LOS ANGELES — A potential strike by San Francisco's Bay Area Rapid Transit District employees could drive up operating costs, but pledged revenues will remain unaffected, Moody's Investors Service said in a recent report.
On Aug. 11, a Superior Court judge put the strike on hold for 60 days, giving the agency and unions until Oct. 10 to reach an agreement.
The strike would impact BART's operations by halting its 400,000 daily rider trips, disrupting $367 million of annual passenger fare revenue that accounts for 91% of total operating revenue, Moody's said.
"Increased labor costs that could result from the contract negotiations also may affect operations," analysts wrote in the report, released Wednesday.
Moody's said a prolonged strike could also have an impact on the economic activity of Aa1-rated San Francisco by decreasing access for commuters who reside outside the city.
BART has $626 million of outstanding sales tax bonds, rated Aa2 by Moody's, and $413 million of general obligation bonds, rated Aaa. Taxes backing those bonds will keep rolling in whether the trains run or not.
Moody's placed the debt on review for downgrade on Aug. 14 in a separate rating action on the possibility that the agency, and 14 other California transit agencies, will lose federal operating and capital grants.
BART's unionized employees went on strike for four days starting July 1 after their contract expired.
They returned to work and kept negotiating; after no publicly announced progress was made, Gov. Jerry Brown requested a cooling off period, which a Superior Court judge granted until Oct. 10.
BART workers last went on strike in 1997.
"The 1997 strike lasted six days and occurred during a period of rising economic activity and employment, and had limited economic impact," Moody's said. "We expect that a similarly short strike in the current strong economic environment would also likely have little measurable economic impact on the city of San Francisco or the region."