This month, the San Francisco Municipal Transportation Agency passed a budget to sustain the next two years, to the tune of about $1.4 billion per year. The agency was able to balance the books this time around, mostly due to federal and state funding. But come 2025, it’s expecting a $76 million budget hole. The Standard sat down with SFMTA Director Jeffrey Tumlin to talk about how the city’s transit agency got here, and his plan for ensuring stable and reliable service in turbulent times.
This interview has been edited for length and clarity.
Muni is facing a $76 million deficit by 2025. How does the budget that was just passed address that, while also keeping the system running and making much-needed improvements?
Roughly speaking, pre-COVID, our budget was split in even thirds from a revenue perspective: about a third [from the city's General Fund], a third transit fare funded, and a third parking fees and fines. And then there was another 10% to 15% that's state and federal grants from various sources.
The other thing that's important to understand is that our expenses rise every year with the cost of living. But our revenues typically are at best rising with inflation or are flat or declining. So every single year, the gap between our revenue and our expenses widens. And historically we have dealt with that gap, which is called our structural deficit, in the classic fashion by deferring maintenance.
And so the reason why Muni is slow and unreliable and decrepit is because we've been papering over our structural deficit by deferring maintenance for decades. I am trying to fix that problem, and that is politically very unpopular.
So when I started this job [in 2019], Muni was running at about a $50 million annual structural deficit. Part of the reason for that is that most of our revenue sources have been in decline. There's a fundamental structural problem with the way you're financing transit and transportation in San Francisco, and we've known that for a long time.
In the pre-Covid era, we set up a whole variety of investments in order to react to that. And then Covid hit and wiped us out. General fund performance in the short run is saving us. But what really saved us was federal relief. So I am running this agency based upon one-time grants.
My strategy has been to spread out our one-time federal funds that basically cover our losses through this year. Our plan is basically using our federal funds to smartly get money to recover, while we rebuild trust with the voters of San Francisco and our passengers and put together the plan or the solution for our current financial problem and create a new sustainable funding base for Muni. This budget is focused on rebuilding trust with San Franciscans that the SFMTA can deliver.
You mentioned figuring out your next sustainable funding source. With no fare increases and ridership down, what is the million-dollar idea for a new funding source?
That is the larger conversation that we are having with the Controller's Office, the Mayor's Office, the City Administrator and through our community survey work, because there's a lot of other agencies that are also in a structural deficit.
The challenge is: Where does Muni fit in all of the government services that are needed? And then if we're going to go to the voters for something, what can get two-thirds? Similarly, what would get broad support and what would result in some organized opposition? Because any organized opposition in this world kills your measure.
I've got two years to figure that out, and two years to rebuild trust because I'm not going to be successful at the ballot or even just getting the larger city family to say that Muni is a priority unless there's trust that we can deliver and that we’re supporting San Franciscans.
So how does Proposition A, the $400 million bond on the June ballot, play into that?
This June we've got a general obligation bond for $400 million. Next November, there is reauthorization of the existing transportation sales tax. So those are both basically reauthorizing what we already have and are both necessary to keep us from collapsing, but don't actually allow us to add anything.
What do these budget numbers mean for post-pandemic recovery of the system and getting it back up to full service operations?
Our current limitation on service restoration is hiring. We've got 1,000 vacancies, including over 300 operator vacancies. We're trying to hire and train as quickly as possible. This budget does get us to full Muni restoration.
But we'll need to make some decisions as each new operator graduating class graduates about how we distribute them, because travel patterns have dramatically changed. Our system was designed primarily to bring people to a financial district that is now empty. It's coming back, but it's coming back slowly. So we have been rearranging all of our Muni service based upon the data of where people are now traveling to and from and with the focus on our most vulnerable populations. So each quarter, we'll be doing a new planning exercise to look at where's the data, where are the needs, and how do we allocate our new operators.
How is staff hiring and recruiting going and where will those resources be concentrated?
So hiring is a national problem for all transit and transportation. Everyone is struggling with vacancies and we seem to be doing a lot better than most of our peers. We are the part of city government that people interact with most. People are familiar with Muni and our jobs, they pay well, they've got great benefits and they have a real career path.
We're investing both the technology and people to make the system work better. We're investing very heavily in personal security, which is also something we've heard very clearly from our passengers. Last December, we hired 20 new transit ambassadors, and then we're hiring an additional 22 as part of this budget.
We're entering a period where our focus is almost entirely around taking existing bus lines and making them faster, more frequent, more reliable, and higher quality. The 9 San Bruno is a really good example. We did a thousand small things, methodically, surgically going in on a block-by-block, intersection-by-intersection basis and fine tuning all of the dials. And it resulted in dramatic improvements to speed and reliability, which in turn resulted in extraordinary improvements to ridership for a very low cost.
Correction: Pre-Covid, roughly one-third of SFMTA's budget was from the city’s General Fund. An earlier version of this story incorrectly stated that roughly one-third of the transit agency’s pre-Covid budget was from federal funding.
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