Caltrain Warns Of $75 Million Deficit During Redwood City Council Meeting Despite Record Ridership Growth

REDWOOD CITY, CA — Caltrain officials warned the Redwood City Council on at their early July meeting that, despite record ridership growth following electrification, the rail agency faces a projected $75 million annual operating deficit that could force major service cuts without new funding.

Caltrain Executive Director Michelle Bouchard said the local railroad service has become the nation's fastest-growing transit system since launching electric service about 18 months ago.

"Since we did launch electrification, our ridership has been growing astoundingly," Bouchard said. "Some months [we have] ridership gains in excess of 50 percent."

Despite the rebound, Caltrain Chief of Staff Casey Fromson said ridership and fare revenue remain below pre-pandemic levels as commuting habits have changed. Fare revenue now covers about 30 percent of Caltrain's operating budget, compared with more than 70 percent before the pandemic.

Without additional funding, officials said Caltrain may have to reduce weekday service to hourly trains, eliminate weekend service and special-event trains, shorten operating hours and potentially close stations.

"We know that cutting the service is not something that we want to do because it also creates this downward spiral," Fromson said.

Councilmember Jeff Gee, who serves on the Caltrain Board of Directors, said the agency's infrastructure costs remain largely fixed regardless of how many trains operate.

"No matter what, we still have 50 miles of track and wires, and the backbone, the equipment ... that have to be maintained," Gee said.

Councilmember Kaia Eakin said the agency's future depends on voters approving the regional transportation funding measure, Senate Bill 63, this November.

"If it doesn't pass, then we don't have public transportation the way that we have known it for 40 years," Eakin said.

Councilmember Diane Howard, who frequently rides Caltrain, praised the new electric trains, calling them quieter and smoother than the previous diesel service while expressing hope the agency can generate additional revenue through development around its stations.