MTD bus in downtown Santa Barbara.
An MTD bus travels through downtown Santa Barbara. (Brooke Holland / Noozhawk photo)

The effects of the coronavirus pandemic are shaping up for a public transit agency providing bus service across Santa Barbara County’s South Coast.

The Santa Barbara Metropolitan Transit District recently released projections of the financial ramifications of the ongoing global pandemic for the agency.

The agency is predicting that its actions in response to COVID-19 will continue to disrupt the economic outlook for the final quarter of the 2019-20 fiscal year ending June 30. The agency says it will impact sales tax revenue, which constitutes nearly $10 million of MTD’s operating budget. 

Although service cutbacks will reduce SBMTD’s operating costs, the budget deficit is expected to exceed $1.3 million compared with the $500,000 deficit forecast in the approved budget, according to Assistant General Manager Brad Davis.

Davis discussed a financial update at Tuesday’s SBMTD board of directors meeting, conducted virtually for the first time. His staff report focused on MTD’s financial performance through the nine-month period ending late March and included projections for the final quarter of the fiscal year.

The SBMTD reserve funds are planned to balance the $522,000 budget deficit, Davis said.

Funding provided by the $2 trillion economic stimulus package — Coronavirus Aid, Relief, and Economic Security Act (CARES Act) — is planned to address the projected $800,000 deficit increase that SBMTD is expecting from the public health emergency.

Those estimates don’t reflect the pandemic-related losses for the Santa Barbara-based nonprofit Easy Lift Transportation. CARES Act money received by SBMTD will be allocated to Easy Lift Transportation, which fulfills MTD’s obligation for the provision of ADA-related paratransit service.

To date, SBMTD has yet to receive federal formula funding for this fiscal year.

“We are highly confident that (CARES Act money) is happening,” Davis said. “That will be used to balance the budget shortfall in addition to the usage of reserves.”

The Santa Barbara MTD board of directors conducted its first-ever virtual meeting on Tuesday.

The Santa Barbara MTD board of directors conducted its first-ever virtual meeting on Tuesday. (Brooke Holland / Noozhawk photo)

The agency has sufficient working capital with no short-term risk of being unable to continue funding MTD operations, according to Davis. Other SBMTD reserves are available to cover delays in the allocation of CARES Act money if needed, Davis explained.

The CARES Act funding is restricted to reimbursement for costs incurred or lost revenues as a result of the coronavirus pandemic, SBMTD General Manager Jerry Estrada said. 

“Those funds are critical for us,” Estrada said. “If we are not able to collect fares, ridership is going to be lower and that’s going to have a major impact.”

The agency faces funding challenges as fare collections were suspended in late March in an effort to reduce employee and customer exposure to the coronavirus, triggering a corresponding drop in revenue from fares. Terminating the fare collection is scheduled to continue at least through June, and the outcome will be a 25 percent reduction in fare revenue for the fiscal year.

SBMTD’s operating budget is $28 million, and $8 million of that total comes from fares, according to Estrada.

“Those two funding sources are going to be directly impacted by the pandemic,” Estrada said, later adding that SBMTD suspended eight of its 24 bus lines because of the effects of the pandemic.

Gov. Gavin Newsom’s stay-at-home order issued in March further reduced the number of people circulating, and therefore the number of people taking the bus, according to SBMTD staff.

Health officials have discouraged unnecessary travel, and people are working from home amid the coronavirus pandemic. School campus closures also had a major impact on ridership.

Year to date, UC Santa BarbaraSanta Barbara City College and K-12 students make up more than one-third of MTD ridership, said Hillary Blackerby, SBMTD’s planning and marketing manager. 

UCSB ridership decreased 2.1 percent in the third quarter (January through March), while SBCC student ridership decreased 11.5 percent, according to Blackerby. SBCC student ridership numbers were up in January and February —7.8 percent and 1.6 percent, respectively.

Many essential workers and people who need to leave for essential reasons rely on the agency’s public transit during the pandemic.

“We know there are people who are health care workers, people who are working in restaurants, grocery stores and things that are open and essential,” Blackerby said.

Ridership on SBMTD dropped about 85 percent because of the COVID-19 pandemic, Blackerby said. 

“It took a few days to get there,” Blackerby said. 

There are 4,000 to 5,800 transit riders on a typical weekday. Before the pandemic hit, the SBMTD normally carried about 24,000 passengers, Blackerby added. Third-quarter ridership totaled more than 1.5 million riders, representing a 5.2 percent decrease of nearly 85,000 riders from the same period of the 2018-19 fiscal year.

“Things changed toward the middle of March,” Blackerby said of SBMTD ridership.

Santa Barbara MTD’s operating results through the third quarter (January through March) of the 2019-20 fiscal year were positive, ending with a small surplus rather than the projected deficit, Blackerby said.

The 2020-21 budget will be discussed at the scheduled SBMTD board meeting in June.

“We are looking at a series of unknown,” SBMTD board of directors chairman Dave Davis said. “We will be adjusting as we go, and even more so than we have in the past.”

Noozhawk staff writer Brooke Holland can be reached at Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.