In BATWG’s March 2023 newsletter we noted that given its major capital and new equipment programs in process, its staggering ridership losses, and its large and growing operating deficit, the hardest part of Caltrain’s development program lies ahead. For these reasons it appears that the following actions are needed:

• get entirely out of the diesel operating business as soon as its new all-electric trains are up and running,
• take full advantage of other opportunities to cut costs, including cutting service and eliminating or reducing employee categories as necessary,
• work with other agencies to accommodate those now using Caltrain south of the Diridon Station,
• benefit from the significant operating advantages of level boarding as soon as possible and
• interact intensively and effectively with the TJPA right up to the time Caltrain is up and running in the Salesforce Transit Center, as well as with other involved agencies such as the San Jose County VTA and its Diridon Station program.

Subsequently, Caltrain’s Board held a budget workshop on April 6th. Staff and consultants laid out their preliminary budget planning inputs for FY2024 and FY2025 as well as operating and capital cost, ridership and revenue premises for the next ten years. Among their proposals and findings:

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• Caltrain will continue the current operation of 104 trains per weekday through FY 24 and then, beginning in FY 2025, increase operations to 128 trains per day (6 trains per hour)
• Ridership estimated to grow 5% in FY24, 20% in FY25, then 15% per year through FY30
• But there continues to be high uncertainty regarding projected ridership
• Expectation that fare revenues cover 22%-23% of operating expense in FY24 and FY25, then stabilize at 32% beyond FY30
• Ridership gains notwithstanding, annual operating deficits of $70 million are projected for FY24 and 25
• These deficits increase every year through FY2033, even with Measure RR funds fully dedicated to operations
• Operating deficits could total as much as $280 million at the end of six years and $560 million at the end of 10 years
• It is anticipated that Caltrain will add a fourth weekday diesel train from Gilroy to San Francisco
• It is projected that Caltrain will be operating both electric and diesel trains through 2033

Staff indicates that it will continue to refine its proposed FY2024/2025 budget for adoption by the Caltrain in June 2023. As those efforts proceed, BATWG encourages the Board to press staff for definitive answers to the following questions:

1. Why are the operating expense and revenue numbers in the April 6^th presentation so different from the numbers Caltrain submitted to MTC in its December 22 short range transit planning scenarios?
2. How could having to operate and maintain both diesel and electric train be avoided?
3. Is adding a fourth diesel train from Gilroy to San Francisco the best use of scarce financial resources? BATWG estimates as of Fall 2022 there will be just 400 rider boardings/weekday south of the Diridon station
4. The new Stadler electric rail cars come equipped with advanced technologies (eg; station LED displays and annunciation, automatic passenger counting) that will significantly reduce the need for crewing activities. Is there a plan to retrain and reassign assistant conductors to other duties?
5. What mechanisms are available to Caltrain to hedge against increasing electricity costs?
6. What is the estimated cost to implement level boarding? What time savings and service reliability improvement could be realized with level boarding? What does that translate to in new ridership? What equipment/labor productivity cost savings could be realized?
7. What are the relationships between service scheduling strategies (i.e., local, express, bullet train schedules/stops) vs. clock-based schedules on projected ridership outcomes? What are the expected tradeoffs in trains per day, ridership, fare revenue, and operating deficits?
8. A 2024-25 recession is now widely anticipated. How will Caltrain take such an event into account in what it presents to the Board in June?
9. What are the most effective ways that Caltrain can grow ridership in order to increase farebox return, cut GHG emissions and reduce negative auto intrusion impacts? (employer and community partnerships? Go Pass improvement and expansion? fare rationalization and integration among transit providers? TDM and TDA strategies? shared promotional programs? improving connectivity? micro-mobility experiments? other?)

Bringing a new rail system on line is not an easy task, especially given all the related problems, including in particular the looming funding shortage. Getting the job done will take a seasoned and dedicated team.

Caltrain has experienced a greater degree of pandemic ridership loss and slower recovery than other Bay Area transit providers. This has come at a time when the agency is pursuing a major capital development program and equipment procurement crucial to its future. In this situation an agency cannot simply wait and plead for more funding. Cost cutting and efficiency gains must be aggressively pursued as well.