DATE: August 18, 2026
TO: Mayor and City Council
FROM: City Manager
SUBJECT
Title
AC Transit Budget & Service Update: Receive a Presentation from AC Transit on Agency Deficit Projections and Potential Service and Workforce Reductions
End
RECOMMENDATION
Recommendation
That the City Council receives a presentation from AC Transit staff on agency deficit projections and potential service and workforce reductions.
End
SUMMARY
The Alameda-Contra Costa Transit District (AC Transit) is the largest public bus-only transit system in California. For 65 years, AC Transit has connected East Bay residents to jobs, schools, healthcare, and community life. However, rising costs have outpaced available funding, leaving the agency at a historic financial crossroads, facing a four-year, $200 million deficit beginning in Fiscal Year 2027-28.
The emergency relief funding that sustained service through the pandemic is now gone. At the same time, costs of operating transit are rising - including wages and benefits, fuel, parts, and bus production - these increases are outpacing the revenues we rely on.
A recent State of California bridge loan provides temporary relief but does not solve the ongoing lack of funding. The passage of a proposed ballot measure in November could provide funding for AC Transit to continue full service. However, without sustainable, long-term funding by December 2026, our 65-year-old transit district faces unavoidable service cuts of up to 16% and potential layoffs, impacting as many as 300 employees.
ATTACHMENTS
Attachment I AC Transit Budget and Service Update
Attachment II AC Transit Presentation