SMART considers cutting staff, trains after election loss, economic uncertainty from coronavirus

SMART will explore reducing its workforce and daily train trips as it seeks to slash $6 million from its budget to counter a one-two punch of failure at the ballot box last month and sharp revenue declines during the coronavirus pandemic.

The board of directors for Sonoma-Marin Area Rail Transit met publicly Wednesday for the first time to size up the North Bay’s commuter rail agency’s sobering financial outlook after voters soundly rejected an attempt at an early sales tax renewal. The election loss presented its own set of challenges, and those are only worsened by the ongoing public health crisis and the dubious economic picture in the months and years ahead.

“Challenge is not the right word for what we’re in right now, but it’s the best one we have,” said Erin McGrath, SMART’s chief financial officer. “The crisis we’re in is not typical. There’s not any jurisdiction in the world that could have planned for this.”

SMART was already staring down a recommended $3 million cut to expenses next fiscal year, which starts in July, because of the defeat of Measure I, which was pitched to voters as a way to refinance rising debt costs. That target will instead be doubled to help cover what is expected to be a shortfall next year of up to $14 million, or roughly a quarter of SMART’s operating budget, because of dips in sales tax revenues and a 90% drop in ridership because of the regionwide shutdown.

The agency is already projecting losses of more than $11 million in sales tax and fare box revenues over a three-month period through June. SMART will benefit from nearly $10.4  million in federal emergency aid in a first round of funding to cover some of those costs, it was revealed Wednesday. That amount, as well as a second possible payout of CARES Act stimulus dollars later this summer, are subject to approval by the region’s transportation commission.

Outside of reducing SMART’s train service and number of employees - both of which were prioritized as last on the chopping block - the slate of potential cuts includes dumping free onboard internet service, limiting the agency’s subsidies to bus service in the north county, lobbying contracts for future state and federal grants and deferring any maintenance and upgrades for the $653 million system that are deemed unrelated to safety.

Saving money by delaying SMART’s 3-mile extension north from Santa Rosa’s northern outskirts to Windsor is not viable because much of the project is funded by grants specifically targeted for capital construction. Work on the $65 million extension from the system’s current northern terminus near Charles M. Schulz-Sonoma County Airport will continue and remains on schedule for opening service by the end of next year.

Meanwhile, board members also acknowledged Wednesday a need to make major changes to how SMART serves its communities to improve public opinion after the crushing election defeat last month. Measure I sought to secure the system’s sales tax into 2059 and was the train’s first time before the voters of Sonoma and Marin counties since they provided 70% backing to fund SMART in 2008. A dozen years later, however, the extension that required a two-thirds majority to pass failed to eclipse 54% support.

“I am grateful more than 50% of the public supported the train. We’ve done incredible work and moved mountains to get here,” said Santa Rosa Councilman Chris Rogers, a SMART board member. “But the progress report is not good. I don’t want to leave the impression with the public that we don’t hear you, and that we haven’t heard the legitimate criticisms that are out there about SMART.”

During the three-hour meeting, which was held online because of the stay-at-home order in both counties, board members accepted responsibility for SMART’s inability to persuade voters. To fix that, they used the session to propose ways of regaining public trust - everything from wholesale review of the agency’s operations to reappointing its oversight committee made up of citizens to reconsidering the composition of its board of directors.

“It’s not status quo, and not business as usual, folks. Not as I see it anyway,” said San Rafael Mayor Gary Phillips, a SMART board member. “We need further discussion of some fairly drastic action if we’re to see eventual passage of a tax measure. SMART is not going to survive if a sales tax doesn’t pass, that’s the overriding consideration.”

Even Marin County Supervisor Judy Arnold, a two-time SMART board chairwoman and one of the agency’s longest-serving members - as well as one of its staunchest defenders - called on the board to make significant policy changes to reengage with the community. She suggested forming subcommittees to focus on public outreach, including repairing relations with key interest groups such as the region’s bicyclists who chose to remain neutral during the campaign for Measure I.

“That should never happen again,” she said. “We need to be the ones to go out to the public and make the case. We need to have a sea change in how we do business.”

The discussion was the initial step in remaking the agency’s reputation, said Novato Councilman Eric Lucan, who serves as board chairman. The meeting acted as the launch of a lengthy listening process to pass a ballot measure before the current quarter-cent sales tax expires in 2029.

Farhad Mansourian, SMART’s general manager since 2011 - and frequent foil to the train’s harshest critics - said the agency would learn from the disappointing loss while also planning through the new realities created by the pandemic. He highlighted SMART’s ability to overcome any hurdle put in its way, and recommitted to doing it yet again.

“We have fallen down before,” Mansourian said. “Some people want to only talk about the number of times we’ve fallen down or how far we’ve fallen. What makes SMART an incredible public asset … is not how many times we’ve fallen, but how fast we’ve gotten up. We are resilient. We will only get better and better. This is not the end.”

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