Caltrain Needs $3.5 Million to Close Budget Gap

Caltrain needs $3.5 million to close this year’s short-term budget gap and keep the current 86-train schedule unchanged, Santa Clara County Supervisor Liz Kniss told the Palo Alto’s Rail Committee Wednesday morning.

Kniss also sits on the Peninsula Corridor Joint Powers Board (PCJPB) as a representative from the Valley Transportation Authority (VTA), one of Caltrain’s three governing powers. She is a former Palo Alto mayor.

There’s a bit of a “family feud” going on between the Valley Transportation Authority and SamTrans over who owes whom money, Kniss said. She plans to talk with VTA's attorney, David Miller, partner at Hanson Bridgett, about VTA's "right of way" purchase from SamTrans to run trains down the Caltrain corridor, from San Francisco to Gilroy, said Joanne Benjamin, policy aide to Kniss.

A few weeks ago, the VTA offered to give SamTrans $7.2 million from its general funds as payment for CalTrain's right of way to use the San Francisco-Gilroy train corridor. VTA requested that all of the $7.2 million go toward SamTrans' contribution to fill Caltrain’s $3.5 million budget deficit.

VTA offered the money in lieu of having to cut service to 76 trains. SamTrans refused to accept that any more than $2 million of the $7.2 million go to Caltrain for fiscal-year 2012 and $3 million for fiscal-year 2013, Murphy said. SamTrans claims VTA owes money to the bus lines, Kniss said.

Caltrain operates with monetary contributions from three partner—the VTA in Santa Clara County, SamTrans in San Mateo County and Muni in San Francisco. These three partners comprise PCJPB. Each year, each partner agrees to make a monetary contribution from its general funds. The partners split their fiscal responsibilities 40-40-20, with SamTrans and VTA each contributing 40 percent of Caltrain’s budget and Muni contributing 20 percent.

In 2009, SamTrans announced that with state budget deficits, it could only contribute $4.9 million to Caltrain’s fiscal-year-2012 operating budget, down from $16 million, said Sheamus Murphy, government affairs manager for Caltrain and SamTrans. This prompted the VTA and Muni to also proportionally reduce their matching contributions, resulting in a $30.3 million deficit, Kniss said.

On April 4, the three partners agreed they could increase SamTrans’ contribution to $10.6 million, which enabled Caltrain’s steep $30.3 million budget gap to shrink to $3.5 million. “The agreement allowed a number of complex financial maneuvers to occur that would still require additional approvals from other boards involved in order for SamTrans’ contribution to be increased,” Murphy said.

To meet the remaining $3.5 million, PCJPB proposed on April 4 to cut service down by 10 trains from 86 to 76. The Baby Bullet trains and weekend service to California Avenue and San Antonio under the most recent proposal. After another meeting, last Thursday the Caltrain board postponed the money-saving service cuts for two weeks, until April 21.

VTA's offer to give SamTrans $7.2 million is part of Caltrain's scramble to find $3.5 million before the April 21 deadline. 

Caltrain’s executive director, Michael J. Scanlon, might have competing interests that favor SamTrans over Caltrain, Kniss told Palo Alto’s rail committee Wednesday morning.

“I think it’s challenging, because Mike serves as general manager and is the transportation head of the SamTrans,” Kniss said. Scanlon also serves as chief executive officer of the San Mateo County Transit District.

If VTA's dispute with SamTrans cannot be resolved, Kniss said Caltrain could also obtain more money from the Metropolitan Transportation Commission, which oversees funding for the whole Bay Area, in lieu of making service cuts, she said. Also, Caltrain could possibly borrow money from the Dumbarton Rail Project Funds or from Caltrain’s electrification fund, she said.

The money to close the gap is there, Kniss said. While there are a handful of options on the table to get the money, it will take more political negotiation to resolve, she said.

“Caltrain is a vital transportation system with more riders than ever,” Kniss said. “We are urgently seeking fair and proper long-term funding solutions,” she said.

Currently, both VTA and Muni receive a dedicated portion of California’s state-sales-tax revenue, Benjamin said. “Caltrains is the only Bay Area transit system without a permanent, dedicated source of funding,” Benjamin said. Caltrain wants to establish something with the state similar to the sales-tax-revenue dedication of VTA and Muni, she said.