This budget cycle, VTA’s reluctance to pay its Caltrain bill is triggering cascading problems. Read on for what’s happening and click here to take action now.
Caltrain’s surprise premature proposed fare increase – put together in a hurry to fill an operating budget gap, rather than crafted based on results of a fare study considering revenue, ridership and equity goals – is triggering pushback among Caltrain’s major business customers and everyday riders, and risking a ridership drop.
Proposed cuts to maintenance of aging, failure-prone equipment risks a coming year of breakdowns and passenger delays. The proposed elimination of funding for bike parking would breaks promises to the ~15% of Caltrain customers who use bikes for first and last mile connections, to reduce the risk of being denied service (bike bumps) and improve bike security.
These cascading problems are triggered by VTA’s reluctance to pay its annual Caltrain bills. According to the agreement among the 3 county partners (San Francisco, San Mateo, and Santa Clara Valley Transportation Authorities), when one partner cuts back on paying its fair share, all the other partners cut back proportionately, tripling the impact on Caltrain’s budget.
For Santa Clara County residents and stakeholders who supported Measure B in part because of a strong Caltrain package, the VTA reluctance to pay its Caltrain bill is especially dismaying. When VTA was putting together the package of Caltrain improvements for Measure B, they checked with a variety of stakeholders including cities, business groups, transit groups such as Friends of Caltrain, and Caltrain the agency about what should go into the measure.
One of the questions that came up in Measure B planning was whether VTA should set money aside to ensure that it can pay its annual Caltrain bills. At the time, VTA staff said that VTA had paid its bills reliably for many years, and can be expected to continue to pay its bills, so this step would be unnecessary, and Measure B money could be used for other purposes, including future capacity increases (longer trains), grade separations, and increased service to South County.
Now, the first budget year after Measure B passed, VTA is experiencing budget challenges due to a big ridership drop, and as a consequence is reluctant to pay it’s Caltrain bill, setting off a cascade of problems since one partner’s budget cutbacks are effectively multiplied by 3.
In response, VTA observes that the level of partner contributions to Caltrain has been steady for several years. After SamTrans had its financial crisis (when Caltrain’s budget gap was filled with other temporary stopgap funding sources), the contribution from partner agencies was lower. VTA’s contends recent budget years with lower partner contributions (made up with temporary funding sources) reflect a “new normalâ€, and partners should no longer expect to pay contributions similar to the earlier level. But this year, SamTrans and San Francisco are able and willing to pay their bill – only VTA is seeking to cut its contribution.
Caltrain’s proposed operating budget did go up 3% over last year, to $151 million, an increase of $4.6 million over the FY2017 Budget.
This type of problem has happened more than once before. In 2010/11, it was SamTrans that couldn’t pay its bill. The triple reduction cut a gaping hole in Caltrain’s operating budget and Caltrain proposed to cut service by nearly 50%, which would have had catastrophic impacts on the usefulness and ridership of the service. At that time, the community of Caltrain riders and supporters banded together and demanded a better solution. The transit agencies and MTC found short-term workarounds. Eventually, SamTrans shored up its budget and is now able to pay its bill.
In 2012, San Francisco had trouble paying its capital bill. The resulting cutbacks in maintenance led to greater equipment breakdowns and rider delays.
This is an absolutely crazy way to run a critical piece of the infrastructure needed every day to keep Silicon Valley’s economy moving.
And responding to a budget hole with an emergency fare increase designed to raise quick cash, rather than updating fares deliberately based on current business and policy goals, is a recipe to lose confidence among important institutional customers and voters who are needed on an ongoing basis for support to fix Caltrain’s structural budget challenges and to continue on the path to major infrastructure and service improvements.
We don’t know exactly how this year’s issue can be fixed.
- Given the assurances it made to stakeholders and voters, VTA should look harder at its finances to come up with funding to keep its commitments.
- All the partners should look at the destructive “triple threat†agreement that triggers cascading budget crises on a regular but unpredictable basis, and come up with a solution that is less destructive when one partner has budget challenges.
- Caltrain should postpone its fare changes until after the board has had an opportunity to consider the results of the fare study. GoPass increases, which are likely warranted, perhaps should be phased in to allow customers to adapt – similar to the way that VTA is phasing in increases to its EcoPass over multiple years.
What you can do now
If you are a Caltrain user or supporter, click here send a note to the Caltrain board and VTA board urging them to work together on a solution that meets core budget requirements like maintenance of aging equipment, allows fare changes to be done in orderly fashion.
If you are a Santa Clara County resident, let the board know if you are disappointed about this surprise cutback after assurances in Measure B planning that VTA would pay its bills. If you live in another county, tell the board that you want the county transit agencies to work together to craft a short and long-term solution to this year’s budget problem and Caltrain’s structural budget problem.
If you use a bike with Caltrain or appreciate steps to relieve crowding, urge the board to prevent cuts to the bike parking program.
If you can, come to the upcoming board meetings.
* SMCTA board meets tomorrow, May 23 10am at San Francisco City Hall.
* Caltrain’s board meeting is  Thursday, June 1, 10am, 1250 San Carlos Ave in San Carlos.
* VTA’s next board meeting is Thursday June 1 at 5:30pm, at the County building at 70 West Hedding Street in San Jose.
Great, both Caltrain and VTA board meetings are a day I will be out of the country. I am REALLY dismayed at VTA. They wonder why people don’t trust government when they are asked to vote for tax or spending proposals at the ballot box.
This will put Caltrain into a death spiral again. First, huge fare increases will drive away some people. Then the completely predictable mechanical problems that cause 30-60 minutes delays will drive away more people and fare revenue will probably end up short anyway.
VTA has done this before, some years ago, maybe 15-20, I don’t remember exactly but VTA froze their contribution to Caltrain. This led to earlier Caltrain fiscal crises and talk of service cuts, fare increases, no improvements to service, etc. Meanwhile VTA went full steam ahead with projects such as BART to San Jose and light rail expansion, which is one of the worst performing light rail systems in the nation.
There have been previous ballot measures which promised (discretionary?) funding to Caltrain and northern Santa Clara County, but that funding was used for San Jose centric projects (BART). This has led some talk of some cities wanting to leave Santa Clara County.
What would it take to rebrand Caltrain as BART and integrate completely? It’s no different than eBART in that a transfer is required.
My understanding is that San Mateo and Santa Clara counties don’t want to join the BART district. But both of them already benefit from BART service, such as SFO and San Jose. The VTA voters agreed to pay a sales tax to fund operation of the extension. Wouldn’t they be willing to pay if they’re getting even more direct service to SF (without much capital investment other than electrification)?
If Caltrain followed the BART schedule (at most 20 minute headways) and connections (e.g. timed transfer at Millbrae and at San Jose), people wouldn’t even know the difference!
The assertation that VTA is not paying its fair share to Caltrain or meeting its obligations per the Caltrain Joint Powers Authority is false. VTA’s contribution to Caltrain’s Operating Budget is drawn from VTA’s transit operating fund. Per the historical and previously agreed upon proportionate funding share, VTA informed Caltrain months ago that we would be budgeting $9 million for this purpose. This is based on the amount that was budgeted last year and represents 16% of the currently proposed Caltrain Operating Budget and 43% of the partner share. We are working cooperatively with Caltrain staff to arrive at a budget that matches the projected income for their operations.
Per the language in the 2016 Measure B sales tax, monies in the measure earmarked for Caltrain are for Caltrain Grade separations and corridor capacity improvements that include station improvements and service enhancements, not general operations.
Hi, Bernice, here are the references to the staff discussion at the May Caltrain board meeting, with links to presentation documents and audio timestamps, with the information used in this blog post.
Caltrain Board Meeting, May 4, 2017
Board Presentation, Operating Budget, Slide 8, and Member Contributions, slide 9
http://www.caltrain.com/Assets/__Agendas+and+Minutes/JPB/Board+of+Directors/Presentations/2017/2017-05-04+Preliminary+FY2018+Operating+Budget.pdf
“(1) Contributions for FY 18 based on Allocation formula (see (2) below), adjusted for under-payment by VTA in FY 17.
Board meeting Audio:
https://www.dropbox.com/s/cpx9z6yk4idaux0/2017-05-04%20JPB%20BOD.mp3?dl=0
1:19:55 on audio
Member Agencies we’re holding at the same level as last year, and that is because there is a formula that allocates those percentages and based on one of the member agencies inability to increase that amount, we’re holding that, and I’ll discuss that in a moment,
1:21:20-1:23 Member contributions. At one time there was an idea that member contributions would make up the difference, and they would be split among the 3 agencies. There is an allocation formula based on a.m. boardings… It’s almost half of what it was at one time. It is the inability of member agencies to contribute at a sustained level that is a major factor in the deficit that we’re facing.
Finally something on the mysterious Caltrain fare study:
http://www.caltrain.com/Assets/__Agendas+and+Minutes/JPB/Board+of+Directors/Agendas/2017/2017-06-01+JPB+BOD+Agenda.pdf
Agenda item #13, Update on Fare Study.
From staff report:
The last system-wide Caltrain fare study was conducted in 2001, when fare elasticity
was determined to represent a significant deterrent to fare increases. The elasticity
measured at that time indicated that ridership was highly influenced by price, resulting
in a high anticipated elasticity (meaning that any fare increase would be expected to
generate a corresponding ridership decline). Since 2001, however, on-board surveys of
Caltrain customers reveal that many riders along the corridor have high relative
incomes and may not be as price sensitive as riders during the early 2000s. Additionally,
Caltrain ridership has continued to climb rapidly, signaling that there may be missed
opportunities to improve farebox recovery ratios.
—————-
What total disregard to/for lower income riders who have abandoned Caltrain and can’t afford the high fares. Ridership has leveled off in recent months. Many of the “high income†riders get the best deal through the GO-PASS or another employer subsidy. At 70% farebox recovery, Caltrain is significantly higher than the JPB partner agencies and higher than nearly all of their so-called “peer†agencies.
Of course staff is insensitive to fares since the agency is a GO-PASS participant. Samtrans is purchasing the GO-PASS for all eligible employees , including those who don’t use Caltrain, and providing the GO-PASS as an employee benefit.
Talking about a low income or “means-based” fare is not an answer, as MTC has found this to be a difficult task and to implement such a program would mean the likelihood that fares would have to be raised for everyone else to account for lost revenue. Additionally how is an arbitrary “low-income” determined?