Auditor: East Bay Area transit could run out of money soon

Six East Bay transit agencies were identified in the report: Alameda-Contra Costa Transit District, Contra Costa Transit Authority, Livermore Amador Valley Transit Authority, Eastern Contra Costa Transit Authority, Union City Transit and Western Contra Costa Transit Authority. All these agencies except for Eastern Contra Costa Transit Authority and Union City Transit are at risk of depleting short-term reserves. Some of those agencies are expected to run out of money in reserve funds during fiscal year 2026-27, according to the report.

Five transit agencies listed in the audit either could not be reached by The Center Square before publication time on Monday. The California State Auditor, an independent, nonpartisan agency that performs audits of government entities, declined to be interviewed.

Robert Lyles, media and strategic initiatives manager for the Alameda-Contra Costa Transit District, said the district agreed with the findings of the audit.

"AC Transit and other Bay Area transit agencies do not have adequate financial reserves to withstand long-term structural funding challenges," Lyles told The Center Square, answering questions by email on Monday. "Our transit district is confronting a fiscal reality unlike any in its 65-year history. Without sustainable, long-term funding, AC Transit is projected to face nearly $200 million in cumulative deficits over the next four years."

That includes annual shortfalls of $50 million beginning in fiscal year 2027-28, Lyles continued.

"These are not abstract numbers on a balance sheet," Lyles said. "They represent a very real threat to the bus service that more than 3 million riders depend on each month."

The state auditor’s report shows that rising operating costs and limited revenue generated from bus fares can’t fix the money problems many of these transit agencies face. The report focused on buses but not on its trains.

“Riders want more frequency,” said Zack Deutsch-Gross, executive director of Oakland-based nonprofit group Transform, which advocates for public transit. “The elephant in the room is the existential crisis facing transit operators in the Bay Area due to budget cuts and service cuts.”

The best way to improve transit service is to run more service lines, Deutsch-Gross told The Center Square, which would take more funding from the state and the local governments.

“Long-term, we know the state needs to step up to fund transit operations,” Deutsch-Gross said. “Here in the Bay Area, we passed numerous sales taxes continuing to tax ourselves to keep our agencies afloat and to grow them. But we’re really hitting a limit where sales taxes are over 10% in some counties, so it’s important the state steps up because we’ve done just about all we can locally and regionally.”

The Metropolitan Transportation Commission, which oversees many of these transit districts, disbursed a total of $1 billion over the last three fiscal years for operating and capital expenses, according to the report. Representatives from the commission did not respond to The Center Square.

Combining any of these agencies might not help, the state auditor said in the report, because many of these taxpayer-funded transportation departments operate in the red. According to the auditor, combining them won’t necessarily save taxpayer money or improve bus service.

“Regarding the California State Auditor’s report on the East Bay Transit Agencies, some of the findings are known concerns,” Assemblymember Lori Wilson, D-Suisun City and chair of the Assembly Transportation Committee, told The Center Square. “I appreciate the California State Auditor’s thoroughness and look forward to working with the community on actionable steps, or perhaps legislation, to address those concerns.”

Sen. Dave Cortese, D-San Jose and chair of the Senate Transportation Committee, declined to comment for this story.

Public transit advocacy organizations, including TransBay Coalition, Seamless Bay Area and San Francisco Transit Riders, did not respond to The Center Square's requests for comment.