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Big CTA deficit prompts finger pointing

An incredulous CTA board shook their collective heads at Wednesday's board meeting and pointed their index fingers squarely at the RTA. And the RTA returned the favor, as internecine squabbling over the projected $87 million deficit for 2008 ensued.

The Tribune reports that CTA Chairwoman Carole Brown expressed " 'disbelief' that the RTA is acting so late in the budgetary process to tell the CTA about 2008 shortfalls."

Meanwhile, RTA's Executive Director Steve Schlickman said, "I believe myself and my staff have been working with the CTA as cooperatively as possible."

As I wrote Tuesday, I'm not surprised that the tax revenues are down, thus creating the shortfall. Nor should the CTA be surprised -- at least about the projected $141 million 2009 deficit. But I do see Brown's point when she says: ""I'm confused. How can we amend 2008 budget marks in February 2009?"

After all, it is the RTA's responsibility "to ensure financially sound, comprehensive and coordinated public transportation for northeastern Illinois."

But it does sound like the RTA is taking that responsibility seriously. "We are scraping every cash source that we can," Schlickman said, including trying to borrow $120 million.

We'll have to hold our breath and fare cards to see how successful that effort is in this tight credit market.

Comments

And meanwhile in the midst of all this economic uncertainty, lower tax revenues, layoffs, fare increases for our customers, etc, we'll give our top level people cost of living raises....yeah, yeah, that's the ticket.


KevinB

The complete incompetence of all the government machinery in this state just makes me laugh. Fortunetely, when something fails so spectacularly like this it may actually cause some neccessary reforms to be made. There is no excuse for anyone at the CTA or the RTA not being aware of the amount of tax revenue coming in. Now we get to see the two agencies scream at each other like children. I predict this will end up being rather amusing. It also is a lovely time not to even have a permanant CTA president.

The two first steps that need to be taken are to get the legislature to immedietely end the senior free ride program and for the CTA to combine the #36 and #151 routes. I actually predict that the latter (or something similar) will occur. Maybe I can even take credit for it. Only after this occurs can the CTA start discussing ways to come up with new revenue.

I am still waiting for someone from the media to explain how the dramatic decrease in the cost of fuel from the time of the projections (which this article states was apparently in August or September: http://www.wbbm780.com/CTA-Faces-Shortfall-In-Tax-Revenues/3878157 ) until now would affect the deficit. It seems to me that it should lessen its severity pretty substantually. But people are batting these numbers around apparently references a deficit which would already take this into account. Perhaps something like this was mentioned at the board meeting and maybe someone here was there and could explain it. When the CTA made released its final budget for this year it was already very clear that the economy would falter. It wasn't clear it would be this bad but it doesn't seem to me that the difference in the projected revenues from that time would be so severe that it would offset by this much the huge drop in the price of fuel. Eventually, I'm sure we will hear an explanation.

And I am going to conclude by stating something that runs the risk of sounding like Kevin B. In fact, several months ago Kevin B. actually stated what I am about to and I yelled at him to tell him he was incorrect. And he was. But now, it would be correct. The CTA is going to close the red line subway on several subsequent days to "replace detiorated rail ties": http://welcome.www.transitchicago.com/news/default.aspx?Month=&Year=&Category=2&ArticleId=2293 These apparently are the ties that they made clear numerous times that they finished replacing over the last couple of years.

I wasn't incorrect MK, just ahead of my time in predicting the future :)

It's a cross that I have to bear.

I also predict that Crains will actually describe Ron's spending as "that of a drunken sailor" in retrospect and judge hime according, but like they say....Wait, wait, wait for it :)

This too shall come to pass.


KevinB

I don't think they replaced all the ties earlier, in fact I know off the top of my head the cross over between Clark/Division & North/Clybourn still had wood ties, so perhaps that is what is being replaced. I assume those crossovers require more time & special equipment so perhaps thats the reason for the delay.

I don't think the 151 and 36 should be combined. Both have had increased ridership and serve a different area. 151 runs on Michigan and the 36 runs on State, so I am not sure how you can combine those routes. North of Belmont I cannot comment on but south of Belmont it would not work.

High-quality municipal bonds are a great way to diversify your fixed income portfolio!

Yeah, I was a little confused about the red line subway work. Did they not actually do the work completely before, or was there a problem with the materials and workmanship, that they have to redo it so soon?

Why doesn't the CTA sell some bonds to the public like the US did in WWII? I'm not sure if I'm joking or not...

I don't know the solution to this. I'm not sure I want to know. But I do know that my brain is going to explode very soon. My only hope is to take out some CTA execs with me.

[Yeah, I was a little confused about the red line subway work. Did they not actually do the work completely before, or was there a problem with the materials and workmanship, that they have to redo it so soon?]

I wish the CTA was more upfront about this kind of thing myself. I suspect they're fixing the changeovers, like they did on the Blue Line in the fall after completing major track renewal work, but it would be nice to know for sure.

But, at least (thus far) the closures are limited to overnight periods, and the trains are still running at proper speeds. Not much of an inconvenience, IMO.

Ms. Brown expressed "'disbelief' that the RTA is acting so late in the budgetary process to tell the CTA about 2008 shortfalls." I think she expressed disbelief that she isn't in DC yet.

Who's in charge of the CTA? The CTA board or the RTA? If the CTA board isn't in charge of the CTA budget then it shouldn't exist. Wow a derailed budget, for '08. It was agreed upon in '07 by Huberman and predecessor. I guess Huberman wasn't magical afterall.

I say let's leave these people in charge. The CTA won't be able to make payments in a year or so and will be forced into bankruptcy. That's the best solution...restructuring of all sweetheart contracts and replacement of management.

$120 million deficit sounds like a lot...until you realize that the CTA yearly operating budget is $1.1 billion. In a severe downturn such as this, the CTA shouldn't be surprised that they have to cut budgets by 10%. Responding to this requires leadership and competence...not passing the buck to the RTA and building holes in the ground.

I think Ms. Brown and the rest of the board is "shovel ready," as in shovel them out.

This has to be seen in the context of an unfolding power struggle between the RTA and the service boards. After the legislation last year, RTA is nominally empowered to take control of budgeting and capital spending, but CTA and Metra have thrown up obstacles at every step. We could cut the budget and improve service at the same time if CTA and Metra would cooperate with each other, but since that's not going to happen we need a strong RTA to bring them into line.

JC, the 151/36 combo is a bizarre idea MK drops here periodically to start a long-winded and pointless argument (with whomever takes the bait) about how cutting service improves transit. Bet to ignore him.

I'm inclined to agree with Kevin B.
Ron Huberman prior to his departure
found money to increase the yearly
salaries of top CTA managers making
over one hundred thousand dollars per
year stating that were paying more in
taxes and the CTA needed to cover that.
But now all of a sudden a "budget shortfall"
exists, coming on the heels of last month's
fare increases, that hit the users of the
Chicago Card the hardest ?
Someone is throwing some s**t in the game
and they need to be audited to determine
where the money is actually being spent.
Each year the CTA comes with that same old
lame a** excuse, we need more money or we
will be forced to increase fares and cut
service. Like The Tattler has been
suggesting, the CTA should first look at
itself and do some in-house cleaning at
all levels and all positions, both salaried
and agreement-covered, then when all those
means have been exhausted then come to the
public for more money. These "doomsday"
threats have become a mantra and we give them
more money but nothing improves, be it the
service, the equipment, nor the attitude
of the employees that come into with the
public. The okedoke needs to stop and people
from Carole Brown on down to the Securitas
people needs to be accountable to the riding
public, not to their paycheck.

side note: Visualizing the most used subway trains.

http://awesome.goodmagazine.com/transparency/web/trans0209takingthetrain.html

source: Digg

Mario Mims,

I really don't understand when people say "nothing improves". I definitely see improvements and fail to see how anyone else doesn't. The rest of your comments are valid, but don't pretend like all they do is sit around, collect fat paychecks, and do no work at the CTA. You're either exaggerating or not credible when you say things like that.


As for the subway comparison, it's crazy that Boston and DC are so close to us in annual rides considering the populations of those cities. I suppose DC's is inflated by tourism (but don't tourist come to Chicago too?), but I don't understand how Boston's is so close.

"But it does sound like the RTA is taking that responsibility seriously. "We are scraping every cash source that we can," Schlickman said, including trying to borrow $120 million.""
_______________________
That begs the question. At least the RTA should have known what tax revenue it was receiving. (I am not sure about who accounts for the real estate transfer tax imposed by the City.) Unless the $85 million shortfall for 2008 all the sudden appeared in December, the RTA should not have approved budgets that it assured us would not result in "doomsday."
http://rtachicago.com/CMS400Min/uploadedFiles/board%20approves%20budget%20for%202009.pdf

With that act of at least lack of oversight, if not political cowardice, the least the RTA could do is look for other sources of funds, or some other solution, before telling the Service Boards to impose cutbacks.

And for those talking about the impending "power struggle," that has been going on at various intensities since 1974. I said, a couple of threads ago, that if the RTA and the Service Boards can't work these problems out, the legislature should recognize that the 2008 "reforms" did not work, and blow the whole thing up politically. The RTA has never exercised oversight, and I doubt that this one ever will.

"151 runs on Michigan and the 36 runs on State, so I am not sure how you can combine those routes."

Like I said in the thread I linked to, you would run the combined route using the 151 routing south of Diversey or Belmont and the 36 routing north of that. Those travelling from the area near State still have the 22 and the red line. Those routes are very busy but not near capacity. So there won't be a problem fitting everyone in, certainly not at non-peak times. If someone wishes to argue that they should preserve the current #36 route during rush hour I won't take a huge deal of time arguing with that. But for the rest of the day and the weekends it certainly makes sense to lower the amount of money spent for bus runs when it does not significantelly increase the inconveinence of customers. In fact, I think it would improve the commute of more people than it would make worse. And you can actually increase the frequency of both the new combined route and the #22 while still significantelly reducing the cost (but that might not make sense with this tight budget).

(Re: Swizzle link to Good transparency - taking the train 2009)

Just my 2 cents, having driven and taken the Metro/"T" in D.C. and Boston:

In the chart they compare the population of DC to the Metro, while the Metro also travels into two states outside of D.C. It's also highly congested in the center of D.C. and very difficult to get around, whereas, many busy locations are more easily accessible by the Metro.

In Boston, there are "roads" that were originally based on foot and horse trails, as well as a very compact area that lends itself to transit. You'd have to be crazy to NOT take the "T" there when you have the choice.

Also, like Chris mentioned, there are lots of tourists in those cities, but I'm also surprised to see such a comparatively low percentage of riders here. I guess it's just too "easy" to get around by car here, or we have many more walkers/cab riders than they do?? (not)

Perhaps a more even measurement would include "commuter train" rides into all of these cities as well. The number of Metra riders would add a bit in Chicago's favor, but nothing like our worldwide counterparts.

While I will apologize for my above comment being off topic, I probably won't do the same for the following:

(Re: MK 151/36 it still goes on????)

Snooze......

MK, do you actually ride either the 22 or 36 at rush hour? They are both jam packed up to at least Diversey in the evening. Anyways, businesses would scream bloody murder about losing riders along a shopping corridor AND it serves people along Clark, not in the park south of Belmont.

Cutting a busy bus route only makes sense if you assume that all those passengers will trundle over to the next closest bus line. If the marginal inconvenience of doing that pushes more people to use their cars more often, then cutting a busy bus route may not save the CTA all that much money.

And keep in mind that in the bizarro public transit funding system we have here, if the CTA loses a dollar of fare, it also loses a dollar of state funding.

On a completely different note, it seems they've resumed running eight-car trains on the brown line during the mid-day. Or at least in the late morning. Previously, trains leaving Kimball in the morning swtiched to four cars after about 9:15ish.

Switching to four cars during the day always struck me as probably unnecessary. (If you have enough cars to run 8-car trains during rush hour, when more trains are in service, then why can't you do the same during the off hours, when fewer trains are in service?) But does anyone know what prompted the change?

Oops... maybe I shouldn't say "resumed" running 8-car trains during the day, since they never did before. (They used to run 6-car trains both during the rush and during the mid-day period, but then when they started using 8-car trains, they only did so during the rush and started using 4-car trains mid-day, ratehr than 6.)

Anyway.

There's clearly a mistake in the graphic - Chicago certainly does not have well over 200 miles of track in the El system. This figure comes from the CTA website, but I think it must be double-counting track that more than one El line uses or something, because right below it when different types of track are divided out, the total is accurate at just over 100 miles (Wikipedia and Urbanrail.net have similar figures).
http://www.transitchicago.com/about/facts.aspx

Chicago still comes out below DC (same track length with more riders) and Boston (same ridership on less track), but the difference is not as pronounced.

The real difference is in bus ridership - unlike Boston and DC, most of the CTA's riders use the bus. We'd need a comparison of rail rapid transit plus bus divided by population for a better comparison of transit ridership.

The reason they were running 4 car trains is because you can break an 8 car train into two 4 car trains easily.
They did that for a number of years on the Jackson Park/Englewood/Howard line for a number of years.
The CTA did it despite massively overcrowded mid-day trains.
Previously, all the mid-day trains had been 6 cars.

The Press Release now on the CTA's site indicates that there was something to the rumors that the NABI articulateds are out of here (at least substantiating that they are out of service for inspection).

http://w.transitchicago.com/news/default.aspx?Month=&Year=&Category=2&ArticleId=2294

Again, what's the deal with the secret bus orders? Were they ordered because the CTA knew in advance of this? Did the stimulus package come in time?

"The reason they were running 4 car trains is because you can break an 8 car train into two 4 car trains easily."

Well, yeah, but that doesn't explain why you would want to do that. Indeed, they could just as easily split red line trains into two 4-car trains (or lots of 2-car trains!), but they don't.

I'm going to chalk it up to the new guy. Acting President Whatsisname sure has wasted no time in cleaning up the mess left by the last guy! (Each new CTA president is supposed to be more slavishly revered than the last, right?)

Did you anyone watch the Carole Brown interview on Chicago Tonight? Apparently, by law the CTA is not allowed to declare bankruptcy. Too bad as many contracts could more easily be renegotiated if this were allowed.

I'm still unsure why I haven't heard anyone from the RTA or CTA mention the possibility of selling short-term bonds to cover this budget crisis. However, this might not be all that prudent either as the CTA already has to make about $70 million in debt payments for 2009 and $75 million in 2010. Adding to this can't be a good thing for long-term viability. (http://ww.transitchicago.com/assets/1/finance_budget/2009sum1.pdf )

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