Published Saturday, May 2, 2009, by the Peninsula Daily

Caltrain in trouble

Transit system eyes declaring fiscal emergency; riders could face higher fares,
service changes

By Mike Rosenberg
Daily News Staff Writer

Caltrain announced Friday it will run out of money by this time next year if it
does not declare a fiscal emergency in June -- a move that would allow it to
raise fares and possibly run fewer trains or make fewer stops.

Caltrain's board of directors Thursday will consider calling for a June 4 public
hearing to formally declare a fiscal emergency and consider fare hikes, service
reductions or both.

Specific proposals will be unveiled the week before that June 4 meeting and any
changes would take effect in October.

Riders' reaction Friday was a mix of disappointment and resignation.

Margaret Okuzumi, executive director of Palo Alto-based transit advocacy group
BayRail Alliance <http://bayrailalliance.org>, called the announcement
"devastating."

"This is exactly what we had feared would happen," Okuzumi said. "This is the
beginning of a downward spiral that we really don't want to be embarking on.

"I'm just so fearful that any additional fare hikes or service cuts is going to
reduce ridership," Okuzumi said. "And that's a terrible thing for the
environment (and) in terms of congestion on our roads."

Though disheartened, Elizabeth Lasensky was pragmatic. "I understand the
dilemma, everybody gets it, there's not enough money," said Lasensky, who
commutes on the train from Menlo Park to Stanford. "But wow, this is at a time
when to some degree I think more and more people are relying on transit to get
around."

In a report, Caltrain Chief Operating Officer Chuck Harvey said the agency will
investigate everything from base fare increases to reducing deals on monthly
passes. He added that "several" service reduction options will be studied for
their cost-savings potential, but did not elaborate.

In a separate report released Friday, Caltrain Budget Manager Ladi Bhuller said
the agency is on pace to spend about $10 million more than its projected
revenues from July through June 2010.

Caltrain expects to spend $102.1 million but will have only $91.9 million
available, or $5 million less than in the current fiscal year, Bhuller said. The
agency will be left with just $3.4 million in reserves by the end of this fiscal
year, which won't be enough to cover the projected deficit.

In a third report, Chief Financial Officer Virginia Harrington said the agency
can declare a fiscal emergency because it will have a negative fund balance by
the end of this fiscal year on June 30.

By declaring a fiscal emergency, Harrington said Caltrain will become exempt
from state environmental reviews, making it easier to increase fees and reduce
service. The state considers service reductions as "projects" that by law must
undergo thorough state environmental review, she said.

Caltrain is no stranger to financial difficulties, but this year the agency
finds itself in perhaps the worst economic straits ever.

Harrington said. Caltrain has used one-time funding measures to avoid running
out of money each of the past seven years, but this year those revenue sources
have just about dried up.

The only steady sources of annual income for Caltrain now are fare revenue and
relatively minor contributions from Santa Clara, San Mateo and San Francisco
counties, ranging from $7 million to $16 million each. Harvey said the agency
will also ask the counties for more money.

Compounding the problem is a move by the state to cut Caltrain's Transit
Assistance Funds, which in previous years totalled about $6 million.

And Caltrain's record ridership gains in 2008 have begun to level off, Harvey
said, at least in part due to rising unemployment and the economic recession.
Fares account for nearly half of Caltrain's revenue.

Agency spokeswoman Christine Dunn said officials have been working on the budget
for the past couple months.

"It's a very difficult time not just for Caltrain and SamTrans but for transit
agencies all over California," Dunn said.

Riders already have seen fares increase once this year. On Jan. 1, the base fare
increased by 25 cents to cover rising gas prices.

At its meeting Thursday, the Caltrain board will also consider implementing a
"fuel hedging program" to minimize risks associated with the volatile fuel
market.

Caltrain already has cut services to some stations in recent years and
eliminated weekday trains to Atherton and the Broadway stop in Burlingame.

E-mail Mike Rosenberg at mike.rosenberg@...


[BATN: See also:

With oil down, ridership up, Caltrain alters reason for fare hike
http://groups.yahoo.com/group/BATN/message/40239

Caltrain hikes base fare 25 cents (31 Dec 08)
http://groups.yahoo.com/group/BATN/message/40162

Caltrain plans fare hike on Jan. 1 to help cover rising fuel cost
http://groups.yahoo.com/group/BATN/message/39914

Caltrain board approves 25-cent base fare hike
http://groups.yahoo.com/group/BATN/message/39474

Fares up more than fuel, but Caltrain pushes fare hike anyway
http://groups.yahoo.com/group/BATN/message/39348

Caltrain meetings on proposed fare hikes draw few
http://groups.yahoo.com/group/BATN/message/39194

Caltrain eyes fare increase to offset increased diesel costs
http://groups.yahoo.com/group/BATN/message/39158

Caltrain eyes fare hike due to increased fuel costs
http://groups.yahoo.com/group/BATN/message/39144

Caltrain reports record ridership for third year
http://groups.yahoo.com/group/BATN/message/39094

Caltrain aims for Jan. 1 fare hike to offset rising fuel costs
http://groups.yahoo.com/group/BATN/message/39017

Caltrain eyes fare increase to offset rising diesel fuel costs
http://groups.yahoo.com/group/BATN/message/39016

Letter: Now that ridership is up, will BART, Caltrain cut fares?
http://groups.yahoo.com/group/BATN/message/38618

VTA and Caltrain ridership rise with gas prices
http://groups.yahoo.com/group/BATN/message/37785

Caltrain annual report notes record ridership, revenues
http://groups.yahoo.com/group/BATN/message/36582 ]