SMART signals financial plan if hotly contested sales tax extension fails

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Officials with SMART say they remain hopeful about passage of the rail agency’s early sales tax renewal, but they have also begun preparing for its potential failure, for the first time acknowledging publicly on Wednesday that voters next month may not extend the 2½-year-old system’s main revenue stream.

Faced with the possibility that Measure I may not pass, Sonoma-Marin Area Rail Transit’s brain trust has started outlining the financial decisions that would be necessary to avoid eating through the agency’s rainy day funds within the next three years if existing service is preserved. The 30-year extension of the quarter-cent tax could also succeed, likely avoiding cuts to SMART’s workforce and 38 daily trains, as well as to perks or discount programs.

“There are two scenarios, one better than the other. The status quo isn’t an option, because we would dip into those reserves,” Erin McGrath, SMART’s chief financial officer, told the board of directors Wednesday. “We will wait and see what happens in March, of course, but … we’ll just continue to work toward the future as we always have done.”

SMART is seeking the extension of the tax that expires in 2029 to refinance its rising debt payments, which this year account for about a quarter of its expenses. But slashing as much as $9 million from the annual budget in jobs and service to overcome the fiscal hurdle would be difficult, because so much of SMART’s operations are interwoven. For example, officials said, it’s not as easy as a bus service cutting one route and a single bus driver, because rail agencies still have to maintain the signals and railway, no matter how many daily trips they make.

“It’s a whole organization. Everything is related, right, so it’s a functionable transit agency,” General Manager Farhad Mansourian told the board. “So we’ve been looking at what are those opportunities — not good opportunities — but what are those choices for … some of those things we don’t have to do? It becomes a combination of … what is important, and what is not important; which ones do you keep, which ones you don’t keep?”

If tasked with shaving expenses, SMART would move to prioritize future spending around maintaining what it has already constructed while continuing a focus on safety, Mansourian said. In addition, the chances of building upon the agency’s haul of $323 million in outside grant funding to extend the line beyond Windsor or finish the multiuse pathway would be more limited going forward, because those “discretionary” dollars for use as needed matching funds would be harder to come by.

Board members are optimistic they won’t have to consider that reality, which they signaled Wednesday might also result in dumping some of the current discounted ticket options — including monthly passes, as well as those for seniors, children and the disabled — to help balance the budget. Such decisions would almost certainly hurt ridership, which has been on the uptick with the turn of the new year as new stations in Larkspur and downtown Novato opened to full service, and SMART added more trains to fill gaps in weekday schedules.

SMART’s ridership grew from a weekday average of about 2,400 daily passengers last year to nearly 2,850 in January. The agency reported those counts continued to rise in the first two weeks of February, to an average of 2,976 passengers per weekday — almost a 29% increase compared to this same time last year. Preliminary February weekend totals also saw gains, which drew applause from board members.

Still, Measure I has been polarizing for residents of Sonoma and Marin counties. It’s led to a bruising campaign, where a single wealthy donor has bankrolled the opposition group with almost $1.7 million and, combined with more than $1.1 million toward the pro-campaign, smashed the all-time record in the North Bay for contributions toward a ballot measure — now at more than $2.8 million and counting.

With under two weeks until the March 3 election, only about 11% of ballots have been returned so far, according to the registrars of voters in both counties. That means there’s still time to persuade voters that SMART deserves their support in its efforts to hit the two-thirds majority threshold needed for Measure I to pass, said Novato Councilman Eric Lucan, who serves as chairman of the SMART board.

“A lot of people haven’t voted yet, so there’s opportunity for us to continue to get the message out,” said Lucan, who is also co-chairman of the pro-campaign. “Any time you have money in elections, especially spending like what we’re seeing, it clouds messaging. It’s going to be close, because anything related to SMART has always been close. It’s not easy, but it’s definitely obtainable and I remain optimistic.”

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

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