Caltrain may cut service due to 'fiscal emergency'

Caltrain board unanimously declares emergency to allow big cuts in weekend service and eliminating some daily commute

Major Caltrain weekend- and mid-day service cuts plus a fare increase are being planned by this fall and early 2011.

Faced with a $12.5 million budget deficit for the 2011 fiscal year, Caltrain's Board of Directors unanimously voted June 3 to declare a fiscal emergency for the second year in a row.

The fiscal emergency allows the Peninsula Corridor Joint Powers Board to implement changes such as fare increases and reductions in service without meeting the requirements of the California Environmental Quality Act, Caltrain spokeswoman Christine Dunn said.

The act typically requires an evaluation of the potential environmental impacts of changes to public transit service, but the declaration of a fiscal emergency allows agencies to forgo that prerequisite.

Dunn said a number of fare increases and service reductions were suggested at the board meeting today.

Eliminating Gilroy service would save the agency $600,000 a year, and removing weekend service would save $300,000 a year, according to Dunn.

Other potential service reductions include losing four midday trains, which would save $150,000 annually, and eliminating four early morning or late evening trains to save $130,000 annually, Dunn said.

The board will also consider two possible fare increases: a 25 cent base fare increase which would generate $1.4 million annually and a 25 cent zone fare increase to garner $2 million each year, she said.

Service changes would be implemented as early as October, and fare increases would go into effect in January, according to Dunn.

Caltrain officials are "cautiously optimistic" the service reductions and fare increases will help the agency patch together its budget, but are concerned for next year's budget when the deficit is expected to be even greater.

The main problem, Dunn said, is that Caltrain has no dedicated funding source.

"We go through this process every single year where we try to make ends meet," Dunn said. "It all goes back to same problem of lack of a dedicated funding source for Caltrain."

The board of directors will meet again on July 1 to consider the possible service changes and fare increases.

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Like this comment
Posted by Bill
a resident of Menlo Park: Central Menlo Park
on Jun 7, 2010 at 9:55 am

Would it kill the reporter to do some actual reporting here? Perhaps they could check out Caltrain's 2009 budget Web Link.

If they did, they would see that administrative wages & benefits are up 26.5% in just 2 years and Rail Operations Expenses (which is mostly salaries for engineers and other operations staff) are themselves up 18.6%. The real story here is how Caltrain's spending spree on dramatically higher pay and benefits (in the midst of a huge recession) has caused a "fiscal emergency" which they plan on fixing not by reducing their ill-advised spending spree but by making massive service cuts.

Is the reporter not even curious why eliminating weekend service, which represents almost 29% of the days in a week, results in a laughably small savings of $300K or just 0.35% of costs??!!

It's clear that Caltrain has bankrupted itself by growing salary and wage expense far in excess of revenue growth yet instead of rightsizing the workforce and it's wages, like any private company would be forced to do, their solution is to cut service dramatically and raise fares.

It would be nice to see a newspaper at least try to hold them accountable or even ask a tough question or two instead of just regurgitating their self-serving alarm.

Like this comment
Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Jun 7, 2010 at 10:43 am

Thank you Bill for doing some much needed homework on this issue.

Lax oversight by the press and by we the citizens have allowed our public agencies to run amuck on expenditures and then either demand higher taxes or dramatically announce a cut in services. The problem is Expenditures, Expenditures, Expenditures and we all need to hold our public officials accountable for controlling expenditures rather than trying to raise taxes or blindly cutting services.

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Posted by Michael G. Stogner
a resident of another community
on Jun 7, 2010 at 11:17 am

Bill and Peter, I'm with both of you, this is the exact same game plan they are forcing on the Public. Reduce services, declare an emergency.....

Lets get serious here. Caltrain is an excellent safe and dependable service. First lets solve the
Expenditures which nobody in leadership wants to talk about.

Schedule adjustment not a problem, we don't need 90 plus trains a day anyway never did.

Market the 2 zone monthly pass which gives the rider every bus in San Mateo County.

Like this comment
Posted by curious
a resident of Menlo Park: other
on Jun 7, 2010 at 12:24 pm

I guess I'm missing something here. Caltrain says the issue is not having a "dedicated funding source." I take this to mean that the program is not self-sufficient and is subsidized by taxes. Is this standard for large-scale public transportation across the country? Just curious.

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Posted by Frank Thorne
a resident of another community
on Jun 7, 2010 at 12:35 pm

Hi curious, yes, Caltrain is subsidized by taxes, and I believe that this is common -- although I'm not 100% sure. Pretty much every type of transportation infrastructure is paid for with public money. (Notably, roads...)

Caltrain keeps me, and many others whom I know, happily off the 101 during commute hours. If we are forced to drive, then we will all make everyone else's commute that much worse. Although I agree with the statements made above and would like to see Caltrain control its expenses, I think taxpayers should be quite happy to subsidize Caltrain.

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Posted by Steve
a resident of Menlo Park: Central Menlo Park
on Jun 7, 2010 at 1:06 pm

Peter -
Before you thank Bill you should check his numbers.
Looking at his link to the CalTrain annual budgets, I can't see where he comes up with these large increases. For example he claims a 2-year 18.6% increase in Operating expenses that he attributes mostly to increased wages & benefits.
Yet when I look at the latest FY09 budget and compare it to FY07, I find that rail operators wages/benefits went from $54.8 million in FY07 to $55.3 million in FY09, an increase of less than 1%.
Even if you look at the total operating expenses for these years, FY09 increased only 14.5% over FY07. Rather than being caused by increases in wages/benefits, the increase operating costs appears to have resulted from $3.1 million in security services (a new budget item not even included in budgets prior to FY09), a $4.3 million increase in fuel costs (42%!) and a $725 thousand increase in insureance (19%).
Similarly, the Administrative wages & benefits increased $956 thousand from FY07 to FY09, an increase of 19%, not the 26.5% that Bill claims.
Bill, thanks for pointing us to the Caltrain budgets but please explain how you came to the conclusions you did. I'm no accountant but I can't see where your results/interpretations come from.

Like this comment
Posted by Tom Croft
a resident of Atherton: other
on Jun 7, 2010 at 1:53 pm

I've lived a few hundred yards from Caltrain tracks and have seen many changes that are clearly costly. They are all extreme safety measures clearly intended to keep drunks, dopeheads, and would-be suicides from dying on the tracks. Sober humans were never in jeopardy.
These additions are probably built by union folk with cradle-to-the-grave benefits, pensions, etc. All this must be paid for. Yet no agency or person provides their cost to us riders.

Like this comment
Posted by Alice
a resident of another community
on Jun 7, 2010 at 1:55 pm

Will history repeat itself with High Speed Rail?

Like this comment
Posted by DThomas
a resident of another community
on Jun 7, 2010 at 2:28 pm

Alice...before that happened, California would have had to hire 150,000 workers to get HSR started...
When it is finished, that will be a different story.
Almost like waiting for the Bay Bridge or in our own County, for the Devil's Slide Tunnel to be completed.
At least, people are being cautious and not just throwing money to the wind and checking out expenses like we have NEVER done before when it was out of control spending.

Like this comment
Posted by Joseph E. Davis
a resident of Woodside: Emerald Hills
on Jun 8, 2010 at 8:48 am

If Caltrain cannot make money from usage fees, it should shut down. Likewise for any transport system.

The people have voted with their feet: bloated, slow, inefficient systems packed to the gills with overpaid union parasites and useless administrators deserve a hasty demise.

Like this comment
Posted by Just Fix It
a resident of Menlo Park: Central Menlo Park
on Jun 8, 2010 at 9:05 am

Joseph Davis, do you also believe all California roads should be toll roads so they make money from usage fees?

Caltrain obviously needs a good housecleaning and new thinking, but government subsidies for a public need are not the problem. Government exists for the public good -- that's why I'm willing to pay taxes. Public transportation is a public good. Let's focus on the problem: Managers and bureaucrats who can't think creatively enough to make this system work for the public. And politicians in Sacramento who cut back on funding public services, including education, before raising taxes on their corporate friends.

Like this comment
Posted by Steve
a resident of Menlo Park: Central Menlo Park
on Jun 8, 2010 at 10:41 am

Joe Davis -
The people have indeed voted with their feet taking ridership in 2009 to a new record high of over 39,000 riders per weekday, up from 26,000 in 2004. That's 39,000 fewer cars on the freeways.
Ridership is down a few percent this year due to the economy, same as after the DotCom bust in 2001. But overall riders are quite happy with the system, especially the baby bullets.
It will be a severe hardship for many if CalTrain is forced to reduce service. It will be a disaster if it is forced to suspend operations.
Joe, you're very good at finding fault with the system but I've yet to hear you come up with any viable solutions. I think that fits the definition of a crank.

Like this comment
Posted by Steve
a resident of Menlo Park: Central Menlo Park
on Jun 8, 2010 at 12:21 pm

Joe Davis -
Just to add that the 50% increase in ridership since 2004 was accomplished by the same people you described as "useless administrators".
Would you care to apologize?

Like this comment
Posted by Ram Duriseti
a resident of Menlo Park: Central Menlo Park
on Jun 8, 2010 at 12:33 pm

CalTrain is a valuable local resource.

The trains are packed at peak hours. They are largely empty for several hours in the middle of the day.

All I want to know is whether or not union workers and engineers will get the boot if trips are reduced OR will they sit around for larger portions of the day doing nothing of value.

I just don't understand how they are losing money given their large ridership with ever increasing fares.

It seems like an independent audit is in order. I cannot trust the objectivity of the inmates.

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Posted by Steve
a resident of Menlo Park: Central Menlo Park
on Jun 8, 2010 at 4:36 pm

Ram -
you wrote: "I just don't understand how they are losing money given their large ridership with ever increasing fares."
Bill's link to the CalTrain budgets Web Link for the past several years makes it pretty clear. It costs about $85million a year to operate the CalTrains, yet fare receipts only bring in about $41 million. Other sources of income boost revenues up to only around $48 million. If it wasn't for subsidies from Joint Powers Board agencies of around $39 million, the train would die. JPB agencies have said they have to reduce their contributions, hence the coming fiscal train wreck.
Doubling fares would solve the revenue problem except that ridership would drop precipitously and we'd all be back in the same boat again.
Face it, Mass trait needs subsidies to survive. Always did, always will.

Like this comment
Posted by Bill
a resident of Menlo Park: Central Menlo Park
on Jun 8, 2010 at 9:40 pm


My calculation are based on numbers found in the Fiscal Year 2009 Operating Budget. Web Link

Under Operating Expenses, in line 23 "Contract Operating & Maintenance", expenses were $49.315M in FY 2007 (Actual) vs. $58.501M FY 2009 (Adopted), that's an increase of $9.186M or 18.63% in two years. Similarly, under "Administrative Expense", line 34 "Wages and Benefits" went from $4.718M in FY 2007 (Actual) to $5.966M in FY 2009 (Adopted). That's an increase of $1.248M or 26.45% in two years.

I tried to locate the figures you cited but could not. Perhaps you used a different budget year.


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Posted by Steve
a resident of Menlo Park: Central Menlo Park
on Jun 8, 2010 at 11:52 pm

Bill -
As I said, I'm no accountant, but it seems to me you're mixing apples (actual expenses) & oranges (proposed expenses). I noticed that the actual expenses for contract operating & Maintenance is always several million less than what was proposed the previous year. It's like they're building a buffer into this line item to allow for unforeseen contingencies.
A better way to measure increases in the budget is to compare the increase in actual expenses year to year for contract operations & maintenance for those years where it's available (FY05 thru FY07).
Actual FY06 vs Actual FY05 $47,245,437-$45,444,945=$1,800,492 (+4.0%)
Actual FY07 vs Actual FY06 $49,315,658-$47,245,437=$2,070,221 (+4.4%)
So the 2-year increase from FY05 to FY07 is only 8.4%, not the 18.6% you calculated using Proposed vs Actual (albeit for FY07 to FY09)

Similarly, the Administrative expenses from FY05 to FY07 were:
FY06 vs FY05 $6,029,472 - $8,372,308 = -$2,342,836 (-28%)!
FY07 vs FY06 $7,124,718 - $6,029,472 = $1,095,246 (+18%)
a net decrease of ~10% from FY05 to FY07, not the 26.5% increase you calculated using actual & proposed numbers from FY07 to FY09.
Bottom line: your claim about "Caltrain's spending spree on dramatically higher pay and benefits" has no basis in fact.

Like this comment
Posted by Steve
a resident of Menlo Park: Central Menlo Park
on Jun 9, 2010 at 7:09 am


You must not be reading different documents than I am. The document I refer to indicates that revised 2008 expenses were actually $1.87M or 2.13% higher than the budget that was adopted. In all likelihood 2008 Actual expenses will be closer to this revised #, as that's why they were revised in the first place.

To say that my statement "Caltrain's spending spree on dramatically higher pay and benefits" has no basis in fact is plain wrong and misleading. It indeed does have a basis in fact: the most recent Caltrain document with black and white numbers. My calculations based on the numbers in this document are demonstrably correct and my statement stands as a fact.

Expenses may have been lower 4 or 5 years ago, but that's not what is at issue here. What's at issue is the recent mismanagement of expenses that's why I am using the most recent #s. Using numbers from 4 or 5 years ago doesn't achieve anything other than to suggest that Caltrain did a better job managing expenses 4 or 5 years ago (which it may well have). They aren't proposing cuts because of what they spent 4 or 5 years ago but because of what they are planning on spending this year.

I suppose there's a chance that 2009 actuals could come in below projections, unlike 2008 when they clearly came in 2.13% above projections, but the fact that Caltrain's management is raising alarm bells suggests that they don't think this is very likely.

I am dealing with facts based on the most recent hard numbers presented by Caltrain's own management, you seem to be dealing with a hope that they won't spend as much as planned despite the most recent evidence (2008 revised numbers vs. adopted) suggesting they will spend more than planned. When the actual numbers for 2009 come in, I think one of us will be disappointed and it won't be me.


Like this comment
Posted by Ram Duriseti
a resident of Menlo Park: Central Menlo Park
on Jun 9, 2010 at 1:18 pm


The problem with any cost analysis, as I'm sure you are aware, is deciding what to include and exclude. Our highways are massively subsidized as is our fuel consumption. In my mind, there are 2 ways to go about this:

1) subsidize mass transit the way in which we subsidize our national and state highways/streets

2) remove all subsidies on all of the above and let the market sort things out through a use based tax levied on fuel consumption.

I personally would lean towards option 2. To accurately model the scenarios, the best way to approach it would be a system of equations run through a simulation rather than some simple spreadsheet. Mass transit and our highway system are somewhat substitutable goods with inter-dependencies and, as with all taxes, a use based tax would alter consumption itself.

Like this comment
Posted by service cuts hurt
a resident of Menlo Park: Central Menlo Park
on Jun 9, 2010 at 5:52 pm

When Caltrain cuts back service, its convenience really drops. In Menlo Park, service is worse than it was for many years. I was a very loyal commuter and still try to use it even though my job isn't in SF anymore. However the reduced schedule is a problem. I don't have time to waste between the fewer trains or to go to another station where the schedule is more frequent. Reducing trains and raising fares is the opposite of what they should do if they want more riders.

Others have made the legitimate point that mass transit needs subsidized. More riders may not be enough to save the system An audit of where the money is spent is wise, too.

Like this comment
Posted by Alfred
a resident of another community
on Jun 17, 2010 at 7:24 pm

Bare fact on MV Caltrain Ridership:
On average, 4.62% of people living in MV use Caltrain
Mountain View Population (2000 census)
- Total 70,708
Mountain View Caltrain Average Weekday Ridership (Caltrain 2010 data)
- Total 3,264

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