Caltrain is cashing in on its recent fare hike and taxpayer fund infusion by raising the rail line's spending to record heights -- even paying more for executives than initially proposed -- despite the agency's claims it needed the money to keep trains running.
The commuter train's latest proposed $103.8 million budget is the highest in its more than two-decade history. As promised in May, the plan for the fiscal year that starts in July includes no changes to the current 86-train schedule.
For more than a year, officials warned that the agency was going broke and would have to slash service and shutter half its stations. The ensuing outcry prompted local government agencies, including the Valley Transportation Authority, to bail out the rail line with millions of dollars, while the agency raised fares and parking fees.
Yet the extra revenue hasn't been met with spending cuts -- rather, the agency, fresh off a spending increase in last year's budget, is again boosting expenditures. If the budget is approved by the Caltrain board on Thursday, the coming fiscal year's spending will jump 16 percent compared with last year -- and it will have soared 42 percent since 2006, even though service levels have decreased since then.
"In this era, you've got to look at both sides of the ledger," spending and revenue, said Palo Alto Councilman Pat Burt, who sits on the city's rail committee. "You've got to run the operation leaner and more efficiently."
With fuel costs soaring, Caltrain officials insist the only way to keep service intact is to spend more.
"We didn't cut after we got the money because we got the money to maintain the 86-train schedule," spokesman Mark Simon said.
Still, since getting the money, officials are budgeting more for several areas, including executive compensation.
On May 5, agency leaders proposed spending $6.1 million on pay and benefits for the rail line's administration, which consists of SamTrans employees who spend part of their time managing Caltrain.
But since then, the Metropolitan Transportation Commission -- which controls Bay Area taxpayer funds for transportation -- has agreed to give Caltrain an extra $3.5 million to help with its budget crisis. At the same time, the new budget shows Caltrain managers giving themselves $333,000 more in compensation from their first budget proposal.
That's still $181,000 less than what Caltrain is paying for executives in the current budget year. However, by July, the administration's compensation will have jumped 56 percent since 2005.
Caltrain and two other Peninsula transit agencies teamed up to pay joint-CEO Mike Scanlon more than $400,000 last year, higher than any other transit boss in the state even though the size of the agencies he oversees is about average.
It comes as rank-and-file employees such as engineers and conductors -- who are provided by Amtrak and make up the majority of Caltrain's budget -- have received pay bumps totaling nearly 40 percent in the past three years.
Caltrain Deputy CEO Gigi Harrington said SamTrans employees will spend more of their time working on Caltrain and less on SamTrans, raising the rail line's expenses for manager pay. They insist the employees won't receive more money; rather, they'll be getting a bigger chunk of their paycheck from the Caltrain budget. The last time officials made a similar claim, payroll records showed employees ended up taking home more money.
One of the biggest areas of spending to jump is fuel costs, up nearly $700,000 in one year, and the agency has only limited control of that.
Simon noted that before the agency received more revenue, it planned to slash spending by cutting service.
"We have been cutting spending and the budget demonstrates that in a number of ways," Simon said. The agency expects to spend less on insurance, shuttles and utilities, for instance.