Measure B proponents often make a misleading claim that Measure B will fully fund the ongoing cost of the proposed BART extension, based on a VTA memo issued a few days before the VTA board decided to place Measure B on the ballot.

The VTA memo does not accurately represent the true ongoing costs. According to the contract that BART and VTA signed in 2001, VTA would have a permanent deficit even with the proposed 1/8-percent tax. This structural deficit threatens existing VTA’s bus and light rail operations and other VTA commitments like East San Jose light rail and Caltrain electrification.

VTA/SVLG claim

VTA has to pay directly on net labor cost, energy, and other operating expenditures, and a maximum 5-20% of operating cost for capital reserve.

The memo claims to provide an estimate for these costs, even though VTA and BART have yet to come to agreement on an operating plan.

Contract terms

VTA is required to pay a percentage of its sales taxes quarterly to the BART District, which by contractual agreement is approximately 31% of a 1/2-percent sales tax. Measure B would only cover about 80% of the contractual obligation.

The BART District would deduct the operating cost from the contract payment and fare revenue, and keep the rest as capital reserve. The 5-20% capital reserve cited by the memo is actually the minimum payment. The maximum is set at 30%.

As a result, using VTA’s estimate of the operating costs as outlined in the memo, Measure B leaves a shortfall of $15-30 million for VTA every year. Even if VTA were to save up the tax revenue collected years before operation, it would still produce a deficit the long run.

Beware of spin

Just because a memo is produced by staff or a consultant doesn’t mean that it is accurate (VTA went on at great length about the consultants). VTA/SVLG has a history of presenting staff/consultant memos that have been optimistic or misleading. In October 2000, VTA provided a “revised” sales tax revenue estimate just weeks before the election suggesting that the 2000 tax generate more than enough funds to cover all operating costs for all the proposed transit improvements for the 30-year duration of the tax.

Just weeks before the VTA board voted to place the tax on the ballot, VTA’s general manager Michael Burns admitted to the press that a 1/8-percent sales tax isn’t enough.

But what that proposed one-eighth-cent sales tax would really get them is an estimated $42 million annually, which is still $8 million short of what it’s expected to cost to operate BART—$50 million.

But where would the VTA get the remaining funds to pay for the trains? Even the general manager for VTA says the cost to run BART through the South Bay is a moving target.

“That could go up, that could go down,” said Michael Burns, general manager of VTA.

It should be noted that at press time VTA defined “operating cost” as the contractual mandate. Now the VTA’s memo is trying to redefine “operating cost” to be something different than the contractual mandate.

Finally, it is important to note that none of the memos supporting VTA’s claim have legal standing. The only document that has legal standing is the contract itself.