SamTrans, the San Mateo County Transit District, held a special meeting last week to help address structural deficits in the District’s operating budgets.

At that meeting, the San Mateo County Transit District Board of Directors authorized General Manager/CEO Mike Scanlon to continue negotiating a deal for increased funding of the agency’s share to the Caltrain operating budget, including consideration of a portion of funds offered to SamTrans by the Santa Clara Valley Transportation Authority.

The Board indicated that it would be willing to accept up to $5 million over two years in funds from VTA that are owed to SamTrans for the purchase of the Caltrain right of way.

Should the Caltrain funding negotiations prove successful, Scanlon said it would mean a substantial improvement over the drastic service cuts disclosed at the start of the budgeting process.

“There will have to be some service reductions,” Scanlon told the Board. “I’m cautiously optimistic we can put together the puzzle and while there will be some sacrifices and some cuts, it won’t be nearly as severe as we had originally planned.”

While Caltrain was one focus of the meeting, the primary purpose was to review SamTrans’ own financial difficulties, which have led to the agency reducing its share of the Caltrain operating budget.

A preliminary Fiscal Year 2012 budget presented to the Board shows SamTrans providing $4.9 million in funding to Caltrain. Even with that reduction in its Caltrain contribution, SamTrans still would face a $10.9 million shortfall in its operating budget, which would have to be made up from reserves.

The budget presentation shows SamTrans running an operating surplus of $11.7 million, but also shows $24.5 million in debt service.

The presentation also shows that SamTrans is at risk of running out of operating cash by August 2015.

An Ad hoc board committee has been meeting since 2006 to come up with solutions for the District’s structural deficit. Projections in 2006 showed the District running out of cash by mid-2010, but a series of steps by SamTrans has resulted in an improved fiscal condition. Those steps have included:

  • Administrative layoffs
  • Furlough days for administrative employees
  • Hiring and salary freezes
  • A 7.5 percent reduction in bus service
  • Refinancing the District’s debt
  • Negotiating an end to SamTrans/BART partnership
  • A reduction in the annual contribution made by SamTrans to Caltrain of $5.9 million in the current fiscal year.

Still, Scanlon and Board members noted, SamTrans’ fiscal condition remains uncertain and Board members made it clear they regard the bus and Paratransit services provided by the agency to be essential.

“The money we spend here at SamTrans is going to lifeline services,” said Director Omar Ahmad.

Recent ridership surveys have shown that more than 60 percent of SamTrans customers do not own a car – the bus is their means to get to work, to school, to the grocery store and to the doctor.

Scanlon told the Board that the negotiations have involved his counterparts at the two other agencies that are partners in Caltrain – VTA and the San Francisco Municipal Transportation Agency – as well as Steve Heminger, the Executive Director of the Metropolitan Transportation Commission.

The deal, should it come together, will involve a variety of funds from a variety of sources.

“The deal is not done,” Scanlon said. “We are working diligently on the deal and the Board’s willingness to take a portion of the VTA right of way repayment money is one piece of the puzzle that includes fare increases and some cuts in current Caltrain service.

Scanlon and Board members warned that even if the negotiations succeed in providing an interim, two-year bridge in Caltrain funding, it is critical that a permanent, dedicated funding source be put on the 2012 ballot and that it pass.

“If we don’t get something done in 2012, the probability is we will see Caltrain service gone,” said Director Adrienne Tissier.

Caltrain does not have a dedicated funding source, depends on contributions from its three partners -San Francisco, the Santa Clara Valley Transportation Authority, and SamTrans – for a major portion of its operating budget.