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CTA avoids fare hikes by using capital funds to balance budget

The CTA will transfer almost $129 million in cash originally earmarked for station fixups and new buses to help fill $155 million budget hole this year.

CTA officials laid out these details for the agency's board at last week's meeting:

  • Reduce the injuries and damages reserve fund: $10 million
  • Savings on labor costs: $3.8 million
  • Savings on fuel and power expense: 1.5 million
  • Transfer to preventive maintenance from capital: $128.6 million
  • Additional RTA funding: $8 million
  • CTA sale-leaseback funds: $2.8 million

CTA Chairwoman Carole Brown also expressed her displeasure with the RTA upon learning that the $56.1 million promised by RTA last month to retire the 2008 deficit would have to be repaid. The CTA originally was told it would be a grant, not a loan. The CTA has until 2011 to repay it.

CTA President Richard Rodriguez warned that fare increased and/or service cuts are still possible for 2010 and 2011, the Sun-Times reported:

"It’s not as if we can completely rule out fare increases and service reductions,” Rodriguez told the CTA board Wednesday. “We are aggressively looking at ... other ways to tighten the belt.”

Ridership still up over last year. There was some good news at the meeting. Ridership remains strong this year over last year, with a 2.5% increase systemwide. Rail ridership is up 4.8% year-to-date, with Brown Line riders causing the biggest jump at 12.2%.

Comments

Can T.I.F, district money be used to maintain or build C.T.A. facilities ?

It doesn't matter if TIF money can be used for CTA stations.
Daley won't allow it, as he plans to use that money for the Olympics!

Well, according to Daley TIF money can be used for whatever he wants.

This may include giving money to a developer to build property on the former Wilson Yard. Despite the fact that this is the largest single parcel of land on the north side, the city gave the developer money for it so they can put more housing for poor people there. TIF funds are supposed to help a neighborhood, not make it worse and/or enrich developers.

Luckily, there are people fighting back and if they win, might mark the first challenge of TIF funds in Chicago, if not elsewhere.

Maybe if RTA hadn't wasted, and continues to waste, money on the useless "Goroo" site, they'd have more dollars available to devote to actual transit operations.

Jeez, how much more can they raise the fare? I don't know if it's going to be worth it commuting from the suburbs to the city anymore.

Why wouldn't it be worth it to commute from the suburbs via CTA? In that situation, it costs even more to commute via car, so the savings would be greater than if you lived in the city. Technically, you're getting a better deal than city dwellers due to the distance you commute. Your comment makes no sense.

What does this mean for new buses and rail cars? I read the stories and it wasn't clear. Is CTA sacrificing new rail cars to stay in business this year? I don't know what the right answer is, but wondering what CTA is giving up.

They're raiding the capital budget to shore up operations, in this case transferring capital funds (that were to be spent on station rehabs) to bus and rail maintenance.

Apropos of nothing in particular:

>Western Avenue Traffic Signal Priority should kick off by late spring.
>Jim

(posted roughly mid-March)

I thought I'd repost and see if anyone had an update.

We're in the 3rd trimester of spring now. Many would say it's too late to terminate Signal Priority. Others say you should be able to terminate Signal Priority anytime. What's the story?

"Jeez, how much more can they raise the fare? I don't know if it's going to be worth it commuting from the suburbs to the city anymore."

Because driving into the Loop with gas $2.50/gal. or more and paying whatever ungodly amount it costs to park down there is cheaper than whatever fare increase they might propose? Really?

Well, if you have to fill-in a $128M whole (that's the only deficit worth mentioning--all those other items are things they should do anyways) with capital money, then it doesn't matter how big of a turn-around the economy takes. Next year, and probably the year after that, will not jump from the red to the black in such a large amount. There won't be much money (for operating dollars, that is) coming from the State, in fact, the only action lately is Gov. Quinn today threatening to massively cut mass transit subsidies. And if CTA starts another Doomsday strategy, they'll start going the same way Mr. Stroger looks like he's going.

SO... If Mr. RRod is basically saying that fare increase or service cuts will probably be needed next year (only 7 months away, by the way) then it really begs the question: why not get started right now? What is the obsession with closing or "balancing" out this year? In any other business, or just your own personal finance, if you knew a big bill was coming your way, you'd start saving now, right?

The reason you'd get started now is because that bill just gets worse-and-worse the longer you wait. So in other words, Mr. RRod, by admiting cuts are needed, but waiting another 7 months to act (on top of the two months that he's been stalling on), he is going to have to enact even larger cuts.

And it's fiscally worse than that. We all know that CTA's pension is underfunded; so each dollar spent today, tomorrow and the next that they can't afford, represents essentially a future burden of payments to fund contributions that the future CTA will have to pay-off.

And it gets even worse. To "balance" this year they're taking from capital dollars. $128M of capital--that's one-quarter the price tag of the Brown Line expansion. And it'll get spent off in a little over half a year! So that's a bunch of CTA's capital stock not being replaced, fixed-up, brought to a "state of good repair." This essentially costs the CTA even more in future operating costs as older, unrepaired capital is costlier to operate.

Balancing this year's budget this way is borrowing from tomorrow's CTA--plain and simple.

What's worse, politically, in my mind, RRod and Ms. Brown have lost the crisis moment and as far as I can tell, CTA, not once, sent any signals that they'd ask their employees, particularly the Bus union, for any help in solving the crisis.

@Sarah What I meant was, finding a job closer to home.

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