Caltrain Board Reviews Annual Budget And Ridership Numbers

Caltrain Board Reviews Annual Budget And Ridership Numbers

Rail Agency Sees Skyrocketing Ridership; Still Faces Uncertain Financial Future

Ridership Graph

Caltrain staff today presented a preliminary report to the Joint Powers Board indicating the rail service’s Fiscal Year (FY) 2014 budget will be balanced, but warning that Fiscal Year 2015 faces a significant budget shortfall that could result in service cuts and fare increases.

Unprecedented revenue increases due to historic ridership growth, savings from prior budget years and one-time-only stopgap funds will make it possible for Caltrain to put forward a balanced budget, reported Gigi Harrington, Deputy CEO for Finance. 

But Caltrain’s financial future remains uncertain beyond the next fiscal year as the rail agency continues to grapple with a lack of dedicated funding and surging demand for its services. A copy of the report to the Board and the preliminary budgets for FY14 and FY15 can be found here.

As Caltrain has done in the past, the proposed FY14 budget was balanced using what is known as “one-time only” stopgap money.  Over the last few budget cycles, these measures have included the use of regional funding through MTC, stopgap funds and funds repaid to SamTrans for the purchase of the rail corridor.  SamTrans has used that funding to cover its share of the operating deficit, which, in turn, has allowed Caltrain to maintain a robust level of service to meet the growing demand.  With all of those funds exhausted, Caltrain will need to either identify a new funding source or consider service reductions for FY15.

“Caltrain is vital to the rebounding economy of our region, and demand for the service has never been higher,” said Ken Yeager, Chair of Caltrain’s Joint Powers Board.  “These historic ridership levels look like they will remain on track, so there will be no fare increases or reduction in service levels in this year’s budget.”

Caltrain’s total proposed operating budget for FY14 is $120 million, an increase of 7 percent over the previous year’s budget.  The increase is a response to Caltrain’s ridership growth.  With such high demand, the complexity of operating the system and managing the contract is growing, leading to an overall increase in Caltrain’s operating budget. 

“We absolutely do not want to impact our customers, so we will continue to work closely with our partners and other regional stakeholders to look for solutions to Caltrain’s long term structural deficit,” said Gigi Harrington, deputy CEO for finance and administration.  “Without a dedicated funding source, Caltrain struggles to put together a balanced budget each year, making the long term planning needed more difficult.”

Unprecedented Ridership Growth

As ridership continues to grow, surging more than 11 percent each year for the past three years, Caltrain’s farebox revenue is also strong, this is helping to offset the structural deficit and the increase in operating costs.  Caltrain is projecting farebox revenue of $66.1 million and parking revenue of $3.7 million for FY14.

Since 2010, Caltrain has experienced a 38 percent increase in ridership.  As of the annual ridership counts conducted in Feb. 2013, Caltrain is carry an average of more than 47,000 average weekday riders, nearly doubling its ridership since introducing the Baby bullet service in 2004.   High demand has resulted in service constraints during the peak hour commute, with some trains operating at 130 percent of capacity. 

 

“Caltrain is straining at the seams,” said Chuck Harvey, deputy CEO of operations, engineering and construction.  “We need to look for ways to add capacity to the existing system to take some pressure off the most popular trains and to provide a more comfortable ride for our passengers.”

Caltrain is looking at options for expanding its capacity.  One possibility under consideration is the purchase of additional rail equipment.  It is unlikely Caltrain would implement any schedule changes or add rail capacity before the end of this year.

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About Caltrain:   Owned and operated by the Peninsula Corridor Joint Powers Board, Caltrain provides commuter rail service from San Francisco to San Jose, with limited commute service to Gilroy. Caltrain has enjoyed 28 consecutive months of ridership increases, surpassing more than 50,000 average weekday riders earlier this year. While the Joint Powers Board assumed operating responsibilities for the service in 1992, the railroad will celebrate 150 years of continuous passenger service in 2014. Planning for the next 150 years of Peninsula rail service, Caltrain is on pace to electrify the corridor by 2019, reducing diesel emissions by 90 percent and adding more service to more stations. 

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Media Contact: Jayme Ackemann, 650.508.6238