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Caltrain officials say the agency is broke and will need to slash service.

Caltrain is broke and will almost certainly need to wipe out half its service, leaving no trains on weekends, weeknights or midday and leaving the agency's future in doubt, officials said Thursday.

"And that's only if we're lucky," Caltrain CEO Mike Scanlon told the agency's board of directors. "This is not an April fool's joke. This is real."

Scanlon said the cuts would need to be completed by June 2011, although the agency may begin reducing its schedule as soon as this fall. The board would vote on the cuts at a future meeting.

Officials at the agency stopped short of saying they expected the railroad to fold, but said the news calls into question its ability to survive. Scanlon said the agency's business model is simply not sustainable.

"We're rapidly approaching a cliff," he said. "It's going to be very, very painful. It's probably going to force people back on congested freeways."

Caltrain's financial state has long been declining. The agency, which has a budget of $97 million, has lost $10 million in funding from the state each of the past three years. And for the past year, it has been losing riders, which account for 40 percent of the agency's revenue.

But now a new, more damaging problem has emerged. Scanlon, who is also the CEO of the San Mateo County Transit District, or SamTrans, said he will ask that agency's board of directors to lower its Caltrain contribution by about 70 percent by July 2011.


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SamTrans, the Santa Clara Valley Transportation Authority and San Francisco Muni each provide Caltrain with a subsidy, which combined amounts to $39.4 million. But with the smaller SamTrans contribution, VTA and Muni will lower their shares proportionately. SamTrans, Muni and VTA are all facing budget cuts of their own and recently cut service and raised fares, and Scanlon said they are all "beyond broke."

As a result, Caltrain expects its budget deficit to reach roughly $30 million.

"I don't see any silver bullets," he said.

A fare increase has not been proposed.

Mike Rosenberg covers San Mateo, Burlingame, Belmont and transportation. Contact him at 650-348-4324.