Caltrain's Fiscal Crisis FAQ
Q. How did Caltrain end up with a $30 million deficit?
A. Caltrain is the only transit system in the Bay Area without a permanent, dedicated source of funding. Other agencies rely on money from sales taxes, property taxes, state funding and other sources. Caltrain has no such source.
For the last several years, 40 to 45 percent of Caltrain’s annual operating budget has been covered by passenger fares, parking fees, and other revenues. Annual contributions from the three partners in the Caltrain system have been in the range of 40 percent.
As the economy has worsened, undermining the ability of the partners to maintain their contributions, Caltrain has balanced its budget through a combination of service cuts, one-time-only money, administrative cuts, including salary and hiring freezes, staff reductions and furlough days and fare increases. This is an unreliable, unsustainable approach.
Two years ago, SamTrans determined it had to reduce its Caltrain contribution to $4.8 million, a reduction of $11.7 million over two years. If the partners follow suit and cut their shares accordingly and Caltrain continues to run its current schedule, the result would be a $30 million deficit in FY12.
Q. What are you doing to solve the current budget crisis and minimize service cuts?
A. Caltrain staff is evaluating a number of potential financial solutions from Caltrain Board and staff, the Caltrain partners, more than 1,500 comments from the public and proposals from the Silicon Valley Leadership Group and the Friends of Caltrain. They include:
Redirect money set aside by the three partners for electrification
Spend funds from VTA and SFMTA that repay SamTrans for the purchase of the Caltrain right-of-way in 1991
Reallocate regional bridge toll money being collected for future Dumbarton rail service
Seek other federal, state and regional discretionary funding
Update the basis for contributions from Caltrain’s member agencies
Find additional cost savings in the Caltrain budget
Q. Why don’t you raise fares?
A. Raising the base fare 25 cents is under consideration. At the beginning of the year, Caltrain increased the fare for each zone 25 cents. This increase will raise an estimated additional $1.2 million in Fiscal Year 2011. The annual price of the Go Pass also was raised from $140 to $155. This increase will raise an estimated additional $300,000 annually.
Q. Why not charge what it costs to operate Caltrain?
A. Nearly half of the cost of operating Caltrain comes from passenger fares.
If Caltrain were to double fares, a round trip from San Jose to San Francisco would increase from $17 to $34. That would be too much money for many Caltrain riders, and there would be a decline in paying customers.
Caltrain’s overall financial problems can be dramatically improved by running more trains and carrying more people, but the system’s infrastructure is maxed out. The way to improve the infrastructure is to modernize and electrify Caltrain, which is being actively pursued.
There is more information on Caltrain fares at the Caltrain website at this link: http://www.caltrain.com/Fares.html
Q. Why can’t you add one more station or one more train?
A. Caltrain has a fixed amount of money that can be used to run the trains. It is using this money to operate as many trains as possible with as few train crews as possible. Adding just one station or just one train could mean adding extra train crews, which will cost a lot more money – money that Caltrain doesn’t have.
Q. How will you decide which stations will have service suspended?
A. The factors include:
How close the station is to another station that would still have service
Whether the station is a transit hub with connections to other transit systems
Whether there is major construction work underway at the station
Plans for adjacent transit-oriented development
Q. Why not have vendors at all the stations to generate rental income for Caltrain?
A. Caltrain is looking into expanding its vendors at stations. Currently, there are vendors at the San Francisco, Hillsdale, San Carlos, Mountain View and San Jose Diridon stations.
Q. Why not charge for premiums – a “first-class” car, a “silent” car, express service, peak-hour service vs. off-hour service, to bring a bike on board?
A. We’re not sure legally we can do some of these things, but we’re looking into all of them. We do worry that our customers will find some of these changes unacceptable.
Q. Why not increase parking fees?
A. An increase in parking fees is under consideration.
Q. Why are you spending money on big construction projects at stations when you don’t have any money?
A. Construction projects are paid out of another budget – the capital budget -- with money from other sources. Almost always, it is illegal to use money from the capital budget to run the train.
Q. Why don’t you sell ads? Why don’t you sell more ads?
A. Caltrain is working to expand its active advertising program, which includes selling space at stations and “wrapping” a train in advertising. This year, the advertising program is projected to generate $100,000 in revenue.
Q. Why not sell naming rights to your stations or your trains?
A. We are looking into it right now. If you know of any company or other entity that might be interested in paying for such rights, please contact Brian Fitzpatrick, Caltrain Real Estate Manager, at firstname.lastname@example.org.
Q. Why hasn’t Caltrain been consolidated with other transit agencies?
A. Caltrain is part of a consolidated agency – it is managed by SamTrans, the transit agency for San Mateo County, providing bus and paratransit services. SamTrans also manages the San Mateo County Transportation Authority.
SamTrans employees work for three separate agencies, three separate boards and produce three separate budgets. The result is significant savings to Caltrain - only about 6 percent of Caltrain’s budget is spent on administrative staff. Caltrain reached 6 percent by continual efforts to cut costs. The 6 percent in administrative costs is the lowest among transit agencies in the Bay Area.
In addition, the Metropolitan Transportation Commission is exploring consolidating transit agencies throughout the Bay Area, and Caltrain is an active partner in that effort.
Q. Why not raise private funds – a foundation to support Caltrain?
A. We are working with the Silicon Valley Leadership Group to explore that possibility.
Q. What other ideas are you considering to attract more customers or make more money?
A. They include:
Expanding our program to sell and/or lease Caltrain property
Expanding bike capacity so that every train will have two bike cars, an increase of more than 50 percent in the past two years
Adding Wi-Fi and smartphone apps as an amenity for riders
Expanding the current program of shuttles, subsidized by employers, government agencies and Caltrain that take customers to and from work.