Taken with Transportation

About Town with Our CFO

June 25, 2024 SFMTA Episode 16
About Town with Our CFO
Taken with Transportation
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Taken with Transportation
About Town with Our CFO
Jun 25, 2024 Episode 16

In this episode of Taken with Transportation, we speak with SFMTA Chief Financial Officer Bree Mawhorter. We talk about the agency's budget and how more efficient service can save money. Plus, we take a little transportation tour with Mawhorter and discuss the many ways she gets around town.

Show Notes Transcript

In this episode of Taken with Transportation, we speak with SFMTA Chief Financial Officer Bree Mawhorter. We talk about the agency's budget and how more efficient service can save money. Plus, we take a little transportation tour with Mawhorter and discuss the many ways she gets around town.

MELISSA CULROSS, HOST: What does it take to be the person who holds the purse strings at the SFMTA?

BREE MAWHORTER, SFMTA CHIEEF FINANCIAL OFFICER: When I think about being a CFO, I think about it being my job to protect the long-term financial health of the agency.

MELISSA: Welcome to Taken with Transportation, the SFMTA’s official podcast. I’m your host Melissa Culross, and in this episode, we’re getting to know the agency’s Chief Financial Officer, Bree Mawhorter, and learning how she gets around town. We begin on a breezy afternoon in San Francisco’s Glen Park neighborhood…where Mawhorter lives with her family.

BREE: So, we are sitting in the plaza of the Glen Park BART station. I have parked my bicycle at a bicycle rack right outside of BART. Most of the time when I’m coming to work, I ride on the bike path from Glen Park up Chenery or sometimes the Slow Street on Arlington where I connect to the bike path on Valencia and ride it all the way to work. Sometimes if it’s rainy, I will take the J Church, which is, if you walk over the bridge by the BART station, I can take the J Church. Sometimes when I walk my daughter to school, I walk along Arlington, leave her at Dolores Huerta and then get on the 14 or preferably the 14R. This is pretty major intersection for cars, and there’s lots of people walking all around, walking to downtown Glen Park.

MELISSA: In addition to the nearby J Church light rail line, several Muni bus routes also pass through this area of Bosworth and Diamond Streets where we’re sitting…

MUNI ANNOUNCEMENT: 44 O'Shaughnessy to the Bayview District.

MELISSA: …just steps away from the downtown, so to speak. 

BREE: Downtown Glen Park has an IRL bookstore, which is so exciting, a lovely market, a nail salon and then various and sundry delightful little coffee and restaurant places. So, we could really spend a whole weekend in our neighborhood and never need to leave and walk everywhere that we wanna to go.

MELISSA: Mawhorter first moved to San Francisco in 2000 before leaving for a few years to earn a Master’s degree in urban planning and a Master’s in public policy. She came back in 2004 and has worked for the city for years, including a previous stint with the SFMTA. She began her current position as CFO in November of 2022. And what is the job like for her?

BREE: People ask me all the time how it’s going, and I always say, “It’s a terrible job, but I like it.” So I don’t know if that’s good or bad. It’s not a terrible job; it’s just a difficult job. But nothing that’s worth doing is easy. When I think about being a CFO, I think about it being my job to protect the long-term financial health of the agency. So, for me, it’s a lot about making sure the agency good internal controls. Making sure that we are set up for a long-term path for financial success, and creating processes, decision sets and information that let the other members of the executive team make good decisions.

MELISSA: Okay, so let’s talk a bit about that financial health…and the agency’s budget.

BREE: Our budget over the next two fiscal years increases at around 3% each of the next two years. But inflation is over 3% and employee wage increases are over 5%. So, numerically, if your major cost drivers, which are inflation and employee wages, are going up, it is a minor miracle that our budget is only going up 3%. And I think that’s really indicative of how hard the agency’s been working to become more efficient. And I would say that because our expenditure is going up so much more slowly than originally anticipated, we actually managed to cut our budget deficit from a projected 260 million when I first started at the agency to 227. So, 227 is still a big and a scary number, and it’s gonna require a lot of work to continue to close the gap, but I think we should all be really proud of the work that we’ve already done to secure our financial future.

MELISSA: Mawhorter gets a little more specific about efficiency at the agency.

BREE: I have just been so impressed with the transit team and their commitment to being more efficient because it makes Muni service run more reliably. But there also is a financial benefit to that, as well. So, for example when we do capital projects that create Muni-only lane, then the Muni vehicles are moving more smoothly, and we can use fewer vehicles and fewer staff to run the same amount of service. Which means that we can move that increased service elsewhere without increasing cost.

MELISSA: Other divisions and agency processes certainly are becoming more efficient, as well. Mawhorter and I opt for a change of scenery and walk for a few blocks while she talks more about how she gets around the area.

BREE: We are on Arlington Street, which is a Slow Street. It’s a little bit hilly. So, you know, if we become out of breath, you’ll know why. It runs from Noe Valley to Glen Park, and either I or my family is on this Slow Street five days a week because we use it to walk our daughter to school. And we also use it to walk our dog to her dog friend’s house. And there are a number of electric bike charging stations, which are a great amenity for the neighborhood.

MELISSA: A handful of runners and walkers pass us while we’re here, and Mawhorter talks more about the agency’s budget.

BREE: I think we all know in personal lives, everything is more expensive than it was three years ago, and the same is true for Muni. All of our tires and hoses and parts are more expensive. And on the Streets side, all of our paint and bollards and other street safety items are more expensive, as well. And those costs increase by somewhere between 3-5%. So, in order for our budget to remain in balance, that means revenue has to increase by 3-5%, as well. And that’s only if we do nothing new. If do everything exactly the same this year as we did last year, we can expect our costs to be 3-5% higher. And when we also want to do better by doing more or doing new things and being innovative, then those things also add cost to the budget. And we also have to realize that so much of our infrastructure is aging, and as things age, they become more and more expensive to maintain. And so, that’s also a big piece of the challenge. 

MELISSA: And where does the pandemic and its lingering effects fit in with all of this?

BREE: I think the impacts of the pandemic on the MTA’s financial health truly cannot be overstated. I think the immediately obvious impacts are that when people are working from home, they’re moving around less. And of course, when they’re moving around less, that means they’re riding transportation less, and they’re parking less. And those are two major sources of revenue for the agency. But they are also in our parking garages less and on our vehicles less, which impacts lesser-known sources of revenue, which is our retail uses at our parking garages and our advertising revenue on our vehicles and in the system. And then, perhaps most impactful of all, our two biggest sources of revenue are actually operating grants, which are largely funded through state revenues and the city’s general fund. And we all know the impacts of COVID on the city. And, you know, I frequently say, as goes the health of the general fund, goes the health of the MTA. And so, when the general fund growth is looking very slow over the next 5-10 years, that means that we can expect our revenue to be mostly flat, as well.

MELISSA: At this point, we leave Glen Park. We meet again at the Van Ness Muni station where we are waiting for the J Church, the light rail line Mawhorter rides. We start talking about the importance of public transit to San Francisco.

BREE: You know, I think Ted Egan, the city’s economist, said it really well when he said, “There is no economic recovery without public transportation.” And I think the fact that workers get to work on public transportation really points to the fact that you can’t generate economic activity unless people have a way to get there. And in the absence of public transportation, what we’ll be facing is gridlock in the streets, which slows down economic productivity because people can’t get where they need to go, and goods can get to where they need to go. And then I think transportation also provides a lot of other policy benefits outside of the economic benefits. Certainly, we cannot meet our climate goals unless we are all out of our cars more and on other modes of transportation like buses and trains and bikes and walking and scooters and other mobility devices. And, you know, I think, especially in the Bay Area, commitment to climate change is so important to us as a regional value. And then transportation makes a major contribution to equity. Not everyone can afford to travel in a private vehicle. That’s very expensive. And people of all income levels need to be able to move around and get themselves and their family where they need to go. 
 MELISSA: Does the traditional transit funding model still work?
 BREE: You know, that is such a good question. And I think a question that policy makers and elected officials are making throughout the country. You know, there have been, overall, due to the work from home trend, there’ve been a lot of transit agencies who have been struggling to generate passenger revenue and the loss in that revenue has to be replaced by something. And at least five other major transportation agencies in the country have recently gotten additional government subsidies to support their operation. That includes the New York Metro, the Boston Metro, the Denver RTD and WMATA in Washington D.C. So, I think that really points to a fact that we need to think about a different transportation funding model, given the decreases in ridership in the wake of societal structural changes that have happened post-COVID.

MELISSA: So, what could replace the dependence on passenger revenue?

BREE: That’s something that we’re all really trying to figure out. Transportation has been funded in a certain way since post-World War Two. And, you know, been 60 years of history and tradition, and I don’t think we’re going to find the answer to this question in the next 30 days, but we definitely need to figure it out in the next three years. 

MELISSA: Our J car arrives…

MUNI ANNOUCEMENT: J Church to Balboa Park station.

MELISSA: We hop on, and Mawhorter talks about her relationship with the line.

BREE: I took the J every day to work the first time I worked at the MTA, uh, when I worked in Revenue Collections and Sales. 

MELISSA: And today?

BREE: If I don’t ride my bike, or I don’t ride the 14, then I ride the J.

MELISSA: The experience of riding public transit is different for everyone and can be really personal. For some people, it’s the only time they can find to read a book. Others listen to music or podcasts. People around us are chatting. What riding the J like for Mawhorter?

BREE: I think it’s a nice opportunity to reflect on what the day is going to be or what the day was, as I either go to work or come home. And, you know, I often find that I get some of best ideas when my mind is relaxed, and I’m not actually thinking about the problem. Something will drift into my head, and I’ll think, “Aha! That was the solution all along.” So, I think riding public transportation can be just a great way to give you a moment in your day to slow down a little bit and, um do some creative problem solving.

MELISSA: We get off the J on Church Street and decide to head back toward Van Ness. That’s when we get an unexpected treat. We’ve gotten on, actually, an F Market, one of our historic street cars. And this is something, another great thing about the J.

BREE: Well, my favorite thing about the J is that sometimes, if you’re waiting for the J, an F historic trolley car will come by, and you get to ride that. And I will say that one of my Muni dreams is to someday ride the Boat car because I really wanna ride that thing.

MELISSA: The boat car or boat tram is an open-air historic streetcar. Our thoughts turn back to the SFMTA budget and Mawhorter tells us a bit more about the process. Work on each two-year budget begins about a year in advance. 

BREE: So, the first thing that we have to do, is we have to project how much revenue we anticipate having. Um, just like your household budget, we can only spend what we bring in. So, in order to know how much we can spend, we have to know how much money we anticipate generating. Then we have to look at what our spending patterns were for the prior fiscal year. And then we need to factor into the expenditure any changes in expenditure that we see coming in the next budget cycle. And then we have to compare revenue and expenditure. And if revenue is more than expenditure, meaning we’re planning to generate more revenue than we are planning to spend to provide our current level of service, then the budget’s fun. Then you get to add things that make the work that we do easier and the service that we provide better. And if expenditure exceeds revenue, then that’s not very fun at all. And then you have to identify where…places where you can spend less, and where service is gonna have to decrease.

MELISSA: And just how many people work on the budget?

BREE: When well executed, the budget is an agency-wide effort because the budget impacts everyone. Every single one of us is touched by the budget because it depends on how many colleagues we have on our team. It depends on what we can spend in order to do the work that we wanna do. So, the core of the budget team is the Operating Budget Team, which reports to me. And then each of the divisions has a budget liaison. And then, everyone in the agency would be working to make sure that their division budget liaison understands and is best able to advocate for their division’s needs. 

MELISSA: Community meetings are held to get the public’s input, and the SFMTA Board of Directors must approve every budget before it is sent to the mayor’s office and then finally the San Francisco Board of Supervisors. We ask Mawhorter how she approaches this process and her work overall.

BREE: Every CFO does their job a little bit differently, and that, I think, comes from your own personal experiences as a human and the experiences you’ve had in your career. And when I think about the things that I care about as a CFO… The things that I care a lot about are working collaboratively, being transparent, giving everyone in the agency information about the budget so that there can be ownership and understanding throughout the agency, and that people have the information that they need in order to be able to make good decisions throughout the year.

MELISSA: Back on Arlington, the Slow Street in Glen Park, we take a breath and ask Mawhorter for some final thoughts.

BREE: I think in being CFO, I’ve been consistently impressed with the passion that MTA staff bring to their daily jobs and how much they care about the work. And certainly, when people care this much and are working this hard, there’s always hope for the future because we’re finding ways to do things that are gonna increase public trust in our work. We’re finding ways to do things better and more efficiently, which brings down expenditure. And we’re finding new ways to raise revenue. So, I think staff are consistently working hard and being creative, and as long as we keep working hard and being creative, there’s always hope for the future. 

MELISSA: Thank you for joining us on TAKEN WITH TRANSPORTATION. We’re a production of the San Francisco Municipal Transportation Agency, and you can find the latest episodes at SFMTA.com-slash-Podcast, as well as Apple, Spotify or wherever you listen. I’m Melissa Culross. Be well and travel well.