SamTrans recently worked with Standard & Poor’s (S&P) and Fitch Ratings agencies to review the organization’s financial strength and determine its ability to repay outstanding bond commitments. Both agencies upgraded SamTrans’ rating with S&P giving SamTrans a AAA, the highest rating available on the bond market, and Fitch giving SamTrans a rating of AA+ and a rating outlook of Stable.
The rating translates into better terms on outstanding debt. Organizations assigned a AAA and AA+ rating are determined to have exceptional creditworthiness and the strong ability to repay debt obligations in the future.
This will enable the district to refinance outstanding long-term debt reducing cash outlays required for debt service and resulting in significant savings for the district going forward
During the recession, SamTrans projected that it could run out of funding as early as 2014. The district had taken on additional costs and service commitments without the benefit of additional funding beyond the half-cent sales tax that funds bus operations on the Peninsula. Since SamTrans’ inception in 1976, the district has taken on federally mandated paratransit services, without funding from the federal government, become a member in the Peninsula Corridor Joint Powers Board that operates Caltrain service, and committed to funding a portion of the BART — to — SFO construction.
In an effort to balance the agency’s budget, the SamTrans board of directors took a number of steps to address the deficit; reducing both SamTrans and Caltrain service, laying off employees, requiring employees make contributions to their retirement and health care costs and restructuring its debt.
“SamTrans customers and employees made great sacrifices to see the district through a difficult. It’s time we must remain focused on our core businesses,” said Michael J. Scanlon, general manager/CEO for the San Mateo County Transit District.
The austerity measures along with an improving economy, growing ridership on both the SamTrans and Caltrain system and contributions towards elderly and disabled transit services through San Mateo County’s Measure A program, SamTrans is able to balance its budget and reduce concerns regarding long-term funding availability.
