MEMBERS PRESENT: John McLemore (Chair), Maria Ayerdi (Vice Chair), Michael Burns, Arthur Lloyd, Michael Nevin, Manuel Valerio, Ken Yeager, Sue Lempert

MEMBERS ABSENT: Mary Janney, Sophie Maxwell

STAFF PRESENT: Michael Scanlon, David Miller, Joan Cassman, George Cameron, Roger Contreras, Howard Goode, Chuck Harvey, Rita Haskin, Martha Martinez, Jennifer Buhr, Ian McAvoy, Susan Stark

Chair McLemore called the meeting to order at 10:04 a.m. and led the Pledge of Allegiance to the flag.

PUBLIC COMMENT

Jeff Carter, announced that a long time rail advocate, Ernie Hills, had recently suffered an injury and is now residing in Mills Hospital in acute rehabilitation on the fifth floor. Additionally, Mr. Carter questioned the status of responses to the questions he submitted at the public hearing in regard to fares affected by the restructuring.

CONSENT CALENDAR

At the direction of Legal Counsel, the Minutes from May 1, 2003 were pulled from the Consent Calendar due to a requested correction by Director Arthur Lloyd.

The Board unanimously approved, by roll call, the following items under the Consent Calendar:

1. Adoption of Statement of Revenue & Expenses, April 2003
2. Approval of FY2004 Insurance Program (Resolution 2003-17)
3. Approval of Proposed Overall Annual Goal for FY2004 (Resolution 2003-18)

The motion of approval for the corrected May 1, 2003 Minutes was unanimously approved.

CHAIRPERSON'S REPORT

Chair McLemore reported:

• The APTA Rail Transit Conference begins on June 8 in San Jose. The Colorado DMU unit will be on display at the conference.
• New Caltrain pins were distributed.

MTC LIAISON REPORT (SUE LEMPERT)

Sue Lempert reported:

• MTC is hosting a transportation conference summit in San Francisco on June 14.
• At the last MTC meeting there was controversial discussion regarding High Speed Rail and how High Speed Rail should enter the Bay Area. The issue of whether the Altamont Pass should be reconsidered. The previous recommendation was for the Pacheco Pass, coming through San Jose. Ultimately, MTC reaffirmed the support of the Pacheco Pass with an eight to five vote.

REPORT OF CITIZENS ADVISORY COMMITTEE

Michael Kiesling reported:

• The last CAC meeting was held in Santa Clara County. The Historical Society provided a tour within the Historical Depot. There was a presentation on the update of the website so that the CAC is more easily located on the site. A representative from VTA was also present at the meeting to provide information on their proposed budget.

REPORT OF THE EXECUTIVE DIRECTOR

Michael J. Scanlon reported:

• Key Caltrain Performance Statistics:
1. Average Weekday Ridership for April was down 7.9 percent, from 31,376 riders to 28,886.
2. Year-to-Date Average Weekday Ridership is at 27,676, down from 31,393 which is an 11.8 percent difference.
3. Total Revenue was off 4.1 percent from $1.86 million to $1.79 million.
4. On-Time Performance off slightly at 93.5 percent versus 94.2 percent from last April.
5. Shuttle Ridership off slightly with 4,041 riders, down from 4,116.
• Commented that BART will be opening in just 17 days. This will open a world of opportunities that will be very attractive for public transit. Hopefully the opening will attract new riders and increase ridership. Marketing has been aggressively conducting outreach for the opening so the JPB is prepared to meet and greet the riders.
• Acknowledged the Municipal Railway and Michael Burns because of his efforts in coordinating a schedule adjustment of a four-minute hold on Muni Route #47 to allow customers to facilitate both transfers at Millbrae and San Francisco.
• Staff has continued working with Courtyard Condominiums to mitigate the impact of the signal bridge in Santa Clara. There are plans of strategically placing trees and shrubbery to lessen the impact of the signal bridge.
• The Monthly Safety and Security Report was distributed. Highlights include:
1. VTA Safety Fair was held May 13. Approximately 400 youths attended Operation Lifesaver presentations.
2. Officer on the Train event was May 21 and was very successful.
3. Captain Jim Martino of Amtrak received a safety Certificate of Commendation this month in a presentation held in Washington D.C.
4. Additional fencing is being done from Whipple Avenue in Redwood City, north towards San Carlos.
• Rail grinding was completed May 14.
• New Sunnyvale station opened and there was a ceremony May 22.
• The second Baby Bullet Locomotive was received and placed into service.
• APTA Rail Transit Conference begins on Saturday. The Colorado Rail DMU will be on static display from Monday, June 9 to Wednesday, June 11.
• The southbound Bayshore station platform will be relocated starting May 23 and the northbound platform will be moved the following weekend. The relocation will allow for construction activities for North CTX. The project will be completed in the spring.

AUTHORIZATION TO IMPLEMENT GO PASS PILOT PROGRAM

Rita Haskin, Chief Communications Officer, recommended, on behalf of the Staff Coordinating Council (SCC), that the Board authorize the implementation of a six-month pilot GO Pass program beginning July 1. The program would be similar to the Stanford University Pass, where Caltrain would work with Silicon Valley Companies who previously purchased the Caltrain Eco Pass. Employers would pay $34.50 per employee, with all full-time employees being required to participate. There would be time to collect usage data and there may be a possibility to roll it into the University Pass Program next year.

Director Nevin commented that this is a great opportunity for the employees and for Caltrain to attract new riders.

Director Valerio questioned whether the companies listed within the Staff Report were companies that have already expressed an interest in the program.

Ms. Haskin clarified that the companies listed were those that were involved in the Eco Pass Program and information has already been sent out to them regarding the GO Pass Program.

The motion to approve the pilot GO Pass program, by roll call, unanimously and resolution 2003- 19 was adopted.

AUTHORIZATION TO FILE TWO TRANSPORTATION FUND FOR CLEAN AIR (TFCA) REGIONAL DISCRETIONARY GRANT APPLICATIONS IN SUPPORT OF THE CALTRAIN SHUTTLE PROGRAM

Ian McAvoy, Deputy Chief of Development, reported that the SCC recommends Board authorization to file applications with Bay Area Air Quality Management District for TFCA in the amount of $1 million for operating support for the Caltrain Shuttle Program, and the amount of $192,000 for exhaust filter retrofits for the 2004 calendar year. The exhaust filters will enable the Caltrain Shuttle Program to meet applicable California Air Resources Board (CARB) particulate matter (PM) standards for public transit fleets. The proposed funding request for the operation of the shuttles, in the amount of $1 million is the maximum that can be granted per application under the TFCA regional fund guidelines. There is no expansion of shuttle routes proposed to the Caltrain Shuttle Program for the next calendar year.

Director Nevin questioned whether there was competition on the grant applications since it is a requirement of the TFCA.

Mr. McAvoy responded that there is significant competition and said that there is a contingency plan if Caltrain is not successful. Mr. McAvoy noted that for the past 10 years Caltrain has been successful in receiving the operating money for the shuttle program.

The motion to approve filing two TFCA regional discretionary grant applications passed, by roll call, unanimously and resolution 2003- 20 was adopted.

APPROVAL OF THE FY2004 OPERATING BUDGET

Susan Stark reported that the proposed FY2004 budget was presented to the board at the May 1 board meeting as an informational item. Since that time, staff met with several board members to respond to any questions. Additionally, a redlined version of the budget was sent under separate cover. Specific changes included approximately $170,000 increase to the revenues created from the Peninsula Pass Program, $12,500 increase to the Shuttle expense line to reflect the remaining two months of the $2 Peninsula Pass subsidy, $50,000 decrease to the Wages & Benefits expense line item which is the result of eliminating all wage increases. The net result of these changes is a reduction of the Other Sources line item of approximately $208,000 which translates to an overall $37,500 reduction to the total proposed budget for FY2004. Total FY04 proposed Caltrain Operating budget is $70,994,780.

Director Burns commended staff for the opportunity to discuss the proposed budget.

Director Valerio also commended staff for the work put into the proposed budget. Director Valerio also noted that at the Valley Transportation Authority Board of Directors meeting a two-year budget spending plan would be passed. VTA's anticipated contribution to Caltrain remains unchanged from the last few years despite the dire financial situation in Santa Clara County which may include service cuts on their own service. Further, Director Valerio anticipated that Caltrain would continue its efforts to keep costs as low as possible and provide the best service for the money provided.

Michael Scanlon reassured Director Valerio that with the aid of VTA staff, Caltrain has been able to keep the costs down while providing a reliable railroad service.

Chairman McLemore complimented all the staff members and Staff Coordinating Council that came together when putting together the proposed budgets for all three member agencies.

The motion to approve the FY2004 Operating Budget passed, by roll call, unanimously and resolution 2003-21 was adopted.

APPROVAL OF THE FY2004 CAPITAL BUDGET

Ian McAvoy made a PowerPoint presentation on FY04 Capital Budget. The presentation included program background, budget history, funding anticipation, key components, expenses, funding, FY04 member local contributions, and a multi-year funding example. The proposed budget included ongoing infrastructure improvements consistent with the guidance set forth in the Rapid Rail Plan. These elements include Station Improvements, Right Of Way, Operating & Maintenance Facilities, and Electrification. The proposed FY2004 Capital budget is $78,997,378.

Director Yeager expressed concern over the maintenance facility (CEMOF), specifically in regard to the fluctuation of the total dollar amount.

Howard Goode, Chief Development Officer, responded that there has been an increase in the project costs over the past several years.

Director Yeager questioned what the initial cost of the project was and how it has escalated. Originally Director Yeager believed the project to be $67 million and now the project is $139 million.

Mr. Goode responded that that was the cost when Caltrans first estimated the project in the southern part of San Jose about a dozen years ago.

Mr. Scanlon reiterated that $67 million was a number in 1990 or 1992, and not 1998. Caltrain inherited the project from Caltrans with that estimate and there was never an update of the number as time went forward and locations changed. Mr. Scanlon suggested that at the next meeting there would be a presentation including a timeline with details of the project so that each member agency knows exactly what the facts and chronology of events are.

Director Nevin commented that the timeline should include when and where the project started in comparison to the location that is now being looked at.

Mr. Scanlon commented that the presentation would include the details of how the cost estimates were comprised based on locations and the scope of work. Mr. Scanlon commented that the construction contract would include options allowing construction to occur as funding is available.

Director Yeager questioned CEMOF's cost in the context of other project requirements, and expressed concern at the prospect of budget approval without a firm CEMOF increment.

Mr. Scanlon recalled from prior months when asked how stable the current project estimate was he responded by saying the numbers were solid provided that the project construction started right away. In conjunction with what is approved at today's meeting, staff is ready to start construction on the project in September. Mr. Scanlon stated that the figures for the much-needed maintenance facility are definitely in the ballpark and the administrative building will be an option on the contract. At this point, if the capital budget were not approved, it would put Caltrain back several years.

Director Yeager requested clarification whether $87 million has already been identified for this project.

Mr. Scanlon answered that the $87 million is an accumulated amount from capital budgets from previous years.

Director Yeager stated that with the $15 million being proposed today would bring the project to $102 million as far as identified funds. Since the budget is set at $139 million there is still a search for $37 million.

Mr. Scanlon confirmed that dollar amounts Director Yeager stated and further responded by saying that Caltrain may not spend the entirety of the amount initially.

Mr. Yeager questioned how much money has been figured in for future operating costs for the facility.

Mr. Goode responded that the estimate is under development and has not been refined yet.

Mr. Scanlon commented that in order to run the railroad properly, this is a facility that is needed and is something that money should be spent on. Ultimately it will be paid for in other ways such as better performance and maintenance, even though it will initially add operating costs.

Director Yeager acknowledged the need of the maintenance facility but questions whether Caltrain can afford it especially since the member agencies can't afford to put more money into operating.

Mr. Scanlon commented that staff would try to have estimated operating costs available at the presentation.

Director Lloyd commented on locomotive maintenance and stated that Caltrain will be saving operating costs because of the opportunity to do maintenance in-house.

Director Valerio commended Mr. Scanlon and Director Yeager for their efforts with the project and reiterated that with the economic times it is necessary to make sure that Caltrain can afford it and maintain the facility.

Chair McLemore stated that in addition to the presentation of the maintenance facility, a presentation on the overall Rapid Rail Program is necessary especially in regard to funding.

The board, by roll call, (Yeager descending) approved the FY2004 Capital budget.

PRESENTATION OF STRATEGIC PLAN - THREE SCENARIOS

Ian McAvoy made a PowerPoint presentation in regard to the Strategic Plan - Three Scenarios. The assumptions of the Three Scenarios will influence the development of the Service, Capital and Financial elements of the Strategic Plan. The scenarios include Baseline, Enhanced, and Build-out. Each one of the scenarios will include service, capital and financial plans for the future. Staff will present the Draft Strategic Plan to the JPB for adoption this fall.

Director Ayerdi questioned what the status of the High Speed Rail MOU was now that their future is clearer.

Mr. Scanlon responded that a draft has been given to them for review. There was a meeting last week with High Speed Rail Authority and work will continue. The MOU will be brought to the board later during the summer.

Director Ayerdi commended staff for their efforts to enhance the Caltrain system. Additionally Director Ayerdi questioned why the final plan is going to be next year rather than earlier.

Mr. McAvoy responded that it would be appropriate to give ample time for public review in the process because it is the first major upgrade for Caltrain's planning process. Additionally, it is important to receive member agency support.

Director Ayerdi questioned what kind of public outreach program would be done for the project.

Mr. McAvoy responded that staff has not established the specifics but would go through similar processes as previous projects by having meetings in the three member agency counties and providing the best possible outreach available.

Director Ayerdi questioned whether the staff members from the three member agencies have already been selected or if there is a process in place.

Mr. McAvoy commented that for the public outreach effort staff have not been selected but there is a peer review group made up by management from the different agencies.

Director Michael Burns questioned how the ridership projection components would be prepared.

Mr. McAvoy responded that a number of ridership forecast efforts are in place including countywide patronage forecasts. Staff is now making sure there is consistency within all the forecast efforts. Mr. McAvoy stated that with the information that has been received, there are hopes that a significant ridership increase will occur based on the level of improvements made.

Director Burns questioned if that was what was driving the service plan.

Mr. McAvoy confirmed service plan is based on this information.

Commissioner Lempert suggested that the public outreach start with the elected officials because they may not realize the great opportunities available.

Mr. McAvoy commented that some cities have already contacted Caltrain for more information on the Strategic Plan.

Mr. Scanlon commented that staff has been talking within San Mateo County in regard to the corridor development process, particularly with the development of stations and re-development of properties with the transit stations being at the center of the community. Additionally Mr. Scanlon, in response to Director Ayerdi's question on terms of timing, it is extremely difficult to mentally prepare for the year 2020 especially with the tough economics of the time. By leaving a little more time to prepare the document, staff will be able to complete the necessary steps in successfully planning and reshaping the peninsula.

Chairman McLemore commented that on January 14, 2004 MTC will begin their efforts to create the next Regional Transportation Plan so Caltrain would want a lot of basis with the Strategic Plan.

Vaughn Wolffe, RailPAC, questioned whether ridership and market demand were the same thing. Further he commented that there isn't a tie between ridership and an increase in frequency and stated that in relation to the 1950's there was a much higher ridership and yet less frequency due to the economy. Therefore, Mr. Wolffe requested that the ridership and frequency information be incorporated into the document and presented to the public. Additionally, Mr. Wolffe pointed out that in the Table 2 there were weekday projections but not weekend trains.

Mr. Scanlon clarified that market demand is ridership and the numbers included in the document are approximations and there would need to be scheduling for the number of vehicles that would be necessary in order to meet the market demand.

Jeff Carter, Burlingame, commented that Caltrain doesn't do a lot of advertising for ridership. Mr. Carter stated that sales tax and fares are not good funding sources and commented that there needs to be a more permanent and dedicated funding source, perhaps bridge toll or business taxes. Additionally, Mr. Carter commented that electrification is projected for 2010 or 2020 and suggested accelerating the project. Further, Mr. Carter reiterated the comment of Mr. Wolffe and the lack of increase in weekend ridership and that one of the goals for weekend ridership should be to at least run the holiday schedule because weekend riders tend to be more revenue per passenger revenue riders.

REPORT OF LEGAL COUNSEL

The board met in closed session with Real Property Negotiators to discuss the following items:

1. Closed Session: Conference with Real Property Negotiators (Real Estate staff and General Counsel) pursuant to Government Code Section 54956.8: Property Location: (500 Stockton Street, San Jose, CA, JPB Parcel No. JPB-SC-0006 (APN 259-10-003); Parties: Worldcom Network Services, Inc.; Under negotiation: Price and terms of contract.
2. Closed Session: Conference with Real Property Negotiators (Real Estate staff and General Counsel) pursuant to Government Code Section 54956.8: Property Location: (600 Stockton Street, San Jose, CA, JPB Parcel No. JPB-SC-0009 (APN 259-10-008); Parties: Kosich Construction Company; Under negotiation: Price and terms of contract.
3. Closed Session: Conference with Real Property Negotiators (Real Estate staff and General Counsel) pursuant to Government Code Section 54956.8: Property Location: (610 Stockton Street, San Jose, CA, JPB Parcel No. JPB-SC-0010 (APN 259-10-009); Parties: Thomas J. Connally; Under negotiation: Price and terms of contract.
4. Closed Session: Conference with Real Property Negotiators (Real Estate staff and General Counsel) pursuant to Government Code Section 54956.8: Property Location: (686 Stockton Street, San Jose, CA, JPB Parcel No. JPB-SC-0015 (APN 259-10-0014); Parties: Armon G. & Darrel A. Strachan, Trustees; Under negotiation: Price and terms of contract.
5. Closed Session: Conference with Real Property Negotiators (Real Estate staff and General Counsel) pursuant to Government Code Section 54956.8: Property Location: (478 Stockton Street, San Jose, CA, JPB Parcel No. JPB-SC-0005 (APN 259-10-0002); Parties: Bernal Trust; Under negotiation: Price and terms of contract.

Item 14f, Closed Session: Conference with Real Property Negotiators (Real Estate staff and General Counsel) pursuant to Government Code Section 54956.8: Property Location: JPB Mainline, Burlingame to San Bruno; Parties: San Francisco Bay Area Rapid Transit District; Under negotiation: Price and terms of contract. authorization was delegated appropriately and instructions were given on the issue of real estate associated with BART extension to SFO, Legal Counsel stated they will report back at a later meeting.

CORRESPONDENCE

Previously distributed.

DATE/TIME OF NEXT MEETING: Thursday, July 3, 2003, 10 a.m. at San Mateo County Transit District Administrative Building, 1250 San Carlos Avenue, San Carlos, CA 94070

ADJOURNED: 12:35 p.m.