AC TRANSIT BOARD GREENLIGHTS DEVELOPMENT OF CONTINGENCY PLAN FOR SERVICE REDUCTIONS

AC TRANSIT BOARD GREENLIGHTS DEVELOPMENT OF CONTINGENCY PLAN FOR SERVICE REDUCTIONS

The two-scenario Alternate Service Plan could result in considerable service cuts and layoffs

OAKLAND, Calif. - The Alameda-Contra Costa Transit District (AC Transit) Board of Directors approved an Alternate Service Plan framework at its March 25 public meeting, outlining two potential budget scenarios, the more significant of which could reduce bus service by up to 16% and result in a workforce reduction of as many as 300 employees.

In reaching its decision, the Board considered the District's mounting long-term structural deficits. Current projections forecast annual operating deficits of about $50 million beginning in FY 2027-28 and continuing in the years ahead.

To help stabilize service in the near-term, AC Transit will receive up to $55 million in a one-time operating loan from the State of California for FY 2026-27. Beyond that, maintaining current service will depend on securing a new, sustainable, long-term funding source.

The Board was informed that if new funding does not materialize, the transit district has no choice but to reduce total expenses. To prepare for that possibility, AC Transit developed a framework for two Alternate Service Plans outlining potential service and staffing adjustments based on current service levels, which remain at 85% of pre-pandemic operations.

• Scenario One: This framework identifies a projected $36.76 million budget gap, driven by $35 million in needed expense reductions and $1.75 million in expected lost fare revenue. Closing this gap would require an estimated 11.4% reduction in service, which could impact up to 200 through a reduction in force.

• Scenario Two: This framework outlines a $53 million budget gap, made up of $50 million in expense reductions and $3 million in lost fare revenue, which would require a 16.4% reduction in service. Given the depth of these reductions, the workforce impact would be equally significant, with up to 300 employees facing a reduction in force.

Both scenarios also assume a 5-6% decline in farebox revenue, reflecting potential ridership losses on lower-productivity routes.

Today, AC Transit's overall farebox recovery rate is about 8%. The final percentage could vary depending on the plan ultimately adopted by the Board of Directors.

AC Transit's deepening budget shortfalls, combined with escalating operating costs, have accelerated development of the Alternate Service Plan framework. While no specific bus lines were identified for reduction, the financial outlook requires that all bus lines be reviewed for potential adjustment.

The two-scenario framework is designed to protect the current core bus network, known as Realign, and was launched in summer 2025. Realign is shaped by several years of input from riders, the community, and frontline employees. The goal is to preserve as much of the existing network as possible rather than redesign it.

Following Board approval of the framework, staff will now develop two draft service plans detailing specific bus line adjustments for the Board's consideration and vote on June 10.

It is essential that riders and East Bay communities understand that the Alternate Service Plan framework is a contingency plan. If new funding is secured to sustain current service levels, no reductions will be implemented. If not, the proposed changes could be considered as part of the June 2027 service change, following the required public hearing process.