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SFMTA CFO: fares buoy revenue even as grants lag; $307M multiyear gap looms
Summary
CFO told the board the agency is projected to end the fiscal quarter on budget thanks to stronger-than-expected passenger fares (about $13'14M over budget) and parking revenue, but operating grant shortfalls and rising costs produce a multiyear structural deficit beginning FY26'27; staff outlined revenue, one-time resources and efficiency strategies to close the gap.
Brie Mahorder (identified in the transcript as CFO) presented a quarterly financial update showing that, as of Sept. 30, the agency is projected to end the year on budget if current revenue and expenditure trends hold. "So as of September 30, we are projected to end on budget, assuming that our revenue continues to perform as it has during the first 3 months of the year and that we continue to maintain strong expenditure control," the CFO said.
Key points from the presentation:
- Transit passenger fares are beating budget by roughly $13'14 million for the year-to-date, which the CFO called a strong sign of rider confidence as service quality improves. "Transit fares are over budget by $14,000,000," she said.
- Operating grants (state and regional transfers) are underperforming relative to budget assumptions, largely reflecting broader state revenue dynamics; that shortfall to date is offset by stronger fare revenue and conservative expenditure management.
- Parking-meter revenue is meeting or exceeding targets due to changes in travel patterns (shift from monthly garage use to more single-ride meter parking).
- The agency projects a structural multiyear gap starting in FY26'27 (presented as the program'level deficit scenario), which staff framed as a three-legged approach to close: regional and local ballot measures, one-time revenues (fund balance, project cleanup), and sustained agency efficiencies.
Board members pressed the CFO on fund-balance accounting and bridge options; the CFO explained prior-year timing decisions on pandemic relief funding and said staff expect a fund-balance amount of roughly $60 million available for one-time use, in addition to reserves. She also described negotiations with state partners about potential bridge financing to cover the timing gap between when ballot measure revenues would be authorized and when they would start to flow.
Public commenters and advocates who testified during the budget item urged the board to protect transit service levels and to avoid overreliance on fares as the primary revenue source; several urged the board to be transparent about what would happen if regional or local measures fail at the ballot.
Staff said they will return with more detailed options on enterprise revenues and fare policy in two weeks and a capital-budget framework in January, and they plan a board workshop ahead of a scheduled April vote so the budget can be submitted to the mayor by May 1.
