Caltrain would keep all of its 86 weekday trains running for the next year if the agency's board of directors approves on Thursday the staff's latest proposal.

The Peninsula Corridor Joint Powers Board (JPB) is scheduled to vote Thursday on a proposal that would raise base fares by 25 cents and increase the daily parking rate from $3 to $4 -- changes that would take effect July 1.

But the agency would not have to make the types of draconian service cuts that officials had previously considered to close the budget shortfall, which remains at $3.5 million for the next fiscal year.

A new staff report suggests that the budget hole could be filled by increased contributions from its partner agencies. Caltrain doesn't have a dedicated funding source and relies on annual "donations" from the San Francisco Municipal Transportation Agency, the San Mateo County Transit District (SamTrans), and the Santa Clara Valley Transportation Authority.

In a new report, staff is recommending keeping all 86 weekday trains running in fiscal year 2012. The report acknowledges, however, that maintaining this level of service is "contingent upon favorable conclusion of discussions among MTC (the Metropolitan Transportation Commission) and the JPB partner agencies."

The report projects the agency's revenues in fiscal year 2012 to be $99.3 million and its expenses to be $102.8 million. Staff is still working with the MTC and the three transit agencies that fund Caltrain to close the $3.5 million gap.

"Funds to fill the $3.5 million shortfall have been tentatively identified but are subject to positive ongoing discussions between the JPB partner agencies and the Metropolitan Transportation Commission," Michelle Bouchard, Caltrain's director of rail transportation, wrote in the report.

Staff is also recommending raising the monthly parking rate from $30 to $40.

The JPB board considered earlier this month a staff proposal to cut service from 86 trains to 76. The board delayed voting on the proposal to give staff more time to seek additional funding that would make the cuts unnecessary.

Staff is proposing to balance the 2012 budget using one-time funding sources such as rolling over the 2011 budget into next year and transferring funds from the capital program to preventive maintenance. At the same time, staff will continue to hold discussions with the partner agencies in hopes of getting increased contributions in future years.

"This will be challenging," Bouchard wrote in the new report. "JPB's reserves are below reasonable levels and JPB partners continue to experience reductions in their own sources of revenues largely attributable to the ongoing global recession."

Caltrain's board of directors is scheduled to vote on the latest staff proposal at 10 a.m. Thursday at SamTrans Administrative Offices in San Carlos.