Caltrain board appears to make progress on 3-county governance

At its meeting on November 4, the Caltrain board appeared to make progress on changes to governance that were accelerated by the board’s agreement to put Measure RR on the ballot in 2020.  Board members posed a variety of questions and concerns; pending answers to the questions, the matter seemed fairly likely to be headed for approval, albeit with a split vote.

The proposal presented to the board on Thursday included a provision for Caltrain to have a separate executive director reporting to the Caltrain board; to establish a larger tier of employees who work specifically on rail; to establish more explicit shared services agreements for employees whose services are shared with SamTrans; and to complete repayment to SamTrans for putting up the funds to purchase the right of way from the State in the 1990s.  The proposal maintains the formal status of SamTrans as managing agency, and all employees would remain employees of SamTrans.  And the proposal directs the agency to participate constructively in regional rail and transit governance discussions that are moving forward in the coming year.

The proposal is time-limited; if SamTrans is not repaid the remaining principal by January 1, 2023 and interest by January 1, 2024, the agreement expires, and the executive management of Caltrain reverts to the General Manager of SamTrans. This was the shared leadership model that had been in place between the SamTrans right of way purchase and December 2020, when Jim Hartnett stepped down as General Manager; and Michelle Bouchard was promoted to acting Executive Director of Caltrain, separate from the acting SamTrans GM role filled by Carter Mau.

The strongest opinion was expressed by Supervisor Walton, who asserted that the proposed solution did not meet the aims of the resolution the board adopted in 2020 to get Measure RR on the ballot, including the initiative to develop an agreement to reform governance in 2021. Walton has been a strong proponent of spinning off Caltrain into an entirely separate agency from SamTrans.  However, what board members had in mind with the 2020 resolution was not uniform. At the August 2021 board governance workshop, it was clear that the option to split off Caltrain as a separate agency did not have the largest support from the board.  A compromise along the lines fleshed out in November met more of board members’ goals.  

Supervisor Chavez had been on record earlier as supporting spinning of Caltrain into a separate agency, but in Summer 2021, as Caltrain and other regional transit services face a financially risky future with potentially slow post-pandemic ridership recovery, the $50 million price tag to unshare all the SamTrans services, Chavez remarked that the price tag seemed high.

An open question raised by several board members at the November meeting is the amount of right of way repayment; the proposal called for repayment of $19.8 million outstanding, plus interest dating back to 2008, which was the date of an agreement for SamTrans to be repaid as part of a deal that kept Caltrain running in during an earlier fiscal crisis. The amount of interest wasn’t specified in the November 4th materials. Acting ED Bouchard noted that a specific proposed amount was being reviewed by member agencies and not yet ready to present. Board members understandably want to know a definite amount.

Notably, Director Heminger asked for a provision where SamTrans would renounce any further repayment claims once these payments were made by 2024.  At the previous governance workshop in October, which focused on regional governance options, Heminger had expressed interest in direct inter-board discussions of regional governance options involving multiple agencies; and Heminger was previously  on record as supporting a merger of Caltrain and BART.    

If future regional governance discussions create options with Caltrain being spun off as an independent agency with more services shared by a regional authority, for example customer-facing network management services, or megaproject delivery services; or Caltrain being merged with BART and/or other regional rail services; or a future with robust ridership recovery and enough financial strength to take on the cost of replacing all the shared SamTrans services; if any number of future conceivable options resulted in SamTrans no longer being the managing agency, SamTrans might want further repayment, and Heminger’s questions will surface that expectation now. 

In the important provision giving the Caltrain board the power to hire and fire the Executive Director, a notable element was the requirement to have a supermajority vote of at least six members out of the 9-member board, with at least one vote of support in each of the three counties. This provision would reduce the likelihood of intercounty disputes creating a revolving door for the executive director role.  An intercounty dispute so severe that two counties are united in wanting to fire an executive director, and the other county was united in wanting to keep an executive director, would be a symptom of disputes sufficiently deep as to call the agreement for the three counties to jointly govern the railroad into question. 

A refined proposal is expected to be brought back to the board for approval in December, in time for the deadline the Caltrain board set for itself. An agreement on the three county governance issues would allow the Caltrain board to focus on the risks and opportunities of governing the service for riders – setting a path to recover ridership at a time of likely permanently changed travel patterns; completing the delayed electrification project; and participating in regional governance discussions with opportunities to provide more closely coordinated service for riders, and more cost-effective and speedy delivery of capital programs to extend and improve service.