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The financially embattled AC Transit Bus District, which only two weeks ago decided to risk delay or possible abandonment of its long-planned, signature Bus Rapid Transit project in order to hold off some of its painful January bus service and personnel cuts, saw a glimmer of hope this week that it might be able to keep BRT essentially on track while preventing the worst of the cuts.  

On Wednesday night, the AC Transit board was scheduled to consider a recommendation by AC Transit General Manager Rick Fernandez to delay any service cuts or personnel from the first of January until mid-March in order to give the district time to sort out the slightly brightening financial situation. 

Postponing the cutbacks would mean an additional cost of $4 million to the district for operating with its current bus lines and staff for the first two and a half months of the year.  

Part of the guardedly good news AC Transit is now considering is a recent California Supreme Court decision affirming an appeals court ruling that the State of California, since the 2007-08 budget, has illegally shifted at least $1.19 billion—and possibly as much as $4.19 billion—in tax money that California voters had intended in four separate statewide initiatives to go for mass transit projects in the state. 

The Supreme Court and appeals court rulings may mean that some of that money would go back to agencies for which voters originally intended it, public transit organizations like AC Transit. 

But while “this ruling could result in additional funding to the district,” a staff memo for Wednesday’s board meeting read, “when and how these funds might begin flowing is unknown.” 

A second part of the somewhat-brightening financial picture facing AC Transit was the news that Metropolitan Transit Commission Executive Director Steve Heminger had agreed to support an AC Transit MTC fund-swap proposal to help stop some of the cuts while still leaving $45.6 in Regional Measure 2 funds committed to BRT. 

That information, which was released at Tuesday night’s Berkeley City Council meeting by MTC Commissioner and Berkeley Mayor Tom Bates, could not be independently confirmed with AC Transit officials. 

Faced with a projected $57 million operating deficit that caused the district to declare a fiscal emergency this year, AC Transit had planned personnel layoffs and a 15 percent cut in bus service for the beginning of next year. 

But two weeks ago, at the initiative of AC Transit General Manager Rick Fernandez, the AC Transit Board of Directors voted to ask the Metropolitan Transit Commission to swap out $35 million in Congestion Mitigation and Air Quality (CMAQ) capital-project-only funds already committed to BRT for unrestricted CMAQ funds that AC Transit could use to erase a portion of its deficit. 

Bus Rapid Transit is AC Transit’s ambitious proposal to run faster-than-rapid, light-rail-like bus service between downtown Berkeley, downtown Oakland, and downtown San Leandro along the Telegraph Avenue/International Boulevard/East 14th Street route currently operated by the 1 and 1R lines, a majority of it along dedicated, bus-only lanes. 

Swapping out the CMAQ funds could set back implementation of the BRT project a year, and it could mean either a scaled-down version of BRT or possible abandonment of the project altogether. 

Fernandez had also recommended proposing a similar swap of $45.6 million in MTC-controlled Regional Measure 2 (RM2) funds also committed to the BRT project, saying that MTC Executive Director Steve Heminger would only agree to the fund swap if AC Transit could demonstrate the swap would stabilize the district’s finances over a 10-year period, and Fernandez did not believe such a stabilization—including holding off much of the planned service cuts—could be done without the RM2 funds included in the package. 

Heminger’s recommendation is key to approval of the fund swap by the 19 member Metropolitan Transit Commission. 

But at the request of Board Vice President Chris Peeples and in the belief that swapping both the CMAQ and the RM2 BRT funds might mean the death knell of BRT—something neither the AC Transit board or staff wants—the board voted two weeks ago to approach Heminger with the CMAQ-only proposal. 

This week, according to Berkeley Mayor and MTC Commissioner Tom Bates, during a meeting that included General Manager Fernandez, AC Transit Board President Rocky Fernandez (not to be confused with the general manager), AC Transit Board member Jeff Davis, Bates, MTC Commission Chair Scott Haggerty, and AC Transit and MTC staff, the district got a welcome surprise when Heminger agreed to support the CMAQ-only proposal, leaving the Regional Measure 2 funds still committed to BRT for now. 

Heminger’s support for the proposed two-year CMAQ-only swap comes at some cost to its financial independence. Prior to the release of the first year of CMAQ funds, Heminger said that AC Transit “must agree to a comprehensive, independent financial review that considers cost control and revenue enhancement strategies to ensure the district’s long-term financial viability.” And prior to the release of the second and final year of the CMAQ funding, Heminger said that AC Transit “must take the necessary steps to implement the identified strategies.” 

As a condition of his support, Heminger also said that AC Transit should submit to a broader cooperation between East Bay transit agencies, who have often battled each other for scarce public transit dollars. At this week’s meeting, Heminger said that AC Transit must also “agree to an independent, comprehensive operational analysis for east bay and transbay service areas” in cooperation with such transit agencies as BART, and “where financially feasible…must agree to the subsequent implementation of the findings.” 

What Heminger meant by such East Bay public transit cooperation was not spelled out in a memo of “proposed conditions” to the MTC proposed fund swap he released “for discussion” for his meeting with AC Transit officials. 

All of this has not been finalized and must go before both the AC Transit Board and the 19-member Metropolitan Transit Commission for approval.