Until the COVID-19 pandemic, steady growth in federal transit funding, enhanced state transportation funding, special state greenhouse gas reduction funding programs, 2019 fare increases, and a conservative budgeting approach had all combined to establish a strong financial foundation. Due to the still ongoing impacts of the pandemic, that foundation is much less certain for the foreseeable future despite an influx of federal relief funding and the promise of still more federal funding in the future with the 2021 reauthorization of the federal transportation funding measure. The most immediate question for 2023 and beyond is when, if ever, will ridership and fare revenues return to pre-pandemic levels and what, if any, strategic service adjustments or operational approaches could be implemented to right-size the system and more quickly recover from the pandemic. 

As noted under "Major Projects", the most immediate organizational challenge resulted from the 2018 decision by the California Air Resources Board (CARB) to mandate the purchase of zero-emission buses (ZEBs) by all public transit agencies. For agencies like Yuba-Sutter Transit with a fleet of under 100 buses, the Innovative Clean Transit (ICT) regulation requires that at least 25 percent of all buses purchased be powered by either battery electric or hydrogen fuel cell systems beginning in 2026. All transit agencies, regardless of fleet size, will be required to purchase only ZEBs starting in 2029. While this regulation will significantly increase the cost of buses, the greater impact to Yuba-Sutter Transit is the need to replace the current operating and maintenance facility within the next seven or eight years to accommodate the infrastructure to support the large-scale conversion to zero-emission buses. 

Beyond these immediate issues, the ability to meet the anticipated demand for transit services both effectively and efficiently in the future will be a challenge as the approved or planned large scale developments in Yuba and Sutter Counties are largely in areas where public transportation is largely non-existent. The potential demand for services of every kind from these projects will severely stretch what in most cases is still just a minimal level of service. To compound the problem, except for the fees that are being collected by Yuba County for the development and operation of their two park and ride lots, routine impact fees have not otherwise been required from new developments for the capital and operating revenue necessary to serve those developments which will result in even more pressure on the limited available local transit funding sources. 

Plumas Lake and Sutter Pointe are two examples of this challenge because of their size and locations well outside of the existing transit service area; their low density, single-family residential nature; and their primary market being out-of-area commuters. Many of those attracted by the lower cost of living and proximity to employment centers in the mid-valley, will be commuting to work in Placer, Sacramento, and Yolo Counties and beyond. In addition to these developments, thousands of new homes along with many hundreds of thousands of square feet of new commercial projects have either been approved or are under consideration across the region. Even recent projects such a Yuba College's Sutter County Center or the Hard Rock Hotel & Casino Sacramento at Fire Mountain present significant operational and financial challenges because of the placement of these obvious trip generators far from any existing service with no additional funding to support any related service expansion. 

Even without population growth, the demand for specialized services for seniors and persons with disabilities is expected to grow significantly according to all population projections. Also, specialized services that are now provided through the Alta California Regional Center for the developmentally disabled are limited and Yuba-Sutter Transit's own Dial-A-Ride service was already operating at or near capacity levels during peak periods prior to the pandemic.