SMART cutting weekday service by one-third as part of $7 million in cost savings

SMART will drop almost a third of its weekday train schedule when the rail agency resumes regular commuter service, part of more than $7 million in cuts to match lower revenues with rising costs projected in the next budget cycle starting in July.

Sonoma-Marin Area Rail Transit hopes to transition to the slimmed-down, 26-train weekday schedule sometime this summer, according to an agency spokeswoman. The reduction from 38 daily trains is expected to save the 2½-year-old rail agency more than $1 million annually as it looks to close the gap between projected spending and reduced funding, primarily from slumping sales tax revenues, in the upcoming year.

The North Bay rail agency has direction from its board of directors to spend into its reserves and slash another $6 million from its budget through one-time savings and other ongoing expense reductions unrelated to worker salaries. It is cutting spending in response to a mix of financial impacts from the stay-at-home order to slow the spread of the coronavirus and growing annual debt payments tied to the construction of SMART’s initial line of service, which launched in August 2017 between San Rafael and north of Santa Rosa.

Since health officials began restricting public activities in mid-March, SMART has eliminated weekend service and operated a reduced, 16-train weekday schedule. Ridership has plunged by 90%, leading to an estimated loss of about $1 million in fare revenue this year, with expectations that it will worsen by another $500,000 — or perhaps more — through next June, said Erin McGrath, SMART’s chief financial officer.

“It’s a challenging time because things are moving and changing literally day by day,” she told the SMART board Wednesday during its virtual meeting. “Regarding the length of the shutdown and how far out we should be projecting on sales tax losses, anybody who has the answer to that, I have a dollar for you.”

The rail agency hopes to achieve $1 million in annual savings by refinancing its debt payments, a process that is expected to be completed by this fall. SMART had hoped to save more than $12 million a year through a refinancing plan connected to an early sales tax extension, but voters in the two counties soundly rejected the ballot measure in March.

SMART is taking a wait-and-see approach on whether it can avoid permanently ending its 10-train weekend service depending on how quickly the local economy recovers and sales tax revenues rebound. Even in the trimmed budget year ahead, the voter-approved quarter-cent sales tax that supports SMART represents more than 40% of its overall funding.

McGrath previously estimated annual savings of $1.6 million if weekends were scrapped, and the system instead focused solely on providing weekday commuter service. A board decision is not anticipated before late summer or early fall while SMART awaits more detailed sales tax information after the close of the current spending year.

Eliminating weekend service would include laying off 14 employees, or roughly 10% of SMART’s full-time workforce. Potential also still exists to merely offer an even more limited weekend schedule going forward, preserving some of those jobs, the SMART spokeswoman said.

Dropping down to the 26-train weekday schedule - six northbound and southbound trains during each morning and evening commute, and one each direction in the afternoon - would result in the loss of seven full-time jobs. Those positions are already vacant and will be frozen under the plan.

As it stands, SMART is already banking on additional federal aid in its new budget cycle. The rail agency was included among the Bay Area’s public transit systems that received emergency funding through the CARES Act, collecting nearly $10.4 million in a first-round award. It is planning for another $6.6 million payment as early as July, or will face faster, deeper cuts, McGrath said.

“We know time is of the essence and not to hold that up,” said Sonoma County Supervisor David Rabbitt, a SMART board member who is involved with the region’s transportation committee making the federal aid decision. “We need to make sure that we get dollars out to those agencies that are trying to craft budgets like we are today to know how to count on those dollars as soon as possible.”

The SMART board is scheduled to meet next on June 17 to adopt its annual budget.

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