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Transit at a Crossroads

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Transit at a Crossroads Transit at a Crossroads President’s 2007 Budget Recommendations Chicago Transit Authority Transit at a Crossroads Chicago Transit Board Carole L. Brown, Chairman Appointed by: Mayor, City of Chicago Susan A. Leonis, Vice Chairman Appointed by: Governor, State of Illinois Carole L. Brown Chairman Henry T. Chandler, Jr. Appointed by: Mayor, City of Chicago Cynthia A. Panayotovich Appointed by: Governor, State of Illinois Charles E. Robinson Appointed by: Mayor, City of Chicago Alejandro Silva Appointed by: Mayor, City of Chicago Nicholas C. Zagotta Appointed by: Governor, State of Illinois Frank Kruesi, President www.transitchicago.com 1-888-YOUR CTA Transit at a Crossroads CTA Organization Chart . .1 CTA Mission and Values . .2 Letter from the President . .3 Introduction . .7 Accomplishments & Plans . .8 2006 Operating Budget Performance 2006 Operating Budget Schedule . .30 2006 Operating Budget Performance Summary . .31 President’s 2007 Proposed Operating Budget President’s 2007 Proposed Operating Budget Schedule . .38 2007 Major Budget Assumptions . .39 President’s 2007 Proposed Operating Budget Summary . .40 President’s 2007 Proposed Operating Budget Schedules Department Budget Schedule . .48 Department By Line Item Schedule . .49 Department Budgeted positions . .50 President’s 2008 – 2009 Proposed Operating Financial Plan President’s 2008 – 2009 Proposed Operating Financial Plan Summary . .51 President’s 2008 – 2009 Proposed Operating Financial Plan Schedule . .61 Business Units Business Unit - Overview . .62 Business Unit - Activities by Unit . .63 President’s 2007 – 2011 Capital Improvement Plan & Program Introduction . .73 Sources of Funds . .77 Uses of Funds . .80 Detailed Capital Improvement Project Descriptions . .90 Appendices . .96 Chicago Transit Authority Organization Chart 1 Chicago Transit Authority Our Mission We deliver quality, affordable transit services that link people, jobs and communities. Our Values We will accomplish our mission with a diverse workforce that is: z Courteous — We will create a pleasant environment for ourselves and our customers. z Innovative — We will seek out and encourage employees who initiate change, improvement, learning and advancement of our goals. z Motivated — We will meet each task with spirit, enthusiasm and a sense of pride to be second to none. z Professional — We will provide transit service with the highest standards of quality and safety for our customers and ourselves. z Reliable — We will be dependable for our customers and fellow employees, and will maintain the highest standards of trust. z Results-Oriented — We will focus on getting the job done and will derive personal satisfaction from the service we provide. Our Commitments We will accomplish our mission by: z Setting clear goals, standards and priorities. z Communicating openly with customers and employees. z Helping all of our employees develop to their fullest potential through enhanced training and education. z Being accountable to fellow employees and customers. z Supporting employees so that they can serve customers. z Engaging employees in decisions that affect them and their work and creating a stronger sense of ownership among our employees. 2 Letter from the President Transit at a Crossroads In 2006, the Regional Transportation Authority (RTA), CTA, Metra and Pace teamed up to launch the Moving Beyond Congestion project, an initiative designed to build consensus in the region for improved and expanded public transportation. Over 275 community organizations, businesses, labor unions and local governments have already come together as Partners for Transit to lend their voices to the dialogue. This positive step reflects a growing recognition that improving transit is essential to economic growth, which is increasingly threatened by congestion. According to the independent Texas Transportation Institute, Northeastern Illinois has gone from having the nation’s seventh worst traffic congestion in 1983 to second today, now costing residents over $4.2 billion annually in lost productivity and wasted resources. This is my tenth budget recommendation to the Chicago Transit Board. Given the strong support our partners have expressed for Moving Beyond Congestion, I am more optimistic than ever that transit will finally secure the resources necessary to thrive. At the same time, I am cognizant of the reality that the mere survival, let alone growth, of the existing transit network is in question if no action is taken to correct long- standing operating and capital funding shortfalls. The symptoms of the problem are clear. Since the state last revisited funding for the day-to-day operations of CTA, Metra and Pace in 1983, CTA has grappled with a steep decline in inflation- adjusted funding levels. Between 1985 and 2004, CTA’s public funding for mainline bus and rail operations trailed inflation by more than one percent every year. These reductions have added up. If funding had just kept even with inflation since 1985, CTA cumulatively would have received $1.6 billion more to operate its buses and trains. CTA also faces a severe capital funding shortfall that threatens its ability to reach a state of good repair. In just the past two years, CTA’s capital budget has been slashed by over $400 million. Not only has capital money been used to cover operating budget shortfalls, but new state capital funding for transit has also stopped with the expiration of Illinois FIRST. This state legislation, which funded transit, roads, and other infrastructure improvements, had provided as much as $176 million annually for critical CTA capital projects. Capital funding shortfalls have resulted in deferred mainte- nance, delays in infrastructure improvements, and difficulty in planning, financing and implementing multi-year projects. While Illinois FIRST funding for transit has ended, dedicated state funding for roads has continued to flow. This unbalanced policy does not exist at the federal level. When the federal transportation program expires, Congress continues to appropriate funds for roads and transit until a new program is authorized. CTA is grateful for the support it does receive from the state. Indeed, the General Assembly already recognizes that a serious funding problem exists. The Mass Transit Committee of the Illinois House, established two years ago, affirmed many of the points CTA identified regarding inadequate funding levels and changing allocations over time. In 2005 and 2006, the General Assembly provided an additional $54 million in operating grants to RTA. CTA received all of these 3 Letter from the President funds in 2005 and half in 2006. With this funding, CTA rescinded cuts that would have eliminated over 50 transit routes and consequently achieved its highest ridership since 1992. While we wait for a long-term solution, we have worked to preserve service in an increasingly diffi- cult financial environment with escalating fuel, security, health care and benefit expenses. To do so, CTA has had to take various short-term, unsustainable measures with their own consequences. For example, over the past two years, CTA has delayed key infrastructure improvements by diverting $60 million from capital projects to fill operating budget gaps – on top of not receiving over $350 million in state capital funding after Illinois FIRST expired. CTA has also increased operating revenues by raising cash fares twice, from $1.50 to $1.75 and then to $2.00, a 33-percent jump since 2003. While customers have remained with CTA so far, fare increases of this magnitude cannot continue indefinitely without driving people away from transit. CTA is also always working to improve efficiency. Since 1997, CTA has pursued major efficiency initiatives that cumulatively have saved over $1 billion. Based on recommendations made through a recent independent review of CTA by AECOM Consult, CTA is taking further steps to be even more cost effective. In addition, after the initial bids for the Brown Line Capacity Expansion Project did not meet cost estimates, CTA reduced expenses by over $100 million by repackaging the bids and modifying the construction plan without sacrificing essential station improvements for customers. This year, at the direction of the General Assembly, all paratransit operations in the six- county RTA service area have been consolidated under Pace to ensure a regional approach to delivering this important service. For 2007, my budget recommendations reflect CTA’s ongoing efforts to work smarter, cut expenses and seek innovative revenue sources. But even with these efforts, $580.5 million is needed for operations and to meet retiree pension and health care liabilities growing through an arbitration award and under state law. At present, only $470.3 million has been identified. But following the funding marks RTA adopted for the CTA, my budget recommendation anticipates that new funding sources will be identified in 2007 to maintain service. If no additional funding is obtained, CTA will be required to take actions to balance its operating budget. RTA Chairman Jim Reilly has expressed confidence, however, that a solution will be found and I personally share his confidence. Metra and Pace are also beginning to feel the pinch that CTA has experienced for many years. We all understand how urgent it is to address the funding challenge. As Chairman Reilly said last month, "Over the long term, the resources that we have on the operating side and the resources that we have on the capital side just aren't adequate to keep the system that we have, let alone expand it … At the end of the day, if we don't have the resources we need, the average commuter is going to have fewer options. They'll either have fewer routes or they will have less service on each route. And the system physically will at some point have to get smaller if we don't have the money needed to maintain trains and buses…" Noting that the $27 billion asset of regional transit infrastructure belongs to the people of Northeastern Illinois, the RTA states that “together, we all need to decide on whether we are going to invest in this asset or shrink it.” Crafting an appropriate solution to the funding problem requires understanding its origins and consequences.
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