MEMBERS PRESENT: Michael Burns, Jose´ Cisneros, Don Gage, Jim Hartnett, Arthur Lloyd, Sophie Maxwell, John McLemore, Michael Nevin, Ken Yeager

MEMBERS ABSENT: None

MTC LIAISON: Sue Lempert

STAFF PRESENT: Michelle Bouchard, George Cameron, Joan Cassman, Cheryl Cavitt, Robert Doty, Rita Haskin, Gigi Harrington, Chuck Harvey, Jennifer Hardie, Ian McAvoy, David Miller, Michael Scanlon, Mark Simon

Chair Nevin called the meeting to order at 1:35 p.m. and led the Pledge of Allegiance.

DECLARATION OF FISCAL EMERGENCY FOR FISCAL YEAR 2006

Gigi Harrington, Chief Financial Officer, said staff recommends that the Board of Directors declare a fiscal emergency under California Public Resources Code section 21080.32 and California Environmental Quality Act implementing guidelines, Title 14 of the California Code of Regulations section 15285 for FY 2006.

The criterion for declaring a fiscal emergency is that the transit agency expects to have negative working capital within one year from the date of the declaration. Based on current levels of service, the FY2006 budget projects $64.9 million in working capital sources and $78.5 million in working capital uses during the fiscal year, resulting in a deficit of $13.6 million. Given the estimated $1.4 million available at the end of FY2005, working capital at the end of FY2006 is projected to be a negative balance of $12.2 million on June 30, 2006.

At its March 3 meeting the Board was given a report of the agency's financial status. The Board concluded there were significant financial issues regarding the FY2006 budget and called for a public hearing regarding the possible declaration of a fiscal emergency. Further, although not required, staff conducted public meetings, one in each member agency county, to solicit public comment on proposed service and fare changes. The JPB also held a public budget workshop on March 14 to consider various revenue and expenditure options, including the possibility of increasing fares and/or reducing service.

At its April 7 meeting the Board held a public hearing at which a presentation demonstrated there was evidence a fiscal emergency existed. The Board called for public testimony and there were three members of the public who provided comment regarding this item. Staff has drafted responses to the public comments received and the JPB can now declare that a fiscal emergency exists. Ms. Harrington reiterated that a declaration of fiscal emergency does not by itself implement service reductions or changes to fares.

Jim Janz, Atherton, said the City of Atherton is willing to help Caltrain out of its fiscal crisis. A long-term solution needs to be identified.

Jeff Carter, Burlingame, said a dedicated funding source is needed for Caltrain. He also said a ¼-cent sales tax should be implemented in the three member counties.

The motion to declare a fiscal emergency was unanimously approved, by roll call, and Resolution 2005-14 was adopted.

AMENDMENT TO THE CALTRAIN CODIFIED TARIFF: FARE INCREASE AND GO PASS

Chuck Harvey, Chief Operating Officer, said on April 7 the Board conducted a public hearing to consider adjustments to the JPB's Codified Tariff, amending fares and instituting the Go Pass. Staff is recommending that the Board implement a 17.5 percent increase, a 25-cent increase to the base fare and a 25-cent increase to the zone upgrade, effective January 1, 2005. Staff also is recommending an additional 5.6 percent increase, 25-cent on the base fare, effective July 1, 2006. Staff is requesting the fare increase be done in two separate increments because there is concern with elasticity of ridership.

Director McLemore said due to the increase in gas price, there is an inordinate amount of pressure on transit agencies. Therefore, he said he would like to see both increases implemented together rather than waiting six months for the second increase.

Michael Scanlon, Executive Director, said staff analysis shows that the elasticity, or the number of riders lost, would be much greater if the increases were implemented together. Staff's intention is to implement the new service model to attract new riders and then have the second fare increase in January. The higher increase is worth approximately $1.1 million on an annualized basis. If implemented on January 1, 2006, half of that projected amount could be earned without taking undo risk of turning potential riders away by doing both increases at once.

Director Burns asked if $1.1 million included an estimated of lost riders.

Mr. Scanlon said yes, the $1.1 million is the net gain, which assumes an elasticity of .3.

Director Gage asked if the second increment of the fare increase would have to go through the same outreach process as the first increase.

Mr. Scanlon replied staff is asking the board to authorize both increases today. If the second increase is not authorized today, staff would have to go through the outreach process again.

Paul Marcelin-Sampson, representing the Metro Riders Union of Santa Cruz, said they are in favor of the proposed increases because it is important for transit agencies to keep-up with economic realities and inflation. He noted that Golden Gate Transit, operator for Marin and Sonoma Counties, have had a successful annual inflationary fare increase program since 1996. Mr. Marcelin-Sampson said he does not support a surcharge for Baby Bullet service because it uses 1/3 less running time and is less expensive to operate.

Andy Chow, representing San Jose State Transportation Solutions, said many of the riders from San Jose State already think the fares are high. However, considering the financial situation, a 17.5 percent increase is acceptable. They do not favor the second fare increase. Mr. Chow recommended that conditions be made part of the second increase. For example, if the fuel prices are still high six months from now, the fare increase should go into effect. However, if the fuel prices come down, the increase should not occur.

Ed DeLanoy, San Carlos, suggested operating off-peak trains with three cars, which would reduce fuel costs.

Director Gage said he would like a farebox recovery policy instituted.

Mr. Scanlon said staff will begin developing such a policy.

Director Lloyd said he thought having the second fare increase dependant upon fuel prices had merit. If fuel prices come done, the Board can re-examine the second fare increase.

Director McLemore made a motion to incorporate both fare increases effective July 1 with the clause that the second increase would be re-examined after six months and would be adjusted with fuel prices. Director Burns seconded the motion from Director McLemore.

Director Harnett said he opposed the motion because the fare increase should not be directly contingent upon fuel prices. Caltrain has a financial crisis, only one component of which is the fuel prices. Under the best circumstances, if the recommendation for change in service is adopted, Caltrain will have very minimal reserves and can not afford to risk solvency of the system. Director Harnett said he agrees with the staff analysis that there should not be one lump sum fare increase, specifically due to elasticity.

Director Maxwell agreed with Director Harnett that the financial crisis is not due solely to fuel. The Board has to recognize there are other issues involved and even if the fuel prices go down, the money will be needed somewhere else, such as providing more service.

Director Cisneros asked what the net impact would be if both fare increases were taken together.

Michelle Bouchard, Senior Planner, said staff analysis showed an annual net revenue of $4.1 million as opposed to $4 million.

Director Gage amended the motion to include a general review in six months to determine whether or not the fare increase meets the needs of the agency.

Director McLemore and Director Burns accepted the amendment made by Director Gage.

Director Lloyd said he supported the incremental fare increase.

Mr. Scanlon said one of the risks with the new service model, if approved, is that it will take time to build the new ridership base.

Director Burns asked how staff felt counterbalancing the 25-cent increase with the fuel impact.

Mr. Scanlon said staff believes the risk would be greater if both fare increases were brought together.

Director Yeager said he did not support the motion because he believes the second increase should wait six months to see if it would still be necessary.

Ms. Lempert said she supported the staff recommendation with the added six month review.

Director Burns asked if both fare increase were implemented July 1, would $500,000 more be generated.

Mr. Scanlon replied staff estimated $4.1 million for the entire year for both fare increases. If the fare increases are implemented incrementally, approximately $4 million will be generated.

Director McLemore said he would rather have both increases together because if Caltrain is going to lose riders, he doesn't believe it will be as a result of the fare increase but because of cutting service.

The motion to implement both fare increases on July 1, 2005 with a general review on January 1, 2006 did not have majority support of the Board. (Ayes: Burns, Gage, McLemore. Noes: Cisneros, Hartnett, Lloyd, Maxwell, Yeager, Nevin.)

Director Lloyd made a motion to support the staff recommendation of implementing a 17.5 percent increase effective July 1, 2005 and an additional 5.6 percent increase of January 1, 2006.

Director Hartnett amended the motion to include adoption of a farebox recovery policy so that the necessity of the second fare increase can be reviewed against such a policy.

Director Lloyd accepted the amendment suggested by Director Harnett.

The amended motion was approved unanimously, by roll call, and Resolution 2005-15 was adopted.

In response to Mr. DeLanoy's comments, Mr. Harvey said consists sizes are balanced to optimize equipment turns and fuel cost savings. Analysis shows that with consists of three cars or less, there isn't significant savings.

Director Burns said it has been his experience that four cars are needed to effectively break.

Mr. Harvey said that is also an issue.

BRIEFING PAPER - ANALYSIS OF SERVICE OPTIONS

Mr. Harvey made a presentation including background leading up to this meeting, a historical perspective of Caltrain, establishing service levels, suspension of service at stations, congestion impacts of hold-out stations, maintaining connections and a FY2006 budget summary.

Mr. Harvey said although a fiscal emergency has been declared, which exempts certain CEQA requirements, Caltrain did have to file a Title 6 review, which was accurately completed and no disproportionate impact was found in the proposed service changes.

Mr. Harvey said San Mateo County is prepared to fund shuttle service, from a different funding source other than member agency subsidies, between Atherton and Redwood City stations and between the Broadway merchant area and the Burlingame and Millbrae stations.

Mr. Harvey said with the fare increase structure the Board just approved, closure of midline ticket offices, identification of operating efficiencies, implementation of the Super-88 schedule and with capitalization of some maintenance costs, there will still be a $2.4 million deficit. The remaining deficit can be funded by a variety of different reductions in service, including weekend, Gilroy, midday service, or by an increase in member agency contributions.

Director Nevin said at the last meeting the Board agreed that service at College Park should be re-evaluated since the station has the highest ridership of all the proposed service suspension stations. He and Director Yeager asked staff to review the schedule to see if limited service to College Park in the morning and afternoon (one train northbound and southbound for a total of 4 trains daily) could be operated.

Director Yeager said he believes the Board understands the importance of the College Park station for Bellarmine. Although the students would like more, four stops would accommodate the schedules of most of the students.

Mr. Scanlon said staff has analyzed the schedule and have determined to make the calculated risk of adding the four stops to College Park. Mr. Scanlon said College Park is in a throat area where trackage is shared with Union Pacific, ACE, Capital Corridor and Amtrak. However, at the level of one stop in each direction in the morning and afternoon, staff has determined the stops a reasonable risk to take. Students that can not use the train scheduled for College Park and can use either Santa Clara station or Diridon station and make a connection to Bellarmine.

Director Gage said he is concerned that the second Gilroy train in the morning (6:26 a.m. train) does not stop at all the stations northbound, including stations with the highest ridership. If the train does not stop at all stops in Santa Clara County, people will not see a value in riding Caltrain. He suggested having all three scheduled trains stop at all the stations.

Mr. Scanlon said staff is looking at what can be done. Initial analysis shows that all trains can stop at the Santa Clara County stations in the afternoon. However, it will take more analysis to see what can be done in the morning.

Director Gage asked what the cost data is to operate this schedule for Gilroy service.

Mr. Scanlon said the schedule eliminates a train that costs approximately $450,000 to operate, which only generates approximately $100,000 in revenue. Of the public comment received, most riders said they wanted service to Santa Clara station, which the Super-88 service schedule provides. Mr. Scanlon also clarified that the estimated $350,000 saved from the reduction or elimination of service, is a marginal cost. If something other than suspension of service occurred, the fully allocated cost would be used and it would be considerably higher.

Director Gage asked where the northbound Gilroy trains are turned.

Mr. Scanlon said northbound trains get turned in San Francisco and become southbound trains until Gilroy.

Director Gage said he would like staff to analyze the option of having all Gilroy trains stop at Lawerence station since it has the highest ridership.

Mr. Scanlon said staff could switch the schedule so that all Gilroy trains stop at Lawerence rather than Santa Clara station, if that is the pleasure of the Board.

Director McLemore said in the first analysis, 354 stops were taken away. If the four stops to College Park are added in, 350 stops will be eliminated. Director McLemore asked if the 24 peak-period stops that have been added back into the schedule are additions or if they were traded for other stations.

Mr. Scanlon said the extra peak-period stops are additions.

Director Burns asked if there is a time transfer with the alternative services for Broadway and Atherton.

Mr. Harvey said staff will custom design the shuttles to meet with the train schedule.

Director Burns asked if there would be a time transfer with the VTA service provided to College Park.

Mr. Harvey said the VTA Rapid Bus 522 runs an average of every seven minutes so a custom schedule is not necessary.

Director Burns said even with a bus connection, many of these trips can be done in less time because Caltrain runs faster.

Mr. Harvey said analysis shows that the Bellarmine students can get to school in the same amount of time even if they do not use Caltrain to College Park station.

Director Burns asked what percentage would be needed from the member agencies to close the remaining $2.4 million deficit.

Mr. Scanlon said it was slightly less than six percent.

Director Burns said the San Francisco representatives are aggressively looking for a way to increase their contribution. Of all the options, the increase of member agency contributions is the one that he feels the Board should look at.

Chair Nevin asked staff to address the issue of midline service.

Mr. Scanlon said staff has identified a way to run a midline express, which can be done within the existing budget and crew. With this new schedule, 96 trains would operate per day. The 96-train schedule would provide an additional betterment of $400,000 with the budget deficit, which would bring the remaining deficit down from $2.4 million to $2 million.

Director McLemore asked for a matrix of net loss and gain of the service schedule options.

Robert Doty, Acting Chief Operating Officer, said staff has the numbers and will distribute the matrix to the Board.

Director McLemore asked if the 96-train schedule included service to Atherton or Broadway.

Mr. Scanlon said Atherton and Broadway will be provided with a very robust shuttle service.

Comments regarding proposal of service suspension to College Park Station
Judge Jack Grandsaert, Redwood City, said he took the train to College Park to attend Bellarmine because it was safe. He said he would not have attended Bellarmine if it wasn't for College Park. Later in life, he continued to commute by train. If service is eliminated at College Park, many young men will not be able to attend.

Dan Couch, Menlo Park, said many people would not be able to attend Bellarmine if College Park station closed. Adding 300 cars to the roads, if the station closed, would have an adverse effect on the environment, traffic and parking conditions.

Patrick Go, Redwood City, said that closure of College Park would be detrimental towards every student and their families.

Father Gerald Wade, San Jose, said he appreciates the four stops to College Park, which were implemented in the new schedule proposal. He asked if two additional stops could be made in the afternoon.

Mike Henry, Morgan Hill, said many would not be able to attend Bellarmine if it were not for service to College Park.

Tome Gordnt, Morgan Hill, said he appreciates the four stops to College Park that have been added to the schedule. However, he asked for two additional stops (one each northbound/southbound) in the afternoon. If the stops were added, he would work with Caltrain staff to guarantee ridership.

Brian Adams, San Jose, said if College Park station closes, at least 300 people will be forced to drive. He also suggested altering the arrival time of the routinely delayed trains.

Bob Couch, Menlo Park, said at the meetings he attended, people requested more bullet trains after 8 a.m. and 6 p.m. If the bullet trains were operated at that time, the College Park station would not interfere with the schedule.

Comments regarding proposal of service suspension to Broadway Station
Rosalie O'Mahony, Burlingame, said 76 percent of voters in Burlingame supported the reauthorization of Measure A, counting on service. She asked for three trains in the morning and afternoon at Broadway.

Terry Nagel, Burlingame, asked the Board to make a decision that would affect the least amount of customers. If commuters are asked to change their patterns, many will abandon the system and be forced back into their cars. She asked that the Baby Bullets be phased into the system while keeping all stations open.

Joe Galligan, Burlingame, said 24 percent live within ½ mile radius of the Broadway station, promoting transit oriented development and smart growth. He said the Transportation Authority (TA) has funds to help educate the community with transit and he would like the TA to partner with the City of Burlingame to educate those living near the train station to try to increase ridership.

Ross Bruce, Burlingame, said to increase ridership, stations need to be open. If Broadway station creates hold-out conflicts, he recommended that it be upgrade with the funds that have already been approved. He also recommended having advertising on or around the trains to help stem the fiscal crisis. He said a shuttle service from Broadway will not work because it will not accommodate the bicyclists and will deter riders because of the extra connection.

John Root, Burlingame, said by closing stations, the nature of the community changes. He asked the Board to maintain minimum service to Broadway because they have the highest percentage of people who access the station by walking.

Dan Anderson, Burlingame, said eliminating stations is the least effective way of increasing ridership. Many people in Burlingame live within a transportation hub and yet the proposal calls for elimination of the Broadway station, which will make people drive their car.

Justin Schnee, Burlingame, said station closures will push people to drive. San Mateo County voted against BART when it was first built because residents were happy with the train. He said people choose the train because of comfort and its location to downtown and business areas. Mr. Schnee said there are too many gaps in the new schedule and money will be lost from fare invaders.

Comments regarding proposal of service suspension to Atherton Station
Jeff Ira, Redwood City, commended the Board for their courage and leadership, specifically with the combination of revenue increases as well as cuts in service during this crisis.

John Bacon said if the train consist was reduced from five cars to two cars, the time lost per stop due to greater acceleration is 38 seconds, which he feels is significant over the length of the route.

Jerry Carlsun, Atherton, said before the vote of Measure A, the Atherton City Council was promised that Atherton station would me made a non hold-out station. However, the new proposal states that Atherton station service should be suspended because it is a hold-out station. He urged the Board to install 4-quadrant gates at Fair Oaks Drive and Watkins Avenue to improve safety and would cost less than a grade separation.

James Janz, Atherton, said all stations along the corridor represent towns, schools and people and he urged the Board not to close them for small, unproven and potential economic benefits.

Bill Conwell, Atherton, asked the Board to re-analyze the cost to provide service to Broadway and Atherton stations.

Rosemary Maulbetsch, Atherton, said convenience is equally as important as the amount of time it takes to arrive to a destination. She said the congestion of the system is not caused by hold-out stations but from the increasing number of trains operating.

Jim Robinson, Atherton, said residents recently surveyed indicated 83 percent support for retention of service. By reducing or eliminating service to stations, it will be difficult to recapture the riders that are forced to find other means of transportation, he said.

John Maulbetsch, Atherton, said Caltrain has an obligation to serve based on Caltrain's principles. He said the analysis is poor if the cost of a single element of the schedule can not be isolated.

Kathy Janz, Atherton, said she bought her house specifically because it was located near the Atherton station. She said ridership will not increase if services are reduced.

Greg Conlon, Atherton, said Atherton and Burlingame are major contributors of the revenue Caltrain receives and he believes service should be provided. He said Caltrain is creating barriers by forcing people to take a shuttle.

General Comments regarding the proposed fare increase and service changes
Paul Marcelin-Sampson, Santa Cruz, said there is demand for Baby Bullet service, not local service.

Margaret Okuzumi, representing BayRail Alliance, said it appears that some people have forgotten the problem that Caltrain doesn't have enough money. Given the circumstances, BayRail Alliance commends staff for their work.

Jeff Carter, Burlingame, said if service to stations is suspended, it is important to consider when service will reconvene. He said local service to all stations is very valuable.

Chair Nevin asked Mr. Carter his opinion of the proposed 96-train schedule.

Mr. Carter responded that he has not had time to analyze the schedule but it sounds like a step in the right direction. However, he said, the schedule does not address the problem of station closures.

Brian Wilfley, Los Altos, said most of the methods of bridging the budget gap are burdensome. However, many are bare minimum actions needed in response to the budget crisis.

William Llewellyn, San Jose, said there is no guarantee that the additional bullet service will be as well patronized as the existing service or that displaced local and express riders will transition to other trains rather than drive.

Francis Wong, Mountain View, asked if the Baby Bullet B stations will be equipped with mini-high platforms.

Larry Lewicki, Menlo Park, said there are drastic cuts to Lawerence station, which he said is unacceptable because it alienates rush-hour commuters.

Chair Nevin asked staff to describe the key elements of the 96-train schedule.

Mr. Harvey said the 96-train schedule decreases the number of stops being eliminated within the Super-88 schedule. More service would be provided to Lawerence station and staff is analyzing whether more connections can be made with Gilroy service.

Mr. Doty said he believes there is a possibility to add Lawerence station service to the morning and afternoon for all three Gilroy trains.

Director Yeager asked if there would be any disruption adding two additional stops in the evening, one southbound and one northbound, to College Park.

Mr. Scanlon said staff can analyze the schedule; however, the 96-tain schedule is stretched already.

Mr. Doty said there are also other external elements that Caltrain can not control.

Mr. Harvey said Caltrain works under a shared trackage rights agreement. Traffic patterns are extremely complex and objectives need to be balanced.

Mr. Scanlon said the proposed changes are to save the train system. As presented at the Board workshop held on March 14, the 60-train schedule would provide service to all stations but it will not attract people to ride the train, it will not solve the budget deficit and it will not sustain this railroad.

Director Hartnett made a motion to adopt the 96-train schedule with the College Park stops as recommended, with Gilroy service including amendments affecting Lawerence station as described, that there be shuttles at Atherton and Burlingame so long as there is demand, and that the changes are made within the schedule that has been recommended.

Director Hartnett said to some extent, Caltrain's principle of providing timely and safe public transportation will not be provided in the same way for some communities. However, even those communities will still be offered timely and safe public transportation; it will just be delivered differently. In the long term, this is a system that can be built on to provide even better service. Director Hartnet said he is concerned with the survival of the system even with the 96-train schedule because there is still a budget deficit, the proposal is based on estimates and there is no way to determine how people will accept the changes. However, Director Hartnett said if something is not done, it will be the end of the railroad.

Director Lloyd said Caltrain service is well-run and is the best it has ever been. He complimented the staff for the 96-train schedule and said it was the best piece of scheduling he has seen.

Director McLemore asked if a proposed FY06 budget, with these changes, would be provided in May. He said VTA had a budget meeting and the three percent allocation to Caltrain is still within the budget for FY2006. He said in the long-term, he would like to see the Gilroy service, and other areas where service was reduced, increase once the economic conditions recover.

Mr. Scanlon said staff anticipates to have a draft budget for distribution in May with adoption in June. If the 96-train schedule is approved, there will still be a $2 million deficit. If each member agency contributes 3 percent, the deficit would be $900,000. Mr. Scanlon said a cost recovery policy should be created, as mentioned by Director Gage, and there needs to be a long-term solution to funding this regional rail agency.

Director Gage said VTA has made a lot of investment for Gilroy and he is concerned with ridership due to the reduction in service.

The motion to approve the 96-train schedule was unanimously approved, by roll call, and Resolution 2005-16 was adopted.

APPROVAL OF MINUTES FROM APRIL 7, 2005

Ms. Lempert said the minutes should reflect she was present at the last meeting.

The revised minutes of April 7 were unanimously approved.

DATE/TIME OF NEXT MEETING

TThursday, May 5, 2005, 10 a.m. at the San Mateo County Transit District Administrative Building, 1250 San Carlos Avenue, San Carlos, CA 94070

ADJOURNED

Meeting adjourned at 3:50 p.m.