuse procedural matters that deal with other procedural matters or forget that we've done a good job on the substance," commented Board Director Christian Peeples.

Responses to comments received at the public hearing, in writing and by email will be provided to the Board at its June 24 meeting.

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