SMART quietly marks 3 years of service, faces ‘clouded picture’ following tax defeat and pandemic

When SMART began service three years ago this month, transit officials, local representatives and an enthusiastic corps of supporters hailed the opening of one of the North Bay’s largest public works projects in decades, touted for a generation as a more efficient and environmentally friendly way to get people up and down the Highway 101 corridor.

The passenger line was the culmination of efforts over 15 years to pass a tax measure, reconstruct a railway and fire up diesel-powered commuter trains in Sonoma and Marin counties for the first time in nearly 60 years.

Three years ago, a lead green-and-gray rail car blared its horn as it pulled before an eager crowd at the downtown Santa Rosa station. SMART was officially underway.

Since then, the rollout for Sonoma-Marin Area Rail Transit has been marked by major additions: two new stations, including the opening of its southern extension to Larkspur that included 2 miles of newly laid track, plus about 14 miles more of a bicycle and pedestrian path.

But it has also hit significant, and potentially perilous setbacks that are now clouding its future. The latest back-to-back blows came in March, when voters overwhelmingly rejected SMART’s bid for an early extension of its quarter-cent sales tax, its main source of operating revenue. Two weeks later, the county’s coronavirus shutdown to ward off the spreading pandemic led to profound changes in travel patterns and a sharp drop in transit ridership, adding to the serious budget woes already facing SMART.

So, SMART marked its three-year anniversary this past Tuesday with little fanfare and no public celebration. Officials taking stock of the moment point to a $653 million system and a continuing build-out that they say meets promises made to voters when it was approved in 2008, at the outset of the past recession.

The resulting sales tax slump led to a slower, phased launch of service. The line reached its southern terminus at Larkspur last year, and added another stop in Novato. Completion of the extension to Windsor remains on target for the end of 2021.

“I’m very proud of what we’ve done and where we are,” said Farhad Mansourian, SMART’s general manager since 2011. “Our history from 2008 is one tremendous challenge after the other. But show me another major project, from the time of the promise of funding until they delivered in nine years … with all the difficulties that we had. In operations, we are 3 years old. We’re a toddler. We’re learning, and we’re only getting better.”

Still, the rebuke delivered by voters in early March was a staggering defeat. SMART’s early sales tax renewal, billed as a way to ensure the system’s survival for the next 40 years, fell 13 points short of the two-thirds majority it needed to pass. The loss set in motion a difficult reckoning for the agency that continues to play out, with the first of several public listening sessions vowed after the election set to take place this week.

SMART officials had to postpone those sessions and host them online because of what came next: a historic global pandemic that prompted stay-home orders in the Bay Area and statewide, hollowing out ridership for SMART and other public transit systems. Nearly all, including SMART, have shifted to reduced schedules, and most have voiced dire concerns about their funding shortfalls jeopardizing future service.

“The situation facing all Bay Area transit operators is extremely serious. We know these are bad times,” said John Goodwin, spokesman for the Bay Area’s Metropolitan Transportation Commission. “It’s clear that everybody is going to suffer a severe financial hit. Federal help for transit agencies is definitely needed.”

’It’s going to be difficult’

The future of SMART, officials said, was already in some question without passage of the tax renewal to help manage rising debt payments tied to construction of the initial rail line. But now, combined with depleted sales tax returns and fare box revenues amid the pandemic, the fledgling commuter rail system finds itself approaching an existential emergency.

“It’s going to be difficult. I can’t say I have the answer and this is what we’re going to do,” said Novato Councilman Eric Lucan, chair of SMART’s board of directors. “We do know that things are going to change as far as people going back to work in offices. If everyone works from home, it’s not surprising that very few people are riding the train. But we do know that public transit plays a very important role in our communities and it’s not time to close up shop or go in a completely different direction.”

SMART was awarded about $15 million in federal stimulus aid to cope with the losses, but those relief dollars will only go so far. The rail agency slashed $6 million from this year’s budget, and plans to reduce its weekday schedule by a third once regular service is restored. Weekend service for now remains canceled.

SMART also will spend $7 million, or more than 40%, from its reserves to weather the anticipated economic slide through next summer.

The reduced schedule during the pandemic means 16 trips each weekday instead of the prior 38, with SMART down to about 14% of its average pre-pandemic ridership of 3,000 passengers per day. How many of those passengers will return and what the resulting service may look like going forward are still big unknowns.

San Rafael Mayor Gary Phillips, a nine-year SMART board member, acknowledged that even before the pandemic, the bid to attract more riders had been a “bumpy ride.” The pandemic forestalled many of the gains and exacerbated other financial woes, making for a “very clouded picture” of SMART’s future, he said.

“Even with ridership of 3,000, there were obvious financial challenges, which were witnessed when we went to the ballot this year. So that challenge still exists even with the return of 3,000,” said Phillips, a corporate accountant. “It’s going to be a real challenge to continue the service as we were once known with the frequency and some amenities. Quite frankly, time is the only factor that will provide an answer to the question.”

Service cuts impact riders

Some loyal riders said they await the day SMART resumes more frequent trips.

The return of more regular service can’t come soon enough for Stephanie Loehr, 30, of Petaluma. She used to ride the train each weekday to Larkspur, and then bike to her job as manager of the Barnes & Noble in Corte Madera. Since March, she has been forced to find other, less reliable ways to and from work because SMART’s temporary schedule no longer offers trips that accommodate her usual 10:30 a.m. to 6:30 p.m. workday.

“I used to ride it daily. Now I ride it not even once a week sometimes,” Loehr said, sitting on the train this month beside her red bicycle. “You can’t always bring the bike on the bus, and (SMART) is quicker, too, which is also another selling point for the train.”

Meanwhile, some of SMART’s 12 board members, made up primarily of elected officials from the two counties, said they recognize they’ve yet to address head-on many of the issues brought up in the contentious battle over SMART’s failed tax renewal. A single wealthy donor bankrolled the opposition campaign with $1.7 million — helping make it the most expensive ballot measure race in North Bay history — and rallied critics who have demanded that the rail agency be more transparent and accountable to taxpayers.

SMART had yet to meet its main objectives and did not deserve decades more guaranteed public money, Molly Gallaher Flater, chief operating officer of Windsor-based Gallaher Companies, said in a written statement in January. The agency has not made good on its pledge to voters to complete the planned 70-mile line and bicycle and pedestrian path connecting Larkspur to Cloverdale, nor lessened congestion or reduced greenhouse gas emissions by pulling motorists off the roadway, she said. The system’s cost was far too high for the number of people it served, and its financial future didn’t appear to be improving, Flater wrote.

In response to Measure I’s defeat, SMART has committed to roughly two dozen virtual listening sessions in cities up and down the line, and will kick off its first one Sept. 2 with a focus on Santa Rosa. The meetings are expected to run through the end of the year.

“I think these listening sessions are important, and that they’re meaningless if we don’t actually listen and make the changes that we’re hearing,” said Sonoma County Supervisor Shirlee Zane, a 10-year SMART board member. “There’s a culture on the board that says we don’t confront our critics with real solutions. So there’s a lot we have to do to turn this thing around and we’ve only barely begun.”

Makeup of board questioned

Several critics of SMART have called on the board to be recomposed, which would require legislative action in Sacramento. Such a change could, for example, transition the agency to a model used by BART, which has board members directly elected by voters.

“That’s a real question to be contemplated,” said Healdsburg Councilman Joe Naujokas, a SMART board member. “Look, given all the hoops and conditions for members to be on the board, you are eliminating the potential talent and applicant pool significantly. There could be members of the community, who, for one reason or another, can’t or aren’t willing or able to be on a City Council, but might be fantastic as a SMART board member, right?”

Novato resident Mike Arnold, an economist and longtime SMART adversary, has called on the board to sever ties with Mansourian, an unrivaled champion of the system in the eyes of SMART supporters but a lightning rod for critics. A leadership change, Arnold argued, will be required to win back voters for any renewal of the sales tax before the current quarter-cent measure expires in 2029.

“If you look at the issues we raised, it’s about the culture of the organization — how the place operates, how it runs and what it does. And the culture of SMART is dominated by Farhad, no question about it,” Arnold said. “If they renew his contract, it will signal that they don’t intend to make any changes. As a consequence, it will diminish their ability to pass the next tax extension measure. That should be apparent from the Measure I results.”

Mansourian’s five-year contract runs through August 2021. He is one of the North Bay’s highest-paid public officials, last year earning $319,595 in base salary, which is on par with peers at larger transit agencies, including BART and the Golden Gate Bridge District.

Mansourian declined to discuss his future with the agency, saying he was focused on guiding SMART through the pandemic. But board members acknowledged his tenure would be a talking point in public discussions over the agency’s future.

“It’s up to every board to hold their staff accountable, and we have to listen to the critics and see how we can do better as a board, and as a train,” said Zane, who is in the final months of her tenure with SMART and on the Board of Supervisors. “He has a contract, and when the contract ends, the board — and I won’t be on board at that time — will have to evaluate the needs of the agency.”

Coping with pandemic

SMART has seen a small rise in ridership since the low point of the pandemic in early April. Throughout, train officials have sought to reassure passengers about safety, with more frequent train cleanings, face mask protocols now in place and moves to improve air filtration and possibly use ultraviolet light to limit the spread of germs on trains. Social distancing measures could be necessary when trains again become more crowded.

Jordan Raftis, 26, a part-time Santa Rosa resident, used SMART for the first time earlier this month to make his way to San Francisco International Airport, opting for the train because the local airport shuttle hasn’t been running since early into the pandemic.

“I’m riding it as far down as it goes and then hopping an Uber,” said Raftis, who co-owns a cannabis shop in Santa Rosa. “As long as they’re keeping things clean and I’ve got my hand sanitizer, I have no problem with it. It seems like a good system.”

But SMART still does not have a timeline — nor the hundreds of millions of dollars it will require — for completing the line north of Windsor, to Healdsburg and Cloverdale. The estimated cost of the 5-mile extension from Windsor to Healdsburg, including a major bridge overhaul and station, stands at $194 million, with the 17-mile extension from Healdsburg to Cloverdale at $170 million. Together, the cost of that 22-mile extension, to more sparsely populated cities in northern Sonoma County, would amount to $364 million — roughly half of the system’s price tag so far.

The rail line has been promoted by city and transit officials as a way to attract and build new transit-oriented housing along the corridor, but getting those projects rolling has proved difficult. A phased development adjacent to SMART’s downtown Santa Rosa station is the exception, with the developer hoping to complete the first phase — proposed as a 109-unit, six-story multifamily housing project — by summer 2022.

SMART also is poised to finalize a complex deal this November that will exchange properties in Petaluma, paving the way for hundreds of more homes and providing $8 million toward building a long-planned second station on the city’s east side. The cost of the infill project was previously pegged at as much as $11 million, and a target date for opening has yet to be released.

Construction continues on the $65 million Windsor extension, which when finished will expand the line to 48 miles. That, too, could hit potential delays if a two-yearlong legal battle over voter-approved toll hikes on Bay Area bridges is taken up by the state Supreme Court.

SMART has $40 million dedicated to the Windsor extension tied up in the lawsuit. The court is expected to say whether it will review the case by mid-November.

Funding the future

The rail agency has otherwise had a successful run leveraging its average of $30 million in annual sales tax revenue to secure a total of $323 million in federal, state and regional grants. Those proceeds have mostly gone toward the build-out of the rail line, as well as segments of the accompanying bicycle and pedestrian path promised to voters in 2008.

With local funds scarce amid the pandemic for nearly all transit agencies, the competition for outside funding is bound to stiffen. SMART has no projects listed in a Bay Area-wide five-year transportation plan — a reality that would leave the North Bay’s rail agency unable to seek key grants for its future build-out.

“If you can’t apply for the grants, you’re dead in the water. Time is running out. We better get going,” Zane said.

SMART is lobbying to have its northern extension projects included in that plan, which rests with the influential Metropolitan Transportation Commission. The rail system also has entertained a more conceptual state proposal to extend east from Novato to Vallejo along Highway 37, linking into the Capitol Corridor line.

The regional transportation road map won’t be finalized until next summer, so projects can still make the cut, said John Goodwin, the commission spokesman.

If all three of SMART’s capital projects are ultimately held out of the plan, Mansourian said he’s committed to finding other funding sources. He cited the agency’s unlikely but successful bid for $20 million in federal funding to complete the $55.4 million Larkspur extension as an example.

“My job is to get to Cloverdale, in phases — and east — unless the board tells me don’t and they haven’t said that,” Mansourian said. “Is it tough? Of course it is. But nobody thought we’d get to Larkspur, nobody thought we’d go to Windsor. We have a bad habit that we keep proving people wrong, and I very much enjoy that. So we don’t give up.”

You can reach Staff Writer Kevin Fixler at 707-521-5336 or kevin.fixler@pressdemocrat.com. On Twitter @kfixler.