Caltrain proposal to close electrification funding gap

At today’s Caltrain board meeting, Caltrain modernization lead Marian Lee presented an update on how Caltrain intends to fill a $431 million funding gap that remains to pay for Caltrain electrification.

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The biggest source of funds is expected to be a $220 million Federal Core Capacity grant. This relatively new federal grant program is designed for older transportation systems looking to modernize to increase capacity, which is an excellent fit for Caltrain electrification.  Lee reported that a recent trip to Washington DC went well, and the project is expected to be included in the President’s budget proposal.

The other major grant sources are the state’s Cap and Trade funds, with funding for High Speed Rail and Caltrain, and the region’s RM1 and RM2 bridge toll funds. In addition, $60 million is expected from the 3 county partners, San Francisco, San Mateo and Santa Clara counties.

The bulk of the funding gap emerged when Caltrain updated the project estimates, earlier calculated in 2008. The updated estimates showed a gap of $306 million. In addition the initial 9-party funding agreement from 2012 was short $125 million at the time.

Caltrain considered but isn’t pursuing loans and fare increases to help full the gap.  Federal “TIFIA” loans would be available, but would add to Caltrain’s operating budget. Since Caltrain does not have stable operating funding, relying on voluntary (!) contributions from its partners to meet its budget every year, it didn’t make sense to add operating cost.  (And this is all the more reason to provide Caltrain with stable operating funding).

Caltrain isn’t adding surcharges to its fares, which are already higher than BART’s, but does plan to increase fares by 7.5% to keep up with operating and maintenance cost increases.

The proposal will be presented for the approval to local agencies and the board in the fall.

Update.  At the board meeting, Caltrain staff said that the federal grant funding was looking highly likely, but the money would likely come in after Caltrain owes its first payments for electric trains.    Caltrain is working on setting up a line of credit to bring in cash to pay the project bills before the grant funding kicks in.

Funding source Amount
Federal Transportation Authority Core Capacity Grant $220 million
Cap and Trade – High Speed Rail $113 million
Cap and Trade – Caltrain $9 million
Metropolitan Transportation Commission Regional Measure 1 and 2 $29 million
Local agencies $60 million