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The COVID-19 pandemic has challenged many local transit agencies used to relying on large numbers of ticket-buying riders.
For Caltrain, the pandemic has hit especially hard. That’s because it’s one of the local transit agencies that has traditionally relied most heavily upon rider fares to cover its costs.
Since the pandemic started, ridership has dipped by 95%, according to a statement from Caltrain. The agency initially cut the number of daily trains to 42, then in June increased operations to 70 trains per day, but even so, ridership remains far lower than the 65,000 passengers who rode Caltrain daily before the pandemic.
In early August, an eighth-cent sales tax barely eked its way onto the November ballot, requiring the OK from seven local agencies to do so.
If the measure passes – it will need the approval of two-thirds of voters to move forward – it will generate about $108 million per year for up to 30 years.
Proceeds from the measure wouldn’t start to come in until the fall of 2021, but the transit agency would be able to borrow against future proceeds from the measure, according to Caltrain board chair and San Mateo County Supervisor Dave Pine.
Before the pandemic, the idea was to use those funds to help the rail agency’s electrification process, aimed at enabling the number of daily riders to triple to about 180,000 up from 65,000, Pine said.
Ticket sales constituted about 70% of the transit agency’s revenue, which in good times, was a positive element: A majority of its revenues were self-sustaining and it offered one of the “best fare box returns in the nation,” Pine said.
But without many riders and without the ballot measure, Caltrain will probably only be able to run through the end of the year, Pine said. The rail agency’s budget is highly dependent on how many people return to using the rail services in the next six months, he said.
To save money, Caltrain has cut the number of trains it runs per day to 70 from 92 and eliminated the Baby Bullet service. And it has received tens of millions of dollars in CARES Act funds. However, some provisions of the funds, which require that staff members be retained, only go so far to help reduce the agency’s costs, Pine said.
As of mid-August, Caltrain’s operational budget for the 2020-21 fiscal year still had about a $17.6 million deficit, according to recent agency documents, even factoring in $41.5 million in federal CARES Act funds, a hiring freeze, no universal wage increases and other measures to reduce costs.
If Caltrain had to shut down, it would stop its passenger service but continue to operate the rail corridors the agency is in charge of, including moving projects that have already been funded forward, the documents stated.
One of the reasons that the ballot measure almost didn’t get approved was because of ongoing tensions about the structure of Caltrain and how it is governed.
In an Aug. 6 board meeting, board members negotiated for several changes that they wanted the agency to make, enumerated in a resolution approved that day. The resolution states that the members of the Caltrain board want to change the governance structure so that they have more say over who is appointed executive director of the agency, and that the joint powers board will work to reimburse SamTrans for past investments in Caltrain.
The joint powers board – made up of members from all three of the counties along the Caltrain line – said it planned to hire an auditor and legal representatives who don’t work with SamTrans by mid to late January. It also planned to develop recommendations for a new governance structure by the end of 2021.
A complex history
Over the years, Caltrain has been owned by a number of agencies. It started in 1863 with the San Francisco and San Jose Railroad Company before being bought by Southern Pacific Railway in 1870. A century later, the rail commuter business became unprofitable. By 1980, the state helped subsidize the rail service, but by 1988, the state ended its subsidies.
In 1991, the three counties that Caltrain passes through – San Francisco, San Mateo and Santa Clara – created the Peninsula Corridor Joint Powers Authority to buy the rail right of way. The $212 million cost was covered by $120 million in funds from Prop. 116, a nearly $2 billion California bond measure from 1990 to invest in rail and other transportation programs, and $82 million advanced from SamTrans, the San Mateo County Transportation Authority.
In negotiations over the years, steps were laid out for how the other agencies could repay SamTrans’ additional contribution to buy the rail right of way. A 1991 agreement said that San Francisco and Santa Clara County’s Valley Transportation Authority (VTA) could do so either by fully reimbursing the transportation agency or by paying their share of the additional contribution based on the rail mileage in each county.
The agreement was renegotiated in 2008 because by 2007, neither of the agencies had started to pay back SamTrans. Compound interest increased the amount owed by the two other agencies to $91.5 million, but the amount was reset to $53.3 million. SamTrans forgave the agencies $38.2 million in exchange for being able to remain the managing agency for Caltrain as long as it chose to do so.
In the 2008 agreement, the plan was for the VTA to pay $8 million, San Francisco to pay $2 million and to have the bulk, $43.3 million, paid by the MTC or Metropolitan Transportation Commission, the Bay Area’s transportation financing, planning and coordinating agency. VTA has paid SamTrans $8 million; San Francisco has paid back all but $200,000 of its $2 million commitment; and the MTC has paid back $23.7 million, leaving SamTrans still about $19.7 million short of the $53.3 million committed back in 2008.
The Joint Powers Authority designates SamTrans as the managing agency for Caltrain.
The measure faced complications when leaders in two of the three counties, San Francisco and Santa Clara counties, pushed back.
It was initially discussed because the agency doesn’t have a dedicated source of funding and it is in the process of completing a $2 billion project to electrify the Caltrain line.
Governance challenges
The awkward thing, Pine said, is that the Caltrain board itself can’t change the governance of Caltrain. The governance debate, he added, has been ongoing for years and needs to be resolved.
While SamTrans currently manages Caltrain, the Caltrain board has equal membership among all three counties.
Caltrain was created as a joint powers authority between the city and county of San Francisco, SamTrans and the Santa Clara Valley Transportation Authority.
But SamTrans also manages other operations besides Caltrain, like the paratransit and bus systems in San Mateo County.
The big issue, Pine said, is that the other two counties don’t get a say in staffing matters, such as whether to hire or fire the CEO.
The governance tension goes back decades to 1991, when San Mateo County invested $82 million to purchase the trackage rights. Neither San Francisco nor Santa Clara County put money toward that purchase. When the agreement was restructured in 2008, SamTrans essentially gave up $38 million in interest in exchange for the right to be the managing agency “as long as it desired,” Pine said.
In other words, SamTrans invested tens of millions of dollars in the Caltrain system for which it was never paid by the other two counties, Pine summarized.
“Passing a sales tax for Caltrain would be a game changer during this time of the COVID pandemic and would allow Caltrain to substantially expand its service in the future,” Pine said.
Rider information
To improve safety conditions during the COVID-19 pandemic, Caltrain cleans and sanitizes its fleet and stations with hospital-grade disinfectants. Surfaces that are regularly touched at stations are wiped down multiple times daily, and crews use spray foggers to clean surfaces midday and overnight. Riders must wear face masks and are asked to maintain at least 6 feet of space from others.
Access the latest weekday schedules here. Weekend schedules are unchanged.
Next steps
The Caltrain board is set to meet Sept. 3 to talk about its 2020-21 budget, as well as hold a public hearing about a separate matter: whether to close the Atherton Caltrain station. Access the meeting agenda packet here for additional information.
No one takes the train and shouldn’t with this virus and the threat of thousands more. But then how can the employees and contractors involved get public funds? Tax. Not just to cover existing salaries, benefits and pensions but 2 or 3 times more money because MONEY GROWS ON TREES. How much does the top dog at Caltrain get paid? Anybody out there know?
Caltrain is great! I think public transit is very important to our community.
A sales tax is the worst possible way to fund it – regressive tax.
Shame on the board for taking this path to do the wrong thing for the right reason.
The end does not justify the means.
Vote no.
Sorry.. they’re down 95% of ridership but still running 70 trains?! That makes zero sense.
If you only have 5% of your riders you should only be running 5% of your trains. That’s 4 trains.. which I’ll admit probably isn’t worth doing.
Again.. sorry but if Caltrain were a private business they’d be shutdown. Instead they’re asking for a tax increase which they then want to use as collateral to BORROW money.
30 YEARS they’re talking about. Statistically a lot of us will be dead before that money is paid back.. if ever.
It’s time to just say NO.
A business must support itself, or it’s a charity. Public transit doesn’t work in the Bay Area because it takes hours to get anywhere and is very expensive. I live 35 minutes from AT&T Park but on public transit, it’s a four hour round trip. Public transpo takes longer and costs more, which is why no one uses it.
So when the pandemic is over, and we are all tired of working from home (which I am already) what will replace three rush hour lanes on 101 if Caltrain has folded. Folded would mean brand new electric rolling stock sold before ever being used. Caltrain has made SF Giants baseball feasible for Peninsula fans for 20 years now. I know the games are in an empty park this year, but that won’t go on forever either. Folks here frequently wonder about BART, that decision was made (wrongly) by our political leaders in the 1960’s. Deciding to close Caltrain would be the same type of decision, but this time rendered by the voters.
I seriously question the “3 rush hour lanes” statement. Please share your source if you have one.
I have a great idea though.
How about shutting down the “train to nowhere” aka “California High Speed Rail” and using some of that money to keep CalTrain afloat?
Why are we talking about “folding”? Just shut down until the service makes sense again. I’m sure the brand new electric trains are in storage right now. They can sit a little longer.
How about the SF Giants (worth roughly $3 billion) helping keep the trains running? Sounds like they benefit quite a bit from it as well.
Raising my taxes for 30 years? No thanks.
Not to worry…the initiative will get voted down unless there are other widespread miracles on the immediate horizon.
Miracles include: complete cessation of the Covid-19 pandemic, mass economic recovery, and a significant decline in various street protests.
And ALL miracles must take place BEFORE November 3rd.
A rush hour freeway holds fewer than 3,000 cars per hour. A single 7 car electric trainset holds well over 1,000 passengers. If nobody ever works in SF again, we’ll never need Caltrain. I’m betting neither Otto or I will be here in 30 years. Since there are no fans watching baseball, the Giants don’t have much of the normal operating revenue they have used to provide various kinds of support to Caltrain in the past. Since a contract operator runs the trains, to save money we’d have to terminate the contract. The trains are not in storage yet, who would pay to store them? High Speed Rail has already been stopped. Some of their money is paying to electrify Caltrain, work that is already under contract and would be expensive to terminate.
> “I live 35 minutes from AT&T Park but on public transit, it’s a four hour round trip.”
^ That is because Caltrain makes scheduled stops to pick-up additional Giants fans along the way. Are you advocating an ‘express train’ that runs directly from PA to AT&T Park exclusively for Palo Alto based fans?
> “Caltrain has made SF Giants baseball feasible for Peninsula fans for 20 years now. I know the games are in an empty park this year, but that won’t go on forever either.”
^ If the Giants continue to play poorly, fewer ticket holders will be hopping on Caltrain during game days…problem partially solved.
“would be expensive to terminate”
Is that the new version of “too big to fail”?
Please share the source for the train vs. traffic estimates.
And High Speed Rail has not been stopped. There is a government “authority” using tax dollars to build train tracks in the middle of nowhere.
That money could be used to keep Caltrain afloat through the Covid crisis.
That should be on the November ballot instead of a 30 YEAR tax increase.
Mr. Maddox, I don’t believe in wasting time stringing links together on the web. The construction of HSR in the southern central valley is under contract. As I explained before, such contracts contain expensive termination clauses. Those encumbered funds are state controlled and Caltrain has no access to them. You can find the capacity of the new Caltrain trainsets easily on their Cal Mod website. As for the freeway lanes, I’ve practiced highway engineering in the Bay Area for forty years, so I am confident of that figure, but have no idea where to link it for you given the state of Caltrans’ public facing websites.
Great “Old Steve” that you have inside info. Can and will you answer the first question I asked in the first comment above? It reads: How much does the top dog at Caltrain get paid?
Samtrans’ Salaries should be publicly available. I have no info about where to find salary of top manager of the railroad operator. I also have no interest, as any individual salary is a small fraction of overall costs. The agencies have presented us with a binary choice: Continue to operate through the Pandemic restrictions, or eliminate passenger service for an undefinable future period.
But “Old Steve”: All of the money extracted through the proposed sales tax could be used for salaries and other compensation for Caltrain employees. Wouldn’t voters want to know how much the “top dog” and the rest of the employees are already being paid and how much more they could be paid if this measure were to pass?
i have not seen the ballot language. I believe this discussion is about continuity and post pandemic modern operations. VTA and SF MTA have long term questions about governance. As reported in the story Samtrans has already forgiven millions to benefit the other two agencies from the original PCJPB purchase from the State. Clearly, over thirty years some funds would go to increases in personnel costs. Remember, Caltrain is no longer operated by Amtrak, but another rail operator. Private sector employees whose employer has a contract with Caltrain.
@Old Steve. When you do see the language of the ballot measure you are supporting, be sure to post another comment.