The year-long audit found transit’s greatest threat is the lack of sustainable long-term funding
AC Transit announces that the long-awaited state audit examining six East Bay transit agencies and the MTC, titled 2025-120 East Bay Transit Agencies, is now complete. Its findings come to a clear and unmistakable conclusion: AC Transit and five other East Bay transit agencies are already working together effectively across the region.
The State Auditor further concluded that while collaboration among transit agencies is functioning, the Bay Area’s public transportation systems face mounting structural fiscal pressures that threaten future service levels if sustainable funding solutions are not secured.
Commissioned by the Joint Legislative Audit Committee after a formal April 2025 request from State Senator Aisha Wahab, the audit was launched in response to concerns that East Bay transit systems were too fragmented, duplicated some services, created challenges for riders transferring between agencies, and faced long-term financial instability.
As part of the review, California State Auditor Grant Parks examined how well AC Transit, County Connection, Wheels, Tri Delta Transit, Union City Transit, and WestCAT work together, the financial pressures they face, and whether consolidating transit agencies would improve efficiency or reduce costs. The findings make one point clear: East Bay transit agencies are already coordinating in meaningful ways. The larger challenge is not a lack of collaboration, but the need for long-term, sustainable funding to protect future service.
Among the audit’s most significant findings:
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Transit coordination across the East Bay is already strong.
Auditors took 12 real-world commute trips that everyday riders could reasonably make across East Bay service areas, covering about 25 percent of routes that cross agency boundaries. Their conclusion is that riders did not face significant barriers or major problems transferring between agencies.
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MTC regional integration initiatives continue to lag behind schedule.
Although MTC has launched multiple initiatives intended to improve the rider experience across the Bay Area, auditors found that none of the nine reviewed initiatives were completed within their preliminary timelines. The finding raises concerns about the pace of regional transit modernization efforts.
- Five of the six transit agencies face serious fiscal risks.
Apart from Tri Delta Transit, the selected East Bay transit agencies have adequate financial reserves in the short term. However, all but Union City Transit are at risk of depleting those reserves without new funding – some as soon as fiscal year 2026–27. As a result, agencies may be forced to reduce service levels, further impacting mobility, economic access, and regional connectivity.
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Zero emission bus mandates present major financial hurdles.
Transit agencies reported significant concerns about the cost of purchasing and deploying zero emission buses required under California mandates. The report identifies the transition as a growing operational and fiscal challenge for public transit providers.
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Transit agency consolidation is unlikely to solve financial problems.
Auditors examined whether combining agencies could improve financial sustainability and found that consolidation alone would not resolve structural deficits. Combined agencies would still face negative unrestricted net positions and long-term financial pressures.
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Legal and labor-related barriers could complicate consolidation efforts.
The report notes that federal protections involving private contractors, along with differing labor agreements, would create substantial consolidation challenges. Additionally, standardizing wages and benefits across merged agencies could significantly increase costs because AC Transit currently maintains substantially higher labor costs than neighboring operators.
The audit presents a balanced view of how East Bay transit agencies are working together effectively for riders, but the region’s transit network remains financially vulnerable.
The report also makes clear that consolidation alone will not solve the problem. Long-term sustainability will depend on stable funding, careful management of rising operating costs, and the ability to meet ambitious state climate goals while navigating real fiscal constraints.
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