After adopting a $270 million operating budget, Caltrain is reiterating short- and long-term plans to narrow its deficit with a state loan and upcoming sales tax ballot measure — or else it could shut down entirely, leaders say.
The agency’s backup plan was discussed amid annual budget discussions. Its updated fiscal projections are modestly better than original estimates for the upcoming fiscal year 2027, which starts next month, however, it still anticipates a $75 million average annual deficit in the coming years.
The state loan is helping the agency close its $47.6 million deficit for fiscal year 2026.
Next fiscal year, expenses are expected to increase by a little over 5% compared to the current year, in part attributable to higher maintenance costs of electrified infrastructure. The agency’s contract with TransitAmerica Services, which handles most of its day-to-day operations, has increased substantially over the years as well, going from nearly $94 million in Fiscal Year 2022 to a projected $128 million this year.
“We’ve continued to look for ways to reduce our costs, and we sharpened our pencils and looked at our wages and benefits line item,” Oscar Quintanilla, director of Budgets and Financial Analysis, said during a recent Caltrain board meeting. “We were able to reduce that by $800,000 and this is primarily by delaying the hiring of currently vacant positions.”
With strong ridership growth, fare revenue is expected to surpass the current fiscal year’s forecast, with an increase in average fare per passenger as well. Revenue from Measure RR — a Caltrain-dedicated sales tax measure passed in 2020 — is expected to remain relatively flat.
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The budget adoption also comes at the same time the board finalized its financial efficiency plan if the measure passes — and the more daunting report if it doesn’t.
“I don’t want to sugarcoat it,” Executive Director Michelle Bouchard said during the meeting. “With that level of high fixed cost, it is conceivable that we will not be able to provide any Caltrain service.”
As a condition of the sales tax measure, the Metropolitan Transportation Commission led an independent analysis to identify past and potentially future financial efficiencies each transit operator has done or could implement. The report found that Caltrain realized about $76 million in savings, about 7% of operating costs, driven largely by “a strategic hiring freeze, elimination of the standalone mobile app, reductions in special trains, improved operator crew efficiency and overtime reduction, and integration of electrification infrastructure maintenance into existing operating contracts,” according to the report.
To further efficiency gains, the report recommended updating parking rates, increasing enforcement, monetizing its fiber optic and communications assets, increasing GoPass and Clipper BayPass enrollment and evaluating retail partnerships at stations.
The ballot measure could also invite legal challenges, which Board Member Pat Burt said should be taken into consideration when budget planning and implementing efficiency measures.
“I remain very concerned that the bridge loan that we received from the state will not cover us into a period if we get the very good chance of legal challenges to the regional measure should it pass,” Burt said during the meeting.
If the Connect Bay Area measure passes, another efficiency review will required for all agencies that will receive funds.
Folks, don’t be swayed by the fear mongering coming from Caltrain. They’re attempting to scare you so you’ll transfer more of your hard-earned money to ever-increasing union salaries, pensions, and benefits. Remember, these folks have been operating at 100% capacity with ridership at 50% or less all this time. Where has fiscal management been?
Call their bluff and vote NO on any proposals to transfer your money to transportation union workers! Let’s see if they’ll shut down. I’m betting no. Although, per a companion article today, we’d save $615 million by not having a grade separation at the Broadway intersection in Burlingame and potentially ten to hundreds of $billions by not wasting money on other grade separations. Maybe a shutdown would be good.
Reduce the number of trains by 25%, increase fares, cut salaries of employees, freeze bonuses and freeze all pay increases. CalTrain should learn to live within their means, just like a good, responsible household. To the unions who will object, let them know either everyone takes a paycut or workers will be laid off.
Oh, it is crying time again. If they were to spend as much time on justifying their position as they should on running an efficient railroad, there would be no deficit and ridership would increase. Don't fall for the sob story, and vote NO on this bottomless money pit.
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(4) comments
Folks, don’t be swayed by the fear mongering coming from Caltrain. They’re attempting to scare you so you’ll transfer more of your hard-earned money to ever-increasing union salaries, pensions, and benefits. Remember, these folks have been operating at 100% capacity with ridership at 50% or less all this time. Where has fiscal management been?
Call their bluff and vote NO on any proposals to transfer your money to transportation union workers! Let’s see if they’ll shut down. I’m betting no. Although, per a companion article today, we’d save $615 million by not having a grade separation at the Broadway intersection in Burlingame and potentially ten to hundreds of $billions by not wasting money on other grade separations. Maybe a shutdown would be good.
Reduce the number of trains by 25%, increase fares, cut salaries of employees, freeze bonuses and freeze all pay increases. CalTrain should learn to live within their means, just like a good, responsible household. To the unions who will object, let them know either everyone takes a paycut or workers will be laid off.
Oh, it is crying time again. If they were to spend as much time on justifying their position as they should on running an efficient railroad, there would be no deficit and ridership would increase. Don't fall for the sob story, and vote NO on this bottomless money pit.
The answer to this problem is right beneath the question.
Two headlines right next to each other:
- "Caltrain budget warns of deficits, possible shutdown without funding"
- "Burlingame Broadway rail crossing plan gets funding boost"
That headline should really read:
"Mullin, Brownrigg, Medina, and Mates are funneling public transit funding away ... again."
Why is Caltrain responsible for a $600 million "grade separation" project?
It's none of their monetary business to spend public transit funding on Caltran's car projects.
Caltrans and Caltrain separated, because Caltrans wanted to focus on cars and streets on Caltrain on trains.
These projects aren't benefiting Caltrain, make Caltrans pay for car projects like "grade separation" instead.
Caltrain's budget problems solved - you are welcome!
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