Two-Year Financial Plan and Five-Year Capital Program 2007

RTA-BudgetFrntCvr07 1/5/07 3:20 PM Page 1

C M Y CM MY CY CMY K

Regional Transportation Authority Operating Budget, Two-Year Financial Plan And Five-Year Capital Program 2007

The six-county public transportation system serving northeastern Illinois

Composite

Table of Contents

1 Strategy 6 Pace Strategic Plan Suburban Service Overview ...... 3 Budget and Financial Plan by Functional Group ....53 Overview ...... 95 Highlights ...... 4 2006 Budget Versus 2006 Estimate ...... 61 Service Characteristics ...... 95 Budget Issues ...... 6 Organizational Structure ...... 61 Budget and Financial Plan ...... 98 RTA Bonds ...... 63 Governance System–Generated Revenue ...... 98 Fund Accounting ...... 65 Overview ...... 10 Operating Expenditures ...... 99 Governmental Fund Types ...... 65 Budget Process ...... 11 Expenditure Elements ...... 99 Proprietary Fund ...... 66 Cash Management ...... 12 Deficit ...... 101 Fiduciary Fund Types ...... 66 Credit Risk ...... 12 Funding ...... 101 Basis of Budgeting ...... 67 General Obligation Bonds ...... 13 Recovery Ratio ...... 102 Pension Funding ...... 13 2006 Budget Versus 2006 Estimate ...... 102 Ordinance 2006-38 ...... 14 4 CTA Operating Plan Statutory Compliance ...... 103 Ordinance 2006-50 ...... 18 Overview ...... 71 Organizational Structure ...... 103 Ordinance 2006-78 ...... 20 Service Characteristics ...... 71 ADA Paratransit Budget and Financial Plan ...... 74 Overview ...... 105 Service Characteristics ...... 105 2 Budget in Brief System–Generated Revenue ...... 74 Operating Expenditures ...... 76 Budget and Financial Plan ...... 105 Executive Summary ...... 33 Expenditure Elements ...... 76 System-Generated Revenue ...... 106 System Overview ...... 33 Deficit ...... 78 Operating Expenditures ...... 106 Total Revenue ...... 35 Funding ...... 78 Expenditure Elements ...... 106 Operating Expenditures ...... 36 Recovery Ratio ...... 79 Deficit and Funding ...... 108 Total Debt Service and Capital Expenditures ...... 38 2006 Budget Versus 2006 Estimate ...... 79 Recovery Ratio ...... 108 Total Expenditures ...... 39 Statutory Compliance ...... 80 Statutory Compliance ...... 108 Fund Balance ...... 39 Organizational Structure ...... 80 Recovery Ratio ...... 39 Statutory Compliance ...... 40 7 Capital Program Capital Program ...... 40 5 Metra Operating Plan Regional Overview ...... 111 Capital Impact on Operations ...... 40 Overview ...... 85 Source of Funds ...... 111 Service Characteristics ...... 85 Use of Funds ...... 114 CTA Overview ...... 115 3 RTA Operating Plan Budget and Financial Plan ...... 88 System–Generated Revenue ...... 89 Metra Overview ...... 117 Budget and Financial Plan ...... 45 Operating Expenditures ...... 89 Pace Overview ...... 118 Revenue ...... 45 Expenditure Elements ...... 90 Five-Year Capital Program ...... 121 Operating Expenditures ...... 47 Deficit ...... 91 Debt Service and Capital Expenditures ...... 49 Funding ...... 91 Total Expenditures ...... 50 8 Appendices Recovery Ratio ...... 92 Fund Balance ...... 50 2007 Budget Call Calendar ...... 127 Statutory Compliance ...... 92 Recovery Ratio ...... 50 Public Hearings Schedule ...... 128 2006 Budget Versus 2006 Estimate ...... 92 2006 Budget Versus 2006 Estimate ...... 51 Public Hearing Overview ...... 129 Fare Structure ...... 92 Capital Program ...... 51 Glossary ...... 129 Organizational Structure ...... 92 Budget and Financial Plan by Category ...... 52 National Economic Projections ...... 135 RTA Region ...... 135 Six-County Region and County Seats ...... 139 The GFOA Award ...... 140 Regional Transportation Authority

RTA Board of Directors

Jim Reilly, Chairman Fred T. L. Norris Appointing Authority: Appointing Authority: RTA Board of Directors Kane, Lake, McHenry and Will Counties Carole L. Brown Appointing Authority: Vacant Chicago Transit Authority Appointing Authority: City of Chicago Allan C. Carr Appointing Authority: Patrick V. Riley, Jr. Suburban Board Members Appointing Authority: of Cook County Suburban Board Members Patrick J. Durante of Cook County Appointing Authority: Michael Rosenberg DuPage County Appointing Authority: Armando Gomez, Sr. City of Chicago Appointing Authority: Douglas M. Troiani City of Chicago Appointing Authority: Dwight A. Magalis Suburban Board Members Appointing Authority: of Cook County Kane, Lake, McHenry Rev. Addie L. Wyatt and Will Counties Appointing Authority: Mary M. McDonald City of Chicago Appointing Authority: Suburban Board Members Stephen E. Schlickman of Cook County Executive Director Our Transit System at a Crossroads; 2007 is the Year of Decision

ortheastern Illinois’ regional transit system represents one of our most important public assets, valued at over $27 billion and generating an annu- Nal economic impact of more than $12 billion. Two million riders a day use A Letter from the Chairman the CTA, Metra or Pace to get to and from work. In addition to the economic benefits transit provides, it enhances our quality of life by reducing traffic as well as air pollution. Strengthening our transit system requires a major commitment on the part of the entire state and region. For that reason, the Regional Transpor- tation Authority (RTA) launched a major campaign in 2006 to insure that this critical public asset continues to serve the region’s needs. Our challenge is two-fold: rising costs for transit and increasing traffic congestion. Today’s transit costs are climbing dramatically while revenues to support transit are not keeping up. Inevitably, needed repairs are delayed, resulting in slow zones and service cuts. And today, Chicago-area traffic congestion is the second worst in the nation. The average commuter spends a full week each year behind the wheel wasting time and gas. This budget helps meet these challenges in the short-term, but the long-term answer is to unite behind the RTA’s strategic plan called Moving Beyond Con- gestion. Developed in partnership with CTA, Metra and Pace, Moving Beyond Congestion calls for upgrading the existing system and adding new transit services in all six counties of northeastern Illinois. Nearly 400 Partners for Transit rep- resenting business, labor, municipalities, planning and community groups as well as educational and cultural institutions have contributed to the plan. It proposes a financial investment of $57 billion over 30 years to pay for new service projects in Cook, DuPage, Kane, Lake, McHenry and Will counties and to ensure that existing services we rely on each day are improved. As we prepare to present a formal proposal to the Illinois General Assembly during spring 2007, join us as we pursue a bipartisan region-wide consensus to take us where we all need to go… and to get there on time. Supporting Moving Beyond Congestion stands to benefit both transit users and drivers because the more people who use transit, the faster the traffic on the roads will flow. For more information, go to www.movingbeyondcongestion.org or call 312-913-3200.

Jim Reilly, Chairman

RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 1

1 Strategy 2 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 3

Strategic Plan Overview After months of intensive work involving staff from all three service boards and the RTA, leading transportation consultants, and with input from hundreds of transit partners and thousands of individuals, elected officials and community leaders in the city and the suburbs, the RTA re- leased its five-year strategic plan, Moving Beyond Congestion early in 2007. The Moving Beyond Congestion (MBC) five-year strategic plan is our 30-year vision for maintaining, enhancing and expanding our public transit system which is valued at $27 billion dollars and provides two million rides each weekday and thousands more on weekends. Parts of the system are newer, serving growing communities as well as changing urban neighborhoods but other segments of the system are more than a century old. In recent years demand has grown for expanded and improved service. Ridership is up and our performance is meeting or exceeding industry standards across a range of performance indicators however, we face enormous challenges. The system’s annual revenues do not support annual operations and much of the rolling stock is beyond its useful life. The lack of state capital funding has caused needed repairs to be deferred, leading to more slow zones, slower travel times and rising frustra- tion on the part of passengers. The MBC plan offers a review of revenue options with a goal of generating an average of $400 million dollars in new operating funds over the next five years. The plan also calls for approximately $10 billion in capital funding over the next five years, which will help leverage billions more from the federal government. The funds will help to design and implement services and expansion projects that will ensure that our public transportation system can meet the future demands of one of the world’s great metropolitan regions. Many new businesses and communities are locating further from the central city as we grow. Six of the state’s top 10 largest cities are located in the suburbs and they need improved transit services. Chi- cago is bidding to host the 2016 Olympics and our ability to compete for 4 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

that prize depends—in no small measure —on our willingness to invest in public transportation. The quality of our air and the amount of trafﬁc congestion on our roads are directly related to public transportation. Congestion costs this region nearly $5 billion dollars annually whereas public transit gen- erates over $12 billion in annual economic beneﬁts. We have a responsibility to future generations to make the hard choices today that will make their lives easier tomorrow. But when you consider how much is at stake— our economy, our quality of life, and our environment —there really is no choice. Public transportation is vital to our future. Investments in our public infrastructure, such as transit, are the basis of our economy and we strongly feel the state must act now—in 2007—to ensure our region can prosper in the years to come.

Highlights

The MBC plan addresses several major issues across the region which includes congestion and mobility, changing travel markets, service coordination and integration, capital and operations funding, and the risks without additional funding. Capital funding focuses on three themes for investment to maintain, enhance, and expand the system. As discussed earlier, parts of the system are more than 100 years old and require state of good repair upgrades to sustain reliable day-to-day service. Enhancements are needed to provide better community options and seamless service throughout the region. System expansions are needed but far exceed available resources at the federal, state and local level. The MBC plan proposes an evaluation process so that funds are committed to those projects with the greatest potential. This process will serve as a screening tool to make community proposals more competitive throughout the development process. The Service Boards will face an operating budget shortfall before the end of 2007, leaving few options but to reduce service and raise RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 5 fares unless additional funding is secured. The 2007 budget and 2008- 2009 financial plans, presented later in this document, are predicated on securing additional funding (“New Transit Funding”) for mainline bus and rail operations and Additional Funding for ADA paratransit service. If these funds are not secured the aforementioned options are foremost considerations. Additional MBC plans focus on three major themes. The transit system must be people friendly, serve markets, and supported by land use and transportation policies. Initiatives that support these themes include sub-regional planning, integrating development and land use with transit services, congestion pricing, demand management tools (hot lanes), seamless public transportation, modal integration, suburb-to-suburb services, and technology applications. Other initiatives include public-private partnerships, administration coordination, performance measures, improved budget processes, and environmental protection measures. The plan also provides an overview of the investment required to fund the MBC program. It describes funding sources, presents options that could be used to enhance revenues, and discusses cost recovery and cash flow implications. Topic discussions include federal funding, state and local funding, an international perspective, innovative funding methods, and tax and fee options. 2007 is the year of decision for the northeastern Illinois transit system and moving forward from the MBC plan to implementation has two major elements. The first is a set of initial key action items and the second is to use the plan as a living document that is continually updated and refined to reflect on-going changes across the region. Action items include expanding funding and implementing the initiatives discussed earlier and the RTA (Agency) is in its initial stages of formulating strategic goals and measurable outcomes that support this plan. For complete details of the Moving Beyond Congestion plan, please visit our website (www.MovingBeyondCongestion.org). 6 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Budget Issues The primary concern facing the Service Boards (CTA, Metra, and Pace) is the lack of both operating and capital program funding. In recent years, to cover the growth in operating expenses, the Service Boards have transferred capital funds to operations as allowed by federal regulations. This amount has grown from almost $27 million in 2003 to more than $102 Exhibit 1-1: Capital Funds Used for Operations (dollars in millions) 120 million in 2006 (Exhibit 1-1). The main reason the Service Boards have had to use capital funds for 100 operating purposes is the disproportionate increase in operating costs compared to the growth in sales tax funding, the major revenue subsidy 80 that funds Service Board deﬁcits. The imbalances in costs are driven by

60 increases in healthcare, fuel, electricity and security expenditures since 2001. From 1998 through 2001, sales tax growth consistently outpaced 40 operating cost increases as the RTA and Service Boards held cost growth

20 in check (Exhibit 1-2). Despite continued cost containment efforts, since 2003 2004 2005 2006 2002 expenditures in the aforementioned cost categories have increased significantly faster than inflation. However, the RTA and Service Boards continue to implement cost containment measures and have worked with the State Auditor General’s Office on further improvements in a number of areas. The report on these matters is expected in the first quarter of 2007. In 2006, the Service Boards had Exhibit 1-2: 1998 –2007 Sales Tax and Service Board Expenditure Growth (cumulative percent) a combined operating budget short- 55 fall of $156 million. The short- 50 Expenditures

45 Sales Tax fall represents the total amount

40 of Service Board operating costs

35 ($1,775 million) not covered by 30 RTA funding and Service Board 25 revenue ($1,619 million). The RTA 20 system covered the 2006 shortfall 15 with $102 million in federal capi- 10 tal funds transferred to operations 5

0 and a $54 million grant from the 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 State for ADA paratransit services. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 7

Exhibit 1-3: Service Board Operations Funding Summary (dollars in millions) 2006 2007 Change Total Service Board Operating Costs $ 1,775 $ 1,944 $ 169 RTA Funding and Service Board Revenue Service Board Operating Revenue 838 906 68 RTA Sales Tax and PTF 781 812 31 Total Revenue for Operations $ 1,619 $ 1,718 $ 99 Funding Shortfall $ 156 $ 226 $ 70 Shortfall Funding Federal Capital Funds 102 — (102) Additional State Funding 54 — (54) New Transit Funding for Mainline Operations — 144 144 Additional Funding for ADA paratransit — 82 82 Total Shortfall Funding $ 156 $ 226 $ 70

Exhibit 1-4: Mainline Service Funding (dollars in millions) 2006 2007 Change Total Service Board Operating Costs $ 1,699 $ 1,852 $ 153 Service Board Operating Revenue 828 896 68 Sales Tax and PTF 781 812 31 Total Operating Revenue $ 1,609 $ 1,708 $ 99 Funding Shortfall $ 90 $ 144 $ 54 Shortfall Funding Federal Capital Funds 90 — (90) New Transit Funding — 144 144 Total Shortfall Funding $ 90 $ 144 $ 54

In 2007, the operating budget shortfall increases by $70 million ($226 million vs. $156 million) as cost growth continues to outpace the increase in Service Board revenues and RTA funding from sales tax and the public transportation fund (PTF). To cover this shortfall, the RTA is seeking new transit funding for mainline (bus and rail) service, as well as additional funding for ADA paratransit service (Exhibit 1-3). The operating budget was adopted before the region-wide Moving Beyond Congestion capital program was ﬁnished. Metra’s 2007 capital program is based on receiving “additional legislative initiative” program funds of $60 million. If these funds are not secured Metra’s capital program has a shortfall of $49 million. Of the $226 million in new operating funding needed in 2007, $144 million supports mainline service (Exhibit 1-4). In 2006, mainline service cost $1,699 million to operate. The Service Boards balanced their operating budgets by transferring $90 million in federal capital funds to cover operating costs for these services. 8 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

In 2007, operating costs for mainline service are expected to increase $153 million, or 8.9 percent. This increase is driven by increases of $94 million in labor costs (including healthcare and other benefits), $44 million in fuel and electricity costs, and $7 million in security costs. Cost containment efforts will hold all other expenditures to an increase of $8 million. Increased Ser- vice Board revenues in 2007 cover $68 million of these increased costs, and the RTA projects that funds available to the Service Boards from sales tax and State matching public transportation funds will increase by $31 million. The $82 million remaining balance of the $226 million in new operating funding needed in 2007 supports ADA paratransit service. This reflects $92 million in operating costs of which $10 million is covered by Service Board revenues. In 2006, ADA paratransit service required $66 million in funding ($76 million in operating costs less $10 million covered by Service Board revenue). The State provided a grant of $54 million, and the remaining $12 million was covered by additional federal capital funds (Exhibit 1-5). Exhibit 1-5: ADA Paratransit Funding (dollars in millions) 2006 2007 Change In the 2007 budget, the funding Total Operating Costs $ 76 $ 92 $ 16 Service Board Revenue 10 10 — needs for ADA paratransit service Funding Shortfall $ 66 $ 82 $ 16 increase to $82 million—driven by Shortfall Funding Additional State Funding 54 — $ (54) increases in both passenger demand Federal Capital Funds 12 — (12) Additional Paratransit Funding — 82 82 and the prices charged by the outside Total Shortfall Funding $ 66 $ 82 $ 16 service providers. At the end of 2006, Exhibit 1-6: Service Board Funding for 2006 and 2007 (in millions) 2006 extensions to five-year contracts CTA Metra Pace ADA Total were under negotiation with sever- Operating Cost $ 985 $ 536 $ 178 $ 76 $ 1,775 Operating Revenue 497 273 58 10 838 al of these carriers. The 2007 budget Deficit $ 488 $ 263 $ 120 $ 66 $ 937 Public Funding 455 245 81 — 781 looks for paratransit funding—from Funding Shortfall $ 33 $ 18 $ 39 $ 66 $ 156 State or other sources—to increase 2007 CTA Metra Pace ADA Total from $54 million to $82 million for Operating Costs $ 1,133 $ 554 $ 166 $ 91 $ 1,945 Operating Revenue 553 285 53 10 901 this federally mandated service. Ser- Deficit $ 580 $ 269 $ 113 $ 82 $ 1,044 Public Funding 470 257 90 — 818 vice Board funding shortfalls total Funding Shortfall $ 110 $ 12 $ 23 $ 82 $ 226 $156 million in 2006 and $226 mil- The 2006 figures are estimates with region-wide ADA paratransit services seprated from mainline CTA and Pace operations. Some totals may not sum due to rounding. Public Funding includes RTA Sales Tax, PTF and lion in 2007 (Exhibit 1-6). Pace CMAQ funds. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 9

Exhibit 1-7: 2002 –2011 Capital Program (dollars in millions)

1200

1000

800

600

400

200 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

As previously noted, in recent years the Service Boards have used capital program funds for operating purposes. However, this transfer of funds can not continue because capital funding substantially decreases over the next five years (2007-2011) compared to the capital funding during the previous five years (2002-2006). Between 2002 and 2006 capital program funds averaged almost $944 million. However, this average plummets to $606 million between 2007 and 2011 (Exhibit 1-7). This sharp decline results primarily from the expiration of the Illinois First capital program in 2004 and the absence of a new State capital funding program. The RTA is not able to augment its capital program with additional borrowing because it has insufficient revenue to service any new bond offering debt. The operating amounts available to the Service Boards in 2007-2009 are based on securing additional funding for mainline and ADA paratransit service. If these funds are not obtained, the Service Boards must take actions to balance their budgets such as using capital funds for operations, changing service levels, and adjusting fares. Detailed information regarding Service Board and RTA operations between 2005 and 2009 can be found in subsequent sections of this document, which is also posted on the RTA website (www.rtachicago.com). 10 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Governance

Overview The corporate authority and govern- The Service Boards maintain sepa- The RTA was established in 1974 upon ing body of the RTA is the 13-member rate management, exercise control over all approval of a referendum in its six-coun- RTA Board of Directors. Twelve direc- operations (including the passenger fare ty northeastern Illinois region. The op- tors are appointed from within the six- structure), and are accountable for fiscal erating responsibilities of the RTA are set county region: four directors by the matters including ownership of assets, forth in the RTA Act. The RTA is a unit Mayor of the City of Chicago, and a fifth relations with federal and state transpor- of local government, body politic, politi- director who is the chairman of the CTA; tation funding agencies, and the prepara- cal subdivision and Municipal Corpora- four directors by the suburban members tion of their operating budgets. They are tion of the State of Illinois. of the Cook County Board; two directors also responsible for the purchase of ser- As initially established, the RTA was by the Chairmen of the County Boards vices and approval of contracts relating an operating entity responsible for pro- of Kane, Lake, McHenry, and Will coun- to their operations. viding day-to-day bus and rail trans- ties; and one director by the Chairman of The CTA, Metra and Pace provide portation services as well as a planning the DuPage County Board. The Chair- services to different geographic areas and funding agency. However, in 1983, man of the Board, its 13th member, is within the six-county region. The CTA the Illinois General Assembly reorga- elected by at least nine of the 12 appoint- provides rail and bus service to the City nized the structure and funding of the ed members. of Chicago and 38 neighboring suburbs RTA. The reorganization placed all op- To administer the Agency’s statutory within Cook County. Metra provides erating responsibilities with three Service requirements, the Board hires officers transit service to the six-county area, with Boards—the Chicago Transit Authority and staff. One of its officers, who must the majority of the transit riders residing (CTA) and two operating divisions of the be approved by the Board, is the Execu- in the suburbs and commuting to the City RTA, a Commuter Rail Division (Metra) tive Director. The Executive Director ex- of Chicago. Pace’s primary bus service and a Suburban Bus Division (Pace)— ecutes the Board’s policy decisions and area is suburbs in the six-county region, each having its own independent board of staffs the Agency to carry out its mis- with service to areas within the City of directors. These divisions conduct oper- sion and goals. Chicago. Pace is also responsible for re- ations and deal with subsidized carriers. The RTA Act sets forth detailed provi- gion-wide ADA paratransit service. The RTA became exclusively responsible sions for the allocation of receipts by the The RTA Act establishes the RTA as for financial oversight and regional plan- RTA to the various Service Boards, and the primary public body with authority ning issues. imposes a requirement that the RTA’s sys- to apply for and receive grants, loans, and The Service Boards operate within tem as a whole achieves an annual “sys- other funds from the state or the feder- the RTA’s region, but are separate legal tem-generated revenue recovery ratio” al government for public transportation entities. The Board of Directors of each (i.e. aggregate income for transportation programs in Cook, DuPage, Kane, Lake, Service Board is completely independent services provided) of at least 50 percent of McHenry and Will counties (“northeast- of the RTA Board. The RTA Board has the cost of the operation of transportation ern Illinois”). The RTA is responsible for control neither in the selection nor in the services. The Service Boards achieve their the allocation of certain federal, state and appointment of any Service Board direc- required recovery ratios by establishing local funds to finance both the operating tor or its management. Further, directors fares and related revenue to cover the re- and capital needs of public transit in the of the CTA, Metra and Pace are exclud- quired proportion of their proposed ex- six-county region. ed from serving on more than one en- penditures. The RTA is responsible for The Act confers upon the RTA Board tity’s board of directors, including that supervising the budgets and financial per- powers to prescribe regulations requir- of the RTA, except for the Chair of the formance of the CTA, Metra, and Pace. ing that the Service Boards submit to the CTA Board, who is also an RTA Board The Service Boards are considered fis- RTA such information as the RTA may member. cally independent of the RTA. Although require. The Board has statutory author- the RTA reviews the budgets of the CTA, ity to establish by rule or regulation fi- Metra and Pace, approval of the budgets is nancial, budgetary, or fiscal requirements mandated by State statute if such budgets for the system. meet specified recovery ratios. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 11

In addition to its annual budget and Between September 15 and Novem- Also, if the RTA does not find that a financial plan responsibilities, the RTA, ber 15, each Service Board must prepare Service Board budget meets the criteria each year, is required to prepare and adopt and publish a comprehensive annual bud- set forth under the Act, the Board shall, a five-year capital program. The Service get, program document and a two-year fi- five working days after the start of the Boards are prohibited from undertaking nancial plan. “The proposed budget and Service Board’s fiscal year, adopt a bud- any capital project in excess of $250,000 financial plan shall be based on the RTA’s get and financial plan meeting these cri- unless the project has been approved by estimate of funds to be available to the teria. The RTA, CTA, Metra, and Pace all the RTA Board and incorporated into Service Boards, by or through the Au- report on a calendar-year basis. the RTA capital program. The RTA also thority, and shall conform in all respects conducts market research and coordi- to the requirements established by the Statutory Requirements nates planning for public transportation Authority.” Before submitting the bud- The RTA Act sets forth six statutory in northeastern Illinois. The RTA funds get to the RTA, the Service Boards must criteria for Board approval of the budget the development of new types of service, hold at least one public hearing in each of and financial plan of each Service Board. both in the suburbs and in the City of the counties in which it provides service These six criteria are: Chicago, on a demonstration basis. and must hold at least one meeting with Balanced Budget the affiliated county boards. After con- Budget Process sidering the comments from these meet- Such budget and plan shall show a bal- As previously discussed, the Act re- ings, it must formally adopt the budget ance between (a) anticipated revenue from quires that the RTA Board of Directors prior to submitting it to the RTA on No- all sources, including operating subsidies, approve an annual budget, a two-year fi- vember 15. The RTA Act requires that the and (b) the costs of providing the servic- nancial plan, and a five-year capital pro- budgets submitted by each Service Board es specified and of funding any operating gram. The budget calendar and statutory not project or assume receipt of revenue deficits or encumbrances incurred in pri- oversight and amendment requirements greater than that set in the estimates pro- or periods, including provision for pay- govern this process. The essential aspects vided by the RTA. ment when due of principal and interest of the budget calendar are outlined below. The RTA Board must then hold at on outstanding indebtedness. A detailed calendar is provided in the Ap- least one public hearing in the metropol- Cash Flow pendices (Exhibit 8-1). itan region and one meeting with each county board on the proposed budget. Such budget and plan shall show cash Budget Calendar Twenty days prior notice is required for balances, including the proceeds of any By July 1 of each year, the Office of the public hearing. The public hearing no- anticipated cash flow borrowing, suffi- Management and Budget (OMB) is to tice for the 2007 budget may be reviewed cient to pay with reasonable promptness submit to the RTA an estimate of rev- in the Appendices Section (Exhibit 8-2). all costs and expenditures as incurred. enue to be collected from taxes for the After conducting these hearings and Recovery Ratio next fiscal year. taking into consideration the comments, Based upon the estimate of tax re- the RTA Board must adopt a budget that Such budget and plan shall provide ceipts and revenue from other sources, meets the statutory criteria. Unless the for a level of fares or charges and operat- “the Board shall, not later than…Sep- Board can pass (by nine votes) a budget ing or administrative costs for the pub- tember 15 prior to the beginning of the and financial plan for a Service Board lic transportation provided by or subject Authority’s next fiscal year” advise each that meets these criteria, the Act states to the jurisdiction of such Service Board Service Board of the amounts estimated that “the Board shall not release to that which allow the Service Board to meet its to be available during the upcoming fiscal Service Board any funds for the periods required recovery ratio. year and following two years. The Board covered by such budget and financial plan Assumptions is also required to advise the Service except for the 85 percent of sales tax pro- Boards of the times when the amounts ceeds which are directly allocated to the Such budget and plan are based upon will be available and the next year’s cost Service Boards.” and use assumptions and projections, recovery ratio. which are reasonable and prudent. 12 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Financial Practices not release any moneys to the Service balance. The ordinance affirms that the Such budget and plan shall be prepared Board(s) except for the statutory al- annual budget adopted by the RTA each in accordance with sound financial prac- location of taxes. year will reflect a year-end unreserved tices as determined by the RTA Board. • If a Service Board submits a revised and undesignated fund balance of its budget and plan which shows that the general fund equal to or greater than 5 Other Requirements statutory budget criteria will be met percent of the RTA’s total operating ex- Such budget and plan shall meet such “within a four quarter period,” the penditures for that year. If actual sales tax other financial, budgetary, or fiscal re- RTA “shall continue to release funds receipts or other RTA revenue falls short quirements that the RTA Board may by to the Service Board.” The RTA may of the amounts reflected in the annual rule or regulation establish. require the Service Board to submit budget, then the succeeding year’s annual a revised budget and plan that shows budget and two-year financial plan will Oversight that the budget criteria “will be met in provide for the replacement of any short- After adoption of the operating bud- a time period less than four quarters.” fall in the unreserved and undesignated get, the RTA Board has continuing over- balance of the RTA general fund, by no sight powers concerning the budget and Amendment later than the end of the three-year plan- the financial condition of each Service When prudent, the operating budget ning period. Board and region as a whole. The RTA is amended due to shifts in the economic The RTA established this policy to monitors the budgetary and operations climate, governmental funding programs maintain financial stability in order to performance of the Service Boards on or new projects. Depending on the type carry out the RTA’s legislative mandates a monthly basis to ensure compliance of request, the proposed amendment may to plan, fund and oversee public transpor- with their budget and recovery ratio. On be presented to one or more of the RTA tation in the region. The purpose of the a quarterly basis, the following oversight Board Committees for approval. Howev- ordinance was to formalize a practice of is conducted: er, the Board’s Finance Committee must maintaining a level of financial resources • After the end of each fiscal quarter, approve all proposed amendments before available for funding during unfavorable each Service Board must report to they are recommended to the RTA Board. economic periods. the RTA “it’s financial condition and The RTA Board ultimately approves or results of operations and the financial disapproves all proposals. If approved, Cash Management condition and results of operations the RTA and Service Board budgets are The RTA’s policy complies with Il- of the public transportation services amended to include all changes and actu- linois law, addresses safety of principal, subject to its jurisdiction” for that al results and are then monitored against liquidity of funds, rate of return, public quarter. If in compliance, the RTA the amended budget. trust, and Investments in Local and Board so states and approves each Ser- Disadvantaged Institutions. It further vice Board’s compliance by adopted Operations Funding permits investments and prescribes safe- resolution. The RTA provides operating funds keeping, collateralization, and reporting • If “in the judgment of the Board” to each Service Board equivalent to its requirements. these results are not substantially in budgeted deficit for the year as opposed accordance with the Service Board’s to funding the actual deficit. This policy Credit Risk budget for that period, “the Board encourages cost efficiencies by the Ser- The RTA’s policy for credit risk states shall so advise the Service Board” and vice Boards and allows them to retain any no investment shall be made in short- it “shall, within the period specified budgeted funds that are not expended. term obligations of corporations unless by the Board, submit a revised budget Such funds are generally referred to as a such obligations are rated at the time of incorporating such results.” positive budget variance, or PBV. purchase within the highest classification • Once a Service Board submits the established by at least two standard rating revised budget plan, the RTA must Fund Balance services, the investment matures no later determine if it meets the six statutory In 1998, the RTA Board adopted an than 180 days from the date of purchase budget criteria necessary to pass an ordinance establishing a minimum level and the issuer is domiciled in the United annual budget. If not, the RTA does on the unreserved and undesignated fund States. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 13

General Obligation Bonds The RTA’s policy states that bonds should be payable from all revenue and all other funds received or held by the RTA that lawfully may be used for retiring the debt. Exceptions to this are amounts in the Joint Self-Insurance Fund (JSIF) and amounts required to be held or used with respect to separate ordinance obligations. The bonds are secured by an assignment of a lien on the sales taxes imposed by the RTA. All sales tax receipts are to be paid directly to the trustee by ofﬁcials of the State of Illinois. In addition, RTA Sales Tax must be 2.5 times greater than the debt service requirement. If, for any reason, the RTA has not made the required monthly debt service payment, the trustee is to deduct it from the receipts. If all payments have been made, the funds are made available to the RTA for regular use. Under the Act, the CTA, Metra and Pace fare box receipts and funds on hand will not be used for payment of debt service.

Pension Funding The RTA, Metra, and Pace are required to contribute the amounts necessary to fund the beneﬁts of their respective employees in the Plan using the projected unit credit actuarial method. Employer contribution and the income it earns through investments are used to operate the Plan and to pay beneﬁts. Assets are valued recognizing a portion of both realized and unrealized gains and losses in order to avoid wide swings in actuarially determined funding requirements from year to year. 14 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

ORDINANCE NO. 2006-38

AN ORDINANCE AMENDING THE PACE 2006 MARKS, THE RTA 2006 BUDGET, AND PACE’S 2006 BUDGET AND PROGRAM

WHEREAS, Ordinance No. 2005- WHEREAS, Pace’s 2006 budget pre- NOW, THEREFORE, BE IT ORDAINED 66, adopted on September 15, 2005, ad- sumed a level of fare revenue from ADA BY THE BOARD OF DIRECTORS OF THE vised the Service Boards of the funding paratransit service based on the CTA REGIONAL TRANSPORTATION AUTHOR- amounts estimated to be available and paratransit fares increasing from $1.75 to ITY THAT: called on each to prepare and submit to $3.50 on January 1, 2006, which did not 1. The 2006 RTA Operating Marks the Regional Transportation Authority occur, thereby negatively impacting ac- for Pace adopted by the RTA Board on (the “RTA”) proposed budgets for 2006 tual revenues received; and September 15, 2005 by Ordinance 2005- and financial plans for 2007-2008; and WHEREAS, Section 4.11(c)(1) of the 66, and the Pace 2006 Budget adopted by WHEREAS, the Service Boards ad- RTA Act provides that: “If the Board shall the RTA Board on December 16, 2005 by opted and submitted to the RTA pro- at any time have received a revised esti- Ordinance 2005-84, are hereby amended posed budgets for 2006 and financial mate, or revises any estimate the Board as set forth in Schedules I-B, I-C, and I- plans for 2007-2008; and has made, pursuant to this Section of the F (“Service Board Deficit Funding”, Re- WHEREAS, Ordinance 2005-84, receipts to be collected by the Authority covery Ratio Calculations”, and Regional adopted by the Regional Transportation which, in the judgment of the Board, re- Transportation Authority Cash Flow”), Authority Board on December 16, 2005, quires a change in the estimates on which of this Ordinance. approved the 2006 budgets and 2007-2008 the budget of any Service Board is based, 2. The RTA hereby advises Pace that financial plans of the Service Boards and the Board shall advise the affected Service the amounts set forth in Schedule I-B their respective recovery ratios for 2006, Board of such revised estimates, and such (“Service Board Deficit Funding”) are adopted the 2006 Budget and Program of Service Board shall within 30 days after estimated to be available for Pace oper- the Authority, appropriated funds for the receipt of such advice submit a revised ating purposes for 2006, provided that 2006 Budgets, and approved the Five-Year budget incorporating such revised esti- the RTA determines that Pace’s budget Capital Program for 2006-2010; and mates. If the revised estimates require, in for 2006 satisfies the provisions of Sec- WHEREAS, Ordinance 2006-22, the judgment of the Board, that the sys- tion 4.11 of the Act. adopted by the Regional Transporta- tem generated revenues recovery ratio of 3. The 2006 RTA Capital Marks for tion Authority Board on April 6, 2006, one or more Service Boards be revised in Pace adopted by the RTA Board on April amended the Capital Marks and Program order to allow the Authority to meet its 6, 2006, by Ordinance 2006-22, is here- for the CTA and Pace; and required ratio, the Board shall advise any by amended as set forth in Schedule I-D WHEREAS, the July 2005 amend- such Service Board of its revised ratio and (“Service Board Capital Funding”), of ment to the RTA Act requires the transfer such Service Board shall within 30 days this Ordinance. of operation of CTA’s ADA paratransit after receipt of such advice submit a re- 4. The 2006 RTA budget adopted by services to Pace by no later than July 1, vised budget incorporating such revised the RTA Board on December 16, 2005 by 2006; and estimates or ratio”; and Ordinance 2005-84, is hereby amended WHEREAS, Pace will incur addi- WHEREAS, the RTA Board has de- as set forth in Schedules I-A, I-C, and tional capital program costs for start-up termined that it is in the best interest of I-F, (“RTA Statement of Revenues and activities related to the transition to pro- the RTA to take such actions in order Expenditures”, Recovery Ratio Calcula- viding all of the ADA paratransit servic- to carry out its powers and duties un- tions”, and Regional Transportation Au- es in the RTA region; and der the Act. thority Cash Flow”), of this Ordinance. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 15

5. Pace is hereby directed to develop 8. The Executive Director is autho- 9. The Executive Director is autho- and submit to the RTA, as part of the doc- rized and directed to inform Pace of the rized and directed to file the amended uments that the Act requires the Service amounts and times established by this 2006 Annual Budget and a copy of this Boards to submit to the RTA within 30 Ordinance promptly after adoption of Ordinance with the Governor and the days from receipt by the Service Boards this Ordinance. The Executive Direc- Auditor General of the State of Illinois of this Ordinance, its proposed budget tor is further authorized and directed to along with an appropriate certification for 2006, which budget and plan shall take such action as the Executive Direc- that this budget and program meet the not project or assume a receipt of funds tor deems necessary or appropriate to requirements of the Act. from the RTA in 2006 in amounts great- implement, administer and enforce this er than those set forth in Schedule I-B, of ordinance. this ordinance. 6. Pace’s amended budget for 2006 Schedule 1-A: RTA Statement of Revenues and Expenditures Amending General and Agency Funds for 2006 (dollars in thousands) shall comply with the terms and provi- Ordinance 2005-84 2006 Budget Amended sions of Ordinance 2005-84, except that Revenue 2006 Budget Amendment 2006 Budget such amended budget shall be based on Sales Tax $ 719,900 — $ 719,900 the amounts estimated to be available for Public Transportation Fund 179,975 — 179,975 State Financial Assistance 119,001 — 119,001 2006 as set forth in Schedule I-B, and the Reduced Fare 36,275 — 36,275 recovery ratio as set forth in Schedule I- Additional State Funding 54,252 — 54,252 C, of this Ordinance. Nothing in this Or- Other Revenue 14,869 — 14,869 dinance estimating amounts available to Total Revenue $ 1,124,272 — $ 1,124,272 the Service Boards is intended to or shall Ope rating Expenditures Operations Funding $ 786,072 — $ 786,072 have the effect of waiving any discretion RTA Discretionary Funds for Passes (1) 2,000 — 2,000 the RTA may have under law to appro- RTA Discretionary Funds priate amounts available to the Service for ADA Paratransit Service — 1,592 1,592 Additional State Funding-RTA Discretionary 42,451 — 42,451 Boards, subject to compliance by the Ser- Reduced Fare and Sales Tax Interest 37,125 — 37,125 vice Boards with terms and conditions es- Agency Administration 6,697 — 6,697 tablished by the RTA. Regional Services and Coordination Programs 18,090 — 18,090 7. The Executive Director is autho- Regional Technical Assistance Programs 5,986 — 5,986 Total Operating Expenditures $ 898,421 $ 1,592 $ 900,013 rized and directed to take appropriate Debt Service and Capital Expenditures action to implement and enforce this Or- Principal and Interest $ 180,401 — $ 180,401 dinance, and to file the amended budget Regional Technology and Agency Programs 7,270 — 7,270 with the Governor, General Assembly, Transfer Capital Capital/Additional State Funding–RTA Discretionary 11,801 — 11,801 the Comptroller of the State of Illinois, Transfer Capital–C TA 20,353 — 20,353 the Mayor of the City of Chicago, and Transfer Capital–P ace — 1,154 1,154 the Auditor General of the State of Illi- Total Debt Service and Capital Expenditures $ 219,825 $ 1,154 $ 220,979 nois along with appropriate certification Total Expenditures $ 1,118,246 $ 2,746 $ 1,120,992 that this budget meets the requirements Fund Balance (undesignated/unreserved) of the Act. Beginning Balance (2) $ 14,914 — $ 1,654 Remainder/(Deficit) 6,026 (2,746) 3,280 Ending Balance $ 20,940 — $ 4,934 % of Total Operating Expenditures 2.3 — 0.5 Recovery Ratio % 50.7 (0.1) 50.6

Note: (1) RTA funds to Pace for acceptance of CTA passes (“Additional Passes”). (2) The beginning fund balance for the amended 2006 budget reﬂects the RTA’s 2005 year-end audited results. 16 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Schedule 1-B: Service Board Deficit Funding Amending Pace’s Deficit Funding for 2006 (dollars in thousands) Ordinance 2005-84 2006 Budget Amended 2006 Budget Amendment 2006 Budget System-Generated Revenue $ 67,925 $ (1,592) $ 66,333 System Generated Expense 202,330 — 202,330 Total Deficit $ 134,405 $ (1,592 ) $ 135,997 Deficit Funding RTA Sales Tax $ 78,552 — $ 78,552 RTA Discretionary Funds 3,030 — 3,030 Additional State Funding-RTA Discretionary 15,326 — 15,326 RTA Discretionary Funds for Passes 2,000 — 2,000 Federal Funds 33,178 — 33,178 Service Board Funds (PBV) 2,319 — 2,319 RTA Discretionary Funds for ADA Paratransit Service — 1,592 1,592 Total Deficit Funding $ 134,405 $ 1,592 $ 135,997

Schedule 1-C: Recovery Ratio Calculations Amending the Pace and Total System-Generated Revenue Recovery Ratio for 2006 (dollars in thousands) Ordinance 2005-84 2006 Budget Amended 2006 Budget Amendment 2006 Budget CTA $ 542,629 — $ 542,629 Metra 273,420 — 273,420 Pace 72,377 (1,592) 70,785 RTA 14,019 — 14,019 Other Revenue 8,062 — 8,062 Total System-Generated Recovery Ratio Revenues $ 910,507 $ (1,592) $ 908,915 System-Generated Recovery Ratio Expenses CTA $ 1,023,350 — $ 1,023,350 Metra 497,129 — 497,129 Pace 206,782 — 206,782 RTA 30,773 — 30,773 Other Expense 37,047 — 37,047 Total System-Generated Recovery Ratio Expenses $ 1,795,081 — $ 1,795,081 Recovery Ratios —% CTA 53.0 — 53.0 Metra 55.0 — 55.0 Pace 35.0 (0.8) 34.2 Total System-Generated Revenue Recovery Ratio % 50.7 (0.1) 50.6

Note: Pace’s calculation does not include RTA funds for acceptance of CTA passes (“Additional Passes”) or RTA operating funds for ADA paratransit service.

Schedule 1-D: Service Board Capital Funding Amending Pace’s 2006 Capital Program (dollars in thousands) Ordinance 2006-22 2006 Program Ammended Service Board Capital Funding 2006 Program Amendment 2006 Program FTA Capital Grants $ 47,901 — $ 47,901 IDOT Grants — — — Service Board/Other Funds 2,512 — 2,512 Transfer Capital — 1,154 1,154 New Initiative 8,950 — 8,950 Carryover and Deobligations 12,700 — 12,700 Total Service Board Capital Funding 72,063 1,154 73,217 Other Uses (39,162) — (39,162) Total Available $ 32,901 $ 1,154 $ 34,055 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 17

Schedule 1-F: RTA Cash Flow Amending the 2006 Monthly Projection General and Agency Fund (dollars in thousands) Cash Receipts Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Sales Tax $ 57,092 59,764 70,114 51,310 53,512 57,670 60,416 60,645 62,991 61,017 61,342 59,383 PTF 14,442 14,273 14,941 17,529 12,828 13,378 14,418 15,104 15,161 15,748 15,254 15,335 Reduced Fare — — 9,190 — — 9,190 — — 9,190 — — 9,190 State Financial Assistance 14,600 17,800 8,900 8,900 8,900 8,900 — — — 8,900 — 27,900 Additional State Funding — — — — — — — — 9,042 9,042 9,042 9,042 Interest/Other Income–Total 2,625 962 962 962 962 962 2,625 962 962 962 962 962 Total Cash Receipts $ 88,759 92,799 104,107 78,701 76,201 90,100 77,458 76,711 97,345 95,668 86,600 121,811 Cash Disbursements • CTA 85% Sales Tax $ 22,774 23,462 27,278 20,547 21,278 22,912 23,852 23,709 24,825 24,151 24,095 23,767 RTA Discretionary 13,777 13,777 13,777 14,261 14,261 14,261 14,261 14,261 14,261 14,261 14,261 14,261 Reduced Fare Reimbursement — — 7,648 — — 7,648 — — 7,648 — — 7,648 Additional State Funding–RTA Discretionary — — — — — — — — — 2,554 2,554 2,554 Transfer Capital–Additional RTA Discretionary Funds — — — — — — — — — 1,967 1,967 1,967 Capital Program 1,696 1,696 1,696 1,696 1,696 1,696 1,696 1,696 1,696 1,696 1,696 1,696 Total Disbursements $ 38,247 38,935 50,399 36,504 37,234 46,516 39,809 39,666 48,429 44,629 44,573 51,892 • Metra 85% Sales Tax $ 19,591 20,796 24,598 17,538 18,415 19,851 20,908 21,152 21,818 21,054 21,311 20,289 Reduced Fare Reimbursement — — 750 — — 750 — — 750 — — 750 Capital Program 83 83 83 83 83 83 83 83 83 83 83 83 Total Disbursements $ 19,674 20,879 25,431 17,621 18,498 20,684 20,992 21,235 22,651 21,137 21,395 21,122 • Pace 85% Sales Tax $ 6,164 6,542 7,721 5,531 5,793 6,257 6,593 6,686 6,899 6,659 6,733 6,421 RTA Discretionary 280 280 280 253 253 253 253 253 253 253 253 253 RTA Discretionary Funds for Passes 279 — — 700 — — 800 — — 500 — — RTA Discretionary Funds for ADA Paratransit Service (1) — — — — — — 273 267 263 243 294 252 Reduced Fare Reimbursement — — 793 — — 793 — — 793 — — 793 Additional State Funding–RTA Discretionary — — — — — — — — — 4,521 4,521 4,521 Transfer Capital (1) — — — — — — — — — — 500 654 Capital Program 583 583 583 583 583 583 583 583 583 583 583 583 Total Disbursements (1) $ 7,306 7,405 9,377 7,066 6,629 7,885 8,502 7,789 8,790 12,759 12,884 13,477 RTA Operations, Debt Service and Capital Sales Tax Interest $ 71 71 71 71 71 71 71 71 71 71 71 71 Principal and Interest Payments 17,389 17,283 17,358 16,568 7,284 11,491 17,332 17,293 17,350 16,524 10,992 12,984 Agency Administration 558 558 558 558 558 558 558 558 558 558 558 558 Regional Services and Programs 2,279 2,279 2,279 2,279 2,279 2,279 2,279 2,279 2,279 2,279 2,279 2,279 Total Disbursements 20,297 20,191 20,266 19,476 10,191 14,399 20,240 20,201 20,258 19,431 13,900 15,892 Total Cash Disbursements (1) $ 85,524 87,410 105,472 80,667 72,553 89,484 89,542 88,890 100,128 97,957 92,751 102,382 Cash Balance (2) Beginning 37,012 40,247 45,636 44,270 42,304 45,952 46,567 34,483 22,304 19,521 17,233 11,081 Ending $ 40,247 45,636 44,270 42,304 45,952 46,567 34,483 22,304 19,521 17,233 11,081 30,511

Notes: (1) Reﬂects the amended 2006 budget and capital program disbursements. (2) Restricted and unrestricted cash. 18 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

ORDINANCE NO. 2006-50

AN ORDINANCE ESTABLISHING ESTIMATES OF AMOUNTS AVAILABLE TO THE SERVICE BOARDS FOR 2007-2009 AND THE REQUIRED RECOVERY RATIOS FOR 2007

WHEREAS, Section 4.11(a) of the being developed by the RTA in coopera- addition to any CTA fare media that are Regional Transportation Authority Act tion with Pace, CTA and the Illinois De- already accepted by Pace; and (the “Act”), requires that the Regional partment of Transportation pursuant to WHEREAS, the RTA has considered Transportation Authority (the “RTA”), Section 2.30(f) of the RTA Act; and current and projected economic condi- on the basis of estimates of receipts from WHEREAS, the amounts available to tions in its development of estimates of taxes imposed by the RTA and of esti- the Service Boards for operations in 2007 amounts expected to be available for ex- mates of amounts expected to be avail- – 2009 are predicated on securing ad- penditure for public transportation pur- able from the State and other sources: (1) ditional funding, and to the extent that poses in the metropolitan region in the advise each Service Board of the amounts such additional funding is not obtained, fiscal years 2007, 2008 and 2009; and estimated to be available to it during the the Service Boards will have to take ac- WHEREAS, the RTA has taken into next fiscal year and the two following tions to balance their operating budgets account the needs for, and the costs of, fiscal years and the times at which such that may include, but are not limited to, public transportation in the region. amounts will be available; and (2) advise utilizing federal formula capital funds to each Service Board of the system-generat- cover operating expenses, adjusting ser- NOW, THEREFORE, BE IT ORDAINED ed revenues recovery ratio (“recovery ra- vice levels, and adjusting fares; and BY THE BOARD OF DIRECTORS OF THE tio”) it is required to achieve for the next WHEREAS, the RTA recognizes REGIONAL TRANSPORTATION AUTHOR- fiscal year; and that the Chicago Transit Authority (the ITY THAT: WHEREAS, Section 4.11(b) of the “CTA”) and the Suburban Rail Division Act directs each Service Board to sub- (“Metra”) have taken measures to pro- 1. The RTA hereby advises the Service mit its proposed budget for the next fis- tect their operations from terrorism and Boards that the amounts shown in Exhib- cal year and its proposed financial plan for consequently have incurred significant- it A, Schedule I, “Total Funds for Service the following two fiscal years in confor- ly higher security costs, and moreover Board Operations,” of this Ordinance are mity with such actions by the RTA; and the RTA has determined that it is in the estimated to be available for operating WHEREAS, the amounts available best interests of public transportation in purposes for the CTA, Metra, Pace, and to the Service Boards for 2007-2009 are the region to exclude certain amounts of ADA paratransit services respectively, for predicated on the RTA receiving from the security costs for purposes of calculat- 2007, 2008 and 2009, provided that the State of Illinois funding for Reduced Fare ing the CTA and Metra recovery ratios, RTA determines that the Service Boards’ Reimbursement; and thereby providing the CTA and Metra respective budgets and financial plans for WHEREAS, the amounts available to with a period of time to balance such 2007, 2008 and 2009 satisfy the provisions Pace for 2007 – 2009 are predicated on the higher security costs within their respec- of Section 4.11 of the Act. RTA continuing to receive funding from tive budgets; and 2. The Service Boards are hereby di- the State of Illinois for ADA paratransit WHEREAS, the RTA desires to con- rected to develop and submit to the RTA, services and other costs and services and tinue to facilitate the integration of fare as part of the documents that the Act re- are also predicated on securing addition- media accepted for fare payment by the quires the Service Boards to submit to the al funds and achieving cost savings, from Suburban Bus Division (“Pace”) and the RTA by November 15, 2006, their pro- funding sources and cost efficiencies that CTA by funding a portion of Pace’s costs posed budgets for 2007 and proposed fi- may have been identified in the RTA-Pace in providing service to riders using the nancial plans for 2008 and 2009, which Memorandum of Understanding entered CTA 7-day pass, U-pass, and Visitor/Fun budgets and plans shall not project or as- into in June 2006, or that may be identi- (1-day, 2-day, 3-day and 5-day) passes sume a receipt of revenues from the RTA fied by the paratransit funding plan now (collectively, the “Additional Passes”), in for operations in 2007, 2008 and 2009 in RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 19

amounts greater than those set forth in Schedule I: Total Funds for Service Board Operations (dollars in thousands) Exhibit A, Schedule I, “Total Funds for 2007 2008 2009 Service Board Operations.” CTA Operating Funds $ 580,349 $ 655,400 $ 775,933 Metra Operating Funds 267,924 270,253 278,548 3. The required recovery ratios for Pace Operating Funds 112,416 117,039 124,330 2007 for the CTA, Metra, Pace, and ADA Paratransit Operating Funds 81,810 91,627 99,893

ADA paratransit services are set forth The amounts available to the Service Boards for operations in 2007–2009 are predicated on securing additional in Exhibit A, Schedule II, “2007 Recov- funding, and to the extent that such additional funding is not obtained, the Service Boards will have to take actions to balance their operating budgets that may include, but are not limited to, utilizing federal formula ery Ratios.” capital funds to cover operating expenses, adjusting service levels, and adjusting fares. Pace’s amount includes 4. The times at which the receipts from separate RTA Discretionary Funds to Pace for a portion of Pace’s cost in providing services to riders using CTA passes (“Additional Passes”). The ADA Paratransit Operating Funds figure includes additional RTA taxes imposed by the RTA and other Discretionary Funds sourced from Additional State Funding for the costs of ADA Paratransit services amounts expected to be available from the and other costs or services, and is also predicated on securing additional funds and achieving cost savings, from funding sources and cost efficiencies that may have been identified in the RTA-Pace Memorandum of State and other sources for operating pur- Understanding entered into in June 2006, or that may be identified by the paratransit funding plan now being poses for 2007 are estimated to be avail- developed by the RTA in cooperation with Pace, CTA and the Illinois Department of Transportation pursuant to Section 2.30(f) of The RTA Act. able to the Service Boards are set forth in Exhibit A, Schedule III, “2007 Estimated Schedule II: 2007 Recovery Ratios Cash Flow for RTA Sales Tax and RTA CTA Metra Pace ADA Paratransit Discretionary Funds”. Recovery Ratio % 52.0 55.0 36.0 10.0 5. Nothing in this Ordinance esti- The CTA figure includes Chicago Police Department (CPD) “in-kind” revenue and expense. The RTA Act mating amounts available to the Ser- allows certain expenses to be excluded from the recovery ratio calculation including security, depreciation vice Boards is intended to or shall have and facility leases. In addition, Ordinance 2005-06 authorized the exclusion of additional security costs from Service Board expenditures. These exclusions are reflected in the CTA and Metra recovery ratio calculation. the effect of waiving any discretion the The Pace figure includes under contract, RTA discretionary funds for “Additional Passes”, and ADvAntage “in-kind” revenue and expense. RTA may have under law to appropriate amounts available to the Service Boards, Schedule III: 2007 Estimated Cash Flow for RTA Sales Tax subject to compliance by the Service and RTA Discretionary Funds (dollars in thousands) Boards with terms and conditions estab- CTA Metra Pace lished by the RTA. January $ 37,534 $ 19,937 $ 6,558 6. The Executive Director is autho- February 38,264 21,047 6,905 March 42,471 25,354 8,259 rized and directed to inform each of the April 36,017 18,919 6,200 Service Boards of the amounts, times May 37,099 19,440 7,355 and ratios established by this Ordinance June 38,162 20,803 6,646 promptly after enactment of this Ordi- July 38,134 20,958 6,709 August 38,749 21,390 7,853 nance. September 54,154 22,757 20,695 October 53,093 21,447 20,281 November 53,841 22,810 21,706 December 53,129 21,070 20,167 Total $ 520,647 $ 255,931 $ 139,333 20 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

ORDINANCE NO. 2006-78

APPROVING THE 2007 BUDGETS AND 2008 - 2009 FINANCIAL PLANS OF THE SERVICE BOARDS, ADOPTING THE 2007 BUDGET AND PROGRAM OF THE AUTHORITY, APPROPRIATING FUNDS FOR THE 2007 BUDGETS, ADOPTING THE FIVE-YEAR PROGRAM, ALLOCATING CERTAIN REVENUES OF THE RTA TO THE RESPECTIVE SERVICE BOARDS, AMENDING THE ESTIMATES OF AMOUNTS AVAILABLE TO THE SERVICE BOARDS FOR 2007-2009, AND TAKING CERTAIN OTHER ACTIONS WITH RESPECT TO THE BUDGET AND PROGRAM FOR FISCAL YEAR 2007

WHEREAS, Section 4.01 of the Re- cial plan to the RTA for its review and Boards will have to take actions to bal- gional Transportation Authority Act (the the RTA has conducted public hearings ance their operating budgets that may “Act”) directs the Board of Directors of with respect to its Proposed Annual Bud- include, but are not limited to, utilizing the Regional Transportation Authority get and Five-Year Program, and consid- federal formula capital funds to cover op- (the “RTA”) to appropriate money for the ered the proposed budgets and financial erating expenses, adjusting service levels, expenses and obligations of the RTA, in- plans of the Service Boards and the pub- and adjusting fares; and cluding payment of certain public funds lic comments with respect to those bud- WHEREAS, the RTA adopted es- to the Service Boards, and to prepare and gets and financial plans; and timates of the amounts available to the adopt a comprehensive budget and pro- WHEREAS, the amounts available Service Boards for 2007-2009 (‘funding gram document for fiscal year 2007; and to the Service Boards for 2007-2009 are marks”) in Ordinance 2006-50; and WHEREAS, Section 4.02 of the Act predicated on the RTA receiving from the WHEREAS, to reflect updated es- establishes certain requirements with re- State of Illinois funding for Reduced Fare timates of funding available, the CTA’s spect to the allocation and payment of Reimbursement; and funding mark for 2007 has been increased funds appropriated by the RTA to the WHEREAS, the amounts available to by $108,000 and Metra’s funding marks Service Boards; and Pace for 2007 – 2009 are predicated on the for 2007-2009 have been increased by WHEREAS, Section 2.01 of the Act RTA continuing to receive funding from the respective amounts of $1,000,000, authorizes and directs the RTA to adopt a the State of Illinois or other sources for $1,795,000, and $2,130,000; and Five-Year Program with respect to the op- ADA paratransit services and other costs WHEREAS, pursuant to the RTA’s erations and capital projects of the RTA and services and are also predicated on policy regarding Service Board Financ- and the Service Boards; and securing additional funds and achieving ing Transactions (“Funding Policy”) the WHEREAS, Section 4.11 of the Act cost savings, from funding sources and RTA Board must approve the Service authorizes and directs the RTA to review cost efficiencies that may have been iden- Boards’ use of the proceeds from any Fi- the budgets and financial plans of the Ser- tified in the RTA-Pace Memorandum of nancing Transaction, as such term is device Boards for fiscal year 2007; and Understanding entered into in June 2006, fined in the Funding Policy, before such WHEREAS, pursuant to Section or that may be identified by the paratran- proceeds are used, and the primary use 4.11 of the Act, the RTA has taken cer- sit plan now being developed by the RTA of such proceeds should be for capital tain action by ordinance identifying the in cooperation with Pace, CTA and the programs; and further, such proceeds amounts estimated to be available for ex- Illinois Department of Transportation are excluded from the Service Boards’ penditure by each Service Board during pursuant to Section 2.30(f) of the RTA System-Generated Revenues Recovery fiscal year 2007 and the two following Act; and Ratios; and fiscal years and the times at which such WHEREAS, the amounts available to WHEREAS, by RTA policy (Ordi- amounts will be available; and the Service Boards for operations in 2007 nance 2004-54) federal capital funds used WHEREAS, pursuant to Section – 2009 are predicated on securing addi- for the capital-related portion of the op- 4.11 of the Act, each Service Board has tional funding (“New Transit Funding”), erating costs of paratransit services pro- presented its proposed fiscal year 2007 and to the extent that such New Tran- vided under contract are appropriately budget and proposed 2008–2009 finan- sit Funding is not obtained, the Service considered operating revenue for the pur- RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 21

pose of the Service Boards’ System-Gen- to authorize the issuance of working cash ficient to pay with reasonable promptness erated Revenues Recovery Ratios; and notes to fund such operating services as all costs and expenses as incurred; WHEREAS, the CTA’s proposed needed; and (c) Each such budget and plan provides 2007 budget uses certain federal capital WHEREAS, the RTA Board has de- for a level of fares or charges and operat- funds carried-over from prior year cap- termined that it is in the best interest of ing or administrative costs for the pub- ital programs for 2007 operating pur- the RTA to take the following actions in lic transportation provided by or subject poses; and order to carry out its powers and duties to the jurisdiction of such Service Board WHEREAS, the RTA recognizes that under the Act. sufficient to allow the Service Board to the CTA and Metra have taken measures meet its required system-generated rev- to protect their operations from terror- NOW, THEREFORE, BE IT ORDAINED enue recovery ratio, as set forth in Sched- ism and consequently have incurred ad- BY THE BOARD OF DIRECTORS OF THE ule I-C; ditional security costs, and moreover REGIONAL TRANSPORTATION AUTHOR- (d) Each such budget and plan is based the RTA has determined that it is in the ITY THAT: upon and employs assumptions and pro- best interests of public transportation in jections which are reasonable and pru- the region to exclude certain amounts of ARTICLE I dent; security costs for purposes of calculat- APPROVAL OF BUDGETS (e) Each such budget and plan has been ing the CTA and Metra recovery ratios, AND PROGRAMS prepared in accordance with sound finan- thereby providing the CTA and Metra cial practices; and with a period of time to balance such Section One: (f) Provided that each Service Board higher security costs within their respec- Service Board Budgets acts in conformity with the provisions tive budgets; and and Financial Plans of this Ordinance, each such budget and WHEREAS, the RTA desires to con- plan meets the other financial, budget- tinue to facilitate the integration of fare 1.1 In compliance with the Act, the ary, or fiscal requirements that the RTA media accepted for fare payment by Pace RTA has received and reviewed proposed has established. and the CTA by using additional RTA budgets for 2007, and financial plans for Unless the RTA Board makes a de- discretionary funds to fund a portion of 2008 and 2009, of the Chicago Transit termination, by the affirmative vote of at Pace’s costs in providing service to riders Authority (the “CTA”), the Commuter least nine members of the Board no later using the CTA 7-day pass, U-pass, and Rail Division (“Metra”) and the Subur- than July 1, 2007, that the funds identified Visitor/Fun (1-day, 2-day, 3-day and 5- ban Bus Division (“Pace”) (each a “Ser- as New Transit Funding and Additional day) passes (collectively, the “Addition- vice Board”). Funding for Paratransit in Schedules I-A al Passes”), in addition to any CTA fare 1.2 With respect to the proposed bud- and I-B of this Ordinance are available for media that are already accepted by Pace gets and financial plans of the CTA, Me- 2007, the findings in this Section 1.2 are and for this purpose the RTA Executive tra and Pace (as summarized in Schedule repealed for the remainder of 2007, such Director may extend and amend as nec- I-B), the RTA finds as follows: amounts are eliminated from Schedules essary an intergovernmental agreement, (a) Each such budget and plan shows I-A and I-B, and the Service Boards shall authorized by RTA Ordinance 2004-44 a balance between (A) anticipated reve- present to the RTA revised budgets for between the RTA, the CTA, and Pace nues from all sources, including operat- 2007 reflecting such revisions. regarding Pace acceptance of CTA fare ing subsidies and application of Service 1.3 Pursuant to Section 4.11 of the Act, media; and Board fund balances, and (B) the cost the budgets for 2007 and financial plans WHEREAS, the RTA recognizes the of providing the services specified and for 2008 and 2009, for the CTA, Metra importance of maintaining an adequate of funding any operating deficits or en- and Pace, as presented in the attached cash balance to ensure that ADA para- cumbrances incurred in prior periods, in- Schedule I-B, are hereby approved pro- transit service, bus and rail service, and cluding provision for payment when due vided, however, in the event that a budget other operating services run well and that of principal and interest on outstanding or financial plan is inconsistent with the such services are responsive to the needs indebtedness; provisions of this Ordinance, the provi- of the region, and consequently, the RTA (b) Each such budget and plan shows sions of this Ordinance shall govern. has determined that it is in the best inter- cash balances, including the proceeds of 1.4 Pursuant to Section 4.11 of the Act, ests of public transportation in the region any anticipated cash flow borrowing, suf- no more than 30 days after each fiscal 22 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

quarter, each Service Board is directed to (d) The 2007 Annual Budget and The Service Boards cannot obligate report to the RTA its financial condition Program is based on and employs as- or expend before July 1, 2007 an amount and results of operations and the finan- sumptions and projections which are rea- greater than 50% of the federal formula cial condition and results of operations of sonable and prudent. funding for 2007 allocated to such Service the public transportation services subject (e) The budgeted “administrative ex- Board for the projects identified in Sched- to its jurisdiction, as of the end of and for penses” of the RTA for 2007, as defined ule II, until the RTA Board makes a de- such quarter, for review by the RTA for in Section 4.01(c) of the Act, do not ex- termination, by the affirmative vote of at conformity with the approved budget for ceed the maximum administrative ex- least nine members of the Board, that the such period. penses (Statutory Cap) permitted for funds identified as New Transit Funding 2007 of $14,626,303 (“Agency Admin- and Additional Funding for Paratransit in Section Two: istration” expenses are summarized in Schedules I-A and I-B of this Ordinance RTA Annual Budget and Program Schedule I-A). are available for 2007. Unless the RTA Board makes a de- 2.1 The RTA has received and re- termination, by the affirmative vote of at ARTICLE II viewed the 2007 Annual Budget and least nine members of the Board no later APPROPRIATION Program of the Regional Transportation than July 1, 2007, that the funds identified OF FUNDS AND CERTAIN Authority as summarized in Schedule I- as New Transit Funding and Additional OTHER ACTIONS A. The 2007 Annual Budget and Pro- Funding for Paratransit in Schedules I-A gram is hereby approved and the Board and I-B of this Ordinance are available for Section One: finds as follows: 2007, the findings in this Section 2.1 are Appropriation for each (a) The 2007 Annual Budget and repealed for the remainder of 2007, such Service Board Program shows a balance between an- amounts are eliminated from Schedules ticipated revenues from all sources and I-A and I-B, and the Service Boards shall The following amounts for 2007 are anticipated expenses, including the fund- present to the RTA revised budgets for appropriated for payment to each Ser- ing of operating deficits and the discharge 2007 reflecting such revisions. vice Board from the enumerated sourc- of encumbrances incurred in prior peri- es of funds and for the specified objects ods and payment of principal and interest Section Three: and purposes. The total appropriations as on outstanding indebtedness when due, Five-Year Program shown on Schedule I-A for RTA Oper- as summarized in Schedule I-A. ations Funding represents the legal level (b) The 2007 Annual Budget and Pro- 3.1 The Five-Year Program of the of budgetary control. gram shows cash balances sufficient to RTA for the fiscal years beginning Jan- pay with reasonable promptness all obli- uary 1, 2007, and ending December 31, 1.1 Statutory RTA Taxes gations and expenses as incurred, as sum- 2011, has been the subject of public hear- marized in Schedule I-F. ings in each county in the metropoli- There is appropriated, for expenditure (c) The 2007 Annual Budget and Pro- tan region as required by Section 2.01 of by each Service Board pursuant to the gram shows that the level of fares and the Act. The RTA has considered pub- 2007 Budget approved in Article I, 85% charges for public transportation pro- lic comments on the proposed Five-Year of the RTA receipts from taxes imposed vided by, or under grant or purchase of Program. The RTA hereby adopts the pursuant to Section 4.03 of the Act and al- service contracts of, the Service Boards is Five-Year Program attached as Schedule located according to the percentages list- sufficient to cause the aggregate of all pro- II, subject to continuing review by the ed below and specified in Section 4.01(d) jected system-generated revenues from RTA. In accordance with Section 2.01(c) of the Act, and from the State and Lo- such fares and charges received in 2007 and Section 4.02(b) of the Act, no Service cal Sales Tax Reform Fund pursuant to for mainline service to equal at least 50 Board shall apply for or receive any capi- Section 4.01(e) of the Act. The estimated percent of the aggregate cost of providing tal grant or loan unless it is identified in amount of the appropriation is specified such public transportation in 2007, and at the RTA Five-Year Program. as “85% Sales Tax” on Schedule I-E. least 10 percent for ADA paratransit service in 2007, as required by the Act, and as summarized in Schedule I-C. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 23

Collected in DuPage Collected Within Collected Within Kane, Lake, McHenry ant to the 2007 Budget approved in Ar- Within Chicago Suburban Cook County and Will Counties ticle I, from other receipts and revenues CTA 100 30 0 Metra 0 55 70 of the RTA. Pace 0 15 30 The total appropriations as shown in Total 100 100 100 Schedule I-A for 2007 Agency Admin- istration, Regional Services and Coor- After receipt by the RTA of the pro- Operations Funding” on Schedule I-B. dination Programs, Regional Technical ceeds of taxes imposed pursuant to The Executive Director is hereby di- Assistance Programs, and Regional Tech- Section 4.03 of the Act, the Executive Di- rected to provide for the payment of such nology and Agency Capital represent the rector of the RTA shall provide for the funds as soon as may be practicable upon legal level of budgetary control. The Ex- payment to each Service Board the speci- their receipt provided that each Service ecutive Director is authorized to trans- fied proportionate share of such proceeds. Board is in compliance with the require- fer up to 10% from and among each of ments of Section 4.11 of the Act and this these items. 1.2 Reduced Fare Reimbursement Ordinance. (b)Capital Programs: There is appro- ARTICLE III There is appropriated, for expendi- priated, for expenditure by the Service IMPLEMENTATION ture by each Service Board pursuant to Boards for projects specified on Sched- the 2007 Budget approved in Article I, ule II, and pursuant to the first year of the The Executive Director is authorized amounts received from the State of Il- Five-Year Program approved in Article I, and directed to take appropriate action linois Reduced Fare Reimbursement the amounts specified as Transfer Capital to implement and enforce this Ordinance Program. The estimated amount of the – RTA Funds on Schedule I -D from oth- and to prepare and disseminate the 2007 appropriation is included within the Ser- er receipts and revenues of the RTA. Annual Budget and Program of the RTA vice Board “System Generated Revenue” (c)Operating Funds for Passes: There in accordance with the Act and the poli- on Schedule I-B. is appropriated, for expenditure by Pace cies established herein. After receipt by the RTA of funds pursuant to the 2007 Budget approved Nothing in this Ordinance estimating from the State of Illinois Reduced Fare in Article I, for accepting certain CTA amounts available to the Service Boards Reimbursement Program, the Executive passes, a maximum amount as specified is intended to or shall have the effect of Director shall provide for the payment in “RTA Discretionary Funds for Pass- waiving any discretion the RTA may have to each Service Board their proportion- es” on Schedule I-B from other receipts under law to appropriate amounts avail- ate share of the proceeds estimated to be and revenues of the RTA. able to the Service Boards, subject to com- received from the State as identified on The Executive Director is hereby di- pliance by the Service Boards with terms Schedule I-A. rected to provide for payment of such and conditions established by the RTA. funds pursuant to grant or intergov- Furthermore, nothing in this Ordinance 1.3 Discretionary Funds of the RTA ernmental agreements with each Ser- is intended to or shall have the effect of -- Public Transportation Fund, 15% vice Board. waiving any discretion the RTA may Sales Tax, Other RTA Revenues have under law to subject to review the Section Two: determinations made in this Ordinance, (a) Operating Programs: There is ap- Appropriation to the Regional including, but not limited to, setting re- propriated, for expenditure by each Ser- Transportation Authority covery ratios for the Service Boards, es- vice Board pursuant to the 2007 Budget tablishing exclusions or inclusions of approved in Article I, the amounts spec- In 2007 there is appropriated, for ex- certain revenues or expenditures from ified as “RTA Discretionary Funds” on penditure for the operating purposes of the calculation of such recovery ratios, or Schedule I-B from other receipts and rev- the RTA (the “Agency”) the amounts determining the allowable uses of federal, enues of the RTA, or so much as may be specified on Schedule I-A as Agency state or local funds. necessary such that the actual amounts Administration, Regional Services and The Executive Director is authorized appropriated for each Service Board under Coordination Programs, Regional Tech- and directed to execute and file applica- paragraphs 1.1, 1.2, and 1.3(a) of this sec- nical Assistance Programs, and Regional tions on behalf of the RTA with the Unit- tion equal the amounts specified as “RTA Technology and Agency Capital, pursued States Department of Transportation 24 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

(USDOT), Federal Transit Administra- Schedule 1-A: RTA Statement of Revenues and Expenditures General and Agency Funds (dollars in thousands) tion (FTA), the Illinois Department of System-Generated Revenue Budget 2007 Plan 2008 Plan 2009 Transportation (IDOT), and any other Sales Tax $ 745,937 $ 769,807 $ 794,440 funding agency (collectively the “fund- Public Transportation Fund 186,484 192,452 198,610 ing agencies”) for any monies available State Financial Assistance 122,836 125,180 127,500 for funding of the RTA Annual Budget Reduced Fare Reimbursement 36,275 36,275 36,275 Other Revenue 14,722 14,400 14,350 and Five-Year Program. The Executive New Transit Funding (1) 144,534 225,748 331,927 Director is authorized to furnish such Additional Funding for ADA Paratransit 81,810 91,627 99,893 additional information, assurances, cer- Total Revenue $ 1,332,598 $ 1,455,489 $ 1,602,995 tifications and amendments as the fund- Operating Expenditures RTA Operations Funding to Service Boards $ 811,915 $ 837,880 $ 864,648 ing agencies may require in connection RTA Discretionary Funds to Pace 4,000 4,000 4,000 with such applications or the projects. New Transit Funding 144,534 202,103 308,282 The Executive Director is authorized Additional Funding for ADA Paratransit 81,810 91,627 99,893 and directed on behalf of the RTA to ex- Reduced Fare Reimbursement and Sales Tax Interest (2) 37,125 37,125 37,125 ecute and deliver grant agreements and Agency Administration (3) 7,360 7,596 7,840 all subsequent amendments thereto be- Regional Services and Coordination Programs 18,248 18,833 19,436 tween the RTA and the funding agencies. Regional Technical Assistance Programs (4) 6,170 6,367 6,570 Total Operating Expenditures $ 1,111,162 $ 1,205,531 $ 1,347,794 Further, the Executive Director is autho- Debt Service and Capital Expenditures rized and directed to take such action as Principal and Interest $ 186,218 $ 195,157 $ 196,305 the Executive Director deems necessary Regional Technology and Agency Capital (4) 7,499 7,735 7,980 or appropriate to implement, adminis- Transfer Capital–RTA Funds 23,802 20,353 20,353 ter, and enforce said agreements and all Total Debt Service and Capital Expenditures $ 217,519 $ 223,245 $ 224,638 subsequent amendments thereto on be- Total Expenditures $ 1,328,681 $ 1,428,776 $ 1,572,432 half of the RTA. Fund Balance (undesignated/unreserved) Beginning Balance $ 6,198 $ 10,115 $ 36,828 The Executive Director is authorized Change in Fund Balance 3,917 26,713 30,563 and directed to file the 2007 Budget and Ending Unreserved /Undesignated Program and a copy of this Ordinance Fund Balance $ 10,115 $ 36,828 $ 67,391 with the Governor of Illinois, the Illi- % of Total Operating Expenditures 0.9 3.1 5.0 nois General Assembly, the Comptroller Recovery Ratio % 50.4 — — of the State of Illinois, the Mayor of the (1) The figures for 2008 and 2009 include an annual amount of $23,645 to achieve a RTA fund balance of 5 percent by the end of the planning period. (2) Includes annual sales tax interest of $850 thousand. (3) The 2007 statutory City of Chicago and the Auditor Gen- CAP for agency administration is $14,626. (4) Appropriated funds that remain unspent at the end of 2007 continue eral of the State of Illinois, along with an to be available for this purpose without subsequent appropriation action. appropriate certification that this budget and program meet the requirements of the Act. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 25

Schedule 1-B: Service Board Deﬁcit Funding (dollars in thousands)

CTA 2007 Budget 2008 Plan 2009 Plan Total System-Generated Revenue $ 552,694 $ 560,970 $ 569,980 Total Operating Expense 1,133,151 1,215,865 1,341,903 Total Deficit 580,457 654,895 771,923 Deficit Funding RTA Sales Tax 295,098 304,469 314,165 RTA Discretionary Funds 175,251 180,931 186,768 RTA Operations Funding 470,349 485,400 500,933 New Transit Funding (1) 110,108 169,495 270,990 Total CTA Deficit Funding $ 580,457 $ 654,895 $ 771,923 Metra Total System-Generated Revenue $ 285,062 $ 288,224 $ 297,856 Total Operating Expense 553,986 560,272 578,534 Total Deficit 268,924 272,048 280,678 Deficit Funding RTA Sales Tax 257,374 265,594 274,049 RTA Discretionary Funds — — — RTA Operations Funding 257,374 265,594 274,049 New Transit Funding (1) 11,550 6,454 6,629 Total Metra Deficit Funding $ 268,924 $ 272,048 $ 280,678 Pace Total System-Generated Revenue $ 53,433 $ 54,363 $ 55,369 Total Operating Expense 166,124 172,640 180,046 Total Deficit 112,691 118,277 124,677 Deficit Funding RTA Sales Tax 81,574 84,272 87,060 RTA Discretionary Funds 2,618 2,614 2,607 RTA Operations Funding 84,192 86,886 89,667 RTA Discretionary Funds for Passes 4,000 4,000 4,000 CMAQ Funds 1,623 1,237 347 New Transit Funding (1) 22,876 26,154 30,663 Total Pace Deficit Funding $ 112,691 $ 118,277 $ 124,677 Service Board Total Total System-Generated Revenue $ 891,189 $ 903,557 $ 923,205 Total Operating Expense 1,853,261 1,948,777 2,100,483 Total Service Board Deficit 962,072 1,045,220 1,177,278 (1) The amounts available to the Service Boards for Deficit Funding operations in 2007-2009 are predicated on securing RTA Sales Tax 634,046 654,335 675,274 additional funding (“New Transit Funding”), and RTA Discretionary Funds 177,869 183,545 189,375 to the extent that such New Transit Funding is not obtained, the Service Boards will have to take actions RTA Operations Funding 811,915 837,880 864,649 to balance their operating budgets that may include, RTA Discretionary Funds for Passes 4,000 4,000 4,000 but are not limited to, utilizing federal formula CMAQ 1,623 1,237 347 capital funds to cover operating expenses, adjusting New Transit Funding (1) 144,534 202,103 308,282 service levels, and adjusting fares. (2) The amounts Total Deficit Funding $ 962,072 $ 1,045,220 $ 1,177,278 available to Pace for 2007-2009 are predicated on the RTA continuing to receive funding from the State of ADA Paratransit Illinois or other sources for ADA paratransit services Total System-Generated Revenue $ 9,653 $ 10,547 $ 14,504 and other costs and services and are also predicated on Total Operating Expense 91,463 102,174 114,397 securing additional funds and achieving cost savings, from funding sources and cost efficiencies that may Total Deficit 81,810 91,627 99,893 have been identified in the RTA-Pace Memorandum Deficit Funding of Understanding entered into in June 2006, or that Additional Funding for ADA Paratransit (2) 81,810 91,627 99,893 may be identified by the paratransit plan now being Total Deficit Funding $ 81,810 $ 91,627 $ 99,893 developed by the RTA in cooperation with Pace, CTA and the Illinois Department of Transportation Grand Total (1) (2) $ 226,344 $ 293,730 $ 408,175 pursuant to Section 2.30(f) of the RTA Act.

26 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Schedule I-C: Recovery Ratio Calculations (dollars in thousands) System-Generated Recovery Ratio Revenues (1) 2007 Budget CTA $ 582,694 Metra 285,062 Pace 62,191 RTA 14,722 Other Revenue 262 Total System-Generated Recovery Ratio Revenues $ 944,931 System-Generated Recovery Ratio Expenses (2) CTA $ 1,119,817 Metra 518,239 Pace 170,882 RTA 31,779 Other Expense 32,834 Total System-Generated Recovery Ratio Expenses $ 1,873,551 Recovery Ratios % CTA 52.0 Metra 55.0 Pace 36.4 Total System-Generated Revenue Recovery Ratio % 50.4 ADA Paratransit Revenue $ 9,653 Expense 91,463 Recovery Ratio % 10.6

(1) CTA’s figure includes $8 million of certain federal capital funds carried-over from prior year capital programs for 2007 operating purposes and Chicago Police Department (CPD) in-kind revenue and expenditures of $22 million. The Pace figure includes $4 million for Pace’s costs of accepting CTA fare media and ADvAntage in-kind revenue and expenditures of $4.8 million. The RTA revenue is primarily earnings on investments. Other revenue reflects CTA leasing transactions of $4.3 million, which by policy is excluded from the revenue figures of the Service Boards less the $4.0 million for Pace’s cost of accepting CTA fare media. (2) The RTA Act allows certain expenditures to be excluded from the recovery ratio calculation including security, depreciation, and facility leases. RTA Ordinance 2005-06 authorized further security exclusions for Service Board recovery ratios. The amount of these additional exclusions is $32.8 million. This amount is added as other expenditures to calculate the statutory system-generated revenue recovery ratio. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 27

Schedule I-D: Service Board and RTA Capital Funding (dollars in thousands) 2007 Capital Program Budget

Service Board Capital Funding CTA Metra Pace RTA Total FTA Capital Grants (1) $ 289,344 $ 177,474 $ 34,468 — $ 501,286 IDOT Grants — — — — — Other Service Board Funds — 5,110 — — 5,110 Transfer Capital–RTA Funds 20,353 — 3,449 — 23,802 Transfer Capital (2) — 48,808 — — 48,808 Carryover and De-obligations 1,554 25,000 — — 26,554 Total Service Board Capital Funding 311,251 256,392 37,917 — 605,560 CTA Financing 125,000 — — — 125,000 CTA Debt Repayment (30,336) — — — (30,336) Total Program $ 405,915 $ 256,392 $ 37,917 — $ 700,224 Tollway Credits Requested (1) $ 31,200 $ 23,084 $ 6,494 — $ 60,778 RTA Regional Technology and Agency Programs — — — $ 7,499 $ 7,499

(1) Federal Funds require a local match of at least 20 percent. The State of Illinois has traditionally provided capital funding for matching purposes but at this time the State has not provided local matching funds. Tollway credits can be used as local match but they are not spendable funds and using them leaves critical projects underfunded. (2) New Transit Funding for operations on Schedule I-A excludes capital program funding needs. Therefore, this amount is not included in the Transfer Capital–RTA Funds amount shown on Schedule I-A.

Schedule 1-E: RTA Statutory Sales Tax Distribution (dollars in thousands) City of Suburban Collar Estimated 2007 Budget Chicago Cook County Counties Total Service Boards: CTA $ 194,545 $ 100,554 — $ 295,098 Metra — 184,348 73,026 257,374 Pace — 50,277 31,297 81,574 Total Service Boards–85% Sales Tax $ 194,545 $ 335,179 $ 104,323 $ 634,046 RTA–15% Sales Tax (1) 34,331 59,148 18,410 111,891 Grand Total $ 228,876 $ 394,327 $ 122,733 $ 745,937 2008 Financial Plan Service Boards: CTA $ 201,032 $ 103,438 — $ 304,469 Metra — 189,636 75,958 265,594 Pace — 51,719 32,554 84,272 Total Service Boards–85% Sales Tax $ 201,032 $ 344,792 $ 108,512 $ 654,336 RTA–15% Sales Tax (1) 35,476 60,845 19,149 115,471 Grand Total $ 236,508 $ 405,637 $ 127,661 $ 769,807 2009 Financial Plan Service Boards: CTA $ 207,802 $ 106,363 — $ 314,165 Metra — 194,998 79,051 274,049 Pace — 53,181 33,879 87,060 Total Service Boards–85% Sales Tax $ 207,802 $ 354,543 $ 112,929 $ 675,274 RTA–15% Sales Tax (1) 36,671 62,566 19,929 119,166 Grand Total $ 244,473 $ 417,109 $ 132,858 $ 794,440

(1) The RTA’s 15 percent of the sales tax is primarily allocated as discretionary funding for Service Board operations. 28 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Schedule 1-F: RTA 2007 Monthly Cash Flow Projection General and Agency Funds (dollars in thousands) Cash Receipts January February March April May June Sales Tax $ 58,242 $ 61,036 $ 72,336 $ 54,487 $ 56,555 $ 60,452 Public Transportation Fund 14,846 14,560 15,259 18,084 13,622 14,139 Reduced Fare Reimbursement — 9,069 — — 9,069 — State Financial Assistance 9,600 9,600 9,600 9,600 9,600 9,600 Additional Funding for ADA Paratransit 2006 — — — 14,252 — — Working Cash Notes 6,666 6,666 6,666 6,666 6,666 6,670 New Transit Funding and Additional Funds for ADA Paratransit 2007 — — — — — — Interest/Other Income 1,188 1,181 1,188 1,203 1,113 1,506 Total Cash Receipts $ 90,541 $ 102,112 $ 105,049 $ 104,292 $ 96,624 $ 92,367 CTA Cash Disbursements 85% Sales Tax $ 23,273 $ 24,003 $ 28,210 $ 21,413 $ 22,495 $ 24,011 RTA Discretionary Funds 14,261 14,261 14,261 14,604 14,604 14,604 Reduced Fare Reimbursement — 7,562 — — 7,562 — Additional State Funding–RTA Discretionary 2006 10,000 — — 14,252 — — Transfer Capital–RTA Funds 1,967 1,967 1,967 1,967 1,967 1,967 Capital Program 50 700 50 949 850 1,450 New Transit Funding — — — — — — Total CTA Disbursements $ 49,551 $ 48,492 $ 44,488 $ 53,185 $ 47,477 $ 42,032 Metra Cash Disbursements 85% Sales Tax $ 19,937 $ 21,047 $ 25,354 $ 18,919 $ 19,440 $ 20,803 Reduced Fare Reimbursement — 721 — — 721 — New Transit Funding — — — — — — Capital Program 25 — 85 — 25 75 Total Metra Disbursements $ 19,962 $ 21,767 $ 25,439 $ 18,919 $ 20,185 $ 20,878 Pace Cash Disbursements 85% Sales Tax $ 6,305 $ 6,653 $ 8,006 $ 5,982 $ 6,137 $ 6,570 RTA Discretionary Funds 253 253 253 218 218 218 RTA Discretionary Funds for Passes — — — — 1,000 — Reduced Fare Reimbursement — 786 — — 786 — Working Cash Notes 6,666 6,666 6,666 6,666 6,666 6,670 New Transit Funding and Additional Funding for ADA Paratransit 2007 — — — — — — Capital Program 516 396 1,028 1,526 1,517 889 Total Pace Disbursements $ 13,740 $ 14,753 $ 15,953 $ 14,392 $ 16,325 $ 14,347 RTA Operations, Debt Service and Capital Sales Tax Interest $ 71 $ 71 $ 71 $ 71 $ 71 $ 71 Principal and Interest Payments 17,698 17,743 17,863 17,177 7,956 11,497 Agency Operations (1) 2,648 2,648 2,648 2,648 2,648 2,648 Regional Technology and Agency Capital 625 625 625 625 625 625 Total Disbursements $ 21,042 $ 21,087 $ 21,207 $ 20,521 $ 11,300 $ 14,841 Total Cash Disbursements $ 104,295 $ 106,100 $ 107,087 $ 107,017 $ 95,287 $ 92,098 Cash Balance (2) Beginning $ 133,785 $ 120,031 $ 116,043 $ 114,005 $ 111,281 $ 112,617 Ending $ 120,031 $ 116,043 $ 114,005 $ 111,281 $ 112,617 $ 112,886

(1) Agency Administration, Regional Services and Coordination Programs, and Regional Technical Assistance Programs. (2) Restricted and unrestricted cash. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 29

Schedule 1-F: RTA 2007 Monthly Cash Flow Projection General and Agency Funds (dollars in thousands) July August September October November December $ 60,675 $ 62,077 $ 65,623 $ 62,347 $ 65,330 $ 61,811 15,113 15,169 15,519 16,406 15,587 16,332 — 9,069 — — 9,069 — — — — 20,200 20,200 — — — — — — (6,666) (6,666) (6,666) (6,666) (6,666) (6,670)

37,724 37,724 37,724 37,724 37,724 37,724 1,133 1,169 1,198 1,157 1,181 1,506 $ 107,979 $ 118,542 $ 113,398 $ 110,967 $ 142,424 $ 130,903

$ 23,983 $ 24,599 $ 25,800 $ 24,739 $ 25,487 $ 24,775 14,604 14,604 14,604 14,604 14,604 14,604 — 7,562 — — 7,562 — — — — — — — 1,967 1,967 1,967 1,967 1,967 1,967 3,250 3,050 3,550 3,800 1,550 1,550 18,351 18,351 18,351 18,351 18,351 18,351 $ 62,155 $ 70,133 $ 64,273 $ 63,461 $ 69,521 $ 61,247

$ 20,958 $ 21,390 $ 22,757 $ 21,447 $ 22,810 $ 21,070 — 721 — — 721 — 1,925 1,925 1,925 1,925 1,925 1,925 138 100 150 156 146 75 $ 23,021 $ 24,136 $ 24,832 $ 23,528 $ 25,602 $ 23,070

$ 6,633 $ 6,777 $ 7,222 $ 6,809 $ 7,233 $ 6,694 218 218 218 218 218 218 — 1,000 — — 1,000 — — 786 — — 786 — — — — — — —

10,781 10,781 10,781 10,781 10,781 10,781 16 538 2,278 28 16 878 $ 17,648 $ 20,100 $ 20,500 $ 17,836 $ 20,035 $ 18,572

$ 71 $ 71 $ 71 $ 71 $ 71 $ 71 17,698 17,743 17,863 17,177 7,956 11,497 2,648 2,648 2,648 2,648 2,648 2,648 625 625 625 625 625 625 $ 20,980 $ 21,710 $ 21,770 $ 20,995 $ 15,694 $ 16,493 123,804 136,079 131,374 125,821 130,851 119,383

$ 112,886 $ 97,061 $ 79,524 $ 61,548 $ 46,695 $ 58,268 $ 97,061 $ 79,524 $ 61,548 $ 46,695 $ 58,268 $ 69,788

(1) Agency Administration, Regional Services and Coordination Programs, and Regional Technical Assistance Programs. (2) Restricted and unrestricted cash. 30 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 31

2 Budget in Brief 32 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 33

Executive Summary gestion, a forward-looking view of what funds) of $2.2 billion is used to pay for The upcoming budget and two-year transit can do to improve mobility in regional transportation system expendi- financial planning period will prove to be America’s transportation hub. We expect tures of almost $2.2 billion. A remaining extremely difficult years to achieve bal- this effort to have the result of providing balance of $4 million is used to commence anced operating budgets for all bus, rail us with the resources we need not only to replenishment of the RTA fund balance and ADA paratransit service in the region. balance our operating budgets, but also to (Exhibit 2-5). The interchanges between In total, overall cost pressures, particular- keep our valuable public transportation the source and use of funds for operations ly relating to fuel, security, labor, health- system in good repair and to address the and capital (Exhibit 2-13) programs in care and electricity, increase the system’s growing mobility needs and changing 2007 are illustrated in Exhibit 2-6. operating expenditures from $1.9 billion demographics of the region. To achieve The remaining content in this section in 2007 to $2.2 billion in 2009, and in- these goals during the 2007-2009 plan- offers an overview of the region’s pub- crease total Service Board (CTA, Metra, ning period, the RTA is seeking New lic transportation system and the bud- Pace) funding needs (operating deficit) Transit Funding for Service Board bus get process, service characteristics in the from $1.0 billion in 2007 to $1.3 billion and rail operations and Additional State six-county northeastern Illinois region in 2009 (Exhibit 2-1). Included in these Funding for ADA paratransit service in served by the three Service Boards, and figures are the funding needs for ADA the combined amounts of $226 million, a summation of the 2007 operating bud- paratransit service. This rapidly growing $294 million and $408 million, respec- get and capital program. service requires $82 million in 2007, $92 tively (Exhibit 2-4). million in 2008, and $100 million in 2009. The Capital program also lacks the System Overview From a funding standpoint, the pro- funds needed to achieve the desired lev- The Regional Transportation Author- jected growth in sales tax, the RTA’s larg- el of investment necessary to maintain, ity (RTA or the Agency) provides funding, est source of public funding, and Public enhance and expand our public trans- planning and fiscal oversight for regional Transportation Funds (PTF), which are portation system. The needs far exceed bus and rail operations in northeastern appropriated by the State at an amount current federal and state funding autho- Illinois as set forth by The RTA Act. The equal to 25 percent of net revenue real- rizations, and the RTA and the Service Act designates the Agency as the primary ized from sales taxes, do not keep pace Boards are working jointly on a strate- public body in the region to secure funds with the overall cost pressures. For ex- gic plan (Moving Beyond Congestion) for public transportation. The Agency is ample, in 2007 Sales Tax and PTF funds that identifies the needed level of capital authorized to impose taxes in the region provide 78 percent of the overall fund- program funds. This level of investment and issue debt. It is also responsible for ing requirement (Exhibit 2-2), but only is in the closing stages of development but the allocation of federal, state and local 68 percent in 2009 (Exhibit 2-3). not part of the five-year capital program funds to finance both the operating and To address this dire situation and adopted by the RTA Board in December capital needs of public transportation in make the case for public transportation, (see Capital section). the region. the RTA, CTA, Metra, and Pace have In 2007, total public funding and Ser- The RTA Board of Directors governs joined forces in Moving Beyond Con- vice Board operating revenue (source of the Agency. Three independent Service

Exhibit 2-1: 2007 –2009 Service Board Deﬁcit Funding (dollars in millions)* 2007 2008 2009 Service Board CTA Metra Pace Mainline Pace ADA (1) Total Total Total Revenue $ 553 $ 285 $ 53 $ 10 $ 901 $ 914 $ 938 Expenditure 1,133 554 166 91 1,945 2,051 2,215 Operating Deﬁcit $ 580 $ 269 $ 113 $ 82 $ 1,044 $ 1,137 $ 1,277 Funding Current Funding Sources (2) 470 258 90 — 818 843 869 New Transit Funding 110 11 23 — 144 202 308 ADA Paratransit Funding — — — 82 82 92 100 Total New Funding $ 110 $ 11 $ 23 $ 82 $ 226 $ 294 408 Total Funding Needs $ 580 $ 269 $ 113 $ 82 $ 1,044 $ 1,137 $ 1,277

(*) Some ﬁgures may not sum due to rounding. (1) Regional ADA paratransit service. (2) Service Board Formula Sales Tax, RTA discretionary (sales tax and PTF funds), RTA discretionary funds for passes, and CMAQ funds.

34 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 2-2: 2007 Funding Sources for Service Board Deficit — $1,044 million Exhibit 2-4: Additional Funding Needs New Transit, ADA Paratransit ADA Paratransit–8% 450 (dollars in millions)

New Transit–14% 408 400

Sales Tax and RTA Discretionary–78% 350

Exhibit 2-3: 2009 Funding Sources for Service Board Deficit — $1,277 million 300 294

ADA Paratransit–8%

New Transit–24% 250 226

Sales Tax and 200 RTA Discretionary–68% 2007 2008 2009

Exhibit 2-5: 2007 Source and Use of Funds (dollars in millions) Source of Funds (1) Total Percent Boards, the Chicago Transit Authority ations funding for the annual budget and RTA Sales Tax $ 746 34 (CTA), Metra commuter rail and Pace two-year financial plan, and the five-year State Funds 346 16 suburban bus, have operational respon- capital program. ADA Funds 82 4 sibility (e.g., to set fares and provide ser- The marks guide the Service Boards’ New Transit Funds 144 7 RTA Revenue 14 1 vice) for public transportation within the budgetary process. Each Service Board Pace ADA Paratransit 10 — six-county region and are governed by prepares and publishes, for public hearing Service Board Bus/Rail 856 39 their own boards of directors. The CTA and comment, a comprehensive budget Total Sources $ 2,198 100 provides bus and rapid transit rail service document that is to conform to the RTA Use of Funds Total Percent in the City of Chicago and neighboring marks. After considering public com- Debt Service $ 186 8 RTA Agency 32 1 suburbs. Metra provides commuter rail ment, the CTA, Metra and Pace boards of Capital Programs 31 1 service throughout the six-county region. directors adopt their respective budgets. Pace ADA Paratransit 92 4 Pace provides bus service in the suburbs In November, those budgets are for- Service Board Bus/Rail 1,853 84 Total Regional System $ 2,194 100 and between the suburbs and the City of warded to the RTA, which consolidates RTA Fund Balance 4 — Chicago. Effective July 1, 2006, Pace is re- the Agency and the Service Board bud- Total Uses $ 2,198 100 sponsible for all ADA paratransit service gets into a proposed RTA budget docu- (1) State funds include public transportation funds, state in the region (Exhibit 2-7). ment. The RTA Board distributes this financial assistance and reduced fare reimbursements. Service Board bus/rail revenue includes Pace CMAQ Yearly, the RTA Board must adopt an document for public hearing and com- funds but excludes reduced fare reimbursements annual budget, two-year financial plan ment before adoption in December. This which are provided by state funds. and a five-year capital program for each document reflects the 2007 budget, two- Service Board. The principal features of year financial plan, and five-year capital Service Characteristics this process are outlined in the follow- program adopted by the RTA Board on There are more than 8 million resi- ing paragraphs. In September, the RTA December 15, 2006 (Ordinance 2006- dents in the six-county northeastern Il- Board approves the “marks” for each 78). Exhibit 2-8 illustrates the principal linois region, an area that covers 3,749 Service Board. The marks include the re- responsibilities and interactions between square miles. The RTA system deploys covery ratio for the annual budget, oper- the Agency and Service Boards in the an- more than 5,000 bus and rail cars on more nual budget and capital program process. than 400 routes. Last year, the regional RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 35

public transportation system provided Exhibit 2-6: Source and Use of Funds—$ 2,198 million 575 million trips and carried passengers OPERATIONS roughly 3.6 billion miles. Debt Service ADA Paratransit Revenue The system represents a valuable in- $ 186 RTA Sales Tax $ 10 vestment, delivering a very positive im- $ 746 pact on the region. It supports job creation Funds for ADA Paratransit ADA Paratransit and income growth while reducing traffic Expense State Funds $ 82 $ 92 congestion, fuel consumption and air pol- $ 346 lution. Likewise, the system provides mo- New Transit Funds bility to the disabled and access to jobs for $ 144 Additional ADA Funds those without other means to get to work. $ 82 Service Board RTA Funds for Bus/Rail Expense Operating Budget Service Operations $ 1,853 New Transit Funds $ 853 The discussions that follow in this sec- $ 144 tion compare the 2007 budget with esti- Service Board RTA Fund Balance Bus/Rail Revenue mated results for 2006 (Exhibit 2-9). A $ 4 RTA Revenue $ 856 consolidated statement of revenue and ex- $ 14 RTA Agency penditures from 2005 through 2009 is pre- $ 32 sented in the RTA section (Exhibit 3-1). RTA Funds Used for Capital Total Revenue CAPITAL Programs $ 31 As identified in Exhibit 2-9, total reve- Federal RTA Agency nue is estimated to grow from $1,127.9 mil- $ 501 $ 7 lion in 2006 to $1,332.6 million in 2007. Of note are the unappropriated funding sourc- State Funds es for ADA paratransit and New Tran- $ 0 sit Funding that are used to help fund the Service Board operating deficits of the Service Boards. $ 24 New Transit Funds For instance, in 2007, funding from these $ 49 Service Board two sources totals $226.3 million or 17 Capital percent of total revenue (Exhibit 2-10). $ 700 Other Without these sources, which are dis- $ 31 cussed later in this section, the system will Tollway credits can be used as local match for Tollway Credits federal funds but they are not spendable funds and be smaller and service options curtailed. $ 61 Financing/Debt using them leaves critical projects underfunded. Repayment $ 95 Sales Tax RTA Sales Tax is the primary source of revenue for the RTA. The tax is autho- The 2006 and 2007 sales tax esti- Public Transportation Funds (PTF) rized by Illinois statute, imposed by the mates were determined after assessing State Public Transportation Funds RTA in the six-county region of north- state and regional economic data and na- (PTF) are based on a formula tied to sales eastern Illinois and collected by the State. tional trends. Based on this information, tax results and are, therefore, projected Eighty-five percent of RTA Sales Tax the RTA’s sales tax estimate for 2006 of to increase at the same growth rate as the receipts are apportioned to the Service $722.8 million is $2.9 million greater than sales tax. For every four dollars that is col- Boards by statutory formula. Details of the amount budgeted. Sales tax is estimat- lected in sales tax, the RTA receives an ad- this apportionment can be found in the ed to grow from $722.8 million in 2006 ditional dollar in PTF. Estimated receipts Region section of this document. to $745.9 million in 2007, an increase of in the 2007 budget are $186.5 million. $23.1 million or 3.2 percent. 36 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 2-7: RTA Organization Structure New Transit Funding The Service Board budgets and ﬁnan- RTA Planning, Funding cial plans were prepared with the expecta- and Oversight tion that New Transit Funding would be made available through upcoming State Service Boards Fares and legislation. However, there is no guaran- Service Levels tee that such funds will be forthcoming. In that event, focus must shift to a constrained system which provides fewer CTA Pace Bus and Rapid Metra Suburban Bus service options. Unappropriated funds Commuter Rail Transit Rail ADA Paratransit totaling $144 million, balance the Service Boards proposed 2007 budgets.

Exhibit 2-8: Financial Relationship and Responsibilities of the RTA and Service Boards Additional Funding for ADA Paratransit In 2005 and 2006, the State of Illi- Regional Sales Tax/Oth er Revenue Assignment Service Boards nois appropriated additional funds to Transportation CTA, Metra the RTA for ADA paratransit service Authority and Pace Debt Management/Bond Issuance and other costs and services. The appro- Strategic Planning Operations priation for each year was $54.3 million. Discretionary Capital Fund Allocation Funding/Ove rsight Annual Budget However, growing service demands and Regional Services increased operating costs have out-paced Budget Marks and Recovery Ratio Program Support this level of funding. The 2007 budget was developed envisioning continuance Deﬁcit Funding of state appropriations that fully fund the

Annual Budgets/Capital Programs service deficit. Unappropriated funds in the amount of $81.8 million balance the proposed 2007 budget for ADA paratransit service. State Financial Assistance In calendar year 2004, the RTA re- This revenue source is state-autho- ceived $40 million in funds from the state. Operating Expenditures rized assistance to reimburse the debt However, in recent years the state has re- Total RTA operating expenditures for service expenditures for RTA Strategic duced its fiscal year (July to June) amount 2007 are estimated at $1,111.2 million. Capital Improvement Program (SCIP) and applied an administration fee to the This amount is 23.5 percent or $211.2 bonds. Subject to the appropriation of fund. As a result, available funds are pro- million greater than the 2006 estimate of funds by the state, the RTA will contin- jected to be $36.3 million in 2006 and re- $900.0 million. Exhibit 2-11 illustrates ue to be eligible to receive State Financial main constant at that level in 2007. the expenditure distribution budgeted Assistance payments. Budgeted receipts for 2007. for 2007 are $122.8 million. Other Revenue This revenue category includes sales RTA Operations Funding Reduced Fare tax interest, investment income, finan- The RTA’s primary expenditure is the This operating assistance is partial re- cial transaction receipts, miscellaneous funding of Service Board operating defi- imbursement from the state to the Ser- revenue, and grant funds from state and cits. The deficit is the difference between vice Boards for discounts (mandated by local agencies for regional coordination a Service Board’s total system-generated law) provided to students, elderly and and technology initiatives. Total receipts revenue and its total operating expendi- disabled riders. The funds are distribut- in 2007 are budgeted at $14.7 million. tures. The sources of funds are Service ed by the state through the RTA to the Board formula sales tax receipts and/or Service Boards. RTA formula sales tax and PTF funds RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 37

Exhibit 2-9: RTA Statement of Revenue and Expenditures (dollars in thousands) RTA Discretionary Funds to Pace Revenue 2006 Estimate 2007 Budget The RTA continues to facilitate the Sales Tax $ 722,808 $ 745,937 integration of CTA and Pace fare media Public Transportation Fund (PTF) 180,702 186,484 by using additional RTA discretionary State Financial Assistance (SFA) 119,001 122,836 Reduced Fare Reimbursement 36,275 36,275 funds to fund a portion of Pace’s cost for Other Revenue 14,869 14,722 providing service to riders using certain New Transit Funding — 144,534 CTA passes. The amount of funding ap- Additional Funding for ADA Paratransit 54,252 81,810 Total Revenue $ 1,127,907 $ 1,332,598 propriated in 2006 was $2 million. The Operating Expenditures 2007 budget funds Pace $4 million for RTA Operations Funding to Service Boards $ 786,072 $ 811,915 this service. RTA Discretionary Funds to Pace 3,592 4,000 In July 2006, Pace became responsible New Transit Funding — 144,534 of all ADA paratransit operations in the Additional Funding for ADA Paratransit 42,451 81,810 Reduced Fare Reimbursement and Sales Tax Interest 37,125 37,125 region. To assist Pace with pre-start-up Agency Administration 6,932 7,360 transition costs the RTA provided Pace Regional Services and Coordination Programs 18,023 18,248 with additional funding of $1.6 million. Regional Technical Assistance Programs 5,804 6,170 Total Operating Expenditures $ 899,999 $ 1,111,162 New Transit Funding Debt Service and Capital Expenditures Principal and Interest 182,102 186,218 As discussed earlier, additional fund- Regional Technology and Agency Capital 7,270 7,499 ing resources are needed to balance the Transfer Capital—Additional Funding for ADA Paratransit 11,801 — operating budgets, and to maintain, en- Transfer Capital 22,191 23,802 Total Debt Service and Capital Expenditures $ 223,364 $ 217,519 hance and expand the system to meet Total Expenditures $ 1,123,363 $ 1,328,681 changing service needs across the region. Fund Balance (undesignated/unreserved) The Service Board 2007 budgets were Beginning Balance $ 1,654 $ 6,198 prepared with the expectation that New Change in Fund Balance 4,544 3,917 Transit Funding would be made avail- Ending Balance $ 6,198 $ 10,115 able during upcoming legislative sessions. % of Total Operating Expenditures 0.7 0.9 New Transit Funding totaling $144 mil- Recovery Ratio 52.7 50.4 lion is used to fund the operating deﬁ- Please reference the notes on Exhibit 3-1 in the Region section for more information regarding revenue, cits of the CTA, Metra and Pace in the operating expenditures, debt service and capital expenditures. amounts of $110 million, $11 million and Metra (RTA discretionary funds). Additional $23 million, respectively. information regarding Service Board def- Metra’s operating funding level from icits and the sources of public funding is the RTA in 2007 is budgeted at $257.4 Additional Funding for ADA Paratransit located in the RTA section. million, or 3.5 percent higher than the As previously discussed, the State of Total operations funding in 2006 is 2006 budget amount of $248.7 million. Illinois appropriated additional funds to $786.1 million. The combined budget for Metra funding does not include any RTA the RTA in the amount of $54.3 million operating funds to the Service Boards in discretionary funds. for ADA paratransit service and other 2007 totals $811.9 million which is 3.3 costs and services in 2005 and 2006. In Pace percent or $25.8 million greater than 2006 2005, the CTA received the full appropri- funding. RTA funding for each Service Pace’s operations funding from the ation. In 2006, the CTA and Pace shared Board in 2007 is shown below. RTA in 2007 is budgeted at $84.2 mil- the appropriation because Pace became lion, or 3.2 percent higher than the 2006 responsible for all ADA paratransit ser- CTA budget amount of $81.6 million. This vice in the region beginning July 1, 2006. The CTA’s operations funding level amount does not include funds for ADA Although not yet appropriated by the from the RTA in 2007 is budgeted at paratransit service. State, Pace’s 2007 budget deﬁcit of $81.8 $470.3 million, or 3.2 percent higher than million was funded with the expectation the 2006 budget amount of $455.8 million. that the State will continue to fully fund this service. 38 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 2-10: 2007 RTA Revenue Sources — $1,333 million Regional Technical Assistance Programs The RTA supports the growing de- New Transit and Additional ADA Paratransit–17% mand for technical assistance initiatives

Other–1% that encourage transit-oriented improve-

State Financial Assistance–9% ments in the region. Programs supported Sales Tax and PTF–70% include the Regional Technical Assistance Reduced Fare Reimbursement–3% Program (RTAP) and regional corridor studies. The budget for 2007 is $6.2 million, an increase of $0.4 million compared to expenditures in 2006 of $5.8 million. Exhibit 2-11: 2007 Operating Expenditures — $1,111 million Through partnerships with other state

Agency Administration–1% Reduced Fare and Sales Tax Interest–3% and local agencies, the RTA receives external funds that defray part of the pro- New Transit and ADA Paratransit–2 0% gram costs. These programs are discussed in more detail in the RTA section. RTA Regional Services and Prog rams–2% RTA Operations and Pace Pass–74% Total Debt Service & Capital Expenditures Total expenditures in 2007 of $217.5 million are projected to decline from the 2006 estimate of $223.4 million. This dif- Reduced Fare and Sales Tax Interest ly. The Agency’s spending estimates for ference is discussed below. State reduced fare reimbursements are 2006 and 2007 in the respective amounts received as revenue by the RTA, as previ- of $6.9 million and 7.4 million are signif- Principal and Interest ously described, and flow directly to the icantly below the cap. Principal and interest expenditures Service Boards to help defray program Information regarding Agency initia- increase by $4 million from $182.2 mil- costs. The 2007 budget level of $36.3 mil- tives and spending for administration, as lion in 2006 to $186.2 million in 2007. lion remains unchanged from the 2006 re- well as for regional services and coordi- The RTA issued the remaining balance imbursement. nation programs, regional technical assis- of bonds authorized by Illinois FIRST in Since there is a lag between when the tance programs and regional technology 2006 increasing debt service costs. State collects the RTA Sales Tax and when and Agency capital programs, is summa- it distributes the funds to the RTA, the rized below and discussed in more detail Regional Technology and Agency Capital RTA receives sales tax interest and dis- in the RTA section. The 2007 budget continues to fund burses 85 percent of these funds to the region-wide capital-driven technology Service Boards according to the same for- Regional Services and Coordination Programs initiatives and Agency programs. Pro- mula used for sales tax distribution. The The RTA coordinates and funds sev- gram expenditures include funds for sales tax interest distributed by the RTA eral region-wide initiatives that bring Transit Signal Priority, RTAMS, MMIK, has been favorably affected by rising sales together public transportation services. Transit Hub, ATSS expansion, Bus-Info tax receipts. Payments in 2006 and 2007 These programs include system maps, programs, and information system en- are estimated at $0.9 million. local advertising, the transit benefit pro- hancements for the Agency. The budget gram, the Travel Information Center for 2007 is $7.5 million an increase of $0.2 Agency Administration (TIC), ADA certification, Reduced Fare million compared to expenditures in 2006 In 1985, a statutory cap for admin- certification, and the Customer Service of $7.3 million. istrative spending was set at $5 million, Center. The total budget for these pro- Through partnerships with other state with a growth rate of 5 percent per year. grams in 2007 is $18.2 million, or $0.2 and local agencies, the RTA receives ex- The 2006 and 2007 cap allowance is $13.9 million more than 2006 spending. ternal funds that pay some portion of million and $14.6 million respective- these program costs. The RTA section discusses these initiatives in more detail. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 39

Transfer Capital— Exhibit 2-12: 2007 Total RTA Expenditures — $1,329 million Additional Funding for ADA Paratransit Capital–2% In 2006, the State of Illinois appro- De bt Service–1 4% priated $54.3 million for ADA paratransit services and other costs and services.

Of this amount, $42.5 million is used to Operating–84% fund operating expenditures and $11.8 million is appropriated for transfer capital. The $11.8 million is replaced by the transfer of an equal amount of Federal Section 5307 funds for operations. Funds Total Expenditures Beginning Fund Balance are not appropriated in 2007. Total RTA expenditures (operating, The beginning balance is the amount debt service and capital) for 2007 are bud- of the (General Fund) undesignated and Transfer Capital— RTA Funds geted at $1,328.7 million. This amount unreserved fund balance after the previ- The amount of funds appropriated in is 18.3 percent greater than the 2006 es- ous year’s results have been audited and 2006 and 2007 are $22.2 million and $23.8 timate of $1,123.4 million. Operating the accounting records are closed. All million, respectively. Two funding sourc- expenditures are 84 percent of total ex- statements in this document reflect 2005 es cover this category of expenditure, penditures, debt service is 14 percent, and actual results for the 2006 beginning bal- statutory and RTA discretionary. If the capital is 2 percent (Exhibit 2-12). ance. This amount is $1.7 million. statutory apportionment of sales tax to a Service Board exceeds its operating bud- Fund Balance Change in Fund Balance get the funds are transferred to its capi- In 1998, the RTA Board adopted an Total RTA revenue less total RTA ex- tal program. Statutory transfers in 2007 ordinance establishing a 5 percent mini- penditures produce an annual change to are not appropriated because sales tax re- mum level in the unreserved and undes- the fund balance, when revenue exceeds ceipts are not expected to be sufficient to ignated fund balance. If the amount is expenditures, the remainder is added to cover the operating deficits of the Service below 5 percent, the financial plan must the fund balance. If expenditures exceed Boards. Year-end results may provide show full replenishment by the end of the revenue, the fund balance is reduced by funds for Metra, and an amount of $0.7 current planning cycle. the deficit amount. In 2006 and 2007, total million is included in the 2006 estimate. The percentage is based on total oper- revenue is expected to exceed total expen- Since 1995, the RTA has transferred a ating expenditures for the year (as shown ditures by $4.5 million and $3.9 million, portion of its discretionary funds, avail- on Exhibit 2-9). The purpose of the or- respectively. able for region-wide capital or operating dinance was to formalize a practice of initiatives, to the CTA for capital invest- maintaining a level of available financial Recovery Ratio ment. The funding to the CTA in 2006 resources for funding during unfavor- The RTA Act requires the RTA Board for this program was $20.4 million and able economic periods. This policy has to set a recovery ratio for the next fiscal continues at that level for 2007. In 2006 proved its value as economic growth in (calendar) year for each Service Board. and 2007, the RTA appropriated funds to recent years has limited the increase of The RTA Act further requires that the assist Pace with the transition costs for sales tax receipts. combined revenue from RTA operations ADA paratransit service in the respective The ending fund balance for 2006 is cover at least 50 percent of the system op- amounts of $1.2 and $3.4 million. estimated to be $6.2 million, which is 0.7 erating cost. In meeting the 50 percent re- percent of the total operating costs. The covery ratio, The RTA Act requires that 2007 budget shows a year-end fund bal- the revenue figures include all receipts ance of $10.1 million or 0.9 percent of to- consistent with generally accepted ac- tal operating expenditures. The balance counting principles with certain specified at the end of 2009 is $67.4 million or 5.0 exceptions. Therefore, the revenue figure percent of total operating costs as shown used to determine whether the RTA sys- on Exhibit 3-1 in the RTA section. tem meets this 50 percent requirement 40 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 2-13: 2007 Capital Program Budget an established statutory cap. The Act CTA (dollars in millions) also requires that prudent fiscal practice Over the next five years, the CTA Service Board (1) be followed such as proper cash manage- plans to spend over $141 million on low- FTA (Federal) Capital Grants 501 State–IDOT Grants — ment, use of reasonable assumptions, and floor, fully accessible air-conditioned bus- New Transit Funds 49 sound accounting and financial practices to replace vehicles that entered service Service Board/Other Funds 31 es. Each Service Board, the Agency and in 1991 and 1995. Some of these 40-foot RTA Transfer Capital 24 Total Service Board Funding 605 the region as a whole have adopted bud- buses will be replaced by heavy duty 30- CTA Financing and Debt Repayment 95 gets that comply with these stipulations. foot buses that add flexibility for service Total Service Board Capital Program 700 in areas with narrow streets or extensive Tollway Credits Requested 61 Capital Program on-street parking. Purchase of replace- RTA Regional Technology and Capital 7 The capital program marks set by the ment buses provides both a more reliable (1) Service Board: Federal funds (FTA capital grants) RTA Board in September include esti- fleet and reduces expensive failure-based require a local match of at least 20 percent. The State has traditionally provided capital funding for matching mated figures that the Service Boards maintenance and fuel expenditures. purposes but the State, at this time, has not provided use in their program documents. When Also over the next five years, the CTA local matching funds. Tollway credits can be used as local match but they are not spendable funds and final federal appropriations numbers are will invest $126 million in its bus vehicle using them leaves critical projects underfunded. New Transit Funding for Operations on Exhibit 2-1 excludes determined, the RTA Board will con- overhaul program. Regular replacement capital program funding needs. If additional capital sider these changes and any other local of major mechanical components subject (New Transit) funds are not secured, Metra may need to amend their capital program. funding changes needed to bring the pro- to extensive wear will reduce operating gram in balance. The program will then costs and improve service. Bus mid-life includes not only all of the items con- be amended by RTA ordinance to align overhaul activities of $16.7 million in tained in the recovery ratio for the Ser- with the new marks. The five-year capi- 2007 and $84.5 million between 2008 and vice Board budgets, but also the net gain tal program of $2.8 billion is based on the 2011 will improve fleet reliability and re- on lease/leaseback transactions. The stat- funding sources available at this time and duce expensive breakdown-based repair utory calculations of 52.7 percent in 2006 discussed in more detail in the Capital expenditures. As more buses are over- and 50.4 percent in 2007 exceed the man- section of this document. Funds of $700 hauled, unscheduled maintenance will dated 50 percent. A detailed breakdown million are available for the 2007 capital be significantly reduced. of this calculation is provided in the RTA program (Exhibit 2-13). The $319 million purchase of new rail section (Exhibit 3-31). cars will allow the CTA to replace vehi- The RTA Act does not require a re- Capital Impact on Operations cles that have been in service for more covery ratio calculation for the two-year Capital investments by the three Ser- than 27 years and provide additional cars planning period. The 2008 and 2009 fi- vice Boards are intended to improve pub- to meet the service requirements of proj- nancial plans do not include sufficient lic transit service while reducing operating ects such as the Brown Line capacity ex- revenue to offset the level of operating costs. Procurement of replacement vehi- pansion. These replacement vehicles will cost increases to produce system-gener- cles for bus and rail fleets will improve help to lower the CTA’s average car age ated revenue recovery ratios of 50 percent. service reliability, while reducing mainte- of over 22 years and to reduce the pro- To achieve a 50 percent recovery ratio, a nance costs and fuel consumption. Simi- portion of vehicles that exceed the 25- combination of further revenue and/or larly, investments in vehicle overhaul and year FTA standard life of a rapid transit expenditure service standard enhance- preventive maintenance programs will car which now stands at approximately ments, and/or additional recovery ratio reduce service failures and vehicle down 29 percent at the CTA. The deteriorated operating expenditure exclusions, such as time. Rail line expansion and infrastruc- condition of these older vehicles is evi- security and pension, are needed. ture improvements will increase passenger dent from increased service failures and capacity and travel speed, as well as im- longer repair downtime which results in Statutory Compliance prove safety. System-wide improvements, decreased availability for service. The RTA Act requires that the CTA, including upgrades in passenger and main- Metra and Pace each have a balanced bud- tenance facilities, communications and get; the region’s recovery ratio is at least computer equipment, and security sys- 50 percent; and the RTA (Agency) ad- tems, will improve employee productivity, ministrative expenditures do not exceed operating efficiency and passenger safety. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 41

Between 2007 and 2011, the CTA plans Metra The 55-mile initial segment of the pro- to spend $267 million to rebuild existing The proposed $144 million Union posed $1.1 billion Suburban Transit Ac- rail cars and improve rail car accessibility Pacific Northwest (UP-NW) Line excess Route (STAR) Line will link nearly for customers. Systematic maintenance pansion project will upgrade the infra- 100 communities in the northwest, west, and upgrading of the fleet reduces oper- structure, expand service, increase train and southwest suburbs. Creating an inter- ating costs and enhances reliability. The speed, and lower maintenance costs on suburban transportation grid by connect- CTA has embarked on an aggressive pro- this 71-mile line. Extending service from ing with existing rail routes, the STAR gram to schedule replacement of parts McHenry to Johnsburg will provide ac- Line will attract new riders throughout nearing the end of their useful life before cess to employment centers and to resi- the RTA transit network with improved they fail in service. Without quarter-life dents of eastern McHenry and western access to more than half a million jobs in and mid-life overhauls, rail vehicle main- Lake Counties. Rail yards in Woodstock the Northwest Corridor. tenance costs would be three times the and Johnsburg and infrastructure im- current level averaged over the expected provements along the route will increase Pace twenty-five year life of each car. Main- reverse commuting options. The $18 million system-wide replace- tenance costs will stabilize as more rail The $385 million Union Pacific West ment radio system programmed over five cars are included in the preventive main- (UP-W) Line infrastructure improve- years will reduce operating costs and im- tenance program. ments will increase the service capacity, prove communications coverage. Finding Replacement and upgrading of signal speed, and reliability of the UP-W Line. parts for the existing 13-year old system and power distribution system must be A continuous three-track route between is increasingly difficult. accomplished in order to provide con- West Chicago and downtown Chicago, The $2.6 million continuation funding tinued safe operation, decrease the pos- new rail crossovers, upgraded signal sys- for the development and purchase of Tran- sibility of power shutdowns and service tems, and other track improvements will sit Signal Priority (TSP) systems in ma- disruptions, and eliminate slow zones. improve flexibility. The replacement and jor corridors will reduce operating costs Repair of defective track and structure relocation of the A-2 crossing, the busiest and travel times for fixed route service. will help maintain safe and reliable ser- rail crossing in northeastern Illinois, will Improvements to garages and facili- vice. Replacement of track components ease bottlenecks and decrease travel times ties of $2.5 million include replacements and ties will reduce the need to impose on the UP-W Line and enable Metra to of concrete, fire sprinklers, security sys- slow zones due to their deteriorating con- expand daily service from 59 to as many tems, overhead doors, and other equip- dition. Due to the age, usage, and struc- as 80 trains and express service form 20 ment. Safer and more secure facilities will tural condition of several rail stations, to as many as 30 trains per day. Restruc- improve productivity and reduced insur- replacement or rehabilitation is required turing the A-2 crossing will also ease con- ance and claims expenditure. in order to maintain acceptable levels of gestion on Metra’s BNSF Line. Purchases of garage tools, office service. Upon completion, these stations The proposed $524 million, 33-mile equipment and furniture, and non-rev- will be fully ADA compliant. South East Service (SES) Line connect- enue vehicles totaling $1.5 million to re- With a total budget of $530 million, ing Will County, south suburban Cook place outdated equipment will reduce the Brown Line capacity expansion is the County, and the Chicago Central Busi- maintenance and repair expenditures and CTA’s largest capital construction proj- ness District will stimulate economic other operating costs. ect to date. Extending station platforms development in communities along the Continuation funding of $2.6 million at 18 stations to accommodate eight-car south suburban corridor. By relieving for computer equipment and systems in- trains will increase capacity by up to 33 automobile congestion, the SES Line will cludes the HPe3000 Migration proj- percent. The Brown Line shares stations reduce annual construction and mainte- ect and Phase I of the Interactive Voice with both the Purple and Red lines. nance costs of nearby highways by $4 Response (IVR) software. These infor- Installation on 435 buses of automatic million. Construction of the SES Line is mation technology investments will pro- passenger counters that track where cus- expected to generate 550 jobs, $262 mil- vide both Pace personnel and passengers tomers board and alight will assist the lion in wages, and $550 million in Illinois more current and accurate information CTA in determining how best to improve business sales over a ten-year period. on which to make decisions. service to meet customer needs. 42 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 43

3 RTA Operating Plan 44 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 45

Region Operating Plan

Budget and Financial Plan The sales tax is the equivalent of 1 per- therefore, projected to increase at the sales The RTA must prepare and publish a cent on sales in Cook County and 0.25 tax growth rate. For every four dollars document every year that includes a one- percent on sales in DuPage, Kane, Lake, that is collected in sales tax, the RTA re- year operating budget, a two-year finan- McHenry and Will counties. The 1 per- ceives an additional dollar in PTF. cial plan, and a five-year capital program cent sales tax in Cook County is com- None of the PTF revenue is payable to meet specific statutory requirements. prised of 1 percent on food and drugs to the RTA until it certifies to the Gov- This document fulfills the responsi- and 0.75 percent from all other sales, with ernor, State Comptroller and Mayor of bility. Exhibit 3-1 provides a summary the State then providing a “replacement” the City of Chicago that it has adopted of the RTA’s statement of revenue and amount to the RTA equivalent to 0.25 a budget and financial plan as called for expenditures for 2005-2009. Throughout percent of all other sales. The RTA retains by the RTA Act. The amounts that each this document, 2005 is actual data, 2006 15 percent of the total sales tax and dis- Service Board receives through the RTA is the estimate of year-end results, 2007 tributes the remaining 85 percent to the from the PTF are allocated at the discre- is the operating budget, and 2008-2009 is Service Boards according to the formula tion of the RTA Board upon the review the two-year financial plan. specified in the RTA Act (Exhibit 3-3). and approval of each Service Board’s an- Exhibit 3-4 breaks out the 2005 sales nual or revised budget. Revenue tax distribution by Service Board. In Total revenue is projected to grow 2005, the $700 million in sales tax was State Financial Assistance ( SFA) from $1.096 million in 2005 to $1.603 broken out in the following manner: CTA This revenue source is state-autho- million in 2009 (Exhibit 3-1). This is an 39 percent, Metra 35 percent, Pace 11 per- rized assistance to reimburse the debt increase of $507 million over the four- cent, and RTA 15 percent. Sales tax is pro- service expenses for the RTA’s Strategic year period, or a 10.0 percent compound jected to increase from $700 million in Capital Improvement Program (SCIP) annual growth rate. 2005 to $794 million in 2009, a compound bonds. Subject to the appropriation of The RTA Sales Tax is the primary growth rate of 3.2 percent (Exhibit 3-5). funds by the State, the RTA will contin- source of revenue for the RTA. In 2005, The 2007 sales tax budget was devel- ue to be eligible to receive State Financial RTA Sales Tax receipts of $700 million oped after assessing the state and local Assistance (SFA) payments. The RTA comprised 64 percent of the RTA’s total economic trends. After reviewing this received $111.4 million in 2005 and esti- revenue. Public Transportation Funds data, the RTA applied a growth rate of mates $119.0 million in 2006, $122.8 mil- (PTF), State Financial Assistance (SFA), 3.2 percent to its 2006 estimate of $723 lion in 2007, $125.2 million in 2008, and State Reduced Fare (RF), and other rev- million producing revenue of $746 mil- $127.5 million in 2009. enue provided the balance of RTA reve- lion for the 2007 budget. nue, totaling $396 million, or 36 percent From a geographic standpoint, the Reduced Fare F(R ) (Exhibit 3-2). City of Chicago accounted for 30 percent This operating assistance is partial re- of the sales tax collected in 2005, subur- imbursement from the State to the Service Sales Tax ban Cook 55 percent, and the collar coun- Boards for discounts (mandated by law) The RTA Sales Tax is authorized by ties 15 percent (Exhibit 3-6). provided to students, elderly and disabled Illinois statute and imposed by the RTA riders. The funds are distributed by the in the six-county northeastern Illinois re- Public Transportation Funds (TFP ) State through the RTA and then to the gion. The RTA Sales Tax is collected by Revenue from this special fund may Service Boards. the Illinois Department of Revenue, paid be paid to the RTA only upon state ap- The Illinois General Assembly passed to the Treasurer of the State of Illinois propriation. In accordance with the RTA legislation in 1989 that provided funds to and held in trust for the RTA outside the Act, the State Treasurer is authorized and reimburse the Service Boards for the cost State Treasury. Proceeds from the RTA required to transfer from the State’s Gen- of providing reduced fares for passengers Sales Tax are paid directly to the RTA on eral Revenue Fund an amount equal to in the above-mentioned categories. The a monthly basis, without appropriation, 25 percent of net revenue realized from fare reimbursement is included in revenue by the State Treasury on the order of the sales taxes. These receipts are based on a and became available in July 1989. State Comptroller. formula tied to sales tax results and are, 46 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 3-1: RTA Statement of Revenues and Expenditures General and Agency Funds (dollars in thousands) System-Generated Revenue (1) 2005 Actual 2006 Estimate 2007 Budget 2008 Plan 2009 Plan Sales Tax $ 700,395 $ 722,808 $ 745,937 $ 769,807 $ 794,440 Public Transportation Fund 175,668 180,702 186,484 192,452 198,610 State Financial Assistance 111,419 119,001 122,836 125,180 127,500 Reduced Fare Reimbursement 37,127 36,275 36,275 36,275 36,275 Other Revenue 17,196 14,869 14,722 14,400 14,350 New Transit Funding — — 144,534 225,748 331,927 Additional Funding for ADA Paratransit 54,252 54,252 81,810 91,627 99,893 Total Revenue $ 1,096,057 $ 1,127,907 $ 1,332,598 $ 1,455,489 $ 1,602,995 Ope rating Expenditures (2) RTA Operations Funding to Service Boards $ 762,412 $ 786,072 $ 811,915 $ 837,880 $ 864,648 RTA Discretionary Funds to Pace 3,000 3,592 4,000 4,000 4,000 New Transit Funding — — 144,534 202,103 308,282 Additional State Funding–RTA Discretionary 54,252 42,451 81,810 91,627 99,893 Reduced Fare Reimbursement/Sales Tax Interest 37,900 37,125 37,125 37,125 37,125 Agency Administration 6,379 6,932 7,360 7,596 7,839 Regional Services and Coordination Programs 15,523 18,023 18,248 18,832 19,435 Regional Technical Assistance Programs 4,436 5,804 6,170 6,368 6,571 Total Operating Expenditures $ 883,902 $ 899,999 $ 1,111,162 $ 1,205,531 $ 1,347,794 Debt Service and Capital Expenditures (3) Principal and Interest $ 188,211 $ 182,102 $ 186,218 $ 195,157 $ 196,305 Regional Technology and Agency Capital 8,739 7,270 7,499 7,735 7,980 Transfer Capital 27,136 33,992 23,802 20,353 20,353 Total Debt Service and Capital Expenditures $ 224,086 $ 223,364 $ 217,519 $ 223,245 $ 224,638 Total Expenditures $ 1,107,988 $ 1,123,363 $ 1,328,681 $ 1,428,776 $ 1,572,432 Fund Balance (undesignated/unreserved) (4) Beginning Balance $ 12,507 $ 1,654 $ 6,198 $ 10,115 $ 36,828 Change in Fund Balance (10,853) 4,544 3,917 26,713 30,563 Ending Balance $ 1,654 $ 6,198 $ 10,115 $ 36,828 $ 67,391 Total Operating Expenditures % 0.2 0.7 0.9 3.1 5.0 Recovery Ratio % 52.6 52.7 50.4 N/A N/A

Notes: (1) The amounts available to the Service Boards for operations in 2007 are predicated on securing additional funding (“New Transit Funding”), and to the extent that such New Transit Funding is not obtained, the Service Boards will have to take actions to balance their operating budgets that may include, but are not limited to, utilizing federal formula capital funds to cover operating expenses, adjusting service levels, and adjusting fares. In 2006, the State of Illinois appropriated $54.3 million for ADA paratransit services and other costs and services. Of this amount, $42.5 million is used to fund operating expenses and $11.8 million is appropriated for Transfer Capital and the $11.8 million is replaced by transfer of Federal 5307 funds. The amount available to Pace for 2007 is predicated on the RTA continuing to receive funding from the State of Illinois or other sources for ADA paratransit services and other costs and services and are also predicated on securing additional funds and achieving cost savings, from funding sources and cost efficiencies that may have been identified in the RTA-Pace Memorandum of Understanding entered into in June 2006, or that may be identified by the paratransit plan now being developed by the RTA in cooperation with Pace, CTA and the Illinois Department of Transportation pursuant to Section 2.30(f) of the RTA Act. (2) Sales tax interest is $0.9 million. Appropriated Regional Technical Assistance program funds that remain unspent at the end of the year continue to be available for this purpose without subsequent appropriation action. (3) Principal and interest includes reserves/expense reclassifications for debt service/ interest. Appropriated Regional Technology and Agency Capital program funds that remain unspent at the end of the year continue to be available for this purpose without subsequent appropriation action. (4) The change in fund balance for 2005 includes program expenditure de-obligations and/or re-obligations incurred during the year.

In the State’s 2000 fiscal year budget, Other Revenue cash balances and prevailing market rates. the reimbursement level was increased The other revenue category consists of The RTA’s cash balance is primarily com- from $20 million to $40 million. In 2002, sales tax interest, investment income, and posed of funds reserved in prior years for the State reduced its fiscal year funding Agency revenue. Total receipts in 2007 are various Service Board capital projects and to $36 million. In 2003, funding was re- budgeted at $14.7 million. associated RTA financial transaction pro- turned to $40 million, less a 2 percent (or The State pays interest on sales tax re- ceeds. This revenue source is budgeted at $0.8 million) administrative fee. In 2004, ceipts to the RTA from the time of collec- $8.4 million for 2007. the State again reduced its fiscal year re- tion until it is disbursed to the RTA. The Agency revenue of $5.4 million for imbursement. The amount was $38 mil- RTA then disburses this interest to the 2007 includes the fees charged to em- lion less a 2 percent administrative fee. As Service Boards based on the RTA Sales ployers for RTA Transit Checks. These a result, available funds were $37.1 million Tax formula. In 2007, sales tax interest fees offset the costs of administering this in 2005 and remain constant at $36.3 mil- is budgeted at $0.9 million. RTA invest- program. Also included in Agency rev- lion from 2006 through 2009. ment income is dependent on available enue is matching funds obtained under RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 47

Exhibit 3-2: 2005 RTA Sources of Revenue— $1,096 million Exhibit 3-5: RTA Sales Tax (dollars in millions)

PTF–16% 800 794

770

Other–7% 750 746

RF–4% 723 Sales Tax–64% 700 700

federal, state and local programs for re- Additional State Funding for ADA Paratransit 650 gional planning, development and new In 2005 and 2006, the State of Illi- technology efforts. nois appropriated additional funds to the RTA for ADA paratransit service 600 New Transit Funding and other costs and services. The appro- The Service Board budgets and fi- priation for each year was $54.3 million. nancial plans were prepared with the However, growing service demands and 550 2005 2006 2007 2008 2009 expectation that New Transit Fund- increased operating costs have out-paced ing would be made available through this level of funding. The 2007 budget and Operating Expenditures upcoming State legislation. However, 2008-2009 financial plans were developed there is no guarantee that such funds envisioning continuance of state appro- Exhibit 3-1 provides a summary of will be forthcoming. In that event, fo- priations that fully fund the service defi- the RTA’s operating expenditures from cus must shift to a constrained system cit. Un-appropriated funds in the amount 2005 through 2009. Total operating ex- which provides fewer service options. of $81.8 million balance the proposed penditures are projected to grow from Un-appropriated funds totaling $144.5 2007 budget for ADA paratransit ser- $884 million in 2005 to $1.348 million in million balance the Service Boards pro- vice. The amounts needed for 2008 and 2009. This is an increase of $464 million posed 2007 budgets. 2009 are $91.6 million and $99.9 million, over the four-year period, or a 11.1 per- To balance the two-year financial plan respectively. cent compound annual growth rate. and achieve an unreserved/undesignated RTA fund balance that totals 5 percent of Exhibit 3-4: 2005 RTA Sales Tax Distribution by Service Board — $700 million all operating expenditures by the end of RTA–15% the planning period requires New Tran- sit funds of $225.7 million in 2008 and Pace–11% CTA–39% $331.9 million in 2009. The amount of funds that brings the RTA’s fund balance to its required level by the end of 2009 totals $47.3 million which is equally divided Metra–35% in the 2008 and 2009 financial plan.

Exhibit 3-3: RTA Sales Tax Collected (in percent) Exhibit 3-6: 2005 RTA Sales Tax Collection by Area — $700 million

CTA Metra Pace Total Collar–15% Chicago 100 0 0 100 Chicago–30% Suburban Cook 30 55 15 100 Collar Counties 0 70 30 100

Suburban Cook–55% 48 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Operations Funding A detailed discussion of each Service the appropriation because Pace became The RTA’s primary expenditure is the Board’s revenues and expenditures is pro- responsible for all ADA paratransit ser- funding of the Service Boards’ operating vided in the CTA, Metra and Pace sec- vice in the region beginning July 1, 2006. deficits. An operating deficit is the differ- tions of this document. Although not yet appropriated by the ence between a Service Board’s system- State, Pace’s 2007 budget and two-year fi- generated revenue (fare box and other RTA Discretionary Funds to Pace nancial plan deficits were funded with the revenue) and system operating expendi- The RTA continues to facilitate the in- expectation that the State will fully fund tures. Exhibit 3-7 presents the operations tegration of CTA and Pace fare media by this service. The amount of funds need- funding level for the three Service Boards. using additional RTA discretionary funds ed to balance the ADA paratransit service From 2005 to 2009, Service Board opera- to fund a portion of Pace’s cost for pro- budget from 2007 through 2009 is $81.8 tions funding from the RTA is expected viding service to riders using certain CTA million, $91.6 million and $99.9 million, to increase from $762.4 million to $864.6 passes. The amount of funding appropri- respectively. Exhibit 3-8 illustrates the million. This $102.2 million increase rep- ated in 2005 and 2006 was $2 million. The combined amount of New Transit and resents a compound annual growth rate 2007 budget and two-year financial plan ADA paratransit funds required to bal- of 3.2 percent. funds Pace $4 million for this service. ance Service Board operations from 2005 RTA operations funding to the Ser- In July 2006, Pace became responsi- through 2009. Combined funding from vice Boards from 2007 through 2009 is ble of all ADA paratransit operations in New Transit sources and for ADA para- as follows: The CTA’s funding is $470.3 the region. To assist Pace with transition transit service increases from $54 million million, $485.4 million, and $500.9 mil- costs the RTA provided Pace with addi- in 2005 to $408 million in 2009 (Exhib- lion. Metra’s amount during this period tional funding of $1.0 million in 2005 and it 3-8). is set at $257.4 million, $265.6 million and $1.6 million in 2006. $274.0 million. For Pace the amounts for Reduced Fare and Sales Tax Interest the 2007 budget and 2008-2009 financial New Transit Funding State reduced fare reimbursements are plan (which do not include ADA para- As discussed earlier, additional fund- received as revenue by the RTA and flow transit service funding) are $84.2 mil- ing resources are needed to balance the directly to the Service Boards to help de- lion, $86.9 million and $89.7 million. operating budgets and to maintain, en- fray program costs. The reimbursement Total funding for the 2007 budget and hance and expand the system to meet level of $36.3 million from 2006 through 2008-2009 financial plan is provided in changing service needs across the region. 2009 is not expected to fully cover the the Strategy section (Ordinance 2006- The Service Board 2007 budgets and two- cost of this program. In 2005, the State’s 78, Schedule I-B). year financial plans were prepared with Reimbursement was $37.1 million. the expectation that New Transit Fund- Exhibit 3-7: RTA Operations Funding ing would be made available during up- Exhibit 3-8: Additional Funding Needs— (dollars in millions) New Transit, ADA Paratransit 880 coming legislative sessions. New Transit 450 865 (dollars in millions) Funding in 2007 totaling $144.5 million 408 838 400 840 is used to fund the operating deficits (ex-

812 cluding ADA paratransit service) of the 350 800 Service Boards. This amount increases 786 to $202.1 million in 2008 and to $308.3 300 294 762 million in 2009. 760 250 226 Additional State Funding– RTA Discretionary 720 200 As previously discussed, the State of Illinois appropriated additional funds to 150 680 the RTA in the amount of $54.3 million 100 for ADA paratransit service and other 640 54 54 costs and services in 2005 and 2006. In 50 2005, the CTA received the full appropri- 600 ation. In 2006, the CTA and Pace shared 0 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 49

There is a lag between when the State lion. An increase of $0.2 million over the Regional Technology and Agency Capital collects the RTA Sales Tax and when the 2006 estimate. Expenses are projected to The 2007 budget continues the RTA’s State transfers it to the RTA. The RTA re- grow to $19.4 million in 2009. commitment to region-wide capital-driv- ceives interest on this sales tax, and then en technology enhancements. Like re- disburses 85 percent of the interest to the Regional Technical Assistance Programs gional technical assistance programs, the Service Boards according to the same for- The RTA supports the growing de- regional technology programs are coor- mula used for sales tax distribution. In mand for technical assistance initiatives dinated efforts with other state and local 2006, the estimate for sales tax interest that encourage transit-oriented improve- agencies which help support these ef- is $0.9 million and is projected to remain ments in the region. Programs supported forts. Program costs are projected at $5.1 flat from 2007 through 2009. The amount include the Regional Technical Assis- million and are offset by state and local in 2005 was $0.8 million. tance Program (RTAP) and regional cor- funds of $1.6 million. At the end of the ridor studies. year, any funds that have not been spent Agency Expenditures In partnership with other state and are reserved. Spending for Agency administration, local agencies, the RTA receives exter- Included in this category are expendi- regional services and coordination pro- nal funds that defray part of the program tures for the Agency’s capital needs. The grams, and regional technical assistance costs. Estimated receipts of $1.6 million amount remains constant throughout the programs is summarized below and dis- in 2006 cover program expenditures of 2007-2009 planning period. These annual cussed further in the Agency portion $6.2 million with the remaining $4.4 mil- funds, which total $2.4 million per year, of this section. Agency capital expendi- lion provided by the RTA. In 2007, the are used to enhance various information tures for regional technology programs RTA budget shows expenditures of $6.4 technology programs and leasehold im- and internal needs are summarized later million offset by $2.4 million in other provements. in this section. revenue leaving a balance of $3.8 million funded by the RTA. Transfer Capital Agency Administration Two funding sources cover this cate- Debt Service and Capital Expenditures In 1985, a statutory cap for admin- gory of expenditure, statutory and RTA istrative spending was set at $5 million, Exhibit 3-1 provides a summary of discretionary. The statutory apportion- with a growth rate of 5 percent per year. the RTA’s debt service and capital ex- ment of sales tax to a Service Board can The 2006 cap allowance is $13.9 million. penditures from 2005-2009. Total ex- exceed its operating marks. When this The Agency administration estimate in penditures in this category are projected occurs, the Service Board transfers these 2006 of $6.9 million is less than 50 per- to grow from $224.1 million in 2005 to statutory funds to its capital program. cent of the cap. The cap allowance in 2007 $224.6 million in 2009. Since 1995, the RTA has transferred a is $14.6 million, and Agency spending of portion of its discretionary funds, avail- $7.4 million is significantly less than this Principal and Interest able for operations, to the CTA for capital amount, and this trend continues through Principal and interest payments re- investment. From 1995 through 1997, the the 2009 planning period. flect the RTA’s expenditures and project- program was funded at an annual level of ed expenditures from 2005 through 2009. $11 million. In 1998, CTA’s funding for Regional Services and Coordination Programs Payments increase from $188.2 million in this program was increased to $16.5 mil- The RTA coordinates and funds sev- 2005 to $196.3 million in 2009. The RTA lion. The CTA transfer capital program eral region-wide initiatives that bring issued the remaining balance of bonds was funded at $19.2 million in 1999 and together public transportation services. authorized by the Illinois First program increased to $20.4 million in 2000 and re- These programs include system maps, in 2006, thereby increasing debt service mains at this level through the 2009 plan- local advertising, the transit benefit pro- costs. Projected State Financial Assis- ning period. In 2005, total transfer capital gram, the Travel Information Center tance (SFA) for the SCIP bond program was $27.1 million. In 2006, total transfer (TIC), ADA certification, Reduced Fare helps defray about 62 percent of debt ser- capital is $34.0 million. The CTA and Certification, and the Customer Service vice cost. Additional bond information is Pace receive RTA discretionary funds of Center. The budget for 2007 is $18.2 mil- provided at the end of this section. $32.2 and $1.2 million, respectively. Me- tra’s statutory portion, based on current sales tax trends, could reach 0.7 million. 50 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 3-9: RTA Ending Unobligated ed funds. The 2005 ending balance was Change In Fund Balance and Unreserved Fund Balance 75 (dollars in millions) $1.7 million. The estimated ending bal- Total RTA revenue less total RTA ex- 67 ance for 2006 is $6.2 million. The ending penditures produces a change to the fund balances for the 2007 budget and two- balance. When revenue exceeds expendi- year fi nancial plan (2008 to 2009) are tures, the gain is added to the fund bal- $10.1 million, $36.8 million, and $67.4 ance. If expenditures exceed revenue, the 50 million, respectively (Exhibit 3-9). The defi cit reduces the fund balance. The 2006 unreserved and undesignated fund bal- projection indicates a surplus amount of 37 ance for the planning period meets the $4.5 million. From 2007 through 2009, policy requirements by achieving a bal- revenue is estimated to exceed expendi- ance of 5.0 percent in 2009. Fund balance tures and increase the unreserved fund 25 policy details are outlined at the Strate- balance to 5.0 percent of total operating gy section. expenses by the end of the 2009. Chang- The ending balance is determined by es in revenue over expenditures, other 10 6 increasing or decreasing the beginning fi nancing use, and capital grant expendi- 2 fund balance by the annual difference be- tures on a GAAP versus budgetary basis 0 tween revenue and expenditures and the are reconciled at the end of each year. The 2005 2006 2007 2008 2009 de-obligation and/or re-obligation of cer- 2005 year-end reconciliations resulted in For 2007,the total transfer capital is tain program funds. a change to the fund balance of $10.9 mil- $23.8 million allocated to CTA in the lion (Exhibit 3-29). amount of $20.4 million and Pace $3.4 Beginning Balance million. From 2008 through 2009, the The beginning balance is the amount Recovery Ratio amount of $20.4 million is RTA discre- of funds in the undesignated and unre- The RTA Act requires the RTA Board tionary funds to the CTA. served fund balance after the previous to set a recovery ratio for the next fi scal year’s results have been audited and the year for each Service Board. The RTA Total Expenditures accounting books are closed. All state- Act further requires that the combined Total RTA expenditures include all ments in this document refl ect 2004 ac- revenue from RTA operations cover at operating, debt service and capital pro- tual results of $12.5 million as the 2005 least 50 percent of the system operating gram costs. From 2005 through 2009, beginning balance. cost. The RTA’s system-generated reve- these expenses are projected to increase nue recovery ratio in 2005 was 52.6 per- from $1.1 billion to $1.6 billion. This Exhibit 3-10: System-Generated Revenue cent. This statutory calculation computes Recover Ratio (percent) represents a compound growth rate of 53 to more than 2.6 percentage points above 9.2 percent. 52.7 the mandated 50 percent. The ratio is esti- 52.6 mated to be 52.7 percent in 2006 and 50.4 Fund Balance percent in 2007. In 1998, the RTA Board adopted an In meeting the 50 percent recovery ra- ordinance establishing a minimum lev- 52 tio, the RTA Act requires that the revenue el in the unreserved and undesignated fi gures include all receipts consistent with fund balance of 5 percent of total oper- generally accepted accounting principles ating expenditures. The purpose of the with certain specifi ed exceptions. There- ordinance was to formalize a practice of fore, the revenue fi gure used to determine maintaining a level of fi nancial resources 51 whether the RTA system meets this 50 available for funding during unfavorable percent requirement includes not only all economic periods. of the items contained in the recovery ra- 50.4 The RTA Board manages the expen- tio for the Service Board budgets, but also diture of funds to arrive at a planned the net gain on lease/lease-back transac- 50 balance of unreserved and undesignat- tions, and the 1989 Metra fare increase 2005 2006 2007 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 51

which has been restricted for capital in- Exhibit 3-11: RTA 2006 Statement of Revenues and Expenditures General and Agency Fund (dollars in thousands) vestment. Beginning in 2005, this revenue Revenue 2006 Budget 2006 Estimate Change source is included in Metra’s recovery ra- Sales Tax $ 719,900 $ 722,808 $ 2,908 tio calculation. A detailed breakout of this Public Transportation Fund 179,975 180,702 727 calculation is provided in Exhibit 3-31 at State Financial Assistance 119,001 119,001 — the end of this section. Reduced Fare 36,275 36,275 — Additional State Funding for ADA Paratransit 54,252 54,252 — Other Revenue 14,869 14,869 — 2006 Budget Versus 2006 Estimate Total Revenue $ 1,124,272 $ 1,127,907 $ 3,635 Total RTA revenue of $1,127.9 million Operating Expenditures is projected to be $3.6 million more than Operations Funding $ 786,072 $ 786,072 — the 2006 budget of $1,124.3 million. Sales RTA Discretionary Funds to Pace 3,592 3,592 — Additional State Funding–RTA Discretionary 42,451 42,451 — tax and associated PTF revenues are ex- Reduced Fare 36,275 36,275 — pected to be $3.6 million more than plan Sales Tax Interest 850 850 — due to the recovering economic environ- Agency Administration 6,697 6,932 235 Regional Services and Coordination Program 18,090 18,023 (67) ment (Exhibit 3-11). Regional Technical Assistance and Coordination 5,986 5,804 (182) Total operations expenditures of $900 Total Operating Expenditures $ 900,013 $ 899,999 $ 4(1) million are projected to be on par with Debt Service and Capital Expenditures budget. Principal and Interest $ 180,401 $ 182,102 $ 1,701 Regional Technology & Agency Programs 7,270 7,270 — Capital Program Transfer Capital–Additional Funding for ADA Paratransit 11,801 11,801 — At the present time, the 2007-2011 Transfer Capital 21,507 22,191 684 capital program funding marks total $2.8 Total Debt Service and Capital Expenditures $ 220,979 $ 223,364 $ 2,385 billion. When federal, state or local ap- Total Expenditures $ 1,120,992 $ 1,123,363 $ 2,371 propriation ﬁgures change, the Service Fund Balance (undesignated/unreserved) Boards’ capital programs may not match Beginning Balance $ 1,654 $ 1,654 — Change in Fund Balance 3,280 4,544 1,264 the program marks. Ending Balance $ 4,934 $ 6,198 $ 1,264 When this occurs, the RTA Board % of Total Operating Expenditures 0.5 0.7 0.1 considers ordinances that incorporate all changes and bring the Service Board programs in balance with the marks. De- tailed Service Board program information is provided in the Capital section of this publication. 52 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Agency Operating Plan

Budget and Financial Plan by Category fringe benefits. Sixteen percent is used regional service and coordination pro- The Agency budget and financial to cover office costs for rent, utilities, grams. Eighteen percent of the funds are plan (Exhibit 3-12) encompasses four supplies, postage, equipment leases, tele- used for region-wide coordination pro- primary categories: Agency administra- phone, and maintenance. Audit fees are 7 grams that work to increase ridership tion, regional services and coordination percent and the 2 percent balance covers and system awareness, and 47 percent is programs, regional technical assistance other costs such as professional member- for defined regional service programs (e.g. programs, and regional technology and ships and publications. Travel Information Center, Americans Agency capital programs. Expenditures Fringe benefit expenditures, which are with Disabilities Act, Reduced Fare, Cus- in 2005 totaling $35.1 million are expect- 46 percent of salaries, have been primari- tomer Service Center and Transit Check). ed to increase to $41.8 million by the end ly affected by rising group life and medi- These Regional Services programs are of the 2009 planning period, an annual cal insurance premiums and pension plan discussed later in the section. growth rate of 4.5 percent. Combined expenses in recent years. Seventy percent Administrative and Capital program of fringe benefit expenditures are insur- Regional Technical Assistance Programs spending for the Agency increases 1.1 ance and pension plan payments. The re- Regional technical assistance programs percent, while combined regional services maining 30 percent is primarily used to serve the entire region. Major program and coordination programs and regional cover employer payroll taxes. initiatives include: Strategic Planning, technical assistance programs spending In 1985, a statutory cap for admin- the Regional Technical Assistance Pro- increases 6.8 percent, as the Agency en- istrative spending was set at $5 million, gram (RTAP) and the Regional Transit hances efforts to coordinate and improve with a growth rate of 5 percent per year. Coordination Plan (RTCP). Program de- the region’s public transit system. The 2007 cap allowance is $14.6 million. tails are outlined later on in the section. The Agency’s budget for 2007 is $39.3 Agency spending of $7.4 million is well Through joint efforts with other million. Nineteen percent is for Agen- below the cap. state and local agencies, the RTA is able cy administration, 46 percent is used to offset a portion of a program’s fund- for regional services and coordination Regional Services and Coordination Programs ing requirement with revenue from these programs, 16 percent covers regional Expenditures for regional services and entities. Receipts are posted as revenue in technical assistance programs, and 19 per- coordination programs were $15.5 million the general fund and are included in the cent is for regional technology and Agen- in 2005 and are projected to close just un- “other revenue” line item figure shown cy programs (Exhibit 3-13). der budget in 2006 at $18.0 million. During on Exhibit 3-1. the 2007-2009 planning period, expendi- Program costs in 2005 were $4.4 mil- Agency Administration tures are expected to average $18.8 million and are projected to be $6.2 million Agency administrative expenditures lion. Cost estimates for the 2007 budget in 2007. Reimbursements from state and of $6.4 million in 2005 are expected to are $18.2 million, apportioned by category local agencies, which cover 39 percent of increase at an annual rate of 5.3 percent as follows: salaries and fringes 26 percent, total program costs, lower RTA’s funding through 2009 producing costs of $7.8 office services 12 percent, regional servic- contribution. The state and local contri- million. Expenditures in 2007 of $7.4 es and coordination programs 62 percent. bution projected in 2007 is $2.4 million million are 6.2 percent higher then the The split of regional services and co- leaving a net annual use of RTA funds of 2006 estimate. ordination programs expenditure is as $3.8 million. At year-end, any unspent Seventy-five percent of Agency ad- follows: Regional management costs to- funds are reserved to cover the needs of ministrative costs are for salaries and taling 35 percent are divided between longer-term projects.

Exhibit 3-12: Agency Expenditures by Category (dollars in thousands) 2005 Actual 2006 Estimate 2007 Budget 2008 Plan 2009 Plan Agency Administration $ 6,379 $ 6,932 $ 7,360 $ 7,596 $ 7,839 Regional Services and Coordination Programs 15,523 18,023 18,248 18,832 19,435 Regional Technical Assistance Programs 4,436 5,804 6,170 6,368 6,571 Regional Technology and Agency Programs 8,739 7,270 7,499 7,735 7,980 Total Expenditures $ 35,077 $ 38,029 $ 39,278 $ 40,531 $ 41,826 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 53

Regional Technology and Agency Programs by state and local funds of $1.6 million. area is subdivided into regional manage- Included in this category are expen- At the end of the year, any funds that ment, non-capital technical assistance ditures for the Agency’s capital needs. have not been spent are reserved to cov- programs, and capitalized technology These annual funds, which total $2.4 mil- er the needs of longer-term projects. Ma- programs. Exhibit 3-14 identifies the or- lion in 2007, are primarily set aside for jor program initiatives are discussed later ganizations and programs associated with leasehold improvements and finance and in this section. each functional group. Exhibit 3-15 pro- administrative system enhancements. vides annual cost comparison for each Budget and Financial Plan Like regional technical assistance pro- group, and Exhibit 3-16 identifies the dis- by Functional Group grams, the regional technology programs tribution by group of the 2007 budget. are coordinated efforts with other state Agency functional groupings include and local agencies and therefore receive Managing Services, Finance and Admin- Managing Services funding, which reduces the RTA con- istration, Regional Services and Strate- The Managing Services category in- tribution. Program costs are projected gic Plan and Regional Programs. The cludes the Agency’s executive office, le- to be $5.1 million in 2007 and are offset Strategic Plan and Regional Programs gal and governmental affairs, research, analysis, and policy development and Exhibit 3-13: Agency Expenditures by Category — $39.3 million communications functions. Managing Services expenditures are expected to av- Regional Technology and Agency Administration–19% Agency Programs–19% erage $4.9 million during the three-year 2007-2009 planning cycle. The change in cost compared to prior years primarily Regional Technical Assistance Programs–16% reflects this groups’ emphasis on strategic planning, regional coordination and Regional Services and Coordination Programs–46% unified approaches for increased capital and operating funding at the federal, state and local levels. Exhibit 3-14: 2007 Agency Functional Groups Groups Organizations and Programs Executive Office Managing Services Board of Directors, Executive Director, Secretary to the Authority, Legal and Governmental Affairs, Research, Analysis and Policy The executive office includes the RTA Development, Communications. Board of Directors, the RTA Executive Finance and Administration Administrative Services: Human Resources, Information Technology Director and the Secretary to the Author- and Procurement and Contracting; Finance: Financial Planning and ity. The Executive Director executes the Analysis, Controller, Audit and Review, Treasurer, Financial Development— policy decisions of the Board and staffs Grants and Capital Program. the Agency to carry out its statutory Regional Services Regional Services Management, Travel Information Center, Americans with Disabilities Act, Reduced Fare, Customer Service Center, Transit Check. mission. The Secretary of the Authority Strategic Plan and Corridor Studies, Regional Technical Assistant Program, Regional Transit provides support functions to the Board Regional Programs Coordination Plan, Rail Safety Oversight, Project Management Oversight, by working with staff to ensure that the Regional Transit Asset Management Systems, Intelligent Transportation Board is supplied with the information System, Job Access Reverse Commute, Strategic Planning, Planning and Program Management. and materials necessary to fulfill its statutory role. The Secretary also maintains Exhibit 3-15: Agency Expenditure by Group (dollars in thousands) the official records of the RTA Board Actual Estimate Budget Plan Plan and ensures compliance with the Free- 2005 2006 2007 2008 2009 Managing Services $ 3,312 $ 4,614 $ 4,786 $ 4,939 $ 5,097 dom of Information Act and the Open Finance and Administration 4,289 4,895 6,847 7,066 7,292 Meetings Act. Regional Services 12,180 11,798 12,998 13,413 13,842 Strategic Plan and Regional Programs 15,296 16,723 14,648 14,814 14,985 Agency Total $ 35,077 $ 38,029 $ 39,278 $ 40,231 $ 41,215 54 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 3-16: Agency Expenditures by Group— $39.3 million In 2007, staff will continue to promote

Managing Services–12% the Moving Beyond Congestion Strate- gic Plan through various communications materials, press conferences and Strategic Plan and Finance and Regional Programs–38% Administration–17% community outreach activities. Staff will also work to revamp the Agency’s web site. Additionally, Communications will seek collaborative marketing opportuni- Regional Services–33% ties with the Service Boards.

Legal and Governmental Affairs In 2007, the Legal and Governmen- Finance and Administration The General Counsel ensures statu- tal Affairs Department will continue to Finance and Administration includes tory and regulatory compliance, manag- work with legislative offices on particu- the Agency’s finance, human resources es litigation, reviews all legal documents, lar matters of concern to that office, work and administrative service functions. Ex- manages the Joint Self-Insurance Fund with the members of the Northeastern penditures are expected to average about (JSIF) and oversees the Agency’s Equal Illinois State delegation on transit issues, $7.1 million from 2007 through 2009. The Employment Opportunity and Disad- and work to secure State funding for cap- change from the 2006 projected expendi- vantaged Business Enterprise programs ital investment and operations. ture is primarily attributable to general and compliance with applicable civil inflation of 3.2 percent, the Agency’s fi- Research, Analysis and Policy Development rights laws. nancial information system upgrade of This division also oversees the Agen- This new position will be respon- $1.1 million and leasehold improvements cy’s governmental affairs functions. Gov- sible for ensuring that RTA staff has of $0.5 million that are part of the Agen- ernmental Affairs works with federal, the finance, administrative and opera- cy’s capital program. state, and local governments, and with tions information needed to support the Finance legislative consultants to address indus- RTA in achieving a cost effective, cost try and regional concerns. Governmen- efficient, and service effective seamless The Finance Department executes the tal Affairs also works on legislative issues transit system. Agency’s funding and oversight respon- with industry trade organizations such as sibilities outlined in the RTA Act. The Communications and External Affairs the American Public Transit Association Department works to maintain finan- (APTA) and the Illinois Public Transit The Communications Department cial stability in the region and ensures the Association (IPTA). manages the RTA’s internal and external Agency, the CTA, Metra, and Pace exe- In 2006, Governmental Affairs helped production of reports, speeches, presen- cute their statutory requirements for fis- facilitate the Agency’s participation in tations, videos, radio advertising, pub- cal responsibility. State activities as the Illinois Legislature lications and promotional materials to The Finance Department’s divisions continues to focus on public transpor- publicize the Agency’s programs and are Financial Planning and Analysis, tation issues, and the group worked to initiatives. The department also leads the Controller, Audit and Review, Treasury, pursue the region’s interests as SAFE- Agency’s public/media relations, external Financial Development, and Grants and TEA-LU is implemented. affairs and marketing initiatives. Capital Program. The RTA’s legislative agenda for 2007 In 2006, Communications worked The Financial Planning and Analy- has two primary related components: primarily to create and distribute materi- sis division is responsible for the devel- SAFETEA-LU and FY 2007 and 2008 als for the Agency’s Moving Beyond Con- opment of the annual operating budget appropriations. RTA’s primary issues in gestion Strategic Plan. The department and two-year financial plan, as well as the SAFETEA-LU reauthorization de- also worked with the Service Boards to the subsequent analysis of performance bate include funding levels, criteria for update the RTA System map. In addition, against those plans. The division also pro- New Start projects and the allocation of staff played the primary role in a regional vides analytical support to management the Rail Modernization formula funds. effort to give commuters driving alterna- and the RTA Board. In 2006, the division tives through the launch of the Drive Less. earned the Government Finance Officers Live More public awareness campaign. Association (GFOA) distinguished bud- RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 55

get presentation award (the highest recog- change of capital project data, systematic Regional Services nition in government budgeting) for the monitoring of technology and coordina- Regional Services includes the follow- tenth consecutive year. tion project spending and funding, and ing RTA-operated services and programs: The Controller division is responsible better management reporting. Regional Services Management, the RTA for all RTA accounting functions, includ- For 2007, the Finance Department Travel Information Center, ADA/Special ing monthly financial statements, annu- intends to continue the reporting excel- Services Certification and RTA Certifi- al reports, audit coordination, and grant lence that has enabled it to achieve con- cation Helpline; the RTA Reduced Fare accounting. Reporting covers the RTA sistent recognition for the CAFR and program; the RTA Customer Service entity (including “single audit”), the stat- budget documents. The department will Center; and the RTA/CTA Transit Ben- utorily required combined RTA, CTA, also continue to pursue the prudent fiscal efit program. Metra, and Pace presentation, RTA pen- practices in the management of its bond Expenditures for this group during the sion plan, and joint self-insurance fund. program that have enabled it to achieve a three-year planning cycle are expected to The division received a certificate of ex- AA bond rating, which is the highest of average $13.4 million. Thirteen percent cellence in financial reporting (the highest any transit agency in the nation. covers regional services management, recognition in government accounting) 49 percent funds the Travel Information Administrative Services from GFOA for its Comprehensive Center, 24 percent supports the ADA Annual Financial Report (CAFR), its The Administrative Services catego- Paratransit services, 7 percent is used for twelfth consecutive award. ry includes three divisions, Human Re- the Reduced Fare program and Customer Audit and Review examines agency- sources (HR), Information Technology Service Center, and 7 percent covers the wide activities and functions. Opera- (IT) and Procurement and Contracting Transit Check program. tions deemed to have higher risk receive (PC). Responsibilities include recruit- RTA Travel Information Center annual or more frequent reviews. Func- ment and retention, performance man- tions with less risk are examined on a ro- agement, benefits and compensation, The RTA’s Travel Information Center tational basis. The division also performs employee relations, organizational de- (TIC) is a telephone-based service pro- grant-related audits at the service boards. velopment, technology consulting, help viding route and scheduling information The RTA consistently receives a clean desk support, information systems man- for the CTA, Metra and Pace. TIC oper- (“unqualified”) opinion from its external agement, training, purchasing, office sup- ators, working 20 hours a day from 5:00 auditors with no audit exceptions. In ad- plies and facilities maintenance. a.m. to 1:00 a.m., 365 days a year, accept dition, the division performed a complete In 2006, HR introduced new benefits close to 14,000 calls each day. The TIC review of RTA internal controls similar and investment options to all RTA em- phone number is 836-7000, and is acces- to that required in the private sector by ployees. IT enhanced information tech- sible from every area code in the region. the Sarbanes-Oxley legislation. nology security and implemented an The TIC’s call volume of 4.8 million The Treasury division’s responsibilities online purchasing requisition form. increased by 700 thousand in 2005 com- include cash management, short-term and In 2007, HR will continue to ad- pared to 2004. Call volume is projected long-term financing, investments, debt dress ways to offer a competitive total to be 5.1 million in 2006. The moder- service, banking relations, accounts pay- compensation package, identify meth- ate increase in 2006 is attributable to the able, payroll, and service board funding. ods to improve the recruitment and se- more popular RTA trip planner web site. The Financial Development and lection of qualified, diverse candidates. The total visits on this site were 4.3 mil- Grants and Capital Program division is IT will work with the Communications lion in 2006. responsible for the management of capi- staff to develop a centralized database of The performance of the TIC is mea- tal program grants as well as related on- transportation and elected officials. PC sured and reported on a daily basis. The going analysis and status reporting. The will assist in implementing a new DBE most important measure is the call cap- division also manages federal, state, and program, and work with a purchasing ture rate (calls answered/calls received) local funding activity related to the RTA’s consultant to fully comply with all reg- which indicates the efficiency of the ser- planning initiatives ulations and to streamline purchasing vice. In 2006, the call-capture rate aver- The Finance Department has worked policies and procedures. aged 92.0 percent (Exhibit 3-17). to enhance project management through improvements such as electronic ex- 56 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 3-17: Travel Information Center A reduced fare smart card has been of- 2002 2003 2004 2005 2006 fered since 2000. About 3,000 smart cards Calls Accepted (in thousands) 2,931 3,484 4,109 4,800 5,100 are currently being used by reduced fare Call Capture Rate (%) 96.6 95.6 94.0 93.4 92.2 Average Response Time (seconds) 26 25 31 33 41 customers. The “smart card” provides easier access to the fare collection systems Exhibit 3-18: Transit Check Program of the CTA and Pace for some people with 2002 2003 2004 2005 2006 disabilities. This initiative has been well Total Face Value (in thousands) 57,592 58,442 57,179 52,810 49,323 Quantity (in thousands) 1,102 1,050 1,013 874 750 received by many reduced fare riders. New Companies 375 289 186 195 149 RTA Customer Service Center Americans with Disabilities Act (ADA) the passage of the Americans with Dis- The RTA Customer Service Center, Paratransit Certification abilities Act. Originally a self-certifi- located on the second floor at 175 West The RTA is responsible for the cer- cation program, a revised program was Jackson Boulevard in downtown Chi- tification of riders who use special ser- implemented in 1999 and became fully cago, provides walk-in customers with vices, also known as ADA paratransit. operational in 2000. Applicants for ADA maps, timetables and schedules for the Since July 1, 2006, Pace is responsible paratransit services now make appoint- CTA, Metra and Pace without charge. for all ADA paratransit operations in ments through the RTA for interviews The center also sells monthly passes for the region. and assessments at one of five sites lo- the CTA and Pace. The Customer Service The ADA Certification program con- cated throughout the six-county region. Center has a telephone with a direct conducts interviews and does assessments for Each applicant is interviewed by a trained nection to the TIC providing customers applicants requesting a determination for professional. When necessary, applicants with access to this service. ADA paratransit certification as deter- are provided a physical assessment to de- The Customer Service area current- mined by guidelines established in the termine their functional abilities to use ly uses electronic kiosks where custom- Americans with Disabilities Act (ADA). the fixed-route buses or trains and/or a ers can access and print CTA, Metra and The interviews and assessments are com- cognitive assessment. The process helps Pace schedules as well as trip plans from pleted at five sites operated under contract ensure that applicants being certified for the RTA’s internet-based trip planner. In by Community Alternatives Unlimited ADA paratransit services are truly in addition, RTA system maps, CTA maps, (CAU), a not-for-profit social service need of paratransit. and miscellaneous brochures detailing agency. A video is shown at each of the The number of applications sub- various programs and seasonal servic- assessment sites to introduce applicants mitted for ADA paratransit service de- es are available to the public. The center to fixed-route accessibility features and creased by nearly 1,000 in 2006 with also sells CTA passes, transit cards, and to encourage increased use of fixed-route 10,100 applications received. At the end Chicago Cards. services by people with disabilities. of 2006, 40,047 individuals were eligible RTA/CTA Transit Benefit Program An accessibility specialist who re- for paratransit services. For more infor- views customer issues concerning main- mation about ADA paratransit certifi- The RTA/CTA Transit Benefit pro- line accessible transit services, paratransit cation, contact the RTA’s Certification gram markets and administers an em- accessible services and accessibility infor- Helpline at 312-663-HELP (4357/voice) ployee benefit that reduces transit costs mation, also provides support to these or 312-913-3122 (TTY for the hearing or for employers and encourages ridership. programs. The accessibility specialist rep- speech impaired). The program distributes RTA Transit resents the Agency on advisory commit- Checks, which are vouchers that are used RTA Reduced Fare Program tees established by the CTA, Metra, and to purchase transit passes for CTA, Me- Pace and chairs the Agency’s Advisory The RTA Reduced Fare program al- tra, Pace, South Shore Railroad or Van- Committee on Accessible Transportation lows eligible senior citizens and qualified pool services, as well as CTA fare cards. and Mobility. Travel trainers train people persons with disabilities to ride RTA ser- The Transportation Equity Act for with disabilities to use fixed route service vices at a reduced fare. There are currently the 21st Century (TEA-21), which was instead of ADA paratransit. some 320,000 reduced fare permits issued signed into law on June 9, 1998, expand- The ADA paratransit certification in the six-county region. ed the applicability and acceptance of the program began operation in 1993 after RTA Transit Check program. By exempt- RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 57

Regional Technical Assistance Program ing their transit costs from federal, state Strategic Planning and Regional Programs and local payroll taxes, employees who This group includes strategic planning Regional technical assistance initia- regularly use public transportation can and regional program management, plan- tives include market development efforts reduce their taxable income, while em- ning and program management, regional such as station area planning and transit- ployers can reduce their payroll taxes. technical assistance programs, and re- oriented development planning through These changes make the program more gional technology. the Regional Technical Assistance Pro- attractive for employers and make using The Strategic Plan and Regional Pro- gram (RTAP) and studies to promote the mass transit system more attractive to grams group oversees the responsibilities and enable better coordination between commuters. As of January 1, 2007, em- of various planning activities. Expendi- transit agencies. In addition, funds will ployers can deduct from employees’ sal- tures for this group during the three-year be used to develop and manage regional aries up to $110 a month ($1,320 a year) planning cycle are expected to average strategies to relieve congestion through to pay commuting costs. $14.8 million. Twenty-four percent cov- corridor studies like the Cook-DuPage In an effort to extend the program’s ers regional management, 42 percent Corridor and the Southeast Rail Corri- reach, the RTA joined forces with the supports regional technical assistance dor. The RTA’s focus is to help commu- CTA in July 1999 to jointly market the programs, and 34 percent funds regional nities evaluate and develop policies and program as the RTA/CTA Transit Ben- technology programs. Additional infor- funding mechanisms that will support efit program. The expanded program mation for each group is provided in the transit in a specific corridor. allows the region’s employers to offer following sections. Through RTAP, the RTA provides employees both RTA Transit Checks and technical and/or financial assistance to Strategic Planning CTA fare cards. In 2005, the program various levels of local government for began to offer CTA Chicago Cards for Strategic Planning oversees the de- planning projects that support transit those wishing to purchase CTA month- velopment and implementation of a services. RTAP emphasizes a balanced, ly passes. The Chicago Card enables par- Comprehensive Strategic Regional Trans- coordinated, and integrated approach to ticipants to take advantage of the ability portation Plan (The Moving Beyond regional transit planning. to automatically add value to the same Congestion Plan) for public transit in the Station Area Plans / card each month. The Chicago Card region, in cooperation with the CTA, Me- Transit-Supportive Land Use Plus is the CTA’s premier electronic fare- tra, Pace, counties and municipalities in card that is managed through an online northeastern Illinois, as well as local and Station area plans and local transit im- account and is accepted on all CTA rail regional planning agencies with assis- provement projects, supported through and bus routes and Pace buses. The Chi- tance from a consulting team. The goal RTAP, allow communities to pursue an cago Card Plus cards are mailed to the of this effort is to assess the regional tran- integrated approach to transit and land employees directly. sit system’s preservation needs and de- use planning. Station area plans are based The program has grown dramatical- termine how new investments can best on the tenets of transit-supportive devel- ly since the legislative changes initiated in improve the region’s overall transporta- opment—mixed land uses, higher density June 1998 under TEA-21. In 1998, year- tion system. The plan will set forth goals residential developments, and pedestri- end sales were at just under $9 million. objectives and strategies to guide the RTA an-friendly environments—and often In 2006, total sales were more than $49 as it carries out the roles and responsibili- include complementary improvements million (Exhibit 3-18). 2,057 companies ties granted to it under the RTA Act. and enhancements to the community’s currently participate in the program. The transit facilities. Local transit improve- Planning number of new companies and the num- ment projects focus on transit-support- ber of issued transit checks by the RTA Planning works to ensure an integrat- ive land use relative to bus operations or decreased in 2006 due to the increased ed regional public transit system through the development of new local transit ser- popularity of the Chicago Card Plus, planning and coordination initiatives vices, such as reverse-commute orient- which is offered and administrated only with the region’s providers. The plan- ed shuttle bus services and community by the CTA. ning department develops, coordinates, circulators. For more information about the transit and oversees regional technical assistance The RTA’s 2007 RTAP program in- benefit program, call 1-800-531-2828 be- programs and regional technology (capi- cludes the addition of these new station tween 7:00 a.m. and 4:00 p.m. weekdays. tal) programs to achieve this goal. area plans and local transit planning proj- 58 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

ects: Addison Advantage Transit Project, and regional decision making through the line to serve existing and emerging Bellwood 25th Avenue Corridor Tran- a phased study process. A typical RTA travel markets. sit Improvement Plan, Chicago Heights corridor study is structured through The RTA will lead a major multi-mod- Central Business District Transportation three successive phases: al corridor study to identify the most Center Assessment and Circulation Plan, • Travel market analysis—a research effective and desired transportation in- Greater Roseland Red Line Extension phase to learn about travel patterns, vestments to improve mobility in the Study, Evanston Northeast Transit Co- the transportation system and how southwest quadrant of the region – focus- ordination Study, Huntley Station Area well it is working. The results are ing on the Metra Heritage Corridor. Plan, Kane County–Randall Road Plan distilled into manageable themes or As part of these efforts, the RTA is to Improve Access to Bus Service, Lake significant mobility issues. working with local communities to de- County Inter/Intra County Paratransit • Options feasibility—a creative phase velop corridor planning standards so that Transportation Study, Lake Forest Com- to look at new multi-modal networks/ local values and perspectives are included prehensive Transit System Plan, Marengo combinations of potential highway in the planning and design of transpor- Station Area Plan, Mount Prospect Public and transit improvements to address tation improvements. Corridor Planning Transportation Study, and the Plainfield mobility issues. Standards is something new to our re- STAR Line Transit-Oriented Develop- • Systems alternatives analysis—de- gion and is akin to context sensitivity in ment District Plan. termine demand and impact on local the planning rather than design phase of and regional systems of different project development. County Transit Plans combinations of improvements and The 52 communities of the Cook-Du- County transit plans explore de- different modes/technologies. Page Corridor have been working closely mographics and transit service options In conjunction with the three major together to establish their own collective and support long-range planning. To study phases, local study components vision, goals, values and preferences for date, transit plans have been developed establish land use/community develop- the corridor transportation system and its through RTAP for DuPage, Kane, Lake ment opportunities, local financing strat- integration with their towns. Their Cor- and McHenry Counties. As a follow-up egies and corridor planning standards for ridor Planning Standards will help ensure to the DuPage Area Transit Plan, the Du- mobility improvements in the corridor. potential transportation solutions en- Page Mayors and Managers Conference These study elements are typically fund- hance community vitality, local charac- and the city of Naperville are developed through the RTAP and led directly by ter and values, and will provide a valuable ing service plans for an inaugural set of local municipal sponsors. framework for transportation investment community circulators. In addition, ser- The RTA is currently undertaking the decisions. These standards will subse- vice was started on a first of its kind Pace Cook-DuPage Corridor study in part- quently be customized by other towns for connector bus route linking Naperville, nership with the Illinois Department of application throughout the region. Wheaton and the College of DuPage. Transportation to examine potential ma- Regional Transit Coordination Plan jor transportation system improvements Corridor Planning to meet pressing mobility needs in the The RTA emphasizes coordination Corridor studies provide an oppor- western suburbs of Chicago. The first and interconnection of the regional tran- tunity for local officials, citizens and phase of study—the travel market anal- sit system through the Regional Tran- regional planning organizations to ob- ysis—identified critical mobility needs of sit Coordination Program (RTCP). The jectively explore a wide range of possi- the corridor. A broad range of improve- RTCP is a multi-year program to en- ble transportation improvements in large ment options, including proposals from hance regional mobility, with a goal of sections of the region that are experienc- the Regional Transportation Plan, are seamless travel on public transportation. ing mobility problems. The overall goal being developed and evaluated – leading In cooperation with the CTA, Metra and is to find the most effective and desired to the selection of a preferred alterna- Pace, and other local planning entities, solutions that can then be built. Corridor tive. Elsewhere in our region, the North the RTCP addresses the four principal studies also provide a means to update the Shore Corridor study is undertaking a elements of transit coordination—in- Regional Transportation Plan. travel market analysis to explore the po- formation coordination, physical coor- RTA corridor studies integrate tential need for intermediate stations on dination, service coordination and fare specialized technical analysis with local the CTA Skokie Swift, and extension of coordination. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 59

Information Coordination ers and suburb-to-suburb travel. Such In this capacity the RTA acts both as Information coordination improves improvements are typically developed a grantee and a grantor of designated signs, maps and schedules to allow tran- through RTAP projects involving a com- funds on behalf of sub-recipients which sit riders to confidently use the entire bination of local agencies and the region’s in 2007 include the CTA, Metra, Pace, system, including transferring between transit operators. and DuPage County. As the designated transit modes. Improvements under de- recipient of JARC and New Freedom Fare Coordination velopment in 2007 include new products funds, the RTA initiated a collaborative such as way-finding signs and local area Fare coordination makes it easier for planning process with the Chicago maps for interagency transfer locations transit customers to pay for travel on dif- Area Transportation Study, the Service and a system-wide rail-to-rail transfer ferent parts of the RTA system with a Boards, and region-wide stakeholders to map. Existing information products, such single transaction or fare instrument. Po- identify projects for the 2006 program as route maps and schedules, will also be tential benefits of improved fare coordi- that would be implemented in 2007. refined to better indicate transfer oppor- nation include passenger convenience and Projects developed through this tunities. The RTA has obtained a federal enhanced operations. The RTA continues collaborative planning process support CMAQ grant to develop standards for to work with the CTA, Metra and Pace the goals of the JARC and New Freedom and implement prototypes of new and to explore approaches for a universal fare programs. The program of projects refined information products related to card. The exploration of improvements is adopted by the RTA Board of Directors interagency travel. These products will considering the cost of implementing and include two countywide centralized be demonstrated at five key interagency managing fare coordination relative to the call centers for improved paratransit locations in 2008. benefits received. efficiencies, new reverse express bus service to major regional employment Physical Coordination Job Access Reverse Commute centers, a reverse early morning and New Freedom Programs Physical coordination addresses the commuter train to meet suburban start relative ease of transferring between The Safe, Accountable, Flexible, Effi- times along the Union Pacific North modes operated by the CTA, Metra, and cient Transportation Equity Act-A Lega- Line, a program to support 24/7 work Pace. Existing transit connections at ap- cy for Users (SAFETEA-LU) legislation trips for individuals with disabilities in proximately 300 locations throughout the continues the JARC program and intro- DuPage County, and the enhancement region already serve most travel markets duces the New Freedom program un- of service on two CTA routes that to some extent. The RTA has assessed op- der a formula funding agreement. The serve Westside neighborhoods of portunities for physical improvements at goal of the JARC program is to improve the City of Chicago. These projects priority transfer locations that either have access to transportation services to em- total over $5.1 million in JARC and high rates of transfer activity, or provide ployment and employment related ac- New Freedom funding requests. critical local or regional connections. tivities for welfare recipients and eligible Through RTAP, various municipalities low-income individuals. The New Free- Regional Technology/Capital Programs are exploring specific coordination im- dom program aims to provide additional Regional technology funds are invest- provements with RTA assistance. tools for persons with disabilities to over- ment in technologies that seek to improve come existing barriers in accessing the transit service and operational efficien- Service Coordination work force. New Freedom projects must cy, and to enhance the customer’s tran- Service coordination explores options be “new” and “beyond” those required sit experience. Improvements include to better connect regional travel markets by the Americans with Disabilities Act RTAMobile.com, Parking Management with components of the existing transit of 1990 (ADA) and must assist individu- Guidance Systems (PMGS), Transit Sig- system. Cost effective ways to improve als with disabilities. nal Priority (TSP), Multi-Modal Trip regional mobility include the use of buses The RTA is the locally designated Planning System (MMTPS) and the Re- between activity centers and nearby rail recipient of JARC and New Freedom gional Transportation Asset Management stations to serve both reverse commut- formula funds in northeastern Illinois. System (RTAMS) 60 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 3-19: Agency 2006 Budget Versus 2006 Estimate (dollars in thousands) The RTA and project partners have Expenditures by Category Budget 2006 Estimate Variance developed a kiosk information system Agency Administration $ 6,697 $ 6,932 $ (235) that combines destination information Regional Services and Coordination Programs 18,091 18,023 68 Regional Technical Assistance Programs 5,986 5,804 182 from the Chicago Convention and Tour- Regional Technology and Agency Programs 7,270 7,270 — ism Bureau with trip planning and tran- Total Expenditures $ 38,044 $ 38,029 $ 15 sit information. Kiosks are accessible to the public at various locations, includ- Exhibit 3-20: Agency Budgeted Positions ing the Chicago Cultural Center, Navy 2005 2006 2007 2008 2009 Pier, Shedd Aquarium, Palmer House Administration 41.2 43.2 45.2 45.2 45.2 Regional Management 49.0 53.6 54.3 54.3 54.3 Hilton, Union Station, Metra Randolph Total 90.2 96.8 99.5 99.5 99.5 Street Station, and Midway Airport. The Board 12.0 12.0 12.0 12.0 12.0 RTA is expanding the program to include sites in the suburbs with coopera- Regional Transit Intelligent Regional Transportation tion from Pace. Transportation Systems Plan Asset Management System A tool providing enhanced trip plan- The RTA established the Regional The Regional Transportation Asset ning options that include integrated ITH Transit Intelligent Transportation Sys- Management System (RTAMS) was de- content, traffic information on highways tems (ITS) Program as a foundation for veloped by the RTA to improve access and tollways, and dynamic mapping ca- the coordinated development of technol- to, and the coordination of, the tremen- pabilities is under development by the ogy solutions to traditional transit prob- dous amount of transportation data gath- RTA in conjunction with the Federal lems. The program ensures compliance ered by the RTA and its Service Boards. Transit Administration. with the regional and national ITS ar- Through RTAMS, users can quickly re- Operational Efficiency chitectures and standards as required by trieve and cross-reference a wide variety the U.S. Department of Transportation of information about the northeastern Il- Parking Management Guidance Sys- (USDOT). Proven and promising ITS linois transportation system. In addition tems (PMGS) provide real-time infor- technologies can improve mobility and to Service Board data, RTAMS content mation about parking availability for decrease congestion by facilitating in- has been significantly expanded through transit facilities. Through the use of ve- formation-sharing between transit and partnerships with other agencies such as hicle detection technologies, parking in- highway agencies, as well as police, fire, the Illinois and Chicago Departments formation and route guidance will be and emergency services. Benefits include of Transportation, the Illinois State Toll displayed on electronic variable message operational efficiencies, service improve- Highway Authority (ISTHA), the Il- signs located on major arterials and ex- ments, improved incident management, linois Commerce Commission (ICC), pressways. A PMGS field demonstration and expanded trip-planning options. As the Chicago Metropolitan Agency for is underway for the Tinley Park/Hicko- part of the RTA’s program, a number of Planning (CMAP), the Chicago Area ry Creek corridor of the Metra Rock Is- technologies are being evaluated and im- Transportation Study (CATS) and the land District line. plemented to achieve the functional vi- Northeastern Illinois Planning Com- Service Improvements sion of the Illinois Transit Hub. mission (NIPC). Transit Signal Priority (TSP) is a tool Illinois Transit Hub Traveler Information that can improve transit operating effi- The Illinois Transit Hub (ITH) is an The RTA launched RTAMobile.com, ciency while complementing the region’s internal and external communication sys- which provides wireless access to transit ongoing efforts to reduce traffic conges- tem that centrally collects and distributes travel information via web-enabled cell tion. TSP strategies move in-service tran- regional transit information. The transit phones and PDAs. The site provides ac- sit vehicles, either buses or streetcars, hub utilizes technologies from vehicle loca- cess to the RTA’s web based trip planner through traffic signal-controlled intersec- tion, scheduling and incident management with enhanced functionality that includes tions with significantly less queuing and systems implemented by the transit opera- bus and rail schedules. delay, and minimal impacts on pedestrian tors. The ITH facilitates dissemination of safety and general purpose traffic. information through a variety of media. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 61

The RTA has established a Regional TSP Integration Plan that includes both transit and trafﬁc elements for a multi-ju- risdictional system. The operational impacts of TSP were evaluated on various transit routes and roadway segments using a simulation model. Through RTAP, the RTA is coordinating TSP ﬁeld de- ployments for the CTA and Pace. The TSP network being deployed will facilitate the Bus Rapid Transit (BRT) network of the future.

2006 Budget Versus 2006 Estimate The total Agency expenditures of $38.0 million are expected to be close to budget for the year (Exhibit 3-19). The unfavorable variance in Agency Admin- istration is mostly due to higher than budgeted ofﬁce space taxes and increased professional services for pension plan consulting and annual audit fees. Favor- able variances in Regional Services and Coordination Programs and Regional Technical Assistance Programs are attributed to programs that did not materialize as early as expected.

Organizational Structure Budgeted positions for the Agency are summarized in Exhibit 3-20. The current organizational chart is presented in Ex- hibit 3-21. Budgeted positions in 2007 are 99.5 compared to last year’s ﬁgure of 96.8. The increase from 2006 to 2007 includes a new director’s position (Director, Research Analysis and Policy Develop- ment), a new position in the controller division, and transferring a part-time position to full-time in the Strategic Plan- ning and Regional Services department. The RTA Board committee structure is unchanged and detailed in Exhibit 3-22. 62 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 3-21: Agency Organization Chart —Summary by Operating Division

Board of Directors

Secretary of The Authority

Executive Director

Executive Secretary

Research, Finance and Administration Legal and Communications Strategic Planning and Analysis and Policy Governmental Affairs Regional Programs Development

Human Resources Governmental Affairs External Affairs Planning Information Technology Deputy General Counsel

Procurement and Oversight and Contracting Tech nology Development

Financial Planning and Analysis Engineering and Tech nology

Controller Planning and Audit and Review Program Support

Tr easurer Market Development

Financial Development Program Support

Grants and Capital Program Corridor Planning Studies

System Planning

Regional Services Exhibit 3-22: RTA Board Committees

Committee Description ADA Administrative Considers matters relating to the operation of the RTA which are not other- wise within the jurisdiction of another committee including contracting Customer Service policies, personnel policies and issues, marketing and advertising, and litigation. Reduced Fare Audit Authorizes and supervises all audits and reviews, considers matters related to investment performance and review of financial controls. Trav el Information Chairman’s Considers matters referred to it by the Chairman of the Board of Directors. Center Coordinating The members of this committee are comprised of the Chairman of the Board and the Chairmen of the standing committees of the RTA. Tran sit Check Finance Considers issues related to revenue and expenditures, including the Accessibility operating budgets and financial programs of the RTA and the Service Boards. Mobility Limited Considers ADA Paratransit Certification and other issues relating to the provision of public transportation services to the elderly and persons with disabilities. Planning Considers system planning issues, which include the RTA and Service Board capital programs and plans, and special planning studies. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 63

Reference

RTA Bonds be defeased and the liability has been re- general obligation bond issues. The RTA The bonds issued by the RTA car- moved from the financial statements. issued $298,725,000 of general obliga- ry a rating of “AAA” from Standard & On September 18, 1997, the RTA is- tion (1999) bonds to provide resources Poor’s and Fitch IBCA and “Aaa” from sued an advance refunding of a portion to fund an irrevocable trust for the pur- Moody’s Investors Service, Inc., based of its 1990A, 1991A, 1992B and 1993B Se- pose of generating resources for all fu- on the RTA having the principal and in- ries general obligation bond issues. The ture debt service payments. As a result, terest guaranteed by an insurance policy. RTA issued $98,385,000 of general ob- the refunded bonds are considered to be These rating agencies have indicated that ligation refunding bonds (1997 Series). defeased and the liability has been re- they would have rated the bonds “AA,” Proceeds from the issuance amounted moved from the financial statements. The “AA,” and “A1,”respectively, without to $105,570,935, including a premium of refunded bonds are as follows: $113,895 such insurance. These represent strong $7,185,935. The proceeds are to fund an of the 1992A Series, $9,720,000 1993A, investment grade ratings. The RTA has irrevocable trust for generating resources $142,615,000 1994A, and $21,955,000 the distinction of being one of the high- for all future debt service payments. As a 1994C. The refunding was undertaken to est rated public transportation agencies result, the refunded bonds are considered reduce debt service over the next 26 years in the United States. to be defeased and the liability has been by $22 million, an economic gain of $11.4 All bonds are general obligations of removed from the financial statements. million, which represents a 3.9 percent the RTA to which the full faith and credit On August 10, 1999, the RTA made savings on the previous debt service. of the RTA are pledged. These general ob- an advance refunding of a portion of its On February 1, 2001, the RTA defeased ligation bonds, with a balance of $2,156.2 1992A, 1993A, 1994A, and 1994C Series the remaining balance ($37,750,000) of million as of December 31, 2005, are divided into two types: $1,425.5 million in Exhibit 3-23: RTA General Obligation Bonds Payable (dollars in thousands) Strategic Capital Improvement Program General Obligation January 1, 2005 New Issues Retirements December 31,2005 (SCIP) bonds and $730.7 million in RTA 1990A $ 60,795 — — $ 60,795 bonds (Exhibit 3-23 and Exhibit 3-24). 1991A 55,745 — — 55,745 1992A* and 1992B 57,365 — 5,220 52,145 On June 21, 1993, the RTA issued 1994A* and 1994B 28,720 — 4,325 24,395 an advance refunding of a portion of its 1994C* and 1994D 73,595 — 3,505 70,090 1990A Series general obligation bonds. 1996 Refunding 146,770 — 146,770 — The RTA issued $23,265,000 of gener- 1997 Refunding 84,045 — 4,190 79,855 1999 Refunding* 291,310 — 670 290,640 al obligation refunding bonds (1993C 2000A* 248,515 — 4,245 244,270 Series) to provide resources to fund an 2001A* 95,600 — 1,610 93,990 irrevocable trust for the purpose of gen- 2001B Refunding* 35,880 — 1,410 34,470 erating resources for all future debt ser- 2002A* 155,435 — 2,430 153,005 2002B 182,380 — 9,125 173,255 vice payments. As a result, the refunded 2003A* 259,450 — 4,010 255,440 bonds are considered to be defeased and 2003B 150,000 — 2,355 147,645 the liability has been removed from the 2003C Refunding 16,310 — 2,995 13,315 2004A* 260,000 — 1,010 258,990 financial statements. 2005B Refunding — 148,110 — 148,110 On January 30, 1996, the RTA also Total $ 2,201,915 $ 148,110 $ 193,870 $ 2,156,155 issued an advance refunding of a portion Note: *Strategic Capital Improvement Program (SCIP) Bonds. of its 1994B and 1994D Series general obligation bond issues. The RTA issued Exhibit 3-24: RTA Debt Outstanding (dollars in thousands) $151,235,000 of general obligation re- As of As of December 31, 2005 December 31, 2006 funding bonds (1996 Series) to provide RTA Non-SCIP Debt Cap $ 800,000 $ 800,000 resources to fund an irrevocable trust for Authorized But Unissued RTA Debt 69,335 94,865 the purpose of generating resources for Total Non-SCIP (RTA) Principal Outstanding 730,665 705,135 all future debt service payments. As a re- Total SCIP Principal Outstanding 1,425,490 1,646,260 Total Debt Outstanding $ 2,156,155 $ 2,351,395 sult, the refunded bonds are considered to 64 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Series 1993A by issuing Series 2001B. As Exhibit 3-25: 1996– 2005 Debt Service Requirement Test (dollars in thousands) a result, the refunded bonds have been re- Debt Service 2.5 Times Debt Sales Tax Revenue Requirement Service Requirement moved from the financial statements. The 1996 $ 532,304 $ 77,639 $ 194,098 refunding was undertaken to reduce debt 1997 555,496 78,359 195,898 service through 2023 by $3.4 million (an 1998 576,704 77,883 194,708 economic gain of $2.1 million), which 1999 613,514 77,866 194,665 2000 650,284 81,676 204,190 is a 4.7 percent savings on the previous 2001 653,522 95,187 237,968 debt service. 2002 647,685 113,526 283,815 Effective January 1, 2000, the RTA 2003 654,985 140,607 351,518 2004 675,628 159,702 399,255 Act was amended to authorize the is- 2005 700,395 179,536 448,840 suance of an additional $260 million of SCIP Bonds in each year for the period Exhibit 3-26: Recent Bond Projects with Project-to-Date Expenditures (dollars in thousands) of 2000 to 2004. In March 2001, the RTA 2003 B CTA Purchase a Minimum of 426 Replacement Buses $ 8,442 issued $100 million in SCIP bonds. 2003 B CTA Provide for Program Management 2,054 2003 B CTA Rehabilitate Dan Ryan Branch of Red Line 1,182 During 2002, the RTA issued two 2003 B CTA Replace/Upgrade Power Distribution and Signal Systems 1,392 bond offerings. The first issue was a $160 2003 B Metra Acquire Land for New Start Projects 2,621 million SCIP bond offering. The second 2003 B Metra Replace HVAC System at Metra Headquarters 430 issue was a $200 million non-SCIP issue. 2003 B Metra Extend and Upgrade Southwest Service 204 2003 B Metra Expand and Upgrade North Central Service 154 During 2003, the RTA issued three 2003 B Pace Purchase/Install Enterprise Resource Planning System 482 bond offerings. On January 1, the RTA 2003 B Pace Purchase Associated Capital Items 219 issued $150,000,000 of general obliga- Total $ 17,180 2004 A CTA Purchase a Minimum of 426 Replacement Buses 19,055 tion (2003B) bonds to provide resources 2004 A CTA Reconstruct Howard Station-Red Line 6,463 to fund an irrevocable trust for the pur- 2004 A CTA Replace Flange Angles- North Main and Brown Lines 5,420 pose of generating resources for all future 2004 A CTA Perform Bus Mid-Life and Life Extending Overhauls 3,122 debt service payments. The second issue 2004 A CTA Perform Rail Car Overhaul and Life Extending Rehabilitation 3,030 2004 A CTA Replace/Upgrade Power Distribution and Signal Systems 2,733 was a $260 million SCIP bond offering on 2004 A CTA Rehabilitate Purple Line Viaducts and Retaining Walls 1,122 April 1. On the same day, RTA refunded 2004 A Metra Purchase a Minimum of 26 Accessible the remaining portion ($19,055,000) of Bi-Level Electric Multi-Unit Commuter Cars 32,921 its 1993C Series general obligation bond 2004 A Metra Purchase a Minimum of 300 New Accessible Bi-Level Commuter Cars 8,555 2004 A Pace Purchase 26 30 Foot Fixed Route Buses 1,148 issue. As a result, the refunded bonds are 2004 A Pace Improve Garages and Facilities 206 considered to be defeased and the liabil- 2004 A Pace Purchase Associated Capital Items 184 ity has been removed from the financial Total $ 83,959 2006 A CTA Replace/Upgrade Power Distribution and Signal Systems 1,771 statements. The refunding was undertak- 2006 A CTA Purchase a Minimum of 426 Replacement Buses 1,194 en to reduce debt service through 2009 by 2006 A CTA Implement Maintenance Shop Management Information System 1,146 $ 1.6 million (an economic gain of $ 1.6 2006 A CTA Perform Bus Mid-Life and Life Extending Overhauls 1,074 million), which is a 6.9 percent savings on 2006 A Metra Purchase a Minimum of 26 Accessible Bi-Level Electric Multi-Unit Commuter Cars 1,536 the previous debt service. 2006 A Metra Replace 22 Bridges- UPR North Line 1,996 On October 13, 2004, the RTA is- 2006 A Metra Rehabilitate up to 20 Bi-Level Commuter Cars 944 sued one bond offering (Series 2004A) for Total $ 9,661 $260 million in SCIP bonds. The Series 2004A bonds are also secured by the Se- RTA Sales Tax must be 2.5 times es between payments made to trustees ries 2004A debt service reserve account. greater than the debt service require- and payments made to bondholders. On May 2, 2005, the RTA issued ment. As shown over the last ten years Also, investment income earned in the $148,110,000 of general obligation bonds (Exhibit 3-25), the RTA meets this debt service accounts may lower actu- (2005B) to defease the remaining balance test. Any differences between debt ser- al cash transfers from the General Fund. of the 1996 refunding. As a result, the vice amounts presented and amounts The RTA and its Service Boards have 1996 refunding bonds have been removed shown in general purpose financial put an emphasis on making sure that the from the financial statement. statements represent timing differenc- bond proceeds are spent in a timely and RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 65

Exhibit 3-27: RTA 2005 Combined Fund Statement of Revenue and Expenditures by Fund (dollars in millions) Revenue General Agency Debt Capital JSIF Pension Combined Sales Tax $ 105.1 $ 595.3 — — — — $ 700.4 Public Transportation Funds 175.7 — — — — — 175.7 State Financial Assistance 111.4 — — — — — 111.4 Operating Assistance–CTA 54.3 — — — — — 54.3 Reduced Fare Reimbursements — 37.1 — — — — 37.1 Other Revenue 16.3 0.8 9.2 — 1.0 4.6 31.9 Pension Contribution — — — — — 6.8 6.8 Total Revenue $ 462.8 $ 633.2 $ 9.2 — $ 1.0 $ 11.4 $ 1,117.6 Expenditures Operations Funding $ 168.1 $ 595.3 — — — — $ 763.4 Sales Tax Interest to Service Boards — 0.8 — — — — 0.8 Reduced Fare Reimbursements — 37.1 — — — — 37.1 Agency Operations 27.6 — — — 4.6 5.7 37.9 Capital Grants 27.1 — — 251.7 — — 278.8 CTA Operating Assistance Grant 54.3 — — — — — 54.3 Debt Service Operating Transfer 162.2 — (170.6) — — — (8.4) Joint Self-Insurance — — — — — — 0.0 Principal and Interest Bondholder Payment — — 178.4 — — — 178.4 Debt Issuance Costs — — — 8.5 — — 8.5 Other — — — — — — — Total Expenditures $ 439.3 $ 633.2 $ 7.8 $ 260.2 $ 4.6 $ 5.7 $ 1,350.8 Revenue Less Expenditures (1) $ 23.5 — $ 1.4 (260.2) $ (3.6) $ 5.7 $ (233.2) Fund Balance Beginning of the Year $ 71.5 — $ 64.6 $ 502.5 $ 39.6 $ 95.2 $ 773.4 Fund Balance End of the Year (2) $ 95.0 — $ 66.0 $ 242.3 $ 36.0 $ 100.9 $ 540.2

(1) Reconciliation of budgetary basis to GAAP basis provided on Exhibit 3-29 (total adjustments). (2) Before reserves and designations. General fund reserves and designation totalled $93.4 in 2005, leaving an unreserved/undesignated fund balance of $1.6 million. efficient manner. Exhibit 3-26 highlights General Fund Capital Projects Fund recent bond issues with the largest proj- The General Fund is the general op- In 1989, the Illinois General Assem- ect-to-date expenditures. erating fund of the RTA. It is used to ac- bly authorized the RTA to issue a maxi- count for all financial transactions that mum of $500 million of SCIP bonds, and Fund Accounting are not specifically required to be ac- to have a maximum of $500 million RTA The accounts of the RTA are orga- counted for in another fund such as the bonds outstanding. The Capital Projects nized on the basis of funds and account Agency Fund. Exhibit 3-1 shows the Fund is utilized for the receipt and dis- groups, each of which is considered a sep- balance in the General Fund from 2005 bursement of the proceeds of the bond arate accounting entity. The operations through 2009. The General and the Agen- issues. The first Capital Projects Fund of each fund are separated in its own set cy Funds are the only two funds that have was established in 1990 with the issue of of accounts that comprise its assets, lia- annual budgets. Exhibit 3-28 highlights $100 million of RTA bonds to fund cap- bilities, fund equity, revenue and expen- the 2007 budget for these funds. ital projects at the Service Boards. The ditures or expenditures, as appropriate. RTA allocated the proceeds from the RTA resources are allocated to and ac- Debt Service Fund bonds issued under the General Assem- counted for in individual funds based The Debt Service Fund is used to ac- bly’s authorization as follows: 50 percent upon the purposes for which they are count for the accumulation of resources for CTA capital projects; 45 percent for to be utilized and the means by which for, and the payment of, general long- Metra capital projects; and 5 percent for spending activities are controlled. term debt principal, interest and related Pace capital projects. Projects included costs. The interest earned is generated in approved five-year capital programs Governmental Fund Types from the funds being held for payment to will be eligible for reimbursements from The RTA’s governmental fund types the bondholders. The difference between these proceeds by the RTA without fur- are the General Fund, Debt Service the transfer and payment expenditures re- ther review or action by the RTA Board Fund and Capital Projects Fund (Ex- flects the year-over-year timing variance. of Directors. Effective January 1, 2000, hibit 3-27). 66 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

the RTA Act was amended to authorize Exhibit 3-28: RTA Statement of Revenue and Expenditures 2007 Budget by Fund (dollars in thousands) the issuance of an additional $260 million Revenue General Fund Agency Fund Total Budget of SCIP Bonds in each year for the peri- Sales Tax $ 111,891 $ 634,046 $ 745,937 od of 2000 through 2004 and to issue and Public Transportation Fund (PTF) 186,484 — 186,484 have outstanding an additional $300 mil- State Financial Assistance (SFA) 122,836 — 122,836 lion of non-SCIP Bonds. These amounts Reduced Fare (RF) — 36,275 36,275 Other Revenue 13,872 850 14,722 have been issued. Subtotal 435,083 671,171 1,106,254 New Transit Funding 144,534 — 144,534 Proprietary Fund Additional State Funding 81,810 — 81,810 Proprietary Funds are used for activ- Subtotal 226,344 — 226,344 Total Revenue $ 661,427 $ 671,171 $ 1,332,598 ities that are similar to those found in the Operating Expenditures private sector and to account for the fi- RTA Operations Funding to Service Boards $ 177,869 $ 634,046 $ 811,915 nancing of goods or services provided by RTA Discretionary Funds for Passes 4,000 — 4,000 a department or agency to other depart- Additional Funding for ADA Paratransit 81,810 — 81,810 New Transit Funding 144,534 — 144,534 ments or agencies of the governmental Reduced Fare — 36,275 36,275 unit, or to other governmental units on a Sales Tax Interest — 850 850 cost-reimbursement basis. The RTA has Agency Administration 7,360 — 7,360 one Proprietary (Enterprise) Fund—the Regional Services and Coordination Programs 18,248 — 18,248 Regional Technical Assistance Programs 6,170 — 6,170 Joint Self-Insurance Fund. Total Operating Expenditures $ 439,991 $ 671,171 $ 1,111,162 De bt Service and Capital Expenditures Joint Self-Insurance Fund Principal and Interest $ 186,218 — $ 186,218 The Joint Self-Insurance Fund is used Regional Technology and Agency Programs 7,499 — 7,499 to finance claims incurred by the Service Transfer Capital–CTA 20,353 — 20,353 Transfer Capital–Pace 3,449 — 3,449 Boards and the RTA on a cost-reimburse- Total Debt Service and ment basis. This fund is reported as an Capital Expenditures $ 217,519 — $ 217,519 enterprise fund since the predominant Total Expenditures $ 657,510 $ 671,171 $ 1,328,681 participants are outside of the RTA. Fund Balance (undesignated/unreserved) Beginning Balance $ 6,198 — $ 6,198 Fiduciary Fund Types Change in Fund Balance 3,917 — 3,917 Ending Balance $ 10,115 — $ 10,115 Fiduciary Funds account for as- % of Total Operating Expenditures — — 0.9 sets held by a governmental entity in a trustee capacity or as an agent for oth- Exhibit 3-29: 2005 Reconciliation of Budgetary Basis to GAAP Basis Accounting (dollars in thousands) ers. The RTA’s Fiduciary Funds con- General Fund sist of an Agency Fund and a Pension Excess of revenue over expenditures Trust Fund. and other financing use-budgetary basis $ 21,853 Adjustments Agency Fund Capital grant expenditures incurred in current year but considered in prior years’ budgets (8,022) The Agency Fund records the receipt Capital grant expenditures expected to be incurred in and disbursement of amounts due to the future years but considered in current year budget 9,721 CTA, Metra and Pace, including Retail- RTA capital expenditures expected to be incurred in ers’ Occupation and Use Tax (sales tax), future years but considered in current year operating budget 25 interest on this tax, reduced fare reim- Total Adjustments 1,724 bursement grants and federal operating Deficiency of revenue over expenditures and other assistance grants. Sales tax revenue is refinancing use-GAAP basis 23,577 corded in the fund and are equally off- Net Changes in Reserves $ (34,430) set by expenditures recording the pass Net Change in Fund Balance $ (10,853) through to the Service Boards. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 67

Pension Trust Fund Exhibit 3-30: RTA 2005 Statement of Revenue and Expenditures General and Agency Fund (dollars in thousands) The Pension Trust Fund is used to ac- Revenue 2005 Budget 2005 Actual Change count for all accumulation of resources Sales Tax $ 697,600 $ 700,395 $ 2,795 for and payments of, retirement beneﬁts Public Transportation Fund 174,400 175,668 1,268 to employees participating in the RTA State Financial Assistance 109,186 111,419 2,233 Pension Plan and Trust. Reduced Fare 37,240 37,127 (113) Additional State Funding for ADA Paratransit 54,252 54,252 — Other Revenue 20,941 17,196 (3,745) Basis of Budgeting Total Revenue $ 1,093,619 $ 1,096,057 $ 2,438 The basis of budgeting refers to the Ope rating Expenditures conventions for the recognition of costs Operations Funding $ 755,493 $ 762,412 $ 6,919 RTA Discretionary Funds for Passes — 3,000 3,000 and revenue in budget development and Additional State Funding–RTA Discretionary 54,252 54,252 — in establishing and reporting appropria- Reduced Fare 37,523 37,127 (396) tions. The RTA’s annual budget and re- Sales Tax Interest — 773 773 lated appropriations are prepared on the Agency Operations 28,741 26,337 (2,404) Total Operating Expenditures $ 876,009 $ 883,901 $ 7,892 modiﬁed accrual basis of accounting in Debt Service and Capital Expenditures conformity with generally accepted ac- Principal and Interest $ 177,656 $ 188,211 $ 10,555 counting principles except for capital Regional Technology and Agency Programs 8,739 8,739 — grants/expenditures and debt service Metra Transfer Capital 7,152 — (7,152) payments. Capital grants/expenditures Pace Transfer Capital 6,783 6,783 — CTA Transfer Capital 20,353 20,353 — are budgeted for on a project basis, which Total Debt Service and Capital Expenditures 220,683 224,086 3,403 normally exceed one year. Debt service Total Expenditures $ 1,096,692 $ 1,107,987 $ 11,295 payments are budgeted as transfers from Fund Balance (undesignated/unreserved) the General Fund. Beginning Balance (1) $ 12,507 $ 12,507 — Although appropriations are ad- Change in Fund Balance 447 (10,853) 11,300 Ending Balance $ 12,954 $ 1,654 $ 11,300 opted for individual line items, the le- % of Total Operating Expenditures 1.5 0.2 (1.3) gal level of control is restricted to total appropriations/expenditures and total (1) Actual 2004 year end results. administration (statutory cap) appropriations/expenditures. Management has the authority to exceed any line appropriation without Board approval, provided it does not exceed the legal levels of control. It is the policy of the RTA to fund the budgets of the Service Boards up to the amount appropriated in the Budget Ordinance. Budgetary reporting is balanced with accounting records on a monthly basis and is fully reconciled to the accounting system on an annual basis in the Com- prehensive Annual Financial Report and for the annual Municipal Bond Disclo- sure Reports required by the Securities and Exchange Commission (Exhibit 3- 29 and 3-30). 68 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 3-31: Recovery Ratio (dollars in thousands) CTA 2005 Actual 2006 Estimate 2007 Budget Operating Revenue $ 525,804 $ 566,142 $ 560,694 In-Kind Revenue 21,000 22,000 22,000 Total Revenue $ 546,804 $ 588,142 $ 582,694 Operating Expenditures 1,021,446 1,082,198 1,133,151 In-Kind Expenditures 21,000 22,000 22,000 Less Security Exclusion (31,221) (31,000) (35,334) Total Expenditures $ 1,011,225 $ 1,073,198 $ 1,119,817 CTA Recovery Ratio % 54.1 54.8 52.0 Metra Operation Revenue $ 251,702 $ 263,424 $ 274,492 Metra Capital Farebox Revenue 9,392 10,281 10,570 Total Revenue $ 261,094 $ 273,705 $ 285,062 Operating Expenditures 503,638 529,957 553,986 Less Security Exemption (13,292) (14,470) (17,500) Less Depreciation Expenditure (2,709) (2,706) (2,706) Less Transportation Facility Leases (14,051) (15,135) (15,541) Total Expenditures $ 473,586 $ 497,646 $ 518,239 Metra Recovery Ratio % 55.1 55.0 55.0 Pace Operating Revenue $ 55,750 $ 56,993 $ 53,433 CCC for Paratransit Service Under Contract 4,750 9,940 — RTA Discretionary Funds to Pace for Passes — — 4,000 In-Kind Revenue 4,693 4,758 4,758 Total Revenue $ 65,193 $ 71,691 $ 62,191 Operating Expenditures 159,624 204,631 166,124 In-kind Expenditures 4,693 4,758 4,758 Total Expenditures $ 164,316 $ 209,389 $ 170,882 Pace Recovery Ratio % 39.7 34.2 36.4 System-Generated Revenue Recovery Ratio Revenue (1) Total Service Board Revenue $ 873,091 $ 933,538 $ 929,947 CTA Lease Transaction 4,262 4,262 4,262 Agency 16,587 14,869 13,538 Less Pace Pass Revenue — — (4,000) Total Revenue $ 893,939 $ 952,669 $ 943,747 Expenditures (2) Total Service Board Expenditures $ 1,649,127 $ 1,836,476 $ 1,808,938 Add back RTA Security Exemption 24,519 25,470 32,834 Agency 25,601 30,773 31,779 Total Expenditures $ 1,699,248 $ 1,836,476 $ 1,873,551 Recovery Ratio % 52.6 52.7 50.4

(1) Revenue: By policy, the gains made by a Service Board from leasing transactions are restricted for capital investment and therefore excluded from Service Board recovery ratio calculations. However, the receipts are used for the system-generated revenue recovery ratio calculation. Agency reﬂects investment earnings and grant project credits. (2) Expenditures: The RTA Act allows certain expenditures to be excluded from the recovery ratio calculation including security (a base and reduced fare amount), depreciation and facility leases. In addition, 2005 budget Ordinance 2005-06 authorized the exclusion of additional security costs (Security Exemption) from Service Board expenditures. The RTA Security Exemption amount that exceeds RTA Act allowances is added back to system-generated expenditures to calculate the System-Generated Revenue Recovery Ratio. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 69

4 CTA Operating Plan 70 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 71

Overview Exhibit 4-1: CTA Ridership (in millions) Service Quality The Chicago Transit Authority (CTA) 530 The CTA has continued to work at was created by the Illinois General As- 523 improving bus service and upgrading its sembly in 1945 and began operations in bus and rail fleets. The ongoing effort 1947. It became the sole operator of Chi- 516 515 includes purchasing 45 new 30-foot Op- cago transit in 1952 when it purchased tima buses that are shorter and narrow- 506 the Chicago Motor Coach System. The er than the standard 40-foot buses in the CTA is the region’s largest transit oper- 502 CTA’s fleet. Upgrading the bus fleet with 497 ator providing service on 154 bus routes these smaller buses allows service to bet- 492 and eight rapid transit routes. The CTA ter match ridership in neighborhoods is governed by the seven-member Chica- 488 where narrow streets and lower peak rid- go Transit Board. ership call for smaller buses, and to realize cost efficiencies that come from operat- Service Characteristics 474 ing smaller vehicles. The CTA operates the second largest The entire bus fleet has been equipped public transportation system in the U.S. with security cameras since 2003 and the Average weekday ridership on its bus and 460 CTA continues to purchase new buses 2005 2006 2007 2008 2009 rail system is 1.6 million. The CTA’s ser- equipped with these cameras. The camer- vice area encompasses 220 square miles provements designed to speed service and as help to deter vandalism and graffiti, and in the City of Chicago and 40 surround- provide greater customer convenience. assist law enforcement in investigating in- ing suburbs. Average weekday ridership on the cidents and catch perpetrators. In addi- Bus operations provide 2,106 buses CTA is 1.6 million, while Saturday and tion, new rail cars will come equipped traveling over 154 routes covering 2,529 Sunday average ridership is 951,000 and with seven security cameras per car. miles, with approximately 11,846 bus 653, 000, respectively (Exhibit 4-3). The In May 2006, the Chicago Transit stops. Rail service on eight routes has CTA expects its ridership levels to in- Board approved a contract for the manu- 1,190 train cars traveling over 288 miles crease by a compound growth rate of 1.5 facture and purchase of 406 new rail cars, of track. The CTA transferred all para- percent from 2005 through 2009. Total with options that could bring the total transit service to Pace in July 2006. Dur- vehicle miles in 2006 and 2007 are expect- purchase to 706 cars. The rail cars will re- ing the first half of 2006, CTA provided ed to experience small growth over the place the 2200-series Budd cars that were more than 1.2 million rides at a cost of previous year and then remain flat from purchased in 1969-70 and the 2400-series about $26 per ride. 2007 through 2009 (Exhibit 4-4). Boeing-Vertol cars purchased in 1976-78.

Ridership Exhibit 4-2: CTA Annual Ridership By Mode (in millions) Ridership is estimated at 497.4 mil- 2003 2004 2005 2006 2007 Bus 291.8 294.0 303.2 299.2 301.6 lion trips by the end of 2006 (Exhibit Rail 181.1 178.7 186.8 197.0 204.4 4-1). This is 5.0 million trips, or 1.0 per- Paratransit/Taxi 1.9 2.2 2.4 1.2 — cent higher than 2005. Both weekday and Total Ridership 474.8 474.9 492.4 497.4 506.0 weekend ridership experienced increased growth primarily attributable to higher Exhibit 4-3: CTA Average Daily Ridership (in thousands) gas prices. Bus ridership is forecasted at 2003 2004 2005 2006 2007 Weekday 1,437 1,426 1,482 1,584 1,603 299.2 million trips in 2006, which is 4.0 Saturday 855 870 899 951 972 million trips lower, or 1.3 percent lower Sunday 570 582 621 653 652 than 2005. Rail ridership is projected at 197.0 million in 2006 and is higher than Exhibit 4-4: CTA Ridership and Miles (riders and miles in thousands) 2005 2006 2007 2008 2009 the prior year by 10.2 million, or 5.5 per- Actual Estimate Budget Plan Plan cent (Exhibit 4-2). Ridership increases Ridership 492,404 497,436 505,944 514,545 523,292 are tied to growing employment, high- Vehicle Miles 135,733 137,000 137,460 137,460 137,460 Passengers Per Mile 3.6 3.6 3.7 3.7 3.8 er gas prices, and bus and rail service im- 72 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Upgraded features such as security cam- Exhibit 4-5: CTA Capital Statistics (dollars in thousands) eras, aisle facing seating, and alternating 2003 2004 2005 2006 2007 CTA Total Capital Expenditures $ 484,062 $ 457,699 $ 402,951 $ 579,300 $ 434,697 current (AC) traction motor propulsion CTA Bus Vehicles 1,991 2,017 2,033 2,106 2,106 are included in the specifications. Average Age of Buses (in years) 9.5 8.9 9.4 8.2 9.4 CTA Rail Cars 1,190 1,190 1,190 1,190 1,190 New Services Average Age of Rail Cars (in years) 20.0 21.0 22.0 23.0 24.0 Bus Routes Offering Lift Service 131 148 150 154 154 In June, the Pink Line made its de- ADA Accessible Stations 66 72 72 76 82 but as the CTA’s eighth rail line and the first new rail line since the Orange Line The Brown Line Capacity Expansion O’Hare Airports with opportunities for opened in October 1993. The new ser- project of $529.9 million began in 2004 service improvements to be phased in as vice provides a faster trip for customers and continued to progress throughout funding becomes available. from the West Side and near west sub- 2006. In August 2006, the fully renovat- urbs to the central business district. The ed Kedzie and Rockwell stations were Bus System line serves 22 stations and makes all stops re-opened to customers for service. The The CTA’s aggressive campaign to up- along 54th/Cermak branch to Polk sta- station boasts a new glass station hous- grade its bus fleet includes a $95 million tion. At Polk, Pink Line trains cross over es, new platforms, brighter lighting and contract to purchase 265 New Flyer bus- the Eisenhower Expressway and travel accessible features including ramps, tac- es which includes 20 diesel electric hybrid north along the recently renovated con- tile edging and accessible gates. The sta- buses that are powered by both diesel en- nector track above Paulina Street to the tion is also ADA accessible which brings gines and electric motors. By including Green Line elevated structure along Lake the total number of accessible CTA rail 20 hybrid buses, the CTA will be able to Street. Trains then continue eastbound stations to 74 out of 144, or 51 percent of evaluate bus performance against Chi- stopping at Ashland and Clinton stations the system. cago’s extreme weather conditions and before proceeding to the Loop where they The rehabilitation of the Dan Ryan determine if hybrid buses are suitable ad- travel clockwise on the inner track, mak- branch of the Red Line for $283 million ditions to the CTA’s fleet. ing stops at all elevated stations before will be completed by the end of 2006. In 2006, the first of 265 40-foot, low- returning to 54th/Cermak on the same The completion will bring more reliable floor, accessible, air conditioned New route westbound. and efficient rapid transit service to the Flyer buses arrived. The new buses re- As part of service enhancement in South Side of the city with the construc- place existing 5300-series Flxble buses in the West side and near west suburbs, five tion of two new substations, the instal- CTA’s fleet which was purchased in 1991. new bus routes were created (three ex- lation of new contact rail, and upgrades Each New Flyer bus produces 60 percent press routes and two local routes), four to two other substations that will boost fewer emissions than the bus it replaces. existing bus routes were extended, and power to the branch. Improving power The new buses are equipped with security routing and schedule improvements were reliability and the delivery of that pow- cameras, bike racks, air conditioning, au- made to four additional bus routes. These er are the most significant aspects of the tomated announcements and wheelchair service enhancements provide addition- project. Currently, the Red Line serves ramps. An additional feature includes al transit options to all customers and 45,000 customers each day. strap hangers for standing customers, a the surrounding communities, and con- Plans for a new downtown transit sta- rear door easy-touch feature for exiting, tribute to continued ridership growth in tion also advanced in 2006. The Chicago and a new comfortable seat design. the region. Transit Board entered into agreements The CTA launched the Bus Tracker with The Mills Corporation and the pilot in the summer of 2006. The pilot Capital Investments City of Chicago to finance and develop program tracks CTA buses in real time The CTA spent $403 million on cap- a transit center at 108 North State Street, and provides estimated bus arrival times ital programs in 2005. The CTA is ex- also known as Block 37, and new tunnel for customers. Global positioning satel- pected to spend more than $1.0 billion track connections between the Red and lite (GPS) technology is used to identify on capital projects in 2006 and 2007, com- Blue Line subway routes. Under the de- bus locations and provides that informa- bined (Exhibit 4-5). velopment agreement, the CTA would tion via a dedicated web site www.cta- provide direct rail service to Midway and bustracker.com and a bus shelter display. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 73

Currently, the CTA is testing the pilot System–Wide Improvements Partnerships program on the #20 Madison bus route The CTA continued to invest in new The CTA works to maintain partner- and one bus shelter located on the west- technology to further improve service ships with many groups. The CTA’s ef- bound on Madison at Jefferson. The pi- and safety. Through technology, the forts to strengthen its relationship with lot is scheduled to end in December 2006. CTA was able to complete the installa- its riders have been illustrated in previous The results of the pilot and the availabili- tion of the infrastructure necessary to sections. The CTA also works to create ty of funding will determine whether the enhance communication capability in partnerships with its workforce, its secu- Bus Tracker system will be expanded to the Red and Blue Line subway system. rity agencies and vendors, the mobility additional routes. This past summer, the first commercial impaired, the City of Chicago, and the wireless provider activated its service in Illinois General Assembly. Rail System the subway tunnels. Although the main Vendors Work continues on the track and sig- purpose is to improve emergency com- nal renewal project at Clark Junction, the munications capabilities in the subway, The CTA Purchasing Department busy location where the Brown, Red and minimally increasing the investment lets pursues an aggressive Disadvantaged Purple Line trains converge just north of riders use their wireless devices enhanc- Business Enterprise (DBE) program Belmont on the city’s North Side. On a ing security and convenience. Today, only to encourage minority participation in typical weekday, nearly 1,000 trains pass U.S. Cellular riders are able to use their CTA contracts. The CTA has set a min- through the corridor with approximate- wireless devices in the subway, however, imum level of 30 percent for minority ly one train every 50 seconds during rush CTA is working to add service providers participation for projects requiring out- periods. The upgrade to the 100 year old to the system. side vendors. junction will bring new signals and ad- In 2006, the CTA completed a sys- The CTA has also pursued cost sav- ditional connections between tracks to tem-wide fiber optic expansion. The new ings in its purchasing practices by finding allow trains use all four tracks and to im- system allows the CTA to connect secu- the best prices for the good and services prove options for operating trains around rity cameras to its Control Center and procured. These efforts have saved the construction sites, disabled trains or to the City’s 9-1-1 Center. The link be- CTA several million dollars over the past equipment problems. tween the CTA’s Control Center and the few years. Construction began in October to re- City’s 9-1-1 Center included in the Office City of Chicago place an aged viaduct on Church Street in of Emergency Management Communica- Evanston. Located one block north of the tion’s larger Homeland Security grid that The CTA maintains a strong work- Purple Line Davis station, the existing is designed to expand the use of surveil- ing relationship with the City of Chicago viaduct at Church Street has deteriorat- lance cameras throughout Chicago. CTA and various suburban entities. It contin- ed over time with exposure to the ele- announced last fall that all 11 stations on ues to work with law enforcement agen- ments. Due to its condition, Purple Line the 54th/Cermak branch had been net- cies in both Chicago and the suburbs to trains must reduce speed when crossing worked and included in the link between reduce crime on its bus and rail systems. the overpass. In addition to replacing the the CTA’s Control Center and the City’s The CTA has also worked with the City viaduct, the project includes the installa- 9-1-1 Center. Today, 464 security camer- of Chicago on various real estate matters, tion of new abutments, retaining walls, as at 27 stations are a part of the network. especially rail station construction. And foundations, and new waterproofing and By the end of this year, the CTA will have it has worked with Chicago’s Health and drainage systems. 1,200 cameras at 45 stations hooked up to Human Services Department to reduce Delivery of prototype rail cars is ex- the network, and the numbers will con- the number of homeless individuals us- pected in 2008. Production of the base tinue to increase as all 144 rail stations are ing trains for shelter. order of 206 is expected to begin in 2009 connected to the system. Over the past decade, the City of with delivery beginning in 2010. The The CTA received recertification of Chicago has provided the CTA $828.5 CTA’s most recent purchase of new rail its International Standardization Organi- million in capital improvements. This cars was in the 1990s when 3200-series zation (ISO) 9001:2000 registration. The substantial investment in the CTA’s infra- cars were purchased for the opening of CTA is one of only two transit agencies structure includes the Roosevelt Connec- the Orange Line, and to replace older cars in the U.S. to be so certified. tor project, replacement of the elevated on the Brown and Yellow Lines. span at Wacker Drive and Wells Street, 74 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

the renovated Chicago Avenue station tain and improve the infrastructure of securing additional funding (“New Tran- on the Red Line, the elevated Library– CTA bus and rail systems. While feder- sit Funding”). If this additional subsidy is State/Van Buren station, and the reha- al legislators have made a financial com- not obtained, the CTA will have to take bilitation of the underground transfer mitment to the future of public transit, actions to balance its budget that may in- tunnel that provides a pedway connec- state and local legislators must identify clude, but are not limited to, transferring tion between the Red and Blue Line plat- the matching funds required to secure federal capital funds to operations and ad- forms at Jackson. the federal funds. In 1999, the State es- justing service levels and fares. The CTA’s In 2007, Chicago Department of tablished Illinois FIRST, a $12 billion recovery ratio was set at 52.0 percent for Transportation (CDOT) will begin ren- matching program to improve the State’s 2007 by the RTA, which the CTA has ovation work on the Grand station on the infrastructure, which included $2.1 bil- met. The CTA’s statement of revenue and Red Line. The renovation includes mez- lion for transit. The CTA received more expenditures, which includes the recov- zanine expansion, platforms with glazed than $1 billion of Illinois FIRST funding ery ratio, is presented in Exhibit 4-6. The ceramic tile, and vaulted ceiling panels, over four years for capital improvements following section portrays the outlook for additional turnstiles, and installation of to its rail and bus systems. the 2007-2009 planning period. new exit-only rotogates. Budget and Financial Plan System-Generated Revenue Legislators The budget and financial plan submit- Total system-generated revenue is ex- State and federal funding has been ted by the CTA for the current planning pected to increase from $526 million in crucial to the CTA’s ability to rebuild period, 2007 through 2009, conforms to 2005 to $570 million in 2009. This is an its system. Specifically, Chicago Mayor the marks set by the RTA on September increase of $44 million over the four-year Richard M. Daley, U.S. House Speak- 15, 2006. The CTA’s operating funding period, or an average annual increase of er Dennis Hastert, Governor Rod R. marks were set at $580.5 million for 2007, 2.0 percent (Exhibit 4-7). System-gener- Blagojevich, the Illinois Congressional $654.9 million for 2008, and $771.9 mil- ated revenue includes passenger revenue, delegation, and the Illinois General As- lion for 2009. Funds to balance the bud- reduced fare reimbursement, and other sembly have supported efforts to main- get and two-year financial plan include revenue. Passenger revenue comprises 85

Exhibit 4-6: CTA 2007 Budget and 2008 –2009 Financial Plan (dollars in thousands)

System-Generated Revenue 2005 Actual 2006 Estimate 2007 Budget 2008 Plan 2009 Plan Passenger Revenue $ 417,424 $ 463,808 $ 468,334 $ 475,524 $ 483,398 Reduced Fare Subsidy 31,961 32,000 32,000 32,000 32,000 Other Revenue 76,419 62,334 52,360 53,446 54,582 Total Revenue $ 525,804 $ 558,142 $ 552,694 $ 560,970 $ 569,980 Operating Expenditures Labor $ 714,336 $ 769,163 $ 850,322 $ 915,648 $ 1,037,780 Material 71,366 75,337 77,894 79,000 80,000 Fuel 45,788 55,003 61,233 72,000 72,000 Power 22,909 21,582 28,057 29,000 30,000 Insurance and Claims 31,500 53,000 25,000 28,000 28,000 Purchase of Security Services 31,221 31,000 35,334 36,217 37,123 Purchase of Paratransit Services 53,257 27,369 — — — All Other (1) 51,069 49,744 55,301 56,000 57,000 Total Expenditures $ 1,021,446 $ 1,082,198 $ 1,133,151 $ 1,215,865 $ 1,341,903 Operating Deficit $ 495,642 $ 524,056 $ 580,457 $ 654,895 $ 771,923 Deficit Funding RTA Sales Tax 277,210 284,636 295,098 304,469 314,165 RTA Discretionary Funds 164,422 171,128 175,251 180,931 186,768 Additional State Funding–RTA Discretionary 54,252 27,126 — — — Federal Funds — 41,166 — — — New Transit Funding — — 110,108 169,495 270,990 Total Deficit Funding $ 495,642 $ 524,056 $ 580,457 $ 654,895 $ 771,923

Recovery Ratio % (2) 54.1 54.8 52.0 N/A N/A

(1) The budget ﬁgure includes a budget adjustment of $108 thousand and lowers costs to achieve the RTA funding marks. (2) Items excluded from expenditures are for security. In-kind revenue and expenditures from the CPD of $22 million are included. Exhibit 3-31 in the RTA section provides the details for this calculation.

RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 75

Exhibit 4-7: CTA System –Generated Revenues Exhibit 4-8: 2007 CTA Revenue — $553 million (dollars in millions) 580 Other Revenue–9% 570 Reduced Fare Subsidy–6% 561 560 558 553

Passenger Revenue–85% 540

526 Exhibit 4-9: CTA Average Fare Calculation (revenue and ridership in thousands) 520 2005 2006 2007 2008 2009 Passenger Revenue $ 417,424 $ 463,808 $ 468,334 $ 475,524 $ 483,398 System Ridership 492,404 497,436 505,944 514,545 523,292 Average Fare 0.85 0.93 0.93 0.92 0.92 500

Exhibit 4-10: CTA Fare Structure Reduced Full Fare Fare (1) 480 Basic Cash Fare (Bus and Rail) $ 2.00 $ 1.00 2005 2006 2007 2008 2009 No transfers allowed percent of the CTA’s total operating rev- Transit Card (Rail) $ 2.00 $ 0.85 Chicago Card (Rail) 1.75 None enue. The reduced fare subsidy and oth- For every $20 purchase, $22 of value is added to the card er revenue account for the remaining 15 Chicago Card (Bus) 1.75 None percent (Exhibit 4-8). Transit Card (Bus) $ 1.75 $ 0.85 University Pass $ 0.70 None Passenger Revenue First Transfer with Fare Card $ 0.25 $ 0.15 Passenger revenue is expected to in- Allows two additional rides within two hours of issue. Transfers are valid for travel in reverse direction on the route of issue. crease from $417 million in 2005 to $483 million by 2009, a $66 million increase Transit Card Packs Ten-Pack $ 15.00 None or an annual growth rate of 3.7 percent Twenty-Pack None 13.50 (Exhibit 4-9). Passes Higher ridership and a fare increase 1-Day $ 5.00 None accounts for the projected growth in fare 7-Day 20.00 None revenue for 2006. It is estimated that an 30-Day 75.00 35.00 additional 5.0 million trips will be pro- Visitor Passes 1-Day $ 5.00 None vided, which is a 1.0 percent increase over 2-Day 9.00 None 2005 ridership. In January 2006, the CTA 3-Day 12.00 None increased the base fare for cash riders (no 5-Day 18.00 None transfer allowed) from $1.75 to $2.00 per Link-Up Pass $ 36.00 None ride. Fare revenue is estimated at $468.3 Sold by Metra; use with Metra monthly ticket. million in 2007, which is $4.5 million Express Surcharge $ 0.25 $ 0.25 Downtown on bus routes 2, 6, 14 and 147. higher than the 2006 forecast. The CTA fare structure is shown in Exhibit 4-10. Rush Shuttle Fares $ 1.00 None To/From downtown Metra stations during rush hour. 128 Soldier Field Express $ 1.00 $ 0.50 154 Wrigley Field Express–per carload $ 5.00 None

(1) Reduced fares are for children 7 through 11 years old. Grade and high school students with CTA riding permit. Seniors age 65+ and riders with disabilities with RTA reduced fare riding permit. 76 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Reduced Fare Subsidy Operating Expenditures Exhibit 4-12: CTA Total Operating Expenditures (dollars in millions) The Illinois General Assembly passed Total operating expenditures are fore- 1400 legislation in 1989 that provided funds to casted to increase from $1,021 million in reimburse the CTA for the cost of provid- 2005 to $1,342 million in 2009. This $321 1,342 ing reduced fares for the elderly, students, million increase represents a 7.1 percent and the disabled. Fare reimbursement is compound annual growth rate (Exhib- 1300 included as revenue and became available it 4-12). in July 1989. In the State’s 2007 fiscal year For 2006, operating expenditures are 1,216 budget, the appropriation for reduced estimated at $1,082.2 million. This is 5.9 1200 fare for the RTA region is $36.3 million. percent higher than 2005 actual expendi- These funds are distributed to the Service tures of $1,021.4 million. The increase is 1,133 Boards according to the percentage of re- due mainly to higher labor and pension duced fare revenue that each has generat- costs, fuel, and a provision for damages 1100 1,082 ed. The CTA estimates its share at $32.0 and litigation. million per year from 2007 through 2009. Budgeted 2007 expenditures of $1,133.2 1,021 million are 4.7 percent higher than 2006 Other Revenue projections. The financial projections for 1000 2005 2006 2007 2008 2009 This category includes advertising, 2008 and 2009 show operating expen- charters, concessions, contributions from ditures of $1,215.9 million and $1,341.9 total expenditures. Base wages represent local governments, investment income, million, respectively. The 2008 financial about two thirds of that total, while fringe the funding for paratransit services un- projection represents an increase of 7.3 benefits, which are primarily medical in- der contract, and other revenue (Exhibit percent over the 2007 operating budget. surance and pension costs, represent the 4-11). Also included are essential contri- The 2009 financial projection represents remaining one third. Materials, used pri- butions from the City of Chicago and an increase of 10.4 percent over the 2008 marily for maintenance, are 7 percent of Cook County. Annual funds provided by financial plan. total expenditures. Fuel and power repre- the City are $3 million and the County sent 7 percent of the CTA’s expenditures. contributes an additional $2 million. Rev- Expenditure Elements Security, insurance and claims represent enue for this category was approximately The 2007 operating expenditure el- 5 percent of total spending. Other expen- $76 million in 2005 and is expected at $55 ements include labor, material, fuel, ditures comprise the remaining 5 percent. million in 2009. Reasons for this decrease power, insurance and claims, security, The other expenditure category includes include a loss in the grant revenue that oc- paratransit services, and other costs. La- items such as lease, utility, and contrac- curred when CTA paratransit operations bor expenditures, including fringe ben- tual services (Exhibit 4-13). transferred to Pace in 2006. efits, represent 76 percent of the CTA’s Labor Costs Exhibit 4-11: All Other Revenue (dollars in thousands) Labor expenditures are expected to in- 2005 2006 2007 2008 2009 crease from $714 million in 2005 to $1,038 All Other Revenue Actual Estimate Budget Plan Plan million in 2009. This is a $324 million in- Advertising, Charter and Concessions $ 23,963 $ 24,771 $ 24,990 $ 25,470 $ 25,970 crease, or a 9.8 percent compound annual Investment Income 5,432 11,018 12,120 12,726 13,362 growth rate (Exhibit 4-14). Labor expen- Contribution from Local ditures for 2006 are estimated at $769.2 Government Units 5,000 5,000 5,000 5,000 5,000 All Other Revenue 42,024 21,545 10,250 10,250 10,250 million, which is $54.9 million more, or Total All Other Revenue $ 76,419 $ 62,334 $ 52,360 $ 53,446 $ 54,582 7.7 percent higher, than in the prior year.

This increase is due to the rising costs of health care, workers compensation, and wages. Labor expenditures are forecasted to be $850.3 million in 2007, an in- RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 77

Exhibit 4-13: 2007 CTA Operating Expenditures — $1,133 million Insurance and Claims

Other–5% The Provision for Injuries and Dam- Security and Insurance–5% ages represents the expenditure for claims Fuel and Power–7% and litigation for injuries and damag-

Material–7% es that occur on CTA property, or with CTA vehicles. As shown in Exhibit 4-17, the CTA Labor–76% expects fewer bus and rail accidents per 100,000 miles through 2007. The 2006 forecast is $53.0 million and is $21.5 mil- Exhibit 4-14: CTA Labor Expenditure Growth (in thousands) lion more than the prior year. The CTA 2005 2006 2007 2008 2009 utilized increased fare revenue to fully Labor Expenditure $ 714,336 $ 769,163 $ 850,332 $ 915,648 $ 1,037,780 fund the reserve for injuries and damages % Change from Prior Year 5.0 7.7 10.6 7.7 13.3 as projected by the 2005 actuarial analysis. The 2007 funding is $25.0 million ver- crease of $81.1 million or 10.5 percent these costs, a Maintenance Management sus an estimate of $53.0 million for 2006. higher than 2006. This increase is due to Information System (MMIS) will be im- The higher funding level in 2006 allowed higher wages and benefits such as health plemented. The system will track the life CTA to decrease the annual funding for care, pension, and FICA. Healthcare cycle of vehicle parts, warranties and col- 2007. In 2008 and 2009, the CTA projects costs continue to increase at a double- lect other vehicle information that will these expenditures to be $28 million. digit growth rate. In addition, the CTA improve internal management. pension plan is severely under funded. Purchase of Security Services With a current funding ratio of 32.0 per- Fuel Security is strategically deployed cent, actuarial projections show that the Assuming 24.2 million gallons at throughout the CTA system to provide fund will deplete its assets by 2012 with- $2.27 per gallon, the CTA estimates fuel 24-hour coverage, seven days a week. Se- out additional funding and substantial expenditures at $55.0 million for 2006 curity services are provided by the Chi- changes to the plan. Changes to the plan (Exhibit 4-16). The cost per gallon is high- cago, Evanston and Oak Park Police require legislative intervention or union er than 2005 actual results. departments, the Wells Fargo Guard Ser- agreement. There are no changes in the The CTA forecasts the need for 24.5 vice and National K-9 Security. number of budgeted positions for 2007 million gallons of diesel fuel in the 2007 (Exhibit 4-15). Overall, labor expendi- budget. Due to the uncertainty surround- Exhibit 4-15: CTA Budgeted Positions (in thousands) tures of $915.6 million are projected to ing energy prices, the CTA estimates that 12.00 rise by 7.7 percent in 2008 and then in- the cost of fuel will be about $2.50 per 11.7 crease to $1,037.8 million in 2009, a 13.3 gallon. The 2008 and 2009 financial pro- percent change. jections hold diesel fuel costs at $2.94 per 11.3 gallon each year. 11.25 Material 10.9 10.9 10.9 The material category covers all re- Power pair parts for buses, trains, track, struc- Electric power expenditures for the 10.50 ture and signals in the system. Material rail system are forecasted at $21.6 mil- expenditures are forecasted at approxi- lion in 2006. This change largely reflects mately $75.3 million in 2006, $77.9 mil- service increases throughout the system. lion in 2007, $79.0 million in 2008, and Expenditures for power increase by $6.5 9.75 $80.0 million in 2009. The increase in million in 2007, higher by $0.9 million in material expenditures is mainly due to 2008 and higher by $1.0 million in 2009. increased prices for petroleum-based The $6.5 million or 30 percent increase in 9.00 products such as tires. To help manage 2007 reflects the newly deregulated elec- 2005 2006 2007 2008 2009 tricity market in Illinois. 78 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 4-16: CTA Fuel Cost Per Gallon (cost and gallons in thousands) The 2007 budget is $55.3 million, 2005 2006 2007 2008 2009 which is higher than the 2006 estimate Fuel Cost $ 45,788 $ 55,003 $ 61,233 $ 72,000 $ 72,000 by $5.6 million. The increase is primarily Gallons 24,517 24,200 24,500 24,500 24,500 Cost per Gallon $ 1.868 $ 2.273 $ 2.499 $ 2.939 $ 2.939 due to inflation and increases in contractual services. Expenditures are forecasted Exhibit 4-17: CTA Claims and Safety Statistics (dollars in thousands) to increase from 2007 levels in 2008 and 2005 2006 2007 2009 as a result of inflation, which is also Claims $ 31,500 $ 53,000 $ 25,000 true for 2008 and 2009. Bus Accidents per 100,000 Miles 6.29 6.20 6.00 Rail Accidents per 100,000 Miles 0.13 0.12 0.11 Deficit Expenditures are forecasted at $31.0 types of service: special services and the System-generated revenue (fares and million in 2006, which is a slight decrease Taxi Access Program (TAP). Higher de- other revenue) total more than half of the from prior year (Exhibit 4-18). The 2007 mand for the door-to-door service pro- CTA’s operating budget, with the remain- budget is $35.3 million and for 2008 and vided by three carriers and by taxicab der (operating deficit) covered by public 2009, security expenditures are expected companies in the CTA’s paratransit pro- funding. The operating deficits are de- to increase $0.9 million. These increases gram continued to increase this expendi- rived from total system generated reve- are due to the heightened need for secu- ture (Exhibit 4-19). nue minus total operating expenditures. rity since September 11, and the Madrid The deficit for the budget and two-year and London bombings. Exhibit 4-19: CTA Paratransit Cost financial plan is $580 million, $655 mil- and Statistics lion and $772 million, respectively (Ex- Total Cost of Paratransit Purchase of Paratransit Services hibit 4-6). Services (in thousands) 2005 2006 Until July 1, 2006, the CTA provided Paratransit $ 44,928 $ 23,585 Funding door-to-door paratransit service for pas- Taxi 8,329 3,784 sengers who are unable to use mainline Average Cost per Trip 22.18 22.87 RTA Sales Tax and RTA discretion- transit services. This service was provid- Number of Trips (in thousands) ary funding represent the major sourc- Paratransit 1,770 905 ed by three private carriers and various es of public funds to the CTA and are Taxi 631 291 taxi companies. To use this service, a cus- Average Cost per Trip by Mode usually less than half of the CTA’s op- tomer must be certified by the RTA. The Paratransit $ 25.38 $ 26.06 erating budget. The RTA Sales Tax is CTA provided riders with disabilities two Taxi 13.20 13.00 a primary source of the CTA’s operating funding. The RTA retains 15 percent Exhibit 4-18: CTA Purchase of Security Services Expenditures for paratransit service of the sales tax revenue, and distributes (dollars in millions) 40 are projected at $27.4 million in 2006, the remaining 85 percent to the Service 37.1 36.2 which is $25.9 million lower than the pri- Boards. The CTA receives 100 percent of 35.3 35 or year due to transfer of paratransit ser- the RTA Sales Tax collected in Chicago 31.2 31.0 vices to Pace on July 1, 2006. Therefore, and 30 percent of the sales tax collected 30 no expenditures are budgeted from 2007 in suburban Cook County. RTA discre- through 2009. tionary funds for the CTA are expected 25 to range between $164 million and $187 All Other Expenditures million from 2005 to 2009. Apportion- 20 All other expenditures include util- ments from the RTA’s 15 percent share ities, rents, maintenance and repair, of the sales tax revenue and the State’s 15 advertising, commissions, consulting, in- public transportation fund (PTF) are the surance, and other general expenditures. source of the RTA’s discretionary funds. 10 For 2006, $49.7 million is forecasted,

5 which is $1.3 million, or 2.6 percent less than the prior year (Exhibit 4-20). 0 2005 2006 2007 2008 2009 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 79

Recovery Ratio ing customers. The average fare for 2006 and are projected to be unfavorable to The CTA’s recovery ratio equals total is estimated at 93¢ or 5.6 percent higher budget by $45.5 million or 4.4 percent. system-generated revenue, with statuto- than budget and is a result of the fare in- Expenditures for labor, material, fuel, ry and approved adjustments, divided by crease for customers paying cash. and injuries and damages are expected to total operating expenditures, with statu- The reduced fare subsidy is the State’s be over budget for the year. This is pri- tory and approved adjustments. In 2007, reimbursement to the CTA for providing marily due to higher energy and com- the CTA recovery ratio is 52.0 percent. discounted fares to the disabled, the el- modity prices that impacts the CTA’s The Region section provides the detailed derly, and students. The reduced fare re- fuel and material expenditures. In addi- recovery ratio calculation. imbursement is $1.4 million favorable to tion, the CTA contributed an additional The following factors affect the re- budget. Ridership for reduced fare cus- $20.0 million to the injuries and damag- covery ratio for the 2006 estimate and tomers continues to exceed prior years. es fund to meet the actuarial projection. 2007-2009 plans. First is the inclusion of Other revenue is expected to be $6.8 Power, security, paratransit services and $22 million of in-kind security services million favorable to plan. The categories other expenditures are forecasted to fin- provided by the Chicago Police Depart- listed below reflect this line item. ish under budget due to cost containment ment, which is included as both revenue Contributions from local govern- strategies implemented to ensure that the and expenditure in the recovery ratio cal- ments of $5 million are on par with bud- CTA balanced its budget in 2006. culation. Second is the exclusion of ad- get. The RTA Act requires the City of Labor expenditures are projected at ditional security expenditures from the Chicago to contribute $3 million and $769.2 million, which is $20.2 million recovery ratio beginning in 2006. Finally, Cook County to contribute $2 million or 2.7 percent above budget. The in- expenditures for paratransit are eliminat- annually to the operations of CTA. Rev- crease is related to the arbitration award. ed for 2007, 2008 and 2009 as all para- enue from advertising, charter, and con- Wage rate increases under this award, transit services were transferred to Pace cessions is at par with budget. when applied to all union employees, effective July 1, 2006. The CTA’s recov- Investment income is estimated at exceed amounts provided in the bud- ery ratio was 54.1 percent in 2005 and is $11.0 million, which is $6.0 million more get for three year period. Benefits (ex- expected to be 55.8 percent in 2006 (Ex- or 122.8 percent higher than budget. The cluding paid time off) provided to the hibit 4-6). CTA benchmarks its investments against CTA’s employees equal approximate- the rates for the 90-day Treasury bond. ly 27 percent of the CTA’s labor costs. 2006 Budget Versus 2006 Estimate Since the start of the year, interest rates Material expenditures are forecast- The CTA expects a balanced bud- for 90-day Treasury bonds have increased ed at $75.3 million, which is higher than get in 2006. from 3.89 percent to 4.96 percent. budget by $8.2 million. The increase in All other revenue is projected at $21.5 material expenditures is due to higher Revenue million, which is $0.8 million or 3.7 per- energy prices on building materials, ve- Revenue from fares is forecasted at cent higher than budget. This is due to hicle replacement parts and other mate- $463.8 million and compares favorably to higher rental and parking revenue. rials the CTA uses in day-to-day system the budget by $37.3 million, or 8.7 percent maintenance. (Exhibit 4-21). The higher fare revenue is Expenditures Fuel expenditures for revenue equip- due to increased ridership and the Janu- Calendar year 2006 operating expen- ment are expected to be $55.0 million ary 2006 base fare increase for cash pay- ditures are estimated at $1,082.2 million at the end of 2006. This is $7.0 million

Exhibit 4-20: CTA All Other Expenditures (dollars in thousands) All Other Expenditures 2005 Actual 2006 Estimate 2007 Budget 2008 Plan 2009 Plan Utilities $ 20,975 $ 20,891 $ 23,992 $ 24,691 $ 25,691 Advertising and Promotion 2,757 2,331 3,023 3,023 3,023 Contractual Services 37,257 36,597 38,765 38,765 38,765 Leases and Rentals 1,621 2,032 2,042 2,042 2,042 Travel, Training, Seminars and Dues 2,867 2,956 3,111 3,111 3,111 Warranty and Other Credits (20,523) (21,121) (21,781) (21,781) (21,781) General Expenses 6,115 6,058 6,149 6,149 6,149 Total All Other Expenditures $ 51,069 $ 49,744 $ 55,301 $ 56,000 $ 57,000

80 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Statutory Compliance Exhibit 4-21: CTA 2006 Budget Versus 2006 Estimate (dollars in thousands) System-Generated Revenue 2006 Budget 2006 Estimate Variance The RTA Act requires that each Ser- Passenger Revenues $ 426,522 $ 463,808 $ 37,286 vice Board meet the six criterions detailed Reduced Fare Subsidy 30,590 32,000 1,410 in the Region section for their budgets to Other Revenue 55,517 62,334 6,817 Total Revenue $ 512,629 $ 558,142 $ 45,513 be approved. The CTA budget, as submit- Operating Expenditures ted, meets all criteria. Labor $ 748,922 $ 769,163 $ (20,241) Material 67,088 75,337 (8,249) Organizational Structure Fuel 48,000 55,003 (7,003) Power 24,526 21,582 2,944 The CTA organization chart is shown Insurance and Claims 33,000 53,000 (20,000) in Exhibit 4-22 and consists of the follow- Purchase of Security Services 35,335 31,000 4,335 ing divisions. Purchase of Paratransit Services 29,582 27,369 2,213 All Other 50,232 49,744 488 Total Operating Expenditures $ 1,036,685 $ 1,082,198 $ (45,513) CTA Board Operating Deficit $ 524,056 $ 524,056 — The CTA’s governing arm is the Chi- Recovery Ratio % 53.0 54.8 1.8 pts. cago Transit Board consisting of seven board members. The Mayor of Chicago or 14.6 percent higher than budget. The firms. Full year expenditures are estimat- appoints four board members who are 2006 budget assumed an average price of ed at $31.0 million, which is lower than subject to the approval of the City Coun- $2.00 per gallon for 24 million gallons. budget. This lower spending level reflects cil and the Governor. The Governor ap- Fuel prices have been running above bud- the CTA’s decision to utilize alternative points three board members who are get and are estimated to end the year at an security measures, such as increasing the subject to the approval of the State Sen- average price of $2.27. number of CTA employees deployed to ate and the Mayor of Chicago. Electric power expenditures for the rail stations and the installation of addi- The Citizens Advisory Board, the rail system are forecasted at $21.6 million tional surveillance cameras, to maintain CTA Board Members, the Chief of Staff or $2.9 million lower than budget. The a safe environment to riders. In addition to the Chairman, and the Secretary of decrease can be attributed to a warmer to the services contracted by the CTA, the CTA Board report to the Chairman than average winter. the Mass Transit Unit of Chicago Police of the Board. Expenditures for insurance, claims Department (CPD) continues to provide and litigation for injuries and damag- services to the CTA at an estimated cost General Counsel es that occur on CTA property or with of $22 million. The General Counsel handles appel- CTA vehicles are forecasted at $53.0 mil- The purchase of paratransit services late matters, claims and tort litigation, and lion for 2006 which is $20.0 million more is estimated at $27.4 million and is $2.2 workers compensation matters. than budget. This is due to the CTA million less or 7.5 percent lower than bud- working to replenish its damage reserve get. ADA paratransit trips are project- President fund. A 2005 actuarial report showed ed to finish the year at 1.2 million trips. The President is the CTA’s chief ex- the fund to be under funded by approxi- This curbside service was provided by ecutive and is charged with executing the mately $20.0 million. Based on funding three carriers and taxicab companies. Ef- policy decisions made by the CTA Board the reserve at the amount estimated by fective July 1, 2006, all ADA paratransit of Directors and providing direction to the actuaries during 2006, the CTA ex- services was transferred to Pace. Other the CTA staff as they work to fulfill the pects this expenditure to be lower in fu- services include utilities, rents, mainte- mission and goals of the Service Board. ture years. nance and repair, advertising, commis- Security is deployed strategically sions, consulting, insurance, overhead Treasurer throughout the system to provide 24- allocated to capital jobs, and other gen- The Treasurer manages cash and han- hour coverage, seven days a week. These eral expenditures. The current forecast dles investment. services are provided by the Chicago, equals $49.7 million, which is slightly Evanston, and Oak Park Police depart- under budget. ments and contracts with private security RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 81

Office of Inspector General The Technology Management depart- The Office of Inspector General re- ment includes management information views and analyzes the integrity of fi- systems. nancial, operating, and computer system activities and any other organizational Transit Operations activity that management requires. This Transit Operations, which represents office is also responsible for financial and the largest percentage of CTA employ- general investigations. ees, is responsible for bus and train operations, customer and paratransit services Security and System Safety (prior to July 1, 2006), planning, security, Security and System Safety adminis- control center, and training. ters the Destination Safety program with Bus and Rail Operations manages a aims to reduce employee and third party fleet of 2,106 buses and 1,190 rail cars accidents and injuries. that cover 188,000 bus miles and 189,000 rail miles driven every day. They employ Management and Performance approximately 4,200 full-time equivalent Communications and Marketing is re- bus operators and 1,300 rail operators sponsible for marketing, media relations, that provide service to the customers. identity development, and publications. The Control Center monitors passen- Employee Relations department is re- ger and facility security and maintains sponsible in maintaining a high level of accident statistics and monitors environ- employee satisfaction and ensuring la- mental affairs. The Control Center oper- bor-management effectiveness. The de- ates 24 hours a day, 7 days a week. partment also administers labor contracts The Planning department is respon- and grievances. sible for developing routes and schedules Finance is responsible for budgeting, that best synchronize the CTA capabil- general accounting, investment support, ities with customer demand. Planning program development, and the manage- ensures that the highest level of service ment and control of property, grants, is attained. and funding. The Service and Reliability Oper- The Government and Community ations provide preventive and correc- Relations and Affirmative Action de- tive maintenance in accordance with the partment monitors transit legislation that CTA’s maintenance program. affects the CTA on both regional and na- The Training and Customer Service tional levels. department provides employee training The Human Resources department and customer information, researches includes recruiting, hiring, benefit ser- ways to increase customer satisfaction, vices, medical services, and program and forges business relationships. compliance. The Property and Real Estate Asset Construction, Engineering Management is responsible for the man- and Facilities Maintenance agement of the CTA headquarters, the The Construction, Engineering and CTA’s control center, and for the manage- Facilities Maintenance department in- ment of all properties leased by the CTA. cludes system maintenance support, The Purchasing/Warehousing depart- power and way maintenance, rail station ment includes inventory management. appearance, and facility maintenance. 82 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 4-22: CTA Organization Chart

Chicago Tran sit Board

General Office of Counsel In spector General

Trea surer

Security & President System Safety

Construction, Management Tran sit Engineering & Facilities and Performance Operations Maintenance

Communications Bus Construction and Marketing Operations

Employee Control Center Engineering Relations

Facilities Finance Planning Maintenance

Government and Rail Community Relations Operations and Affirmative Action

Human Service & Reliability Resources Operations

Property & Real Estate Training & Customer Asset Management Service

Purchasing / Ware housing

Tech nology Management RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 83

5 Metra Operating Plan 84 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 85

Overview an average weekday ridership of 310,800. ridership in 2006 increased 5.4 percent Metra was formed in November 1983 Peak period ridership represents 78 per- over the comparable period in 2005. The as part of the reorganization of the RTA cent of the total average weekday trips. completion of three New Start projects: by the State of Illinois. Metra (the com- Metra operates 60 percent of its trains the Union Pacific West, the SouthWest muter rail division) is responsible for the on weekdays, 25 percent on Saturdays Service and the North Central Service day-to-day operations of the region’s and 15 percent on Sundays and holidays. expansions resulted in higher overall rid- commuter rail system including fare and The trains’ operating speeds are 8 per- ership in 2006. Ridership on these three service levels, capital improvements, fi- cent higher during a weekday peak peri- lines increased by a total of 12.1 percent nances, passenger services, safety, and od than during off-peak hours. through October 2006. Ridership and systems planning. Service is operated by Metra serves the region on routes service projections are summarized in private carriers under contract to Metra owned by Metra or freight carriers and Exhibit 5-2. and by Metra directly. through the purchase of service agree- Metra has successfully marketed off- Metra is governed by a seven-member ments with Union Pacific and Burling- peak and reverse commute trips. How- board of directors; three of the directors ton Northern Santa Fe, the two largest ever, Metra’s primary customer base is are appointed by the suburban members freight carriers in the nation. The South work trips serving the Chicago down- of the Cook County Board. The County Shore Line, operated by the Northern town market. Surveys indicate that al- Board Chairmen of Kane, Lake, McHen- Indiana Commuter Transportation Dis- though an increased number of riders are ry, and Will counties appoint two direc- trict (NICTD), is another Metra partner using Metra for non-work related purpos- tors and the County Board Chairman providing service between Chicago and of DuPage County appoints one direc- South Bend, Indiana. Exhibit 5-1: Metra Ridership (in millions) tor. The Mayor of the City of Chicago, Metra’s hub is the downtown Chi- 100 subject to City Council approval, also cago business district. Four downtown 84.4 85.2 86.5 appoints one director. The Chairman of terminals feed service to all of Metra’s 11 82.3 Metra’s board of directors must be one of lines. Today, approximately one-half of 80 77.0 the seven directors, and is appointed by all commuter trips from the suburbs to the concurrence of five directors. downtown Chicago are made on Metra. 60 Service Characteristics Ridership The Metra rail system is comprised of Metra’s ridership, excluding South 11 separate lines, which run north, west, Shore service outside Illinois, for the year 40 and south of the Chicago central business 2005 totaled 77.0 million passenger trips district. The system extends 565 route- (Exhibit 5-1). In 2006, Metra’s ridership miles to the limits of the six-county area continues to grow with projected pas- 20 and serves 237 local rail stations in more senger trips of 82.3 million, exceeding than 100 communities. Metra provides the record ridership in 2001 of 79.2 mil- safe, reliable commuter rail service with lion. For the January to October period, 0 2005 2006 2007 2008 2009

Exhibit 5-2: Riders and Miles (in thousands) 2005 Actual 2006 Estimate 2007 Budget 2008 Plan 2009 Plan Total Riders 80,135 85,938 88,055 88,936 90,270 South Shore Elimination (1) (3,151) (3,605) (3,668) (3,705) (3,760) Total Metra Riders 76,984 82,333 84,387 85,231 86,510 Total Revenue Car Miles 33,319 35,824 35,920 36,047 36,003 South Shore Elimination (1) (2,631) (2,747) (2,752) (2,761) (2,756) Total Metra Revenue Car Miles 30,688 33,077 33,168 33,286 33,247 Total Passenger Miles 1,835,419 2,006,074 2,055,665 2,076,221 2,107,365 South Shore Elimination (1) (96,751) (110,960) (112,902) (114,031) (115,742) Total Metra Passenger Miles 1,738,668 1,895,114 1,942,763 1,962,190 1,991,623

(1) Ridership outside the Illinois service area is excluded from the South Shore operating statistics. 79 percent of South Shore ridership occurs outside the Illinois service area.

86 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 5-3: Average Daily Passenger Loads by Service Period (in thousands) Matching the supply of service to the July 2001 –June 2002 July 2005– June 2006 Change % Change demand is one means of maintaining sys- Service Period tem efﬁciency. Metra measures capacity Peak Direction 242 243 1 0.4 Reverse Peak 13 16 3 19.4 utilization train-by-train, which allows it Midday 30 34 4 13.2 to track average daily passenger loadings Evening 16 18 2 9.1 by service period (see Exhibit 5-3) by line Total Weekday 302 311 9 3.0 and to analyze trends. In addition, Me- Saturday 55 67 12 22.6 tra monitors and reports trains with oc- Sunday 32 39 8 24.3 cupancy rates exceeding 95 percent. This

es, work trips still account for more than downtown office occupancy rates aver- information is valuable support for ser- 90 percent of all trips. Exhibit 5-3 com- aged 83.4 percent for the third quarter of vice change decisions. pares 2001 and 2006 average daily load 2006, a decrease of one percentage point Another more general measurement counts by service period. from 2005 and a decrease of 8.6 percent of system-wide effectiveness is made by Trains operating in the reverse-peak points from 2001. relating the number of passengers to the direction, during midday, and weekend number of miles of service, thereby cal- periods have realized the greatest per- Service Quality culating passengers per mile. Metra’s centage gains. These gains are attributable To deliver on its objective, to provide passengers per revenue car mile ratio de- to efforts taken by Metra to broaden its service that is customer-driven, flexible creased from 2.76 in 2000 to 2.51 in 2005. ridership base. Such efforts include Me- and personalized, Metra knows that it In the case of a new service, the num- tra’s weekend ticket, enhanced off-peak must understand the needs and interests ber of miles increases faster than rider- service, targeted promotion of service to of its customers. Metra periodically con- ship, thereby decreasing the passenger suburban employers, marketing the ser- ducts on-board surveys to measure var- per mile ratio. vice for travel to cultural and entertain- ious service attributes. Metra not only Metra strives to strike a balance be- ment attractions, and Metra’s Bikes on measures general rider satisfaction, but tween mile increases due to service ex- Train program. This program was imple- also collects information on what service pansions and passenger growth. The mented on June 1, 2005. In 2006, the pro- attributes are considered the most valu- passenger per mile ratio in 2005 of 2.51 gram was expanded to allow three bikes able to attract and retain riders. This data shows a decrease to 2.49 compared to in each diesel rail accessible car and two provides direction for planning, schedul- the 2006 estimate. According to its 2007 in each electric rail car. ing and marketing activities. For exam- budget, Metra estimates a ratio of 2.54, Passenger loads on peak period, peak ple, Metra’s goal to provide safe, reliable, which is expected to increase to 2.60 by direction trains have realized a slight clean and on-time service is directly de- 2009 (Exhibit 5-5). increase of 0.4 percent during the five- rived from the most important service Another measurement, used to cal- year period. For the January–October characteristics identified through these culate whether costs are being contained 2006 period, average monthly region- customer surveys. and efficiency maintained, is cost per rev- al employment was up 2.0 percent from Metra measures service reliability by enue car mile. This measure recognizes the same period of 2005. However, Me- on-time performance. A train delay is re- that costs tend to vary with the amount tra’s primary travel market is downtown corded if the train is more than five min- of service provided. As seen in Exhibit Chicago and there are indications that utes late at the final destination compared 5-6, this measurement shows that Metra downtown is not performing as well to the schedule. Exhibit 5-4 presents sys- has efficiently held expenditures in-line as the region as a whole. For example, tem-wide annual on-time performance with cost increases, when compared to since 2001. Metra’s on-time performance the Consumer Price Index (CPI). Exhibit 5-4: On– Time Performance in 2005 was 96.3 percent. The cost per passenger ratio measures Year Delays % On-Time To be responsive to changing custom- cost effectiveness and is designed to ex- 2001 6,287 96.8 er needs, Metra continuously looks for amine how well vehicles are deployed to 2002 6,809 96.5 ways to expand and improve its service serve riders. As Exhibit 5-6 illustrates, 2003 5,627 97.1 2004 6,027 96.9 within financial constraints. Metra’s cost per passenger ratio has out- 2005 7,260 96.3 performed the CPI. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 87

Service Expansion so that 93 percent of the Metra system has More than $70.8 million has been spent January 2006 marked the largest ex- a smoother ride. Metra has also replaced on station construction and improvement pansion of rail service in Illinois in de- 80 of the system’s 132 interlockers and projects since 1983. cades with Metra’s completion of three control points. Metra completed work New Start projects. Metra completed on 69 percent of the system’s crossings Safety and Security these projects one year ahead of schedule signals and spent more than $45 million Metra provides employee incentives and $50 million under budget. upgrading highway/rail crossing signal to those regularly meeting goals. Key The extension of the Union Pacific interconnects. among these goals is workplace safety. A West (UP-W) Line to Elburn, and the ex- Since 1984, Metra has expended more safe workplace correlates into a safe en- pansion and extension of the SouthWest than $410.5 million on projects to renew vironment for Metra employees and Me- Service (SWS) to Manhattan, as well as and rebuild its yards, shops, and facilities. tra commuters. the expansion of the North Central Ser- This figure does not include yard projects Metra’s investments in staff training vice (NCS) resulted in a combined rid- related to the three New Start projects. programs and incentive plans have re- ership increase of 12.1 percent through Through two state bond programs sulted in substantial dividends, includ- October on these three lines. passed in 1989 and 1999, Metra was able ing commuter satisfaction and industry Metra currently has $2.5 billion in un- to purchase 56 new locomotives, rehabil- recognition. funded capital projects, including $880 itate 140 electric district passenger cars, In addition to routine workplace safe- million in local matching funds for four and acquire 476 new bi-level cars and 26 ty training, Metra employees have also New Start projects that are authorized new Highliner cars for the Metra Electric been trained to recognize and observe under the most recent Federal Transpor- District. In addition, the funds enabled potential safety hazards in and around tation Act: the Safe, Accountable, Flexi- the rehabilitation of 27 locomotives and trains, stations and tracks. Metra is the ble, Efficient Transportation Equity Act: 75 other rail cars. only railroad organization in the nation A Legacy for Users (SAFETEA-LU). Since Metra began providing service in to train all of its 4,000 employees in ter- Transit in northeastern Illinois has had no northeastern Illinois, Metra has rehabbed rorism awareness and emergency pro- major capital program since 2004, when or rebuilt more than 85 percent of the sys- cedures. As part of these investments, money was available through the Illinois tem’s stations and constructed 22 new security cameras are being installed at FIRST bond program. The state has yet stations. Parking throughout the system several downtown train stations. Metra to authorize a new bonding program to has been expanded by nearly 33,000 spac- is also installing emergency signage in- replace Illinois FIRST. es for a total of more than 85,500 spaces. volving LED technology in strategic lo- Metra Connects program includes cations throughout Metra’s downtown the four projects authorized under SAF- Exhibit 5-5: Passengers per Revenue Car Mile terminals. The signs will alert commut- (in millions) ETEA-LU: the extension and capaci- 2.7 ers in advance to emergency situations ty expansion of the UP-Northwest, the and can display pre-programmed or free capacity expansion and upgrade of the form messages to assist Metra in commu- 2.60 UP-West, the creation of the SouthEast 2.6 nicating with customers. Service line, and the creation of the sub- 2.56 In addition, Metra installed a train 2.54 urb-to-suburb STAR line. If funding is tracking system using Global Positioning 2.51 secured, Metra will expand even farther 2.5 2.49 System (GPS) technology in 2001. GPS into the region, create better suburb-to- monitors the real time position and move- suburb connections and improve service ment of all trains on Metra’s routes. efficiency through key infrastructure im- 2.4 GPS offers Metra’s operations pro- provements. fessionals a snapshot that details the performance of every train during an Maintenance and Modernization 2.3 operational day. The real-time informa- Since Metra was formed in 1984, Me- tion supports and delivers a more effec- tra has replaced more than one million rail tive response to any service disruptions ties throughout the system, and replaced 2.2 or emergencies and leads to enhanced 2005 2006 2007 2008 2009 bolted rail with continuous welded rail, overall safety. 88 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Metra also encourages and provides Strategic Planning each Service Board to achieve their goals. safety training and education opportu- Metra has joined with the RTA, the This includes pricing out each step and nities within the community. CTA and Pace suburban bus in the devel- determining logical funding sources. opment of a strategic plan for public tran- The ultimate goal of the Strategic Plan sit in the region. As part of this effort, the is to provide more quality travel choices Exhibit 5-6: Cost Effi ciency (in dollars) Moving Beyond Congestion project will and reduce the region’s dependence on

22 team the region’s transit providers with the automobile. At the same time, Metra business, government, tourism and com- plans to identify the actions and funding 20 munity groups to gather regional consen- necessary to maintain the current system, sus on what resources the region requires 18 while growing to meet future needs. over the next decade. Budget and Financial Plan 16 The strategic plan will examine the need for more public transit services to Metra’s 2007 operating budget was 14 1 CPI Chicago PMSA address the region’s congestion prob- built with the expectation that New Tran- Cost Per Mile lems; the lack of funding for capital proj- sit Funding will be forthcoming. How- 12 Cost Per Passenger ects; operating funding that has not kept ever, because there is no guarantee such 10 pace with skyrocketing costs of fuel, elec- funding will be available for operations tricity, security, and health care; and the next year, Metra identiﬁed speciﬁc capi- 8 diversion of capital funds to operating tal projects that will be deferred if such

6 budgets by the region’s transit operators. funds are not provided. Although Me- Through a strategic plan, the RTA, tra does plan to defer capital projects if it 4 Metra, CTA, and Pace hope to shape the does not receive this new source of funds, 2005 2006 2007 2008 2009 region’s future transit system by develop- there are no plans for service cuts or fare (1) CPI (Consumer Price Index); PMSA (Primary Metropolitan Statistical Area). ing a set of practical steps that will allow increases in 2007.

Exhibit 5-7: Metra 2007 Budget and 2008 –2009 Financial Plan (dollars in thousands)

System-Generated Revenue 2005 Actual 2006 Estimate 2007 Budget 2008 Plan 2009 Plan Passenger Revenue $ 198,494 $ 219,300 $ 224,800 $ 227,048 $ 230,454 Reduced Fare Subsidy 2,812 3,000 3,050 3,100 3,150 Other Revenue 59,788 51,405 57,212 58,076 64,252 Total Revenue $ 261,094 $ 273,705 $ 285,062 $ 288,224 $ 297,856 Operating Expenditures Transportation $ 137,714 $ 140,637 $ 143,051 $ 147,321 $ 151,705 Maintenance 176,072 179,718 183,192 188,121 193,572 Administration 32,195 31,997 32,317 33,150 34,051 Pension 3,478 3,736 4,840 5,340 5,607 Diesel Fuel 40,815 55,200 59,581 51,814 54,403 Electricity 12,223 14,470 20,058 20,458 21,686 Security 13,292 13,970 17,000 17,000 17,000 Health Insurance 48,197 49,011 52,125 54,210 56,378 Risk Management and Claims 16,721 16,510 16,700 17,090 17,598 Regional Services and Downtown Stations 22,931 24,708 25,122 25,768 26,534 Total Expenditures $ 503,638 $ 529,957 $ 553,986 $ 560,272 $ 578,534 Operating Deficit $ 242,544 $ 256,252 $ 268,924 $ 272,048 $ 280,678 Deficit Funding RTA Sales Tax 241,727 249,410 257,374 265,594 274,049 PBV and Federal Funds (2) 817 6,842 — — — New Transit Funding — — 11,550 6,454 6,629 Total Deficit Funding 242,544 256,252 268,924 272,048 280,678 Recovery Ratio % (1) 55.1 55.0 55.0 55.0 55.0

(1) Includes allowable expense deductions (funded depreciation, security and lease). In 2007, the amount is $35.7 million. (2) Metra used internal funds (PBV) from prior years in 2005. In 2006, Metra used Federal Capital Funds to fund the operating deﬁcit. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 89

Exhibit 5-8: Metra System -Generated Revenue Exhibit 5-9: 2007 Metra Revenue — $285.1 million (dollars in millions) 300 298 Other Revenue–20%

288 285 Reduced Fare Subsidy–1% 280 274

261 Passenger Revenue–79% 260

Exhibit 5-10: Ticket Sales by Ticket Type (in thousands) 240 July 2004 –June 2005 July 2005– June 2006 Change % Change Monthly 1,125.6 1,170.4 44.8 4.0 25-Ride 14.4 15.5 1.1 7.6 Ten-Ride 1,671.5 1,733.3 61.8 3.7 220 Regular One-Way 6,055.8 6,460.4 404.6 6.7 Conductor 4,011.1 4,360.2 349.1 8.7 Weekend 1,127.0 1,307.3 180.3 16.0 200 Link-Up 58.4 73.1 14.7 25.2 2005 2006 2007 2008 2009 PlusBus 13.8 14.5 0.7 5.1

System-Generated Revenue tion project, and continued growth for imbursement is included in revenue and Total system-generated revenue is ex- the lines which had service expansions is contingent upon annual approval by pected to increase from $261.1 million in or extensions in 2006, such as North the State. In 1999, the Assembly passed 2005 to $297.9 million in 2009. This rep- Central Service, Union Paciﬁc West, and new reduced fare legislation, which dou- resents an increase of $36.8 million or a SouthWest Service Lines. Through Oc- bled the reimbursement level of previous compound annual growth rate of 3.3 per- tober of 2006, ridership on the two lines years. This aid, which totals approximate- cent (Exhibits 5-7 and 5-8). most impacted by the Dan Ryan con- ly $3.1 million in 2007, is expected to stay Metra’s system-generated revenue struction project increased 8.6 percent; constant during this planning cycle. has three major components: passenger the three New Start services increased revenue, reduced fare subsidy, and oth- 12.1 percent. Other Revenue er revenue. Passenger revenue of $224.8 Changing rider and ticket trends, such The other revenue category represents million comprises 79 percent of the total as longer trip length and increased one- 20 percent of Metra’s total revenue for revenue budgeted for 2007 (Exhibit 5-9), way conductor and weekend ticket sales 2007. The components of this category are which is 2.5 percent higher than the fore- (Exhibit 5-10), also contribute to the investment income, joint facility and lease cast for 2006 and 3.6 percent higher than higher passenger revenue. The average revenue, advertising income, capital cred- the 2006 budget. trip length for the January–October pe- its, and miscellaneous non fare-generated riod was 22.6 miles in 2006, which was income. The total other revenue category Passenger Revenue 0.5 percent higher than for the same pe- is expected to grow from $59.8 million in Passenger revenue, or farebox revenue, riod in 2005. 2005 to $64.3 million in 2009, which is a is estimated to increase from $198.5 mil- Metra’s fare structure is presented at 1.8 percent annual growth rate lion in 2005 to $230.5 million by 2009. the end of this section (Exhibit 5-14). This increase of $32.0 million represents Operating Expenditures a 3.8 percent annual growth rate. Metra’s Reduced Fare Subsidy Total operating expenditures are passenger revenue increase is the result of The Illinois General Assembly passed forecast to increase from $503.6 million continued strength in the local economy, legislation in 1989 providing funds to re- in 2005 to $578.5 million in 2009. This the higher cost of gasoline, continued ma- imburse Metra for the cost of providing $75.0 million increase represents a 3.5 jor road reconstruction projects, such as reduced fares for the elderly, students, percent compound annual growth rate the Dan Ryan Expressway reconstruc- and persons with disabilities. The fare re- (Exhibit 5-11). 90 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 5-11: Metra Total Operating administration and RTA pension 7 per- Maintenance of equipment activities Expenditures (dollars in millions) 590 cent, fuel and electricity 14 percent, secu- includes regular repairs, inspection and 579 rity 3 percent, health insurance 9 percent, preventive maintenance on passenger and all other 8 percent. (Exhibit 5-12). train equipment to ensure that this equip- 568 ment is safe and in good working order 560 Transportation to meet train schedules and passenger de- 554 This category includes the functions mand for seating. 546 and activities directly responsible for the Maintenance expenditures are ex- operation of the commuter trains. The pected to increase from $176.1 million 530 major functions include train and en- in 2005 to $193.6 million in 2009. This 524 gine crew work, dispatching, tower op- $17.5 million increase represents a com- erations, ticket sales, police and security pound annual growth rate of 2.4 percent 504 services, employee safety, and supervi- (Exhibit 5-7). 502 sory support. The main objective of this Maintenance programs are being ex- area is to run service consistent with the panded to meet the needs of Metra’s published train schedules in a safe and growing rail car fleet, as well as to satisfy 480 efficient manner and in accordance with increased federal safety requirements. 2005 2006 2007 2008 2009 federal and state regulations. Metra’s 2007 operating expenditures Transportation expenditures are ex- Administration and Pension of $554.0 million are projected to grow by pected to increase from $137.7 million in Administration activities include gen- 4.5 percent from the 2006 estimate. 2005 to $151.7 million in 2009. This in- eral support functions for the organiza- In 2008 and 2009, total expenditures crease of $14.0 million represents a 2.4 tion to ensure overall corporate goals and will increase by 1.1 percent and 3.3 per- percent compound annual growth rate regulations are met. Administrative ac- cent respectively, compared to the pre- (Exhibit 5-7). tivities include human resources, labor vious year (Exhibit 5-7). Inflation is the management committee, information major contributing factor. Maintenance systems, training, accounting and other This category includes two types of ac- support areas. Management of the Metra Expenditure Elements tivities: maintenance of way and mainte- owned and operated rail services are also The components of operating expen- nance of equipment. Maintenance of way included in this category. ditures are transportation, maintenance, activities include the maintenance of track, Administration expenditures are ex- administration and pension, diesel fuel structures, communications and facilities pected to increase from $32.2 million in and electricity, security, health insur- to preserve operational safety, reduce trav- 2005 to $34.1 million in 2009. The $1.9 ance and all other, including claims and el times and service interruptions, and in- million increase represents a compound risk management, regional services and crease passenger comfort. Maintenance annual growth of 1.4 percent. downtown stations. Metra’s 2007 total work is concentrated on safety inspections Pension expenditures are projected to expenditures breakdown is transporta- and short-term projects to safeguard over- increase from $3.5 million in 2005 to $5.6 tion 26 percent, maintenance 33 percent, all track and structure conditions. million in 2009. This $2.1 million increase represents a compound annual growth Exhibit 5-12: 2007 Metra Expenditures — $554.0 million rate of 12.7 percent. The Metra contri-

Fuel and Electricity–1 4% bution to the RTA pension of $4.8 mil- Transport ation–2 6% lion for 2007 is $1.1 million higher than Health Insurance–9% for 2006 (Exhibit 5-7).

All Other%–8

Administration and RTA Pension–7%

Security–3% Maintenance–33% RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 91

Diesel Fuel and Electricity in 2009 are up 6 percent compared to the All Other Diesel fuel is one of the most volatile previous year. This expenditure category includes components of the operating expendi- Electric power is projected to increase risk management and claims, regional tures. Diesel fuel averaged $1.69 per gal- from $12.2 million in 2005 to $21.7 mil- services and downtown stations. lon in 2005 totaling to $40.8 million and lion in 2009. This $9.5 million increase Expenditures for risk management was budgeted at $1.90 per gallon in 2006 represents a compound annual growth and claims are expected to increase from to total $49.2 million. Metra is estimat- of 15.4 percent (Exhibit 5-7). $16.7 million in 2005 to $17.6 million by ing an average price of $2.17 per gallon 2009. This $0.9 million increase repre- in 2006 for a total cost of $55.2 million, Security sents a compound annual growth rate of $6.0 million more than the 2006 bud- Security has become a significant con- 1.3 percent. get. Metra is projecting an average price cern for Metra as it seeks to safeguard rid- Metra is also responsible for setting of $2.30 per gallon for 2007 for a total ers and employees alike. This expenditure fare and service levels, capital improve- of $59.6 million or 21 percent over the category includes police and contract se- ment planning and oversight, and service 2006 budget. Metra is projecting diesel curity services as well as planning, coor- planning. Expenditures for these func- fuel prices to decline to $2.00 per gallon dination, and training with other agencies. tions are included in the regional services on average in 2008, then rise to $2.10 per For 2007, the budget is $17.0 million, and downtown stations category. gallon in 2009. which is 22 percent above the 2006 es- Expenditures in this category are ex- Diesel fuel costs are expected to in- timate of $14.0 million. Security expen- pected to increase from $22.9 million in crease from $40.8 million in 2005 to $54.4 ditures are not expected to exceed 2007 2005 to $26.5 million by 2009. This $3.6 million by 2009. This $13.6 million in- levels in 2008 and 2009 (Exhibit 5-7). million increase represents a compound crease represents a compound annual annual growth rate of 3.7 percent (Ex- growth rate of 7.4 percent. Health Insurance hibit 5-7). In 2007, electric power will be deregu- Metra’s health insurance costs for 2006 Deficit lated, and Metra estimated motive pow- were lower than budgeted due to lower er and electric utility costs to increase by cost plans and lower than anticipated pre- The operating deficit is derived from $5.6 million or 39 percent over the 2006 miums. Health insurance costs for 2007 total system-generated revenue minus to- estimate. Cost increases are expected to of $52.1 million are assumed to increase tal operating expenditures. Metra’s 2007 moderate in 2008 as costs of $20.5 mil- significantly (6.4 percent) over 2006, with budget deficit is $268.9 million (Exhibit lion are 2 percent higher than the 2007 more moderate annual growth in 2008 5-7). This deficit is offset by public fund- budget. Expenditures of $21.7 million and 2009 (Exhibit 5-7). ing to reach a balanced budget.

Funding Exhibit 5-13: Metra 2006 Budget Versus 2006 Estimate (dollars in thousands) System-Generated Revenue 2006 Budget 2006 Estimate Variance The RTA Sales Tax is the major source Passenger Revenue $ 217,092 $ 219,300 $ 2,208 of public funds used to cover the budget- Reduced Fare Subsidy 2,998 3,000 2 ed operating deﬁcit. By statute, the RTA Other Revenue 53,330 51,405 (1,925) Total Revenue $ 273,420 $ 273,705 $ 285 retains 15 percent of the sales tax receipts Operating Expenditures and passes the remaining balance of 85 Transportation $ 140,674 $ 140,637 $ 37 percent to the Service Boards. Of this Maintenance 180,112 179,718 394 remaining amount, Metra receives 55 Administration 32,033 31,997 36 Risk Management and Claims 17,321 16,510 811 percent of the RTA Sales Tax dollars col- Regional Services and Downtown Stations 24,127 24,708 (581) lected in suburban Cook County, and 70 Diesel Fuel 49,222 55,200 (5,978) percent of the RTA Sales Tax collected in Security 21,000 13,970 7,030 the collar counties. Metra’s budgeted stat- Health Insurance 54,053 49,011 5,042 Pension 3,736 3,736 — utory sales tax receipts in 2007 are $257.4 Electricity 13,501 14,470 (969) million (Exhibit 5-7). Total Expenditures $ 535,779 $ 529,957 $ 5,822 Operating Deﬁcit $ 262,359 $ 256,252 $ 6,107 Recovery Ratio % 55.0 55.0 — 92 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Recovery Ratio Fare Structure added to this base fare as fare zone bound- Metra’s recovery ratio equals total Commuter rail fares are based upon aries are crossed. The base fare is $1.95 for (system-generated) revenue, with statuto- travel between designated fare zones. a one-way trip. The incremental charge ry and approved adjustments, divided by These zones are set at ﬁve-mile intervals is 40¢ or 45¢ for additional zones (Ex- total operating expenditures, with statu- beginning at each rail line’s downtown hibit 5-14). tory and approved adjustments. In 2007 Chicago station. The zone system does Metra’s recovery ratio is 55.0 percent. The not apply to the South Shore fares, set by Organizational Structure RTA section provides a detailed recovery the Northern Indiana Commuter Trans- Metra’s administrative organization ratio calculation (Exhibit 3-31). portation District (NICTD). chart is presented in Exhibit 5-15. A uniform base fare is charged for Statutory Compliance travel within a zone and increments are The RTA Act requires that each Ser- vice Board meet six criteria, which are de- Exhibit 5-14: Metra Ticket Pricing Formula tailed in the Strategy section, for Board Ticket Type Period of Validity Number of Rides Pricing Basis approval of its budget. The Metra budget Monthly* Calendar Month Unlimited 27.0 times one-way fare 10-Ride* One Year Ten 8.5 times one-way fare meets each of these criteria. One-Way* One Year One Base fare plus increments Weekend Saturday/Sunday Unlimited Flat rate—$5 2006 Budget Versus 2006 Estimate (*) These ticket types are offered at a reduced rate to senior citizens, persons with disabilities, children, and Total revenue is expected to ﬁnish $0.3 students through high school traveling to and from school. Military personnel in uniform are entitled to reduced one-way ticket rates. The base fare for a one-way ticket is $1.95. million favorable to budget for 2006. Pas- senger revenue is projected to be favorable to budget by $2.2 million or 1.0 percent Exhibit 5-15: Metra’s Organization Chart due to higher ridership. Other revenue

is expected to be unfavorable to budget Board of Directors by $1.9 million due mostly to lower capital credits.

Expenditures are forecast to ﬁnish Executive Director $5.8 million, or 1.1 percent favorable to budget for 2006. Expenditures such as transportation, maintenance, and admin- Deputy Legislative Executive Director Affairs istration were close to budget. However, fuel exceeded budget by $6 million or 12.1 lanning & Real Law percent, while security was $7 million Corporate P Audit Administration Estate Development Depar tment or 33.5 percent under budget. Exhibit 5- 13 details the variance between the 2006 budget and 2006 estimate. DBE Director Administrator Marketing

Media Finance Relations

Human Resources RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 93

6 Pace Operating Plan 94 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 95

Suburban Service

Overview Employment and residential shifts muter rail feeder, employer shuttle, and Pace was formed in 1983 as part of the outward from central business districts route-deviation services) and further reorganization of the Regional Trans- have resulted in longer commutes, greater customize the mix of tailored, flexible portation Authority (RTA), and began single-occupant automobile use, increased community-based services (e.g., demand service in 1984. A 12-member board of di- traffic congestion, and declining air qual- response, curb-to-curb van service, and rectors, made up of current and former vil- ity. Changing travel needs are the result subscription routes) based on detailed lage presidents and mayors, governs Pace. of the growing suburban job market, studies of travel markets and local inter- Beginning July 1, 2006, Pace assumed welfare-to-work initiatives, and greater ests and conditions. Vision 2020 address- operating responsibility for all paratransit work-hour, workday, and work-location es three service levels—low, medium, and service in the RTA region. Pace’s regional flexibility. However, increased support for high—which reflect the spectrum of pop- ADA paratransit service is discussed sep- smart growth, transit-oriented develop- ulation and employment density found in arately later in this section. ment, and environmental concerns have Pace’s service area. To achieve high ser- accompanied these trends. In light of these vice levels at low cost, Pace will apply Service Characteristics factors, Pace is working to better serve Bus Rapid Transit (BRT) features, limit- Pace’s mission is to provide efficient various suburban travel markets. ed stops, simple routes, frequent service, well-integrated transportation services To attract more riders, Pace will need off-board fare payment, electronic next- that meet the travel needs of the subur- to gain consensus among a diverse group stop announcements, traffic signal prior- ban Chicago area. Effective suburban of stakeholders, communities, and orga- ity, and bus lanes on expressway/tollway mobility supplies line-haul and com- nizations interested in transportation and and arterial line haul routes. munity-based services that provide ac- smart growth; create viable community To develop an effective regional arte- cess between both nearby and distant and regional partnerships; develop service rial and community-based transit system, origins and destinations. To attract rid- plans for specific communities and groups Pace began route-restructuring initiatives ers in an automobile-oriented market of communities; and gain funding from in 2000. Consistent with Vision 2020, requires coordination of infrastruc- local, regional, state and federal sources. the goals of route restructuring include ture, service, information, and trav- In April 2002, Pace unveiled a new faster, more efficient, and more effective el demand. Achieving this mission will long range comprehensive operating plan service, as well as an enhanced image of also require the continued restructur- called Vision 2020. The plan outlines the transit as an alternative to the automo- ing of Pace’s current fixed-route service. goals and overall direction for Pace for bile. Pace restructured routes in Elgin, Pace’s suburban service area mea- the 21st century and a strategy to create along the Halsted Corridor, and in the sures 3,446 square miles. The suburban a true suburban transportation network vicinity of Orland Square Mall. In 2005, area is divided among the six counties through route restructuring. Vision 2020 Pace completed its restructuring of elev- and incorporates 270 municipalities. also includes plans for transit signal prior- en routes in North Shore communities to Transportation needs in this broad area ity, bus-only lanes, localized flexible tran- serve new trip generators, reduce trans- are as unique as the individual commu- sit services and regional transportation fers, and eliminate unproductive seg- nities Pace serves. Pace service includes centers that provide coordinated links be- ments and route duplication. approximately 160 regular routes, 55 tween the region’s transit services. Late in 2005, Pace implemented an feeder routes, 630 vanpool vehicles, 365 Pace already works with 210 commu- initial round of service changes in the Pace-owned Dial-A-Ride paratransit ve- nities to plan, design, and deliver services. Aurora area as part of its restructur- hicles, and various subscription, seasonal, Vision 2020 identifies nearly 100 service ing efforts in the Fox Valley/Southwest and shuttle routes. The suburb-to-suburb areas for further study in partnership DuPage region. Pace is investigating shut- travel market is the largest service area in with communities. To better support a tle service options for employers located the region and is primarily served by the service area that spans walkable subur- near Metra’s North Central Service sta- automobile. ban neighborhoods, satellite cities, and tions. Pace is redesigning service in south- rural communities, Pace will expand its ern and southwestern Cook County and current offerings (e.g., fixed-route, com- all of Will County. In the next few years, 96 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Pace plans restructuring initiatives in Exhibit 6-1: Pace Ridership (in millions) Exhibit 6-2: Pace Suburban Service Passengers Per Mile West Cook County/Elgin, North Lake 41 1.00 County/McHenry County, and North/ 40.1 0.96 Northwest Cook County. 39.4 0.95 0.95 0.95 38.9 0.95 Pace is seeking to implement a region- 39 0.93 38.3 al Transit Signal Priority (TSP) program along major arterial routes. Implementa- 0.90 36.9 tion of the Harvey Transportation Center 37 TSP initiative will improve the operation 0.85 of the transit terminal and increase the reliability of Pace routes traveling along 35 nearby 154th Street, US 6, and Halsted 0.80 Street. Initially focusing on expanding Pace’s existing express bus service, im- 33 0.75 plementation of a suburban expressway/ tollway service express bus network will connect major regional activity centers 31 0.70 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 and park-n-ride lots. Pace’s Bus Rapid Note: In 2005 and 2006, ridership includes ADA paratransit service. Transit (BRT) Corridor Implementation will develop Pace’s Arterial Rapid Transit to 39.4 million in 2008 and 40.1 million Exhibit 6-3: Pace Suburban Service Cost Effi ciency Network for the Region (PARTNER) in 2009. These 1.1 million and 0.7 mil- 5 program. Integrated with Pace’s express lion increases in ridership correspond to bus service, the PARTNER program will 2.9 percent and 1.7 percent, respectively operate on major east-west and north- (Exhibit 6-1). 4 south arterials and utilize TSP and queue Marketing Strategies jump lanes to increase travel speed and route reliability. Pace’s 2007 marketing strategy imple- 3 mentation will continue to take the form

Ridership of tactical local awareness campaigns. Cost Per Passenger In 2005, Pace ridership of 36.9 million Initiatives will educate the public about 2 Cost Per Mile comprised suburban service ridership of the availability of Pace services and the Passengers Per Mile 36.4 million and ADA paratransit rider- value of public transportation to both ship in Pace’s suburban service area of 0.5 riders and non-riders. After categorizing 1 million. Pace expects 2006 ridership of riders and potential riders based on their 38.9 million, including suburban service commuting, demographic, and psycho- ridership of 37.1 million, ADA paratran- graphic characteristics, campaigns will 0 2002 2003 2004 2005 2006 sit ridership in Pace’s suburban service promote the features and beneﬁts of Pace Note: In 2005 and 2006, cost per mile and cost area of 0.5 million, and ADA paratran- services to these sub-groups on a local or per passenger include ADA paratransit. sit ridership in the CTA service area dur- county level. ing the second half of 2006 of 1.2 million. for suburban service is expected to remain Cost Efﬁciency Beginning in September 2004, the RTA near 0.95 through 2009 (Exhibit 6-2). provides additional funding to Pace to Matching the service supply to de- The cost per mile measurement rec- accept the CTA 7-Day Pass, U-Pass, and mand is one means of achieving system ognizes that expenditures tend to vary Visitor Fun Passes. effectiveness. One way to measure sup- with the amount of service provided Pace expects suburban service rider- ply versus demand is to relate the num- (Exhibit 6-3). Cost per mile has increased ship of 38.3 million in 2007. Pace projects ber of passengers to the number of miles from $3.22 in 2002 to $3.76 in 2005, and suburban service ridership to increase serviced. Pace’s passengers per mile ratio is projected to rise to $3.88 in 2006 with RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 97

Exhibit 6-4: Pace Suburban Service 2007 Budget and 2008– 2009 Financial Plan* (dollars in thousands)

System-Generated Revenue 2005 Actual 2006 Estimate 2007 Budget 2008 Plan 2009 Plan Farebox Revenue (1) $ 31,726 $ 31,988 $ 29,791 $ 30,941 31,765 Local Share/Other 13,738 14,179 14,783 14,830 15,153 Reduced Fare Subsidy 3,236 3,378 3,327 3,327 3,327 Advertising/Investment 5,050 5,448 5,532 5,265 5,124 Total Revenues (2) $ 53,750 $ 54,993 $ 53,433 $ 54,363 55,369 Operating Expenditures Labor/Fringes $ 72,996 $ 78,211 $ 80,989 $ 84,144 $ 86,228 Health Insurance 13,400 14,921 15,299 17,204 19,340 Parts/Supplies 4,390 4,717 4,950 5,115 5,276 Utilities 1,620 1,744 1,868 1,908 1,950 Fuel 11,738 14,246 15,026 15,417 16,025 Insurance 9,611 9,793 9,925 9,689 9,902 Other 7,911 9,475 9,659 10,398 10,877 Public/Private Contract 9,287 9,564 10,307 10,760 11,234 Dial-A-Ride 12,287 12,781 13,296 13,881 14,492 Vanpool 2,531 3,015 3,567 3,981 4,477 Ride DuPage 1,382 1,471 1,570 1,733 1,899 Restructuring Initiative 209 1,137 1,197 — — ADA Paratransit Service 12,261 43,556 — — — Regional ADA Support Credit — — (1,529) (1,590) (1,654) Total Expenditures (2) $ 159,623 $ 204,631 $ 166,124 $ 172,640 $ 180,046 Operating Deficit $ 105,873 $ 149,638 $ 112,691 $ 118,277 $ 124,677 Deficit Funding RTA Sales Tax $ 76,399 $ 78,979 $ 81,574 $ 84,272 $ 87,060 RTA Discretionary Funds 2,653 2,603 2,618 2,614 2,607 RTA Regional ADA Funding 1,000 — — — — RTA/State ADA Paratransit Funds (3) — 16,918 — — — Federal CMAQ and JARC Funds 262 677 1,623 1,237 347 Funding for Paratransit (4) 7,783 3,995 — — — RTA Pass Reimbursement 2,000 2,000 4,000 4,000 4,000 Federal 5307 Funds (5) 16,491 35,170 — — — New Transit Funding (6) — — 22,876 26,154 30,663 Total Deficit Funding $ 106,588 $ 140,342 $ 112,691 $ 118,277 $ 124,677 Funding Surplus/ (Deficit) 715 ( 9,296) — — — ADvAntage Program—In-Kind $ 4,693 $ 4,758 $ 4,758 $ 4,758 $ 4,758 Recovery Ratio % (7) 39.7 34.2 36.4 — —

(*) 2005 Actual includes both suburban service and suburban ADA paratransit service. 2006 Estimate includes suburban service and suburban ADA paratransit service during all of 2006 and ADA paratransit service in the CTA service area provided by Pace during the second half of 2006. (1) Suburban service includes vanpool, municipal vanpool, Ride DuPage, and other services. (2) Excludes ADvAntage Program—in-kind revenue and expenditure (of equal amount) that are included in Pace’s recovery ratio calculation. The amount in 2005 was $4.7 million. The ﬁgure for 2006, 2007, 2008, and 2009 is $4.8 million. (3) Includes additional RTA operating funds for ADA paratransit of $1.6 million.(4) Since the capital-related costs of paratransit service under contract are characterized as operating expenditures under GAAP, this funding is recognized as operating revenue. In 2005 and 2006, this amount is divided between funding for Suburban Service (Dial-A-Ride) and funding for ADA paratransit. The amounts applied to the recovery ratio calculation were $4.8 million in 2005, $4.0 million for Suburban Service in 2006, and $5.9 million for Regional ADA paratransit service in 2006. (5) Federal Section 5307 funding (preventive maintenance and ADA complimentary) transferred from the capital program to operations. (6) If these funds do not materialize, actions to balance Pace’s budget may include, but are not limited to, using capital funds for operations, adjusting service levels, and adjusting fares. (7) The recovery ratio in 2007 exceeds the 36 percent “Mark” set for Pace by the RTA Board on September 14, 2006.

Capital Investment the addition of CTA service area ADA Rolling Stock paratransit during the second half of the The capital program funds the pur- In 2006, Pace intends to replace 38 year. Similarly, Pace’s cost per passen- chase and maintenance of rolling stock, ﬁxed-route buses which have exceeded ger has increased from $3.75 in 2002 to support facilities and equipment (includ- their useful life. The new vehicles will be $4.33 in 2005, and is projected to rise to ing new technologies), and project man- 30-foot vehicles. Pace will also purchase $4.55 in 2006. agement. two buses for local municipal service in the Village of Oak Park. 98 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 6-5: Pace Suburban Service Electrical, Signal and Communications paratransit service beginning in 2007 are System –Generated Revenue 56 (dollars in millions) The program contains funds to begin discussed later in this section. 55.4 the replacement of the 13-year old fleet- System-Generated Revenue 55.0 wide radio system. The program also 55 includes funds for the continued develop- In 2005, Pace’s suburban service and 54.4 ment and purchase of transit signal prior- suburban ADA paratransit service sys- 54 53.8 ity (TSP) systems in major corridors. tem-generated revenue totaled $53.8 mil- 53.4 lion. Pace expects that in 2006 suburban Support Facilities and Equipment service, suburban ADA paratransit ser- 53 The program includes funds to replace vice, and ADA paratransit service in the non-revenue vehicles and purchase mis- CTA service area during the second half 52 cellaneous garage and office equipment. of the year will result in system-generat- The program also contains funds to con- ed revenue of $55.0 million. Pace projects suburban service system-generated reve- 51 tinue the HPe3000 Migration project and for the first phase of the Interactive Voice nue of $53.4 million in 2007, $54.4 million Response software that customers will be in 2008, and $55.4 million in 2009, corre- 50 able to call for “next bus” arrival times. sponding to a compound annual growth 2005 2006 2007 2008 2009 rate of 1.8 percent from 2007 through Notes: In 2005 and 2006, system-generated revenue includes Budget and Financial Plan AD A paratransit revenue. System-generated revenue excludes 2009 (Exhibit 6-5). In 2007, farebox rev- RTA pass reimbursement, funding for ADA Dial-A-Ride paratransit services, and ADvAntage program in-kind revenue. The Pace suburban service budget and enue is expected to account for 56 percent, financial plan presented in Exhibit 6-4 local share/other 28 percent, advertising/ Pace plans to purchase 35 paratransit does not exceed the marks set by the RTA investment revenue 10 percent, and re- replacement vehicles which have exceeded on September 14, 2006. RTA funds to duced fare subsidy 6 percent of total sub- their useful life. These vehicles, a combi- Pace also include up to $4 million in each urban service revenue (Exhibit 6-6). nation of buses and vans, will be operated year (2007–2009) to accept the CTA 7- to provide Dial-A-Ride services in Pace’s Day Pass, U-Pass, and Visitor Fun Passes. Farebox Revenue and Local Share suburban service area. The RTA set Pace’s 2007 recovery ratio In 2005, Pace’s suburban service and Pace plans to purchase 58 Vanpool mark for suburban service operations at suburban ADA paratransit service pas- vehicles for program expansion and to 36.0 percent. Pace’s budget reflecting a senger or farebox revenue totaled $31.7 replace vehicles which have exceeded recovery ratio of 36.4 percent was ad- million. Pace expects that in 2006 sub- their useful life. Pace’s 2007 goals for the opted by the RTA Board on December urban service, suburban ADA paratran- Vanpool program include carrying 2.1 15, 2006. Beginning in 2007, Pace’s reve- sit service, and ADA paratransit service million passengers, which is a ridership nue, expenditures, and funding are sepa- in the CTA service area during the sec- increase of 13.3 percent over the 2006 rated into suburban service and regional ond half of the year will result in farebox estimate. The recovery performance of ADA paratransit service. Pace’s budget revenue of $32.0 million. Suburban ser- the vanpool programs in 2006 is expect- and financial plan for suburban service is vice farebox revenue of $29.8 million is ed to range from 80.2 percent for the presented in Exhibit 6-4. Revenue, expen- projected in 2007 (Exhibit 6-7). Suburban ADvAntage program to 194.4 percent ditures, and funding for regional ADA service passenger revenue is expected to for the Corporate Shuttle Program. Pace plans to increase the number of vans in Exhibit 6-6: 2007 Pace Suburban Service Revenue — $53.4 million service from 660 at the end of 2006 to 790 Local Share/Other–28% by the end of 2007.

Farebox Revenue–56%

Advertising/Investment–10%

Reduced Fare Subsidy–6% RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 99

Exhibit 6-7: Pace Suburban Service Farebox and its transit pass fare for rail to $2.00 Television Network (TTN) of Orlando Revenue (dollars in millions) 33 and to stop issuing transfers for cash fares for the installation of on-board broad- or accepting cash fare transfers from Pace casting monitors. The television screens 32.0 on January 1, 2006, Pace has not increased broadcast informational programming on 32 31.8 31.7 its base fare. At this time, Pace has no ﬁxed-route buses. Fully funded by TTN, plans to raise its suburban service fares the project provides Pace with a minimum 30.9 31 in 2007 other than a $3.00 increase in the of $0.5 million during the ﬁve-year agree- monthly Vanpool fares which will range ment. Investment revenue includes in- from $60 to $144. come from investments of cash balances. 30 29.8

Reduced Fare Subsidy Operating Expenditures 29 The reduced fare subsidy is expected Total Pace operating expenditures of to decline from $3.4 million in 2006 to $159.6 million in 2005 comprised both $3.3 million in 2007 and remain stable 28 suburban ADA paratransit service and through 2009. In 1999, the subsidy essen- suburban service. In 2006, Pace projects tially doubled due to the implementation operating expenditures for suburban ser- 27 of the Illinois FIRST program. vice, suburban ADA paratransit service, 2005 2006 2007 2008 2009 and CTA service area ADA paratransit Note: In 2005 and 2006, farebox revenue includes ADA pa ratransit farebox revenue. Advertising/Investment service during the second half of the year Advertising and investment revenue to total $204.6 million. Pace projects sub- increase from $29.8 million in 2007 to is expected to increase from $5.0 mil- urban service operating expenditures of $31.8 million by 2009, a $2.0 million in- lion in 2005 to $5.5 million in 2007 and $166.1 million, $172.6 million, and $180.0 crease that corresponds to a 3.3 percent then decline to $5.1 million by 2009. million in 2007, 2008, and 2009, respec- compound annual growth rate. Passenger In September 2003, the Pace Board of tively, corresponding to a compound an- revenue includes farebox (cash, pass, and Directors approved a revenue-gener- nual growth rate of 4.1 percent (Exhibit card revenue), Vanpool, and other ser- ating multi-year contract with Transit 6-8). These expenditure totals include vices. Other services are Congestion a regional ADA support credit of ap- Mitigation Air Quality (CMAQ) re- Exhibit 6-8: Pace Suburban Service Operating proximately $1.6 million annually that Expenditures (dollars in millions) ceipts, Job Access Reverse Commute 210 reﬂects many of the administrative and (JARC) receipts, and shuttle service. 204.6 overhead cost to be incurred through-

In 2005, Pace’s suburban service and 200 out Pace in support of ADA paratransit. suburban ADA paratransit service local Growth of labor, fringes and health care share contributions and other revenue 190 costs is the primary factor behind the in- totaled $13.7 million. Pace expects that creases in suburban service operating ex- in 2006 suburban service and suburban 180.0 penditures. 180 ADA paratransit service will result in lo- 172.6 cal share contributions and other revenue Expenditure Elements 170 of $14.2 million. Suburban service local 166.1 Operating expenditure elements in- share contributions and other revenue are 159.6 clude labor and fringes, health insurance, 160 expected to increase from $14.8 million in parts and supplies, utilities, fuel, insur- 2007 to $15.2 million in 2009, a $0.4 mil- ance and claims, other, public and private lion increase that corresponds to a 1.2 per- 150 contracts, Dial-A-Ride, Vanpool, Ride cent compound annual growth rate. DuPage, restructuring initiatives, and Pace’s suburban service fare struc- 140 ADA paratransit (Exhibit 6-4). 2005 2006 2007 2008 2009 ture is presented at the end of this section Notes: In 2005 and 2006, operating expenditures include ADA (Exhibit 6-10). Despite the CTA’s deci- paratransit. Beginning in 2007, operating expenditures are calculated with a regional ADA su pport credit. Operating expen- sion to raise its cash fare for bus and rail di tures exclude ADvAntage program in-kind expenditures. 100 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Labor, Fringe and Health Insurance Costs ditures in 2006 and 9.0 percent of sub- Shuttle services were implemented Labor, fringe, and health insurance urban service operating expenditures in Schaumburg and Downers Grove in expenditures, which accounted for 54.1 in 2007. Fuel expenditures for suburban 2001. The Downers Grove service feeds percent of total operating expenditures service are projected to increase from passengers to the Metra/Burlington in 2005, are expected to account for 45.5 $15.0 million in 2007 to $16.0 million in Northern rail station in Downers Grove. percent of total operating expenditures in 2009, a $1.0 million increase that corre- In 2007, expenditures of $0.7 million 2006 and 58.0 percent of suburban service sponds to a 3.3 percent compound annu- are expected to be offset by revenue of operating expenditures in 2007. Labor, al growth rate. $0.6 million including local subsidy. In fringe, and health insurance expendi- Schaumburg, a shopper’s trolley service tures for suburban service are projected Insurance and Claims operates in the Woodﬁeld Mall area. In to increase from $96.3 million in 2007 to Insurance and claims expenditures, 2007, the cost of this shuttle is expect- $105.6 million in 2009, a $9.3 million in- which accounted for 6.0 percent of total ed to be $0.5 million, all of which will crease that corresponds to a 4.7 percent operating expenditures in 2005, are ex- continue to be funded by the Village of compound annual growth rate. pected to account for 4.8 percent of to- Schaumburg. During the academic year, tal operating expenditures in 2006 and the Northwestern University Shuttle pro- Parts and Supplies 6.0 percent of suburban service operat- vides service between the campus and Parts and supplies expenditures, which ing expenditures in 2009. Insurance and several transit stops in Evanston. In 2007, accounted for 2.8 percent of total operat- claims expenditures for suburban service approximately 90 percent of the $0.1 mil- ing expenditures in 2005, are expected to are projected to remain near $9.9 million lion expenditure is expected to be offset account for 2.3 percent of total operating from 2007 to 2009. by revenue including local subsidy. expenditures in 2006 and 3.0 percent of Pace provides ﬁxed-route service in 31 suburban service operating expenditures Other communities by contracting directly with in 2007. Parts and supplies expenditures Other expenditures, which accounted four private transit companies: Academy for suburban service are projected to infor 5.0 percent of total operating expen- Coach Lines, Colonial Coach Lines, crease from $5.0 million in 2007 to $5.3 ditures in 2005, are expected to account Laidlaw, and M. V. Transportation. In million in 2009, a $0.3 million increase for 4.6 percent of total operating expendi- 2007, $9.0 million of private contract car- that corresponds to a 3.2 percent com- tures in 2006 and 5.8 percent of suburban rier expenditures are projected to be off- pound annual growth rate. service operating expenditures in 2007. set by revenue of $2.8 million. This $6.2 Other expenditures for suburban service million funding requirement corresponds Utilities are projected to increase from $9.7 mil- to a recovery ratio of 30.6 percent. Utilities expenditures, which ac- lion in 2007 to $10.9 million in 2009, a $1.2 counted for 1.0 percent of total operat- million increase that corresponds to a 6.1 Dial-A-Ride ing expenditures in 2005, are expected to percent compound annual growth rate. Dial-A-Ride (DAR) expenditures, account for 0.9 percent of total operating which accounted for 7.7 percent of total expenditures in 2006 and 1.1 percent of Public/Private Contract operating expenditures in 2005, are ex- suburban service operating expenditures Public/private contract expenditures, pected to account for 6.2 percent of to- in 2007. Utilities expenditures for sub- which accounted for 5.8 percent of total tal operating expenditures in 2006 and urban service are projected to increase operating expenditures in 2005, are ex- 8.0 percent of suburban service operat- from $1.9 million in 2007 to $2.0 million pected to account for 4.7 percent of to- ing expenditures in 2007. DAR expendi- in 2009, a $0.1 million increase that cor- tal operating expenditures in 2006 and tures for suburban service are projected responds to a 2.2 percent compound an- 6.2 percent of suburban service oper- to increase from $13.3 million in 2007 to nual growth rate. ating expenditures in 2007. Public/pri- $14.5 million in 2009, a $1.2 million in- vate contract expenditures for suburban crease that corresponds to a 4.4 percent Fuel service are projected to increase from compound annual growth rate. Fuel expenditures, which accounted $10.3 million in 2007 to $11.2 million in Pace contracts with private operators for 7.4 percent of total operating expen- 2009, a $0.9 million increase that corre- to provide service for 31 DAR projects. ditures in 2005, are expected to account sponds to a 4.4 percent compound annu- The communities served cover a portion for 7.0 percent of total operating expen- al growth rate. of the costs through 41 local share agree- RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 101

ments. Pace also has service agreements ities to provide public transportation Regional ADA Support Credit with local governments for the operation within their communities, will have 155 In 2007, Pace will also begin deduct- of 31 other DAR projects. Generally, the vans in service in 2007. ing approximately $1.6 million of its ad- village or township, under contract with ministrative and overhead expenditures Pace, operates these services. Pace sub- Ride DuPage from its suburban service budget. Pace sidizes these services based on a fund- Launched in mid 2004, Ride DuPage will charge this amount to its regional ing formula. consolidates all scheduling and dispatch- ADA paratransit budget. ing and provides a single point of con- Deficit Vanpool tact for (non-ADA) paratransit riders in Vanpool expenditures, which ac- this county. Ride DuPage expenditures, The operating deficits are derived from counted for 1.6 percent of total operat- which accounted for 0.9 percent of total total system-generated revenue minus to- ing expenditures in 2005, are expected to operating expenditures in 2005, are ex- tal operating expenditures. In 2005, Pace account for 1.5 percent of total operating pected to account for 0.7 percent of total ended the year with a net funding surplus expenditures in 2006 and 2.1 percent of operating expenditures in 2006 and 0.9 of $0.7 million that increased its funding suburban service operating expenditures percent of suburban service operating balance (cumulative positive budget vari- in 2007. Vanpool expenditures for subur- expenditures in 2007. During 2005, Ride ance) from $12.2 million to $12.9 million. ban service are projected to increase from DuPage expenditures were $1.4 million. In 2006, Pace projects a net funding def- $3.6 million in 2007 to $4.5 million in Program expenditures are expected to icit of $9.3 million. From 2007 to 2009, 2009, a $0.9 million increase that corre- reach $1.9 million by 2009, a $0.5 million Pace projects deficit funding to match sponds to a 12.0 percent compound an- increase that corresponds to a 8.3 percent the operating deficit, and, therefore, no nual growth rate. compound annual growth rate. changes to the fund balance. Pace’s Vanpool program, which pro- Funding vides passenger vans to groups of 5 to 15 Restructuring Initiative commuters, continues to grow. In 2007, Pace’s restructuring initiative includes The RTA Sales Tax is the primary Pace expects to have in service nearly both on-going improvements to its fixed- source of funding for Pace suburban ser- 800 vans carrying 2.1 million riders, an route service and the integration of the vice. The RTA retains 15 percent of the increase of 130 vans (19.7 percent) and CTA service area ADA paratransit ser- sales tax funds for discretionary funding 242,000 riders (13.3 percent) from 2006. vice in 2006. In 2005, Pace incurred re- and allocates the remainder to the service The program is comprised of four el- structuring expenditures of $0.2 million. boards by statutory formula. Of this re- ements: the Vanpool Incentive Program Pace expects to incur restructuring ex- maining amount, Pace receives 15 percent (VIP), the Corporate Shuttle, the penditures of $1.1 and $1.2 million in of the sales tax collected within subur- ADvAntage program, and the Municipal 2006 and 2007, respectively. ban Cook County and 30 percent of the Vanpool program. The VIP service, the sales tax collected in the collar counties. core element of the program, is projected ADA Paratransit In 2005, Pace’s portion of RTA Sales Tax to achieve ridership of 1,006,000 with 270 In 2005, Pace incurred ADA paratran- and discretionary funding totaled $79.1 vans by the end of 2007. Pace estimates sit expenditures of $12.3 million to pro- million. This amount is expected to grow that by the end of 2007 the Corporate vide curb-to-curb service to 0.5 million 3.2 percent per year to $89.7 million in Shuttle program will have 28 vans trans- riders in Pace’s suburban service area. In 2009. In 2005, the RTA Board provided porting employees between suburban 2006, Pace expects to incur ADA para- Pace with an additional $1.0 million to employers and nearby CTA, Metra and transit expenditures of $43.6 million to assist with the cost of start-up activities Pace facilities. By the end of 2007, the provide service to 1.7 million riders in related to the transition to Pace of all of ADvAntage element of the Vanpool pro- Pace’s suburban service area during the the ADA paratransit services in the RTA gram is expected to have 337 vans trans- entire year and in the CTA service area region. In both 2005 and 2006, the RTA porting individuals with disabilities to during the second half of the year. ADA funded Pace $2 million to accept the CTA work sites or rehabilitative workshops. paratransit expenditures for 2007 through 7-Day Pass, U-Pass, and Visitor Fun Pace projects that the Municipal Vanpool 2009 are discussed separately later in this Passes. In 2007 through 2009, the RTA program, which allows local municipal- section. plans fund Pace up to $4 million in each of these years to accept these passes. The 102 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Pace suburban service budget and finan- Exhibit 6-9: Pace 2006 Budget Versus 2006 Estimate* (dollars in thousands) cial plan presented in Exhibit 6-4 satis- Amended 2006 System-Generated Revenue 2006 Budget Estimate Variance fy the funding marks set by the RTA on Farebox Revenue (1) $ 35,923 $ 31,988 $ (3,935) September 14, 2006. Local Share/Other 13,707 14,179 472 Advertising/Investment 5,182 5,448 266 Recovery Ratio Reduced Fare Subsidy 3,170 3,378 208 Total Revenue $ 57,982 $ 54,993 $ (2,989) The recovery ratio equals total (sys- Operating Expenditures tem-generated) revenue, with statutory Labor/Fringes $ 76,349 $ 78,211 $ (1,862) and approved adjustments, divided by Health Insurance 15,810 14,921 889 total operating expenditures, with stat- Parts/Supplies 4,939 4,717 222 utory and approved adjustments. With Utilities 1,713 1,744 (31) Fuel 12,337 14,246 (1,909) the inclusion of the revenue for the fund- Insurance 9,001 9,793 (792) ing of ADA and Dial-A-Ride paratran- Other 10,015 9,475 540 sit service under contract of $7.8 million Public/Private Contract 9,852 9,564 288 Dial-A-Ride 12,770 12,781 (11) and $4.7 million of ADvAntage Program Vanpool 2,977 3,015 (38) in-kind revenue and expenditure, Pace Ride DuPage 1,478 1,471 7 achieved a recovery ratio of 39.7 percent Restructuring Initiative 1,220 1,137 83 in 2005. With the inclusion of revenue ADA Paratransit Service 43,869 43,556 313 Total Expenditures $ 202,330 $ 204,631 $ (2,301) for the funding of Dial-A-Ride paratran- Operating Deficit $ 144,348 $ 149,638 $ ( 5,290) sit service under contract of $4.0 million Deficit Funding in 2006 and $4.8 million of ADvAntage RTA Sales Tax $ 78,552 $ 78,979 $ 427 program in-kind revenue and expen- RTA Discretionary Funds 3,030 2,603 (427) diture, Pace expects to achieve a recov- RTA/State ADA Paratransit Funds 16,918 16,918 — ery ratio for its suburban service of 34.2 Federal CMAQ and JARC Funds 1,741 677 (1,064) Funding for Paratransit (2) 8,351 3,995 (4,356) percent in 2006. Exhibit 6-4 provides RTA Pass Reimbursement 2,000 2,000 — the detail used in this calculation. With Federal 5307 Funds 31,437 35,170 3,733 the inclusion as revenue of $4.0 million Total Deficit Funding $ 142,029 $ 140,342 $ (1,687) of reimbursement from the RTA to ac- Funding Surplus/( Deficit) $ (2,319) $ (9,296) $ (6,977) cept the CTA 7-Day Pass, U-Pass, and ADvAntage Program—In-Kind (3) $ 4,562 $ 4,758 $ 196 Recovery Ratio % 35.2 34.2 (1.0) Visitor Fun Passes and $4.8 million of ADvAntage program in-kind revenue (*) 2006 Budget and 2006 Estimate includes suburban service and suburban ADA paratransit service during all of 2006 and ADA paratransit service in the CTA service area provided by Pace during the second half of 2006. and expenditure, Pace’s 2007 budgeted (1) Passenger revenue includes Fixed Route, Van Pool, Municipal Van Pool, Dial-A-Ride, Ride DuPage, ADA paratransit, and Other Services. (2) Since the capital-related costs of paratransit service under contract are suburban service recovery ratio of 36.4 characterized as operating expenses under GAAP, this funding is recognized as operating revenue. In 2006, percent exceeds the 36 percent recovery this amount is divided between funding for Suburban Service (Dial-A-Ride) and funding for ADA paratransit. In 2006, the amounts applied to the recovery ratio calculation were $4.0 million for suburban service and $5.9 ratio mark set by the RTA. million for ADA Paratransit Service. (3) The ADvAntage Program—in-kind revenue and expenditure (of equal amount) is included in the recovery ratio calculation. 2006 Budget Versus 2006 Estimate

Pace projects 2006 operating rev- year $0.5 million or 3.4 percent favor- and $0.8 million unfavorable to budget, enue for suburban service, suburban able. Advertising/investment revenue respectively. Expenditures for health in- ADA paratransit service, and CTA ser- is projected to finish the year $0.3 mil- surance, other, ADA paratransit, parts/ vice area ADA paratransit service dur- lion or 5.1 percent favorable. The re- supplies, and restructuring initiative are ing the second half of the year to be duced fare subsidy is projected to finish expected to be $0.9, $0.5, $0.3, $0.2, and $3.0 million or 5.2 percent unfavorable the year $0.2 million favorable to budget. $0.1 million favorable to budget. to budget. Passenger revenue is expect- Total expenditures are expected to fin- From a funding perspective, Pace ex- ed to finish the year $3.9 million or 11.0 ish the year $2.3 million unfavorable to pects an unfavorable variance of $7.0 mil- percent unfavorable, while Local share/ budget. Expenditures for fuel, labor, and lion in 2006 (Exhibit 6-9). other revenue is expected to finish the insurance are expected to be $1.9, $1.9, RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 103

Statutory Compliance Exhibit 6-10: Pace Suburban Service Fare Structure Current Fares Pace’s proposed 2007 budget, 2008- Regular Fares Full Fare Reduced Fare 2009 plan, and 2007 recovery ratio sub- Full Fare $ 1.50 $ 0.75 Transfer to Pace/CTA* 0.25 0.10 mitted to the RTA complies with the Passes operating marks set by the RTA Board. Pace/CTA (30-Day) $ 75.00 $ 35.00 However, Pace’s 2007 budget and 2008- Commuter Club Card (CCC)—Pace only 50.00 25.00 2009 plan assume unidentified future new Link-Up Ticket 36.00 — transit funding of $22.9, $26.2, and $30.7 Plus Bus 30.00 — Regular 10-Ride Plus Ticket 15.00 7.50 million, respectively. If additional public Student (Haul Pass) 25.00 subsidies are not obtained, other steps Student Summer Pass 40.00 will need to be taken to balance the bud- Subscription Bus (monthly) 110.00 — get and financial plan, which may include, Local Fares Full Fare $ 1.25 $ 0.60 but are not limited to, utilizing federal Transfer to Pace/CTA* 0.50 0.25 formula capital funds to cover operating Local 10-Ride Plus Ticket 12.50 6.00 expenditures, adjusting service levels and —Local transfers are free of charge adjusting fares. Express Fares Premium (Routes 210, 355 and 855) $ 3.00 $ 1.50 Organizational Structure Route 835 (zone fares) 4.10 2.05 Special Express Fare (891 and 892) 2.00 1.00 Pace’s organizational structure is Premium 10-Ride Plus Ticket (210, 355 and 855) 30.00 15.00 comprised of three primary elements: Other administration, central support, and Dial-A-Ride $ 1.60 $ 0.80 Pace-owned divisions. Within each ele- Subscription Bus (1000 series) 3.00 — Special Services (Non-ADA) 5.00 — ment, employees are classified into four Shuttle Routes (No Reduced Fares) $1.00 — areas: operations, maintenance, non-ve- Shuttle Routes 535 and 921 $0.50 — hicle maintenance and administration. Shuttle Routes 205, 206, 207, and 712 $0.25 — These activity areas are defined by the Vanpool Monthly VIP and other van pool services fares range from $60 to $144 depending on the daily round trip Federal Transit Administration Section van miles and the number of passengers. This range represents a $3 increase from 2006. 15 reporting requirements, which apply *Effective January 1, 2006, the CTA discontinued issuing or accepting cash transfers. to all public transit operators. Pace is organized into three main areas: Internal Services, Revenue Services, and Strategic Services (Exhibit 6-11). 104 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 6-11: Pace Organizational Structure

Citizens & Pa ce Riders

Chairman & Board of Directors

General Counsel Executive Internal Audit & DBE Director & EEO

Government Organization Affairs De velopment

Deputy Deputy Deputy Ex ecutive Director Executive Director Executive Director Re venue Services Strategic Services Internal Services

Bus Marketing & Capital Financing Operations Communications & Infrastructure

Fleet Pl anning Budget Planning Maintenance Services & Analysis

Pa ratransit & Administration Vanpool Services

Management Safety, Training Information & Security Systems

West Region Human Fox Valley, Heritage & Southwest Resources

North Region Materials North, North Shore, Northwest & River Management

South Region South, West & Finance South Holland

Risk Management

Purchasing RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 105

ADA Paratransit

Overview Ridership Exhibit 6-12: Pace ADA Paratransit Service Ridership (in millions) Effective July 1, 2006, Pace has pro- In 2005, Pace’s ADA paratransit rid- 4 3.9 vided all ADA paratransit service in the ership in Pace’s suburban service area 3.6 RTA region. Beginning in 2007, Pace’s totaled 0.5 million. Pace expects 2006 3.3 revenue and expenditures are separated ADA paratransit ridership of 0.5 mil- into suburban service and regional ADA lion in Pace’s suburban service area and 3 paratransit service. 1.2 million in the CTA service area during the second half of 2006, totaling Service Characteristics 1.7 million. In 2007, Pace projects re- 2 The RTA administers a regional cer- gional ADA paratransit ridership of 3.3 1.7 tification program that determines if million. Consistent with the Regional individuals with physical or cognitive ADA Paratransit Plan jointly prepared disabilities are eligible for ADA paratran- by the RTA, CTA, and Pace and sub- 1 sit service. If eligible, passengers can ar- mitted to the Federal Transportation 0.5 range for travel within three quarters of a Administration in January 2006, Pace mile of Pace or CTA bus routes or CTA projects ADA Paratransit ridership to or Metra rail stations, as described in the grow 10 percent annually in the CTA 0 20051 20062 20073 20083 20093 Americans with Disabilities Act (ADA). service area and 6 percent annually in (1) 2005 Pace service area. (2) 2006 Pace service area In the suburban area where Pace pro- the Pace suburban service area from 2007 plus CTA service area during second half of year. vides fixed route service, Pace contracts through 2009. Regional ADA paratransit (3) 2007-2009 Pace and CTA service areas. with private operators to provide ADA ridership is projected to increase 0.3 mil- paratransit service. These operators use lion or 9.4 percent to 3.6 million in 2008, Exhibit 6-13: Pace ADA Parantransit Cost Effi ciency Pace-owned lift-equipped vehicles to and 0.3 million or 9.4 percent to 3.9 mil- 30 (cost per passenger) provide curb-to-curb service to ADA- lion in 2009 (Exhibit 6-12). certified passengers within a portion of Cost Efficiency the suburban area of the RTA region. In the CTA service area, Pace con- The cost per passenger measurement 29 tracts with three private operators (Cook- recognizes that expenditures tend to DuPage Transportation (CDT), SCR vary with the amount of service provid- Transportation and Art’s Transportation) ed (Exhibit 6-13). Cost per passenger for 28 to provide ADA paratransit service. The Regional ADA paratransit service is pro- operators use contractor-owned vehicles jected to increase from $28.12 in 2007 to to provide service to ADA-certified pas- $29.40 in 2009. This $1.38 increase cor- sengers throughout the City of Chicago responds to a compound annual growth 27 and the suburban communities served rate of 2.3 percent. by CTA bus and rail operations. Pace also administers two subsidized taxi pro- Budget and Financial Plan grams in the City of Chicago (the Taxi The Pace ADA paratransit service 26 20051 20062 20073 20083 20093 Access Program (TAP) and the Mobility budget and financial plan presented in (1) 2005 Pace service area. (2) 2006 Pace service area Direct program) for ADA-certified pas- Exhibit 6-14 meets the funding marks plus CTA service area during second half of year. sengers, although these programs are not and exceeds the recovery ratio mark set (3) 2007-2009 Pace and CTA service areas. required by the ADA. by the RTA on September 14, 2006. The The CTA and Pace fixed route servic- marks set funding for ADA paratransit es are described in section 4 and earlier in at $81.8 million for 2007, $91.6 million section 6, respectively. for 2008, and $99.9 million for 2009. In 106 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 6-14: Pace Regional ADA Paratransit Service 2007 Budget and 2008 –2009 Financial Plan Exhibit 6-15: Pace ADA Paratransit Service (dollars in thousands) System-Generated Revenue 16 (in millions) System-Generated Revenue 2007 Budget 2008 Plan 2009 Plan 14.5 Farebox Revenue (1) $ 8,995 $ 9,832 $ 13,727 14 Local Share/Reimbursement 658 715 777 Total Revenue $ 9,653 $ 10,547 $ 14,504 12 Operating Expenditures Labor/Fringes (1) $ 2,168 $ 2,255 $ 2,345 10.5 9.7 Health Insurance 341 384 432 10 Administrative Expenditures 1,003 1,024 1,046 Fuel 1,503 1,542 1,588 8 Insurance/Claims 625 638 651 RTA Certiﬁcation 658 715 777 6 Suburban ADA Purchased Transportation 14,770 16,277 17,969 CTA Service Area ADA Purchased Transportation (1) 68,866 77,749 87,935 4 Regional ADA Support Allocation 1,529 1,590 1,654 Total Expenditures $ 91,463 $ 102,174 $ 114,397 2 Operating Deﬁcit $ 81,810 $ 91,627 $ 99,893

Deficit Funding 0 New Transit Funding 81,810 91,627 99,893 2007 2008 2009 Total Deficit Funding $ 81,810 $ 91,627 $ 99,893 Recovery Ratio % (2) 10.6 — — Exhibit 6-16: Pace ADA Paratransit Service (1) As required by the 2005 amendment to the RTA Act, Pace assumed operating responsibility for ADA 16 Farebox Revenue (in millions) paratransit service throughout the RTA region on July 1, 2006. The 2006 Estimate includes revenue and expenditure estimates for the full year of service, including service provided by the CTA during the first half of the year. (2) The recovery ratio in 2007 exceeds the mark set for Pace by the RTA Board on September 14, 2006. 14 13.7 The RTA Act requires a 10 percent recovery ratio for regional ADA paratransit service in 2007.

compliance with the RTA Act, the RTA projects total ADA paratransit revenue of 10 9.8 9.0 set the ADA paratransit recovery ratio $10.5 million in 2008, an increase of 9.3 for 2007 at 10.0 percent. percent. The RTA Act also requires that 8 regional ADA paratransit service meet a System-Generated Revenue recovery ratio of 12 percent beginning 6 Pace projects total ADA paratransit in 2009. To meet this requirement, Pace 4 system-generated revenue of $9.7 million projects total ADA paratransit revenue of in 2007 (Exhibit 6-15). Farebox revenue is $14.5 million in 2009, an increase of 37.5 2 expected to account for $9.0 million or 93 percent over the prior year.

percent of total revenue and local share/ 0 Operating Expenditures reimbursement $0.7 million or 7 percent 2007 2008 2009 of total regional ADA paratransit service Pace projects Regional ADA paratran- revenue (Exhibits 6-16 and 6-17). To meet sit service operating expenditures of 91.5 Expenditure Elements the 10 percent recovery ratio required by million, $102.2 million and $114.4 mil- Operating expenditure elements in- the RTA Act for ADA paratransit ser- lion in 2007, 2008 and 2009, respective- clude labor and fringes, health insurance, vice in 2007, the Pace Board voted to in- ly, corresponding to a compound annual administrative expense, fuel, insurance crease the ADA paratransit fare in the growth rate of 11.8 percent (Exhibit 6- and claims, RTA certiﬁcation, suburban CTA service area and the fare for the 18). Growth in purchased transportation ADA purchased transportation, CTA Mobility Direct program from $1.75 to costs is the primary factor behind these service area ADA purchased transpor- $2.25 and the fare for the Taxi Access increases in operating expenditures. tation, and indirect overhead allocation Program (TAP) from $1.75 to $5.00 effec- (Exhibit 6-14). tive January 1, 2007 (Exhibit 6-19). Pace RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 107

Exhibit 6-17: 2007 Pace ADA Paratransit Revenue — $9.7 million RTA Certiﬁcation

Local Share/Reimbursement–7% RTA certification expenditures are expected to account for 0.7 percent of regional ADA paratransit service operating expenditures in 2007. These expenditures comprise the cost of transporting applicants for ADA certification to and from assessment centers. RTA certifi- Farebox Revenue–93% cation expenditures are projected to increase from $0.7 million in 2007 to $0.8 Exhibit 6-18: Pace Total Operating Expenditures Administration million in 2009, a $0.1 million increase (in millions) 120 Administration expenditures are that corresponds to a compound annual 114.4 expected to account for 1.1 percent of growth rate of 8.7 percent. regional ADA paratransit service oper- 110 ating expenditures in 2007. Pace leases Suburban ADA Purchased Transportation 102.2 its operations center for ADA paratran- Suburban ADA purchased transpor- 100 sit services in Metra’s downtown Chicago tation expenditures are expected to ac- headquarters at 547 W. Jackson Blvd. count for 16.1 percent of regional ADA 91.5 Administrative expenditures are pro- paratransit service operating expendi- 90 jected to remain at $1.0 million from tures in 2007. These expenditures are pro- 2007 to 2009. jected to increase from $14.8 million in 80 2007 to $18.0 million in 2009, a $3.2 mil- Fuel lion increase that corresponds to a 10.3 Fuel expenditures are expected to ac- percent compound annual growth rate. 70 count for 1.6 percent of regional ADA Demand for suburban ADA paratransit paratransit service operating expendi- service is projected to increase 6.0 percent 60 tures in 2007. Fuel expenditures are pro- in both 2008 and 2009. 2007 2008 2009 jected to increase from $1.5 million in Labor, Fringe and Health Insurance Costs 2007 to $1.6 million in 2009, a $0.1 mil- CTA Service Area To administer ADA paratransit ser- lion increase that corresponds to a 2.8 per- ADA Purchased Transportation vice in the CTA service area, Pace hired cent compound annual growth rate. CTA service area ADA purchased 31 additional administrative support transportation expenditures are expect- staff to supplement the six staff members Insurance and Claims ed to account for 75.3 percent of regional who were responsible for administering Insurance and claims expenditures ADA paratransit service operating ex- the suburban ADA paratransit service. are expected to account for 0.7 percent penditures in 2007. These expenditures Labor, fringe, and health insurance ex- of regional ADA paratransit service op- are projected to increase from $68.9 mil- penditures, are expected to account for erating expenditures in 2007. Insurance lion in 2007 to $88.0 million in 2009, a 2.7 percent of regional ADA paratransit and claims expenditures are projected $19.1 million increase that corresponds to service operating expenditures in 2007. to remain near $0.6 million from 2007 a 13.0 percent compound annual growth Labor, fringe, and health insurance ex- to 2009. rate. Demand for CTA service area ADA penditures are projected to increase from paratransit service is projected to increase $2.5 million in 2007 to $2.8 million in Exhibit 6-19: 2007 Fare Structure 10.0 percent in both 2008 and 2009. 2009, a $0.3 million increase that corre- CTA Service Area Fare sponds to a 5.2 percent compound annu- ADA Paratransit $ 2.25 Regional ADA Support Allocation Mobility Direct 2.25 al growth rate. Taxi Access Program 5.00 In 2007, Pace will also begin charging Pace Service Area approximately $1.6 million of its admin- Regular Route Analog $ 3.00 istrative and overhead expenses to the re- Local Route Analog 2.50 gional ADA paratransit budget. 108 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Deficit and Funding Statutory Compliance The annual operating deficits are de- Pace’s proposed 2007 budget, 2008- rived from total system-generated reve- 2009 plan, and 2007 recovery ratio for nue minus total operating expenditures. ADA paratransit service submitted to the From 2007 to 2009, Pace projects that RTA comply with the operating marks public funding from the RTA and the set by the RTA Board. However, Pace’s Sate of Illinois will match the correspond- 2007 budget and 2008-2009 plan for re- ing operating deficits. The Pace budget gional ADA paratransit service assume and financial plan for ADA paratransit unidentified future new transit funding service presented in Exhibit 6-14 meets of $81.8, $91.6, and $99.9 million, re- the funding marks set by the RTA on spectively, the full amount of each year’s September 14, 2006. The marks set the deficit and funding mark. If additional total funding levels at $81.8 million for public subsidies are not obtained, oth- 2007, $91.6 million for 2008, and $99.9 er steps will need to be taken to balance million for 2009. the budget and financial plan, which may include, but are not limited to, utilizing Recovery Ratio federal formula capital funds to cover op- The recovery ratio equals total (sys- erating expenses, adjusting service levels tem-generated) revenue, with statutory and adjusting fares. and approved adjustments, divided by total operating expenditures, with statutory and approved adjustments. The RTA Act requires that regional ADA paratransit service meet a recovery ratio of 10 percent in 2007 and 2008 and 12 percent beginning in 2009. In 2007, Pace’s projected recovery ratio for regional ADA paratransit service is 10.6 percent. Exhibit 6-14 provides the detail used in this calculation. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 109

7 Capital Program 110 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 111

Regional Overview Exhibit 7-1: 2007 –2011 Capital Program Marks

The RTA Act requires that the capital Tran sfer Capital and Service Boards–11% expenditures of the CTA, Metra and Pace be subjected to continuing review so that CTA Financing–15% the RTA may budget and expend funds available to the region with maximum De-obligations–1% efficiency. The RTA Board must adopt RTA Discretionary and Tran sfer Capital–4% FTA Capital Grants–69% a five-year capital program every year. The RTA’s five-year capital program describes the nature, location, and budget by project and by fiscal year of all antic- With funding needs for capital im- nois. And together, we all need to decide ipated Service Board capital improve- provements and rehabilitation greatly ex- whether we are going to invest in this as- ments. Public hearings are held in each ceeding expected resources, the RTA and set or shrink it. county in the northeastern Illinois region the Service Boards must actively pursue to inform the public and government of- additional funding opportunities to pre- Source of Funds ficials of the Authority’s capital develop- serve and enhance the economic viabil- The funding sources for the RTA cap- ment plans. ity of the RTA system. It is critical that ital program include the U.S. Depart- The RTA emphasizes the need to the RTA allocate our available capital re- ment of Transportation’s Federal Transit preserve and enhance the RTA sys- sources consistent with long-range plans Administration (FTA), the RTA, and tem’s valuable infrastructure. This in- and short-range needs. the Service Boards. The total estimated cludes bringing the system’s $27 billion new capital funds available for 2007 are in assets (as measured in terms of re- 2007– 2011 Capital Program Marks Issues projected at $704.0 million. After de- placement value) to good condition Continued financial support for pub- ducting $30.3 million to provide for the and extending or expanding service lic transportation is vital to the region’s CTA’s repayment of principal and in- when demand is justified and funding economic health. However, the region’s terest and adding the CTA and Metra available. This translates into a need of current transit needs, which are based de-obligations of $26.5 million, $700.2 approximately $1 billion per year just to upon bringing the entire system to a state million is available for capital projects. maintain and preserve the existing system. of good repair, continue to outpace pro- At this time, the final federal appropria- In 2005, Congress passed a reautho- jected funding levels. For the 2007 bud- tion figures for 2007 have not been deter- rization of federal funding for transpor- get, we face a large operating and capital mined. Once this amount is established, tation projects. Although this legislation shortfall, because there has not been any the capital program will be adjusted to provided an increase over previous levels new state capital funding for transit since reflect the available funding. of funding, it will still leave a substan- Illinois FIRST, and because operating On September 14, 2006, the RTA ad- tial shortfall. funding has not kept pace with 21st cen- opted preliminary capital funding marks. The region still requires more than tury demand. The $27 billion asset of Since then, the RTA received proposals $500 million per year in additional fund- trains, buses, vans, stations and tracks be- to change the estimates for funds con- ing to properly maintain our resources. longs to the people of Northeastern Illi- trolled by the Service Boards. The RTA budget adopted on December 14, 2006, Exhibit 7-2: RTA 2007– 2011 Capital Program Marks (dollars in millions) incorporated various federal and local

funding source changes proposed by the Service Board Capital Funding CTA Metra Pace Total Service Boards and the RTA (Exhibits 7-1 FTA Capital Grants $ 1,381 $ 771 $ 187 $ 2,339 RTA Discretionary and Transfer Capital 102 — 3 105 and 7-2). Of the estimated $700.2 million Transfer Capital and Service Boards — 312 — 312 of new and de-obligated funding sourc- CTA Financing 425 — — 425 es for 2007, federal funding after reduc- Total New Service Board Capital Funding $ 1,908 $ 1,083 $ 190 $ 3,181 tion for the CTA repayment of principal De-obligations 1 25 — 26 and interest, accounts for $471 million or CTA Principal and Interest (385) — — (385) Total Service Board Available $ 1,524 $ 1,108 $ 190 $ 2,822 67 percent, RTA funds account for $23.8 million or 3 percent, Service Board and

112 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 7-3: Capital Funding in 2007 (dollars in thousands) funding marks includes monies to com- Service Board Capital Funding CTA Metra Pace Total plete the two CTA projects currently FTA Capital Grants $ 289,344 $ 177,473 $ 34,468 $ 501,285 underway as earmarked in SAFETEA- IDOT Grants — — — — LU. The RTA marks includes federal Service Board/ Other Funds — 53,919 — 53,919 RTA Transfer Capital 20,353 — 3,449 23,802 2007 Section 5309 New Start funding of CTA Financing 125,000 — — 125,000 $41.6 million for the CTA’s Douglas and Total New Service Board Capital Funding $ 434,697 $ 231,392 $ 37,917 $ 704,005 Ravenswood lines; and $105.9 million De-obligations 1,554 25,000 — 26,554 CTA Principal and Interest (30,336) — — (30,336) for the completion of the CTA’s Raven- Total Service Board Available $ 405,915 $ 256,392 $ 37,917 $ 700,223 swood project in 2008 and 2009. Further, the CTA and Metra marks include $23.4 other funds account for $53.9 million or 8 nalized, the 2007-2011 capital program million and $49 million respectively in percent, de-obligations account for $26.5 marks will be revised. 2007 for future New Start capital projects million or 4 percent, and CTA financing Certain federal funding programs are consistent with their earmark requests for funds account for $125 million or 18 per- allocated to urbanized areas based on 2007 federal funds. cent (Exhibits 7-3 and 7-4). legislatively defined formulas. The RTA It is expected that the Federal New region receives federal Section 5307 Ur- Starts monies for system expansion will Federal banized Area Formula funds and federal be available in 2008-2011. However, with- The RTA receives federal funds autho- Section 5309 (m)(2)(B) Fixed Guideway out matching funds, the region will not rized under federal sections 5307, 5340 Modernization funds in this fashion. be able to access these funds. Therefore, and 5309 of the Safe, Accountable, Flexi- SAFETEA-LU included a new program, no additional New Start funding is pro- ble, and Efficient Transportation Equity the federal Section 5340 Growing and grammed in 2008-2011. Act: A Legacy for Users (SAFETEA- High Density States, also distributed by In addition, flexible funds are anoth- LU). SAFETEA-LU provides funding formula that will provide funds to north- er source of federal funding for the RTA for federal surface transportation pro- eastern Illinois. 2007-2011 capital program. Flexible funds grams, including transit through federal Other federal funds are available to the are certain legislatively-specified funds fiscal year 2009. For planning purposes, region on a competitive basis. The RTA, that may be used either for transit or high- the RTA preliminary marks assume the with substantial input from the Service way purposes. This provision was first continued availability of federal funds Boards, estimates annual funding lev- included in the Intermodal Surface Trans- in 2010 and 2011. On June 14, 2006, the els based on internal analysis of national portation Efficiency Act of 1991 (ISTEA) House passed its version of the FFY 2007 funding levels, past performance, proj- and continued with SAFETEA-LU. Transportation Appropriations bill; and, ect readiness and existing legislative or Flexible funds include the Federal High- on July 20, 2006, the Senate Committee contractual commitments. The federal way Administration (FHWA) Surface on Appropriations approved its version Section 5309 (m)(2)(A) New Start and Transportation Program (STP) and the of the FFY 2007 Transportation, Trea- Section 5309 (m)(2)(C) Bus and Bus Fa- Congestion Mitigation and Air Quality sury, and Housing and Urban Develop- cility capital funding are often earmarked (CMAQ) improvement program. These ment, the Judiciary, and Related Agencies in federal legislation. The RTA 2007-2011 funds are sought by the Service Boards Appropriations bill. The Senate bill funds federal Section 5309 (m)(2)(A) New Starts through a regional competitive process. Federal Transit Administration (FTA) programs at an $8.875 billion level, a 4.4 Exhibit 7-4: 2007 Capital Funding —$700,223 million

percent increase over the ﬁnal amount CTA Financing–18% appropriated for FFY 2006. At present,

Congress has not approved a FFY2007 RTA Transfer Capital–3% Transportation Appropriation bill for the Service Board/ FTA Capital Grants–67% ﬁscal year starting October 1st. The Fed- Other Funds–8% eral Transit Administration is currently De-obligations–4% operating under a continuing resolution. Once federal 2007 funds are appropriated and local funding decisions are ﬁ- RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 113

The idea behind flexible funds is to en- funds. Local funding sources provide the $211.9 million for federal Section 5307 able a local area to choose to use certain remaining 20 percent match. However, Urbanized Area Formula funds com- federal surface transportation funds based due to the lack of Strategic Capital Im- bined with Section 5340 Growing and on local planning priorities, not on a re- provement Program (SCIP) funding and High Density States, $114 million for strictive definition of program eligibility. Illinois Department of Transportation federal Section 5309 (m)(2)(A) New Start Since the enactment of ISTEA, FHWA (IDOT) Bonds, the Service Boards are funds, $7 million for federal Section 5309 funds transferred to the FTA have pro- left with no local funds available to pro- (m)(2)(C) Bus and Bus Facility funds, vided a substantial new funding source vide a local match for federal funding in $15.3 million for federal Section 5339 Al- for transit projects. These funds can be 2007. Therefore, the Service Boards, as a ternative Analysis funds, and $2.4 mil- used for a variety of transit improvements temporary solution, will exercise the toll lion for federal flexible and other funds. such as new Fixed Guideway projects; revenue credit provision established in the Furthermore, the CTA requested to re- bus purchases; construction and reha- ISTEA, incorporated in Transportation duce its federal funding by $30.3 million bilitation of rail stations; maintenance Equity Act for the 21st Century (TEA- for the payment of debt principal and in- facility construction and renovations; 21) and continued in SAFETEA-LU. terest for 2007 and $354.7 million for this alternative-fuel bus purchases; bus trans- The toll revenue credit provision permits purpose in the out years. fer facilities; multi-modal transportation states to use certain expenditures of toll centers; and technologically advanced revenue as a “credit” toward the required The RTA fare collection systems. FHWA funds are local match for certain highway and tran- In 1999, the RTA Act was amended as transferred to the FTA to one of the fol- sit programs. These credits are not actu- part of the Illinois FIRST legislation. The lowing three programs: Urbanized Area ally funds that can be used; rather they legislation increased the RTA borrowing Formula program (federal Section 5307), are a mechanism to count toll revenue al- authority by $1.6 billion for capital infra- Non-urbanized Area Formula program ready spent for tollway capital projects as structure improvements. This amount in- (federal Section 5311), and Elderly and local matching dollars for federal capital cluded $1.3 billion in authorization for Persons with Disabilities program (fed- funds for transit. SCIP bonds. The State of Illinois reim- eral Section 5310). In addition, other federal funds made burses the RTA for the principal and in- Once transferred to the FTA for a available to the region by formula will be terest expenditures on these bonds. The transit project, the funds are administered allocated among a variety of agencies in- remaining $300 million represented the as FTA funds subject to all the FTA re- cluding transit operators on a competi- RTA bonds for which the RTA does not quirements. These transferred funds may tive basis. These programs include the receive state reimbursement. All of these use the same non-federal matching share federal Section 5316-Job Access and Re- funds (SCIP and RTA bonds) were pro- as if they were used for highway purpos- verse Commute (JARC) program and grammed to the Service Boards since es and administered by FHWA. the federal Section 5317-New Freedom 2004. Also, since the RTA bond autho- In urbanized areas of more than program (for services supplemental to rization represents a cap on outstanding 200,000 population, the Metropoli- ADA requirements). Since projects using bonds, additional bonds can be pro- tan Planning Organization (MPO) de- funds for these programs will be select- grammed when existing bonds are retired. cides the transfer of flexible funds. In ed in 2007 based on a competitive selec- The RTA’s five-year capital marks the RTA region, the MPO is the Chica- tion process coordinated by the RTA contain no additional SCIP or RTA bond go Area Transportation Study (CATS) and CATS, no funding marks are pro- funds since there is no legislation passed Policy Committee. The Service Boards’ posed at this time. The RTA capital pro- to extend the RTA’s bond programs. Note proposed capital programs include proj- gram marks will be amended to include that any additional bonding authority ects that could be funded by these flex- JARC and New Freedom funding avail- would require State legislation, as well ible programs. able to the Service Boards for capital proj- as a funding source to pay the debt ser- All of these federal funds must be ects only. vice on any additional bonds authorized matched by local funding sources. The In summary, the 2007 RTA prelim- to be issued. federal government provides 80 percent inary federal estimates reflecting the In 1995, the RTA began funding a new of the cost of capital projects funded with SAFETEA-LU legislation are $150.7 Transfer Capital (TC) program that utiliz- federal Section 5307 combined with Sec- million for federal Section 5309 (m)(2)(B) es funds available for operations to be used tion 5340 along with federal Section 5309 Fixed Guideway Modernization funds, for capital investments. The 2007-2011 114 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

capital program includes $101.8 million appropriations. Therefore, no IDOT CTA. The CTA will secure all funds and for the CTA from Transfer Capital funds. funding is included in the capital marks pay for all borrowings from their federal The RTA discretionary funds are yet for 2007 and beyond. Section 5307 formula funds and federal another source of capital funding. Discre- Section 5309 Fixed Guideway Modern- tionary funds can be used to match fed- Service Boards ization funds. eral funds or to fully fund Service Board In addition to the funding sources de- projects. In the past, the RTA has used scribed above, the 2007 capital program Transfer to Operating these discretionary funds to address the submitted by Metra includes $48.8 mil- The capital marks were not reduced backlog of unfunded capital needs. In lion of Transfer Capital funds. Transfer to reflect the Service Boards’ use of the last few years, due to limited RTA Capital funds are monies that can be used Section 5307 Urbanized Area Formu- receipts, the RTA deferred an allocation for operations but have, through cost con- la and Section 5309 Fixed Guideway of any discretionary funds to the Service tainment, been reallocated for use on cap- Modernization funds for their oper- Boards for capital projects. For 2007, the ital improvement projects. Also, five-year ating budgets. However, these funds RTA allocated $3.4 million in discretion- funding for this category includes $5.1 may have to be reduced in the future ary capital funds to Pace to purchase 46 million of local community and other if additional operations funding or replacement paratransit vehicles. funding, primarily Homeland Security deficit reductions are not obtained. monies, to be secured by Metra. Use of Funds State State funds historically are awarded CTA Financing The RTA capital program increased to the Service Boards on a discretionary The CTA is proposing to borrow dramatically in 2000 primarily as a re- basis and are used primarily for federal funds of $125 million in 2007 and $300 sult of the increased funding included match purposes to ensure sufficient lo- million in the out-years. These funds will in the Illinois FIRST program. The 1999 cal funds are made available for critical enable the acceleration of rail car and bus program totaled $552.7 million. The av- transit projects in the region. No addi- purchases, the construction of the Wash- erage funding level of 2000 through the tional state funds for capital projects were ington Intermodal Stations and the time- 2004 programs was $918.8 million, a 60 included in State Fiscal Year (SFY) 2007 ly repair of track and structure by the percent increase. The CTA, Metra and Pace have responded by significantly in- Exhibit 7-5: RTA Capital Program Obligations (dollars in millions) creasing their project implementation CTA Metra Pace Total performance. An average of $418 mil- Average 1995–1999 $ 240 $ 154 $ 24 $ 418 lion was obligated annually by the Ser- 2000 320 202 55 577 2001 322 500 61 883 vice Boards from 1995 thru 1999. From 2002 489 473 53 1,015 2000 through 2006 (projected), the Ser- 2003 599 365 25 989 vice Boards awarded an annual average of 2004 414 351 41 806 $807 million in contracts. Project spend- 2005 494 216 37 747 2006 Estimate 375 200 20 595 ing also increased substantially from an average of $420 million per year from Exhibit 7-6: RTA Capital Program Expenditures (dollars in millions) 1995 through 1999 to $795 million from CTA Metra Pace Total 2000 through 2006 (projected). Exhibits Average 1995–1999 $ 234 $ 166 $ 20 $ 420 7-5 and 7-6 illustrate these trends. These 2000 277 182 31 490 2001 351 316 55 722 results show that the Service Boards are 2002 486 340 35 861 putting the monies available to good use, 2003 477 468 81 1,026 providing benefits to public transporta- 2004 450 402 26 878 tion riders. 2005 351 354 33 738 2006 Estimate 400 375 15 790 The primary emphasis of the 2007 capital program is to continue efforts to RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 115

Exhibit 7-7: 2007 –2011 Capital Program Uses (dollars in millions) • $78.8 million for the upgrade of Asset Category CTA Metra Pace Total signal systems and installation Rolling Stock $ 856 $ 208 $ 103 $ 1,167 of Communication-Based Train Track and Structure 62 240 — 302 Electric, Signal and Communications 106 183 23 312 control systems; Support Facilities and Equipment 109 230 62 401 • $49.0. million for the New Start Stations and Passenger Facilities 134 65 1 200 alternative analysis, engineering Miscellaneous — 60 — 60 and construction; Acquisitions and Extensions 257 49 — 306 Contingencies and Administration — 73 1 74 • $61.6 million for the purchase Totals $ 1,524 $ 1,108 $ 190 $ 2,822 of 176 Pace buses; • $16.6 million for the purchase Exhibit 7-8: Regional Five -Year Assets by Category —$2,822 million of 460 Pace vans and community Contingencies, Administration and Miscellaneous–5% vehicles; Acquisitions and Extensions–1 1% • $14.7 million for the purchase of 183 Pace paratransit vehicles; Support Facilities • $18.1 million for the purchase and Equipment–14% Rolling Stock–41% of a replacement ﬁxed route radio system;

Trac k and Structure–11% • $23.0 million for the purchase of a replacement farebox system; Electric, Signal and Communications–11% Stations and Passenger Facilities–7% • $15.4 million for the purchase of the replacement for the HPe3000 bring the system’s assets to a state of good • $319.1 million toward the purchase computer system; repair. When replacing worn out items, of 406 CTA rail cars; • $14.6 million for the construction, it is imperative to utilize modern tech- • $267.6 million for the rehabilitation expansion and improvements to nologies that often result in improved and overhaul of the CTA rapid tran- Pace garages; and functionalities of equipment, facilities sit cars; • $4.4 million for the implementation and rolling stock. In addition, a balanced • $217.8 million for the expansion of of Transit Signal Priority projects. capital program is responsive to custom- the CTA’s Ravenswood Brown Line; er needs and shifting markets by includ- • $141.1 million toward the purchase CTA Overview ing investment in system expansion. of 426 CTA buses; The proposed projects in the CTA’s Investments in the capital program • $127.9 million for the rehabilitation portion of the 2007-2011 capital program can also be broken down into various as- and overhaul of the CTA buses; total $1.5 billion. The CTA’s portion of set categories. Exhibits 7-7 and 7-8 show • $106.2 million for the replacement the capital program continues the rehabil- that $1.4 million, or 48 percent, of the and upgrade of the CTA power itation and replacement of capital assets. program is spent on rolling stock and distribution and signals; The percentage for the general catego- stations and passenger facilities which • $37.5 million for the alternative ries of capital improvements of the total are considered to have the greatest direct analysis, preliminary engineering program are rolling stock at 56 percent; impact on transit users. Substantial in- and construction for four proposed track and structure at 21 percent; electric, vestment in other infrastructure is also CTA New Start projects; signal and communications at 7 percent; critical to maintaining safe, reliable trans- • $143.6 million for the construction support facilities and equipment at 7 per- portation services. of new Metra yards and shops; cent; and stations and passenger facilities The 2007-2011 capital programs for • $97.0 million for the rehabilitation at 9 percent. The general categories of cap- the CTA, Metra, and Pace are presented and improvement of Metra locomo- ital improvements comprising the CTA’s by major asset category in Exhibits 7-9 tives; portion of the capital program are illus- through 7-12. Some of the more signif- • $110.8 million for bridge trated in Exhibit 7-9. icant projects included in the proposed rehabilitation and renewal; Highlights of the CTA’s portion of 2007-2011 capital program include the • $55.5 million for the rehabilitation the 2007-2011 capital program are as fol- following: of Metra commuter rail cars; lows: 116 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 7-9: CTA Five– Year Assets by Category—$1 ,524 million 2) The capacity expansion of the Ra- venswood Brown Line from Kimball Track, Structure and Acquisitions–21% Terminal to Tower 18 in the Loop by extending platforms to accommodate

Support Facilities eight-car trains and making selected yard and Equipment–7% Rolling Stock–56% improvements, at a cost of $217.8 million Electric, Signal and Communications–7% over the next five years, with $64 million programmed in 2007; Stations and Passenger Facilities–9% 3) The repair of track and structure, at a cost of $62.7 million, with $41.1 million Rolling Stock 2400 Series rail cars and the purchase of programmed in 2007; and The CTA’s portion of the 2007-2011 additional cars to meet the service re- 4) New Start projects to extend and capital program includes $269.2 million quirements associated with the Brown expand the CTA rail system at a cost of in the bus rolling stock category. The Line capacity expansion. The CTA is $37.5 million in 2007 for engineering, CTA’s bus fleet consists of 2,106 buses. proposing $57.5 million for the purchase construction and alternative analysis. The five-year program contains $141.1 of new rail cars in 2007. Also, this cap- This includes extending the Red Line million for replacement of over-age bus- ital program contains $267.6 million for from the 95th Street Station to 130th es. These buses will have reached the in- the CTA systematic maintenance and Street, extending the Orange Line from dustry standard retirement age of 12 years upgrade of rapid transit rolling stock in- Midway Airport to the Ford City Mall, by the end of the five-year program. Con- cluding the overhaul and mid-life rehabil- and extending the Yellow Line from the tinued operation of these buses impos- itation for the 2200 and 2400 Series rail Dempster Station to Old Orchard Mall. es unnecessarily high maintenance and cars. This mid-life rehabilitation will en- It also includes funds for the expansions operating costs and reduces service reliable the cars to reach original useful life of the Circle Line that would link all of ability for the CTA’s customers. All new estimates of 25 years. the CTA’s rail lines in the City of Chica- buses will be air conditioned, low-floor go to Metra rail lines and for the Ogden and fully accessible to persons with dis- Track and Structure/ Avenue Transitway project from central abilities. In 2007, on-going bus purchases Acquisitions and Extensions Chicago to the North Riverside Park totaling $29.9 million are planned. The track and structure category in- shopping center. The CTA has requested In addition, $127.9 million is budgeted cludes $319.6 million in 2007-2011 to re- earmarks for these projects in the pend- for capital-eligible bus maintenance ac- habilitate and expand existing rail lines ing federal FY 2007 budget. tivities and life extending overhauls over with $144.1 million programmed in 2007. the five-year program with $23.1 million The CTA rail system contains 287.8 to- Electrical, Signal and Communications planned in 2007. The CTA will continue tal track miles, including yard track. Of The electrical, signal and communi- its aggressive Bus Preventive Maintenance these, 63.2 miles are at grade, with exclu- cations category totals $106.2 million for Program to schedule the replacement of sive right-of-way; 32.1 miles are at grade the CTA’s portion of the proposed five- parts nearing the end of their useful life. with cross traffic; 111.1 miles are on ele- year program, with $37.6 million pro- This program will improve the comfort, vated structure; 55.2 elevated miles are on grammed in 2007. The CTA’s five-year quality and reliability of the CTA’s bus fill; 2.9 are open cut miles; and 23.3 miles plan includes the replacement and up- service and will reduce operating expen- are subway. grade of the train control and track in- ditures by avoiding service disruptions The highlights of the CTA’s five-year terlocking on the Loop Elevated Line and unscheduled maintenance of buses. track and structure program include the with modern equipment providing in- The rail rolling stock category in- following: creased reliability for customers at a cost cludes $586.7 million in 2007-2011 to re- 1) The final funding of $1.6 million in of $15.4 million. It also includes the up- habilitate or purchase CTA rail cars. The 2007 for the reconstruction of the Doug- grade and replacement of the signal sys- CTA’s rail fleet consists of 1,190 train cars. las Branch of the Blue Line from 54th and tem for the entire Dearborn Subway, the The five-year program includes $319.1 Cermak in Cicero through the incline Congress Branch and a portion of the million for the replacement of 2200 and connection to the Congress Branch com- O’Hare Branch on the Blue Line at a cost pleted in 2005; of $90.8 million. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 117

Exhibit 7-10: Metra Five- Year Assets by Category —$1,108 million Track and Structure

Electric, Signal and Communications–17% Rolling Stock–19% The track and structure category totals $239.4 million over the five years of Acquisitions and Extensions–4 % the program, with $33.3 million planned for 2007. Contingencies, Administration and Miscellaneous–1 1% The Metra system operates on approx- Track and Structure–22% imately 475 route miles with over 1,100 miles of track and 800 bridges. Metra is Support Facilities and Equipment–21% Stations and Passenger Facilities–6% continuing a program of system-wide rehabilitation and preventive maintenance Support Facilities and Equipment the Howard Branch of the Red Line and that includes bridge rehabilitation, grade The CTA’s portion of the 2007-2011 continue construction of the Washington separation, retaining wall rehabilitation, capital program includes $108.8 mil- Street Station/Block 37 project connect- continuous-welded rail installation, ties lion in the support facilities and equip- ing the State Street and Dearborn sub- and ballast replacement, rail grinding, ment category with 2007 funding of ways in downtown Chicago. fence installation, grade crossing replace- $19.4 million. ment, and track undercutting. The CTA’s five-year program includes Metra Overview Bridge rehabilitation and replace- upgrades and improvements to various The Metra’s portion of the proposed ment projects, totaling $110.8 million, CTA facilities that need repair and re- 2007-2011 capital program totals $1.1 bil- are planned over the five-year program quire security enhancements, upgrades lion. During this five-year period, Metra and include $46 million on the Milwau- to bus turnarounds, rail stations and bus will continue the process of renewing its kee District-West Line, $24.5 million for garages, and the rehabilitation of eleva- extensive commuter rail infrastructure, the Metra Electric Line, $17.1 million tors and escalators. Various escalators while preparing to expand its system. for the Rock Island Line, $13.5 million and elevators throughout the system are The percentage for the general categories for the Milwaukee District-North Line, beyond their service life, require contin- of capital improvements of the total pro- $3.5 million for the BNSF Railway, $1 ual maintenance work and need to be re- gram are rolling stock at 19 percent; track million for the Union Pacific West Line, placed. Other escalators and elevators and structure at 22 percent; electric, sig- and $1.5 million for the Union Pacific are in poor condition and need to be re- nal, and communications at 17 percent; Northwest Line. habilitated. support facilities and equipment at 21 percent; stations and passenger facilities at 6 Electrical, Signal and Communications Stations and Passenger Facilities percent; acquisitions, extensions and ex- A total of $183.4 million is planned for The stations and passenger facilities pansions at 4 percent; and miscellaneous the five-year program for electric, signal category totals $133.8 million for the at 11 percent (Exhibit 7-10). and communications projects that include CTA’s portion of the proposed five-year Highlights of Metra’s 2007-2011 capi- upgrades and improvements to existing program with $50.3 million programmed tal program are as follows: facilities such as interlockers, switch- for 2007. The CTA operates 144 rapid es, signal systems, and electrical power transit stations serving eight routes. Six- Rolling Stock control facilities. The 2007 program pro- ty-five of these stations are wheelchair The five-year rolling stock program vides $27.8 million for numerous projects accessible via elevator or ramp. The CTA totals $207.9 million, with $61.5 mil- throughout the system. will use the funding in the capital pro- lion planned for 2007. Metra’s fleet in- Improvements to the Lake Street in- gram to reconstruct the Howard Station cludes 144 locomotives, 821 non-electric terlocker, located at Lake and Clinton on the Red Line including the reconstruc- cars and 191 self-propelled electric cars. Streets in Chicago, are planned at a cost tion of the bus terminal and parking lot. The 2007-2011 capital program includes of $2 million in 2007 and $17 million in The station will be made fully compli- $97 million for the rehabilitation and im- the program’s out years. As part of this ant with the ADA. The CTA proposes provement of locomotives, $62.3 million project, a new interlocking control ma- to program funds in the five-year capital for the rehabilitation and improvement of chine will be purchased and installed at program to complete the design and be- commuter cars, and $39.6 million for the the Lake Street Tower. gin construction of the Wilson Station on overhaul of rolling stock fleet components. 118 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Metra has also programmed $7 mil- tation Efficiency (CREATE) project. Acquisitions, Extensions and Expansions lion in 2007 for the renewal of the Metra also proposes $14 million in the For the 2007 capital program, Me- Gresham interlocker on the Rock Island five-year capital program to expand the tra is proposing to spend $49 million for District. Metra’s portion of the out-year Joliet Yard on the Rock Island District. engineering for four proposed new start capital program also includes $5 million Over the life of the five-year pro- projects. These projects include two new for the completion of this renewal. The gram, Metra plans to spend $86.2 mil- lines: the Suburban Transit Access Route capital program contains $4.6 million in lion on support facilities, yards, shops, (STAR) Line and Southeast Service. In 2007 with $14 million in the out-years for and substations. addition, these new start projects also in- the installation of fiber optic cable on the clude upgrades to the Union Pacific West BNSF Railway, to increase the effective- Stations and Passenger Facilities and Northwest lines. All of these projects ness and reliability of signal and control There are 231 stations in the Metra are eligible for federal funding under the system communications at interlockers system, including four major terminals in SAFETEA-LU legislation. Metra has re- and crossings. In addition, Metra is pro- downtown Chicago. In Metra’s portion quested earmarks for these projects in the posing $28 million in the out-year pro- of the five-year capital program, a total of pending federal FY 2007 budget. gram to install a communications-based $65.1 million is programmed for stations train control system on the Metra Elec- and parking. In 2007, $21.2 million is pro- Miscellaneous, Contingencies and Administration tric District and the Milwaukee Dis- grammed for these projects. trict lines. The 2007 program contains several Metra’s portion of 2007-2011 capi- major station projects: tal program includes $133.2 million for Support Facilities and Equipment 1) $3.4 million for the improvements to station studies, project management and The support facilities and equipment the concourse of Ogilvie Transportation oversight, security improvements, adver- category totals $229.7 million for the Center serving the Union Pacific Lines tising, material additives, insurance, sup- 2007-2011 planning period, with $32.8 in downtown Chicago; port engineering, unanticipated capital, million in the 2007 capital program. Sup- 2) $2.3 million for the rehabilitation of administration and contingencies, with port facilities and equipment includes the Winnetka Station on the Union Pa- $30.7 million programmed in 2007. rail car and locomotive maintenance cific North Line; Pace Overview buildings, storage yards, work crew 3) $1.5 million for the replacement of headquarters, maintenance vehicles and the Bartlett Station on the Milwaukee Pace’s portion of the 2007-2011 capi- equipment, office buildings, and associ- District West Line; tal program includes $190.1 million. This ated computer hardware and software. 4) $1 million for the construction of funding primarily provides for the re- Metra’s portion of 2007 capital pro- the 35th Street Intermodal Station on the placement and expansion of rolling stock. gram includes $1.5 million toward Rock Island District; The percentage for the general catego- land acquisition for a new coach yard 5) $0.5 million for rehabilitation of the ries of capital improvements of the total on the Metra Electric District and two 99th Street Beverly Station on the Rock program are rolling stock at 53 percent; new coach yards on the Union Pacif- Island District; and electric, signal and communications at 12 ic Northwest Line. One of these new 6) $0.5 million to the replace the Rob- percent; support facilities and equipment yards on the Union Pacific Northwest bins Station facilities on the Rock Island at 33 percent; and stations and passenger Line will be in Woodstock and the oth- District. facilities at 1 percent; and contingencies er new yard will be in Johnsburg. Metra Furthermore, the 2007-2011 capital and miscellaneous at 1 percent. These al- is proposing $14.9 million in 2007 with program includes $15.2 million to im- locations are illustrated in Exhibit 7-11. $113.2 million in the out-years for engi- prove platforms and ramps at Metra sta- Highlights of Pace’s 2007-2011 capital neering, construction and right-of-way tions for compliance with the ADA, $14.2 program are as follows: purchases for new coach yards and sup- million for engineering for stations and port facilities as well as various capacity parking, $8.3 million for commuter park- upgrades planned for the Chicago Re- ing lots, and $5.4 million to construct gional Environmental and Transpor- commuter parking decks in Geneva and St. Charles. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 119

Exhibit 7-11: Pace Five- Year Assets by Category—$1 90 million ful life, and parts are becoming difﬁcult to ﬁnd. The new radio system will not Support Facilities only save operating money, the technol- and Equipment–33% ogy will provide Pace with better com-

Rolling Stock–53% munication coverage.

Stations and Passenger Facilities–1% Support Facilities and Equipment Pace proposes to program $61.8 mil- Electric, Signal and Communications–12% Contingencies and Administration–1% lion over five years for support facilities and equipment. Of the $8.6 million for support facilities and equipment projects Rolling Stock steering shafts, and other items. Under planned in 2007, Pace’s portion of the cap- In the five-year capital program, Pace the rolling stock category, Pace propos- ital program includes $3.5 million for im- plans to purchase up to 771 transit vehi- es $1 million for bus overhaul in 2007, provements to garages and facilities. The cles for replacement and expansion at a with $4 million programmed in the out- 2007 plan includes funds to make critical cost of $89.5 million. Pace’s fleet consists years. In addition, the 2007 program in- improvements to its facilities such as the of 680 fixed-route buses, 364 paratransit cludes the $1.5 million for the purchase replacement of concrete, fire sprinklers, vehicles and 719 vanpool vehicles. Pace’s and installation of associated capital items security systems and overhead doors. 2007 fixed route bus purchase budget of such as engines, transmissions and other The out-year plan includes $12.1 million $13.3 million includes the replacement of parts for fixed route and paratransit ve- for improvements and upgrades at vari- 38 fixed route buses purchased in 1992 hicles. The 2008-2011 capital program ous garages. The capital program also in- and 1993. All the buses to be replaced have includes $3.8 million for associated capi- cludes $15.4 million in 2007-2011 for the exceeded their useful life; and the new ve- tal purchases. purchase and installation of a replace- hicles will be 30 feet in length. ment computer system for the HPe3000 In 2007, Pace also plans to spend $6.2 Electrical, Signal and Communications system. This program provides for the million to purchase up to 81 paratransit Pace’s portion of the 2007 capital continuation of funding for the HPe3000 vehicles to replace vehicles that have ex- program includes $2.6 million to im- migration project, an integrated system ceeded their useful lives. These vehicles plement seven Transit Signal Priority of financial, purchasing and other busi- will be a combination of buses and vans. (TSP) projects contained in the feder- ness processes. In addition to other rolling stock al Safe, Accountable, Flexible, and Ef- The 2007 program includes $0.5 mil- purchases, Pace’s portion of 2007 capi- ficient Transportation Equity Act—A lion for the purchase of miscellaneous tal program includes $2.2 million for the Legacy for Users (SAFETEA-LU) leg- maintenance and office equipment and purchase of two buses for Oak Park and islation. These projects contain funding replacement of non-revenue vehicles 58 vans for Vanpool services throughout for the development and purchase of the with $1.6 million programmed through Pace’s territory. The funds for the Van- TSP system in major corridors. These 2011. Also, $2.2 million is programmed pool programs are for the replacement of TSP corridors are Cermak Road, Rand in the out-years for office equipment and the vanpool vehicles which have exceeded Road, Cicero Avenue, South Suburban, furniture. their useful life and for the expansion of Grand Avenue, Lincoln Highway and Pace’s out-year program provides service. Pace’s Vanpool program is com- Roosevelt Road. Additional funding is $23.0 million for a system-wide fare- posed of the Vanpool Incentive Program included in SAFETEA-LU for some of box replacement project. The existing (VIP), the Corporate Shuttle Program the TSP projects through 2009. farebox system was installed in 1994. and the ADvAntage Program in addition Also, Pace proposes $18.1 million In addition, Pace’s out-year program to the Municipal Vehicle Program. in the five-year capital program for the includes $2.9 million for the purchase of This program includes a bus overhaul purchase and installation of a new sys- software and hardware and associated de- program including the replacement of tem-wide radio system to replace Pace’s sign and installation services for comput- bus components such as air conditioning existing radio system with $2.5 million ers, printers, computer systems, network, condensers, alternators, regulators, drive planned for 2007. The existing system communications, and presentation needs. shafts, transmission coolers, fan motors, is 13 years old and has exceeded its use- Additionally, in 2007, Pace’s capital pro- 120 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

gram proposes $250,000 for the purchase and installation of the Interactive Voice Response System (Phase I) software to permit Pace customers to get next bus arrival times and $400,000 to purchase 200 Mobile Data Terminals (MDT) for ADA paratransit vehicles.

Stations and Passenger Facilities The ﬁve-year program includes $1.4 million for Pace stations and passenger facilities. This funding will provide for upgrades of numerous passenger facilities as well as the purchase of bus stop signs, shelters and other passenger amenities.

Administration This category provides funding for project administration associated with capital projects. A total of $1.2 million is proposed for 2008 through 2010. Pace project administration covers the in- house staff salaries associated with undertaking and completing capital projects. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 121

Exhibit 7-12: Five-Year Capital Program—Schedule II (in dollars)

C T A 2007 2008 2009 2010 2011 Total Rolling Stock— Bus 21.032 Provide for Bus Associated Capital Maintenance Items—System-wide 176,642 — — — — 176,642 21.803 Perform Bus Overhaul and Maintenance Activities—System-wide 6,376,341 5,088,250 5,088,250 5,088,250 5,088,250 26,729,341 21.806 Perform Mid-Life Bus Overhaul—System-wide 16,700,000 36,800,000 30,900,000 16,800,000 — 101,200,000 31.054 Purchase a Minimum of 426 Replacement Buses (Partial $)—System-wide 29,899,470 39,620,451 — 49,253,009 22,287,895 141,060,825 Subtotal Rolling Stock 53,152,453 81,508,701 35,988,250 71,141,259 27,376,145 269,166,808 Total Bus 53,152,453 81,508,701 35,988,250 71,141,259 27,376,145 269,166,808 Rolling Stock —Rail 22.903 Perform Rail Car Overhaul and Mid-Life Rehabilitation (2200, 2400, 2600, and 3200 Series, Partial $)—System-wide 37,922,091 42,695,000 59,100,000 57,545,815 40,538,789 237,801,695 22.906 Perform Rail Car Overhaul Activities— System-wide 5,959,670 5,959,670 5,959,670 5,959,670 5,959,670 29,798,350 132.056 Replace a Minimum of 406 Rail Cars (2200 and 2400 Series, Partial $)— System-wide 57,549,739 69,938,639 19,502,138 172,062,818 — 319,053,334 Subtotal Rolling Stock 101,431,500 118,593,309 84,561,808 235,568,303 46,498,459 586,653,379 Track and Structure— Rail 171.133 Repair Track and Structure Defects— System-wide 5,400,804 5,400,804 5,400,804 5,400,804 5,400,804 27,004,020 181.5 Repair Track and Structure—System-wide 35,704,327 — — — — 35,704,327 Subtotal Track and Structure 41,105,131 5,400,804 5,400,804 5,400,804 5,400,804 62,708,347 Electrical, Signal and Communications —Rail 121.5 Replace/Upgrade Power Distribution and Signals—System-wide 37,558,486 68,633,246 — — — 106,191,732 Subtotal Electrical, Signal and Communications 37,558,486 68,633,246 — — — 106,191,732 Stations and Passenger Facilities— Rail 141.273 Reconstruct Rail Stations—System-wide 50,257,050 27,715,000 — — 55,873,298 133,845,348 Subtotal Stations and Passenger Facilities 50,257,050 27,715,000 — — 55,873,298 133,845,348 Acquisitions and Extensions —Rail 194.006 Perform Alternative Analysis for New Start Projects 14,100,000 — — — — 14,100,000 194.007 Provide for New Starts Engineering and Construction—Circle, Red, Orange and Yellow Lines 23,380,000 — — — — 23,380,000 194.115 Expand CAT Ravenswood Line/ Design, Land Acquisition, and Construction/ Ravenswood (Partial $)—Brown Line 63,954,712 63,954,712 89,903,320 — — 217,812,744 194.117 Reconstruct Douglas Branch (Partial $)—Blue Line 1,573,675 — — — — 1,573,675 Subtotal Acquisitions and Extensions 103,008,387 63,954,712 89,903,320 — — 256,866,419 Total Rail 333,360,554 284,297,071 179,865,932 240,969,107 107,772,561 1,146,265,225 Support Facilities and Equipment—System 073.50 Improve Facilities—System-wide 19,401,526 13,718,526 13,858,026 16,367,054 45,502,591 108,847,723 Subtotal Support Facilities and Equipment 19,401,526 13,718,526 13,858,026 16,367,054 45,502,591 108,847,723 Total System 19,401,526 13,718,526 13,858,026 16,367,054 45,502,591 108,847,723 TOTAL CTA 405,914,533 379,524,298 229,712,208 328,477,420 180,651,297 1,524,279,756

122 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

2007 2008 2009 2010 2011 Total M E T R A Rolling Stock— Rail 01.21 Rehabilitate and Improve Locomotives—MET 33,900,000 18,000,000 18,000,000 12,600,000 8,400,000 90,900,000 01.31 Improve Locomotives—MET 1,450,000 1,600,000 1,400,000 950,000 650,000 6,050,000 01.51 Rehabilitate and Improve Commuter Cars—MET 8,500,000 5,600,000 9,975,000 6,250,000 25,200,000 55,525,000 01.61 Improve Locomotives and Commuter Cars—MET 500,000 500,000 675,000 1,050,000 1,050,000 3,775,000 01.81 Rehabilitate and Improve MU Electric Cars—MED — 750,000 750,000 750,000 750,000 3,000,000 01.91 Overhaul Rolling Stock Fleet Components—MET 8,100,000 7,650,000 7,800,000 7,950,000 8,100,000 39,600,000 01.95 Enhance Cars and Locomotives—MET 9,000,000 — — — — 9,000,000 Subtotal Rolling Stock 61,450,000 34,100,000 38,600,000 29,550,000 44,150,000 207,850,000 Track and Structure— Rail 02.11 Replace Ties and Ballast—BNS, MED, MWD, RID, SWS, UPR 3,450,000 3,500,000 11,600,000 14,400,000 13,000,000 45,950,000 02.21 Provide for Maintenance-of-Way Work— BNSF, UPR, MET 2,090,000 1,090,000 1,090,000 990,000 1,140,000 6,400,000 02.25 Replace and Upgrade Grade Crossings—MET 1,000,000 2,000,000 2,000,000 2,000,000 2,000,000 9,000,000 02.31 Provide for Track Undercutting and Surfacing— MED, MWD, SWS, UPR 1,250,000 852,000 — 1,133,000 — 3,235,000 02.41 Replace Rail—BNSF, MED, MWD, NCS, RID, UPR 4,500,000 10,400,000 10,218,000 4,936,000 5,156,000 35,210,000 02.42 Provide for Rail Capacity Initiative— BNSF 1,250,000 — — — — 1,250,000 02.51 Rehabilitate and Renew Bridges— BNSF, MED, MWD, RID, UPR, MET 12,500,000 15,850,000 23,050,000 23,450,000 35,950,000 110,800,000 02.55 Fill Bridges—BNSF 200,000 200,000 — 200,000 — 600,000 02.61 Rehabilitate Embankments and Retaining Walls— BNSF, MWD,RID, UPR, MET 3,780,000 1,750,000 1,900,000 6,100,000 6,050,000 19,580,000 02.71 Install Right-of-way Fencing—UPR, MET 300,000 300,000 300,000 300,000 200,000 1,400,000 02.81 Construct Belmont Road Grade Separation—BNSF 3,000,000 — — — — 3,000,000 02.95 Rehabilitate Catenary Structures—MED — 750,000 750,000 750,000 750,000 3,000,000 Subtotal Track and Structure 33,320,000 36,692,000 50,908,000 54,259,000 64,246,000 239,425,000 Electrical, Signal and Communications —Rail 03.01 Upgrade Signal Systems— BNSF, MED, MWD, UPR, MET 10,200,000 23,600,000 18,000,000 18,700,000 8,300,000 78,800,000 03.11 Rehabilitate and Renew Grade Crossings— BNSF, MWD, MED, UPR, MET 600,000 2,800,000 2,400,000 2,700,000 1,800,000 10,300,000 03.21 Install and Upgrade Interlockers and Crossovers—CUS, MWD, RID, UPR 11,000,000 10,400,000 12,300,000 18,800,000 3,100,000 55,600,000 03.31 Provide for Signal Improvements—BNSF, UPR 230,000 150,000 380,000 150,000 150,000 1,060,000 03.41 Provide for Electrical Distribution—MED 600,000 750,000 750,000 4,750,000 2,550,000 9,400,000 03.48 Upgrade Electric Service—UPR — 100,000 100,000 100,000 — 300,000 03.51 Replace Catenary Wire and AC-DC Transmission Lines—MED 850,000 1,850,000 1,850,000 2,350,000 — 6,900,000 03.61 Install Standby Power Systems—UPR, MET — — 1,000,000 — — 1,000,000 03.71 Provide for Electrical Improvements— MED, MWD, MET 800,000 450,000 450,000 800,000 750,000 3,250,000 03.81 Replace and Upgrade Communications Equipment/Systems—MET 3,400,000 5,200,000 550,000 780,000 6,130,000 16,060,000 03.92 Miscellaneous Electric, Signal and Communications—UPR 150,000 150,000 150,000 150,000 150,000 750,000 Subtotal Electrical, Signal and Communications 27,830,000 45,450,000 37,930,000 49,280,000 22,930,000 183,420,000 Support Facilities and Equipment —Rail 04.01 Construct New Yards and Shops— RID, MED, UPR 1,500,000 — 5,000,000 5,000,000 4,000,000 15,500,000 04.02 Provide for Facility Acquisition, Engineering and Construction—MET 14,853,000 25,834,000 27,175,000 29,516,000 30,702,000 128,080,000 04.11 Upgrade Yards and Shops— BNSF, MWD, NCS, RID, UPR 2,100,000 3,000,000 1,000,000 4,800,000 9,200,000 20,100,000 04.21 Upgrade Buildings—MED, RID, MET 1,500,000 2,500,000 2,500,000 2,500,000 2,000,000 11,000,000 04.22 Upgrade Headquarters Building— 547 W. Jackson Boulevard 3,800,000 100,000 700,000 100,000 700,000 5,400,000 04.31 Improve Tanks and Fueling Facilities—MET — 500,000 500,000 500,000 500,000 2,000,000 04.41 Install Field Support Equipment—MET 3,305,000 2,952,381 2,616,344 3,154,685 3,521,932 15,550,342 04.51 Install Ofﬁce Support Equipment—MET 4,270,000 6,435,000 1,785,000 1,335,000 8,785,000 22,610,000 04.71 Renewal of Facilities—MET 1,500,000 2,500,000 2,500,000 2,000,000 1,000,000 9,500,000 Subtotal Support Facilities and Equipment 32,828,000 43,821,381 43,776,344 48,905,685 60,408,932 229,740,342 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 123

2007 2008 2009 2010 2011 Total

Stations and Passenger Facilities— Rail 05.02 Rehabilitate Stations for ADA Compliance—MET 1,750,000 3,350,000 3,350,000 3,350,000 3,350,000 15,150,000 05.11 Rehabilitate Stone Avenue Station—BNSF — 500,000 — — — 500,000 05.12 Rehabilitate and Improve Stations—MED 500,000 600,000 600,000 600,000 600,000 2,900,000 05.14 Improve Bartlett Station—MWD-West Line 1,500,000 — — — — 1,500,000 05.16 Construct Tinley Park 80th Avenue Station—RID 160,512 173,888 180,576 — — 514,976 05.16 Rehabilitate 115th Street - Morgan Park Station—RID — — — 1,400,000 1,600,000 3,000,000 05.16 Replace Robbins Station and Parking—RID 500,000 — — — — 500,000 05.16 Restore 99th Street Beverly Station—RID 500,000 — — — — 500,000 05.18 Improve OTC Concourse—UPR 3,420,000 — — — — 3,420,000 05.18 Rehabilitate Winnetka Station—UP-North Line 2,300,000 2,300,000 — — — 4,600,000 05.21 Construct New Station at 35th Street—RID 1,003,200 1,086,800 1,128,600 — — 3,218,600 05.51 Expand Joliet Station Parking—RID 400,000 — — — — 400,000 05.51 Expand Mont Clare, Mars, Galewood and Hanson Park Station Parking—MWD-West Line 500,000 — — — — 500,000 05.52 Construct Commuter Parking Decks— Geneva and St. Charles 1,705,440 1,847,560 1,918,620 — — 5,471,620 05.53 Expand Aurora Station Parking—BNSF 554,400 — — — — 554,400 05.53 Expand Joliet Station Parking—RID 576,840 624,910 648,945 — — 1,850,695 05.54 Improve Downers Grove Station Parking—BNSF 565,000 440,000 — — — 1,005,000 05.56 Provide for Commute Parking System Improvement - MET 1,000,000 1,000,000 2,000,000 — — 4,000,000 05.91 Provide for Property Acquisition and Appraisal Services—MET 1,300,000 — — — — 1,300,000 05.95 Conduct Engineering for Stations and Parking—MET 3,000,000 2,800,000 2,800,000 2,800,000 2,800,000 14,200,000 Subtotal Stations and Passenger Facilities 21,235,392 14,723,158 12,626,741 8,150,000 8,350,000 65,085,291 Miscellaneous —Rail 06.01 Provide for Kennedy-King and Auburn Park Stations Station Study—RID 60,192 65,208 67,716 — — 193,116 06.21 Improve Metra System Security—MET 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 25,000,000 06.42 Provide Advertising, Material Additives and Insurance—MET 1,600,000 2,100,000 2,100,000 2,100,000 2,100,000 10,000,000 06.43 Provide for Capital Project Oversight and Security—MET 500,000 500,000 500,000 500,000 500,000 2,500,000 06.43 Provide for Miscellaneous General Activities—MET — 100,000 100,000 100,000 100,000 400,000 06.94 Provide for Support Engineering—MET 4,000,000 3,000,000 3,000,000 3,000,000 3,000,000 16,000,000 06.96 Provide for Unanticipated Capital—MET 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 6,000,000 Subtotal Miscellaneous 12,360,192 11,965,208 11,967,716 11,900,000 11,900,000 60,093,116 Acquisitions and Extensions —Rail 07.51 Provide for Engineering and Construction for SAFETEA-LU New Starts Projects—MET 49,000,000 — — — — 49,000,000 Subtotal Acquisitions and Extensions 49,000,000 — — — — 49,000,000 Contingencies and Administration— Rail 08.90 Provide for Project Management—MET 12,750,000 13,110,000 13,481,000 13,863,000 14,256,000 67,460,000 08.99 Provide for Contingencies—MET 5,618,850 — — — — 5,618,850 Subtotal Contingencies and Administration 18,368,850 13,110,000 13,481,000 13,863,000 14,256,000 73,078,850 Total Rail 256,392,434 199,861,747 209,289,801 215,907,685 226,240,932 1,107,692,599 TOTAL METRA 256,392,434 199,861,747 209,289,801 215,907,685 226,240,932 1,107,692,599 124 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

P A C E 2007 2008 2009 2010 2011 Total Rolling Stock —Bus 4201 Purchase a Minimum of 176 Fixed Route Accessible Buses—System-wide 13,300,000 8,750,000 7,700,000 18,200,000 13,650,000 61,600,000 4202 Purchase a Minimum of 183 Paratransit Vehicles—System-wide 6,248,810 3,600,000 1,615,000 1,700,000 1,530,000 14,693,810 4204 Purchase a Minimum of 452 Vanpool Vans (256 Replacement and 196 Expansion)— System-wide 2,000,000 3,500,000 3,500,000 3,500,000 3,500,000 16,000,000 4205 Purchase a Minimum of 6 Community Vehicles—Oak Park 200,640 217,360 225,720 — — 643,720 4206 Provide for Associated Capital Items— System-wide 1,500,000 1,000,000 1,000,000 1,000,000 750,000 5,250,000 4207 Provide for Bus Overhaul—System-wide 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 5,000,000 Subtotal Rolling Stock 24,249,450 18,067,360 15,040,720 25,400,000 20,430,000 103,187,530 Electrical, Signal and Communications —Bus 4126 Implement Transit Signal Priority Project— Cermak Road 250,000 300,000 500,000 — — 1,050,000 4127 Implement Transit Signal Priority Project— Rand Road 160,512 173,888 180,576 — — 514,976 4128 Implement Transit Signal Priority Project— Cicero Avenue 200,640 217,360 225,720 — — 643,720 4129 Implement Transit Signal Priority Projects— South Suburbs 900,320 108,680 112,860 — — 1,121,860 4209 Purchase Replacement Radio System— System-wide 2,500,000 6,300,000 9,300,000 — — 18,100,000 4230 Implement Transit Signal Priority Project— Grand Avenue 320,000 — — — — 320,000 4231 Implement Transit Signal Priority Project— Lincoln Highway 480,000 — — — — 480,000 4231 Implement Transit Signal Priority Project— Roosevelt Road 300,000 — — — — 300,000 Subtotal Electrical, Signal and Communications 5,111,472 7,099,928 10,319,156 — — 22,530,556 Support Facilities and Equipment —Bus 3614 Purchase and Installation of Replacement for HPe3000 Computer System-Phase II (Partial $)—System-wide 3,900,000 3,000,000 1,900,000 1,000,000 5,600,000 15,400,000 4210 Purchase Replacement Farebox System — System-wide — 4,000,000 8,000,000 6,000,000 5,000,000 23,000,000 4211 Purchase Maintenance/ Support Equipment and Vehicles—System-wide 500,000 300,000 300,000 500,000 500,000 2,100,000 4212 Purchase and Installation of Interactive Voice Response System (Partial $)—System-wide 250,000 — — — — 250,000 4213 Purchase Computer Hardware and Software Systems—System-wide — 300,000 500,000 850,000 1,220,000 2,870,000 4215 Purchase Ofﬁce Equipment/Furniture— System-wide — 100,000 100,000 1,000,000 1,000,000 2,200,000 4216 Improve Garages/ Facilities—System-wide 3,505,611 2,500,000 1,130,000 3,300,000 5,200,000 15,635,611 4217 Purchase up to 200 Mobile Data Terminals for Chicago ADA Paratransit Vehicles 400,000 — — — — 400,000 Subtotal Support Facilities and Equipment 8,555,611 10,200,000 11,930,000 12,650,000 18,520,000 61,855,611 Stations and Passenger Facilities— Bus 4219 Construct Passenger and Transfer Facilities—System-wide — — — — 1,000,000 1,000,000 4220 Install Shelters/ Signs/ Passenger Amenities—System-wide — 100,000 100,000 100,000 100,000 400,000 Subtotal Stations and Passenger Facilities — 100,000 100,000 100,000 1,100,000 1,400,000 Contingencies and Administration— Bus 4225 Provide for Project Administration — 222,795 281,199 305,456 365,750 1,175,200 Subtotal Contingencies and Administration — 222,795 281,199 305,456 365,750 1,175,200 Total Bus 37,916,533 35,690,083 37,671,075 38,455,456 40,415,750 190,148,897 TOTAL PACE 37,916,533 35,690,083 37,671,075 38,455,456 40,415,750 190,148,897 GRAND TOTAL 700,223,500 615,076,128 476,673,084 582,840,561 447,307,979 2,822,121,252 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 125

8 Appendices 126 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 127

Exhibit 8-1: 2007 Budget Call Calendar (dates listed are for 2006)

June 22 program marks. Finance Committee November 6 – December 8 Finance Committee meeting; meeting to review each Service Board’s RTA Board Members and staff present 2007 budget call release. budget and two-year financial plan and highlight summaries of the regions pro- to discuss the ordinance setting the opposed budget, two-year financial plan, August 1 erating funding marks and recovery and preliminary five-year capital pro- Deadline for Service Board capital ratio. RTA Board meeting to discuss gram to County Committees and their program and critical issue submittals and adopt the ordinance which sets the Boards. to the RTA. operating funding marks from 2007 through 2009, the 2007 recovery ra- November 10 – 22 August 1 – September 1 tio and the preliminary five-year capital RTA staff consolidates the proposed RTA analysis of the Service Board’s program marks for each Service Board. budgets, financial plans, and revised preliminary five-year capital program. capital programs of the Service Boards RTA and Service Board staff discuss September 15 – October 13 and Agency into the RTA’s proposed issues. RTA staff prepares the prelimi- Service Boards develop detailed bud- 2007 annual budget and five-year capi- nary capital program marks. gets, two-year financial plans, and pre- tal program document. liminary five-year capital programs. August 15 Staff of the RTA and Service Boards November 15 Service Boards submit macro budget meet to review issues. Service Boards submit proposed budgets, and two-year financial plan to the RTA. two-year financial plans, and revised October 2 – December 8 five-year capital programs to the RTA. August 16 – September 1 FTA releases Federal Fiscal Year 2007 RTA staff analysis of each Service Board’s Apportionments in the Federal Register. November 17 macro budget and two-year financial plan. CATS Work Program Committee RTA and Service Board staffs discuss October 2 – December 8 meets to recommend the FTA alloca- business issues. RTA staff prepares the RTA and NIRPC renegotiate Letters of tions between NE Illinois, NW Indi- budget, the two-year financial plan, and Understanding regarding the FTA Sec- ana, and SE Wisconsin. the preliminary five-year capital program tions 5309 and 5307 allocations between summaries for management review. NE Illinois and NW Indiana; and RTA December 1 RTA staff submits for management re- and SEWRPC renegotiate Letter of The RTA’s proposed 2007 budget, view the finance and ordinance infor- Understanding regarding the FTA Sec- 2008-2009 financial plan, and five-year mation required to: (1) set the operating tion 5307 allocation between NE Illi- capital program document is available funding marks for the 2007 budget and nois and SE Wisconsin. for public inspection. the 2008–2009 financial plan of each Service Board, (2) set the 2007 budget October 16 – November 10 December 12 recovery ratio for each Service Board, Service Boards release their budgets, RTA holds public hearings on the pro- and (3) set the preliminary 2007-2011 two-year financial plans, and prelimi- posed consolidated 2007 budget, 2008- five-year capital program marks. nary five-year capital program docu- 2009 financial plan, and 2007-2011 ments to the public, and present these capital program. September 14 documents to County Boards. RTA Planning Committee and Finance December 4 – December 14 Committee meetings to review and dis- November 2 RTA Planning Committee, Finance cuss the preliminary five-year capital RTA Board Committees and the RTA Committee and RTA Board meet to re- Board review the RTA Agency budget. view and adopt an ordinance for the 2007 budget, the 2008-2009 financial plan, and the revised five-year capital program. 128 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 8-2: RTA Community Meetings/ Budget Hearings Schedule The RTA is seeking public input regarding the Moving Beyond Congestion strategic planning process, and regarding the proposed operating and capital program and budget for public transportation in the region. Meetings are open to the general public. No RSVP necessary. All locations are ADA accessible. For questions, call the RTA at 312-913-3200.

CHICAGO SUBURBAN COOK COUNTY DuPAGE COUNTY South North Tuesday, December 5th Thursday, December 7th Thursday, December 7th 6:00 pm - 7:30 pm 6:00 pm - 7:30 pm 6:00 pm - 7:30 pm DuPage County Building Auditorium Sheldon Heights Church of Christ Pace Headquarters, Board Room 421 N. County Farm Road Corner of 113th and Halsted Street 550 W. Algonquin Road Wheaton Chicago Arlington Heights KANE COUNTY Central South Monday, December 11th Monday, December 11th Thursday, December 14th 6:00 pm - 7:30 pm 9:00 am - 10:30 am 6:00 pm - 7:30 pm Kane County Building Michael A. Bilandic Building South Suburban Mayors Building A, Auditorium 160 N. LaSalle Street, Room C500 and Managers Meeting Room C 719 Batavia Avenue (Route 31) Chicago 1904 W. 174th Street Geneva East Hazel Crest North LAKE COUNTY Tuesday, December 12th Southwest Tuesday, December 5th 6:00 pm - 7:30 pm Monday, December 11th 6:00 pm - 7:30 pm Loyola University–Lakeshore Campus 6:00 pm - 7:30 pm University Center of Lake County Quinlain Life Sciences Building Village of Chicago Ridge 1200 University Center Drive 1st Floor, Room 142 10455 S. Ridgeland Avenue Grayslake Corner of Kenmore and Sheridan Chicago Ridge Chicago McHENRY COUNTY West Wednesday, December 6th West Wednesday, December 6th 6:00 pm - 7:30 pm Thursday, December 14th 6:00 pm - 7:30 pm Woodstock Village Hall, Board Room 6:00 pm - 7:30 pm Westchester Village Hall 121 W. Calhoun Street Garﬁeld Park Conservatory Board Room Woodstock 300 N. Central Park Avenue 10300 Roosevelt Road Chicago Westchester WILL COUNTY Monday, December 4th 6:00 pm - 7:30 pm Joliet Historical Museum 204 N. Ottawa Street Joliet RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 129

Glossary Public Hearing Overview Appropriation—A legal procedure Section 4.01 of the RTA Act directs the Accessible—As defined by FTA, a that permits a specified amount of funds RTA to hold public hearings on its annu- site, building, facility, or portion thereof for a given operating or capital purpose to al consolidated budget and financial plan, that complies with defined standards and be expended; the RTA appropriates funds prior to Board consideration of the ordi- that can be approached, entered, and used for expenditures. nance adopting the budget and plan. This by persons with disabilities. Balanced Budget—A budget in which year the RTA held its public hearings be- Accessible Service—A term used to expected revenues equal expected expens- tween December 4 and 14, 2006 in thir- describe service that is accessible to non- es during a fiscal period. teen locations throughout the six-county ambulatory riders with disabilities. This Balanced Scorecard ( BSC)—A bal- region. The location of these hearings is includes fixed-route bus service with anced scorecard translates an orga- detailed in Exhibit 8-2. Court reporters wheelchair-lifts or Dial-A-Ride service nization’s vision and strategy into a recorded testimony and transcripts of this with wheelchair lift-equipped vehicles. comprehensive set of objectives and per- testimony are on file at the RTA. ADA ( The Americans with Disabil- formance measures that provides the At these meetings, the public was ities Act of 1990)—This federal act re- framework for a strategic measurement briefed on the proposed RTA 2007 Bud- quires many changes to transit vehicles, and management system. The BSC en- get and the Moving Beyond Conges- operations and facilities to ensure that compasses four distinct perspectives-fi- tion strategic plan. In partnership with people with disabilities have access to nancial, customer, internal, and learning the Service Boards, the strategic plan- jobs, public accommodations, telecom- and growth. The name reflects the balance ning process will address the region’s munications, and public services, includ- provided between short- and long-term long-term public transportation needs ing public transit. Many capital projects objectives, financial and non-financial and implement innovative approaches to described in this document are being im- measures, past and future-oriented in- funding, planning, service coordination plemented to comply with the ADA. dicators, and external (shareholder and and system growth. A true community ADA Paratransit Service—Non- customer) and internal performance per- dialogue and discussion was conduct- fixed-route paratransit service utiliz- spectives. ed and all who wanted to make public ing vans and small buses to provide Bond Refinancing/ Refunding—is statements were accommodated. Near- pre-arranged trips to and from specif- the payoff and re-issuance of bonds to ly 400 people attended these meetings. ic locations within the service area to obtain better interest rates and/or bond Members of the general public, State and certified participants in the program. conditions which results in the defeasance local elected officials, representatives of Administration Expenditure—Ex- of the old debt. municipalities, transit advocacy groups, penditures for labor, materials and fees Budget—Funds allocated by the RTA community organizations and religious associated with general office functions, Board for a particular purpose; each year leaders from across the region participat- insurance, safety, legal services, and oth- the RTA Board approves a budget doc- ed in the meetings. In addition, written er services. ument for the following year. Funds are comments and suggestions were collect- Agency Fund—This fiduciary fund allocated either by “programming” them ed. This unprecedented level of public in- accounts for the assets held by the RTA or by “appropriating” them. put produced a broad range of opinions in a trustee capacity or as an agent for the Budget Marks—The Regional Trans- and suggestions. CTA, Metra, and Pace, rather than for the portation Authority Act, as amended in Testimony about the 2007 budget RTA’s own programs. Of the four types 1983, requires the RTA to advise each of addressed concerns about the roles and of fiduciary funds (Agency funds, pen- its Service Boards by September 15 of responsibilities of the RTA and the Ser- sion and other employee benefit funds, in- each year of its required revenue recovery vice Boards; the need for more frequent vestment trust funds, and private-purpose ratio for the subsequent year, and the pub- and reliable public transit service; the funds) the RTA uses only the first two. lic funding to be available. These figures process of identifying, evaluating, and Ambulatory Disabled—A person are referred to as budget marks. funding capital project proposals; service with a disability that does not require the Bus Bunching—A traffic scenario in and fare integration among the Service use of a wheelchair. This would describe which more than one bus arrives at the Boards; and better integration of tran- individuals who use a mobility aid other same time. This phenomenon is a subject sit planning and land development in the than a wheelchair or have a visual or hear- of several CTA initiatives aimed at reduc- RTA region. ing impairment. ing service problems. 130 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Bus Rapid Transit ( BRT)—BRT rizon year of 1980 and included many Debt Service—The payment of inter- combines the quality of rail transit and recommendations that were to become est on and the repayment of principal on the flexibility of buses. It can operate on part of the present highway and transit long-term borrowed funds according to exclusive transitways, High Occupan- networks. The success of that planning a predetermined payment schedule. cy Vehicle (HOV) lanes, expressways, effort led to CATS being made a perma- Defeasance of Bonds—a technique or ordinary streets. A BRT system com- nent agency. used to discharge older high-rate debt pri- bines intelligent transportation systems CTA ( Chicago Transit Authority)— or to maturity with new securities bear- technologies, priority for transit, clean- The CTA operates bus and rapid transit ing lower interest rates. er and quieter vehicles, rapid and conve- service in the City of Chicago and several Deficit—For a particular Service nient fare collection, and integration with suburbs. The CTA was created by state Board, the difference between system- land use policies. legislation and began operations in 1947. generated revenues and system operating Capacity Utilization—The percent- CMAQ (Congestion Mitigation/Air expenses. The deficit is sometimes referred age of seats occupied in a train or bus at Quality) Grant—A federal grant pro- to as the “public funding requirement.” a given point in time. gram designed to support transportation The RTA’s current practice is to provide Capital—Funds which finance con- projects that reduce traffic congestion. operating funds to each Service Board struction, renovation, and major repair Cost-Per-Mile—Operating expense equivalent to their budgeted deficit for projects or the purchase of machinery, divided by vehicle miles for a particular the year as opposed to the actual deficit. equipment, buildings, and land. program or in total. For the RTA, its deficit or surplus equals Capital Expenditure—Expendi- Cost-Per-Passenger—Operating ex- total revenues (sales tax, PTF, interest, tures that acquire, improve, or extend pense divided by ridership for a particu- and other income) less operating fund- the useful life of any item with an ex- lar program or in total. ing, debt service, technology, and capital pected life of three or more years and a Chicago Area Transportation Study funding (RTA capital and RTA discre- value of more than $5,000, e.g., rolling (CATS)—the Metropolitan Planning tionary funding of Service Board capital). stock, track and structure, support facili- Organization (MPO) for northeastern Depreciation—Expiration in the ser- ties and equipment, and stations and pas- Illinois responsible, in cooperation with vice life of fixed assets, other than wasting senger facilities. the State, for planning and developing a assets, attributable to wear and tear, dete- Car Mile or Vehicle Mile—A single safe, efficient and affordable transporta- rioration, action of the physical elements, bus, rapid transit car, or commuter rail tion system for the northeastern Illinois inadequacy, and obsolescence. The por- car traveling one mile. region. The CATS committee structure tion of the cost of a fixed asset, other than CATS (The Chicago Area Transpor- ensures that citizens, interest groups, a wasting asset, charged to expense dur- tation Study)—The CATS Policy Com- elected officials, and public and private ing a particular period. mittee is designated by federal, state and agencies are included in the transporta- Dial-A-Ride Service—Paratransit local officials as the Metropolitan Plan- tion planning process. service that requires the user to call ahead ning Organization (MPO) for the north- Chicago Metropolitan Agency for and schedule service. eastern Illinois region. Together with the Planning (CMAP)—combined the pre- Discretionary Funds—Funds that State of Illinois, the MPO is responsible viously separate transportation and land- the RTA allocates, at its discretion, to for carrying out the urban transporta- use planning agencies (Chicago Area the Service Boards. These funds include tion planning process in this region. The Transportation Study [CATS] and the the PTF and a portion of the 15 percent northeastern Illinois region includes: Northeastern Illinois Planning Com- of the RTA Sales Tax. Cook, DuPage, Kane, Lake, McHenry mission [NIPC]) for northeastern Illinois Elderly—A term used to describe in- and Will counties and a portion of Ken- into a single entity designed to protect dividuals who are 65 years of age or old- dall County. CATS was formed in 1955 natural resources and minimize traffic er. This age is used to qualify for the RTA to develop the first comprehensive long- congestion as the region plans for the 21st Senior Citizen Reduced Fare Card. Note range transportation plan for the region. century and beyond. that some paratransit services define el- This plan, completed in 1962, had a ho- Dead-Head—The time when a transit derly individuals at an age other than 65. vehicle is traveling toward a yard, shop, or the start of a run but is not in revenue service. Car miles include dead-head miles. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 131

Express Bus (or route)—A suburban pay, pension contributions, life and health General Long Term Debt Account or intercity bus that operates a portion of insurance, unemployment and workers’ Group (GLTDAG)—This account its route without stops or with a limited compensation, social security costs, and group is not a fund but a separate list of number of stops. other programs. certain long-term liabilities of the gener- Favorable Performance—In a com- FTA (Federal Transit Administra- al government. Debt normally is record- parison of actual results to budgeted lev- tion)—The FTA is the federal agency ed at its face value, without premium or els, favorable performance describes the which helps cities and communities pro- discount. Additions to and deletions from situation in which expenditures are less vide mobility to their citizens. Through GLTDAG are disclosed in the notes to than budget or revenue exceeds budget. its grant programs, FTA provides finan- the financial statements. Farebox Revenue—Revenue ob- cial and planning assistance to help plan, Bond Refinancing/Refunding—is tained from passengers and other fare build, and operate rail, bus, and para- the payoff and re-issuance of bonds, to subsidies except the state reduced fare transit systems. Since 1988, the only FTA obtain better interest rates and/or bond subsidy program. Also referred to as funding available to the RTA has been for conditions which results the defeasance “passenger” revenue. capital projects. of the old debt. Fares—The amount charged to pas- Full Funding Grant Agreement General Fund—The operating fund sengers for use of various services. (FFGA)—The FTA is required to use a that is used to account for all financial Feeder Bus Services—Pace bus routes FFGA to prove financial assistance for resources and normal recurring activities which serve Metra stations. new start projects. The FTA also has the except for those required to be accounted Financial Plan—In addition to an discretion to use an FFGA in awarding for in another fund. annual budget, the RTA Act, as amend- federal assistance for other major capital General Obligation Bonds (GO ed in 1983, requires the RTA and its Ser- projects. The FFGA defines the project, Bonds)— are bonds that are legally vice Boards to develop a financial plan including cost and schedule; commits to backed by the full faith, and credit of the for the two years subsequent to the up- a maximum level of federal financial as- issuing government. The government coming budget year. In combination with sistance (subject to appropriation); estab- is legally obligated to use its full taxing the annual budget, this provides a three- lishes the terms and conditions of federal power, if necessary, to repay the debt. year projection of expenses, revenues, and financial participation; covers the period Gross Domestic Product (GDP)— public funding requirements. of time for completion of the project; and Reported by the Bureau of Economic Fiscal Year—The calendar year is the helps to manage the project in accordance Analysis, this measure of economic ac- fiscal year for the RTA, CTA, Metra, and with federal law. The FFGA assures the tivity is the sum of the market values of Pace. The fiscal year of the State of Illi- grantee of predictable federal financial all of the final goods and services pro- nois extends from July 1 through June support for the project (subject to appro- duced in the United States in a year. 30 of the following year. The fiscal year priation) while placing a ceiling on the Grants—Moneys received from local, of the federal government extends from amount of that federal support. federal, and state governments to provide October 1 through September 30 of the Full-Time Equivalent Position capital or operating assistance. following year. TE(F )—A measurement equal to one Headway—The time span between ser- Fixed- Route Service—Buses that staff person working a full-timework vice vehicles (bus or rail) on a specified route. operate according to fixed schedules and schedule for 1 year. Illinois FIRST—A group of legisla- routes. Fund Balance—The cumulative dif- tion passed by the Illinois General As- Flexible Funds—Federal funds made ference between revenues and expenses sembly to fund capital improvements for available by TEA-21 that can be used for over the life of a fund. the state’s infrastructure, roads, schools various transportation projects, including Funding Formula—A specific for- and transit. both highway and mass transit projects. mula used to determine a subsidy level. Infrastructure—The physical as- Allocation of these funds is at the discre- Fund Balance—The excess of fund- sets of the RTA system, e.g., rail lines tion of state and local agencies. ing over deficit for a given period of time. and yards, power distribution, signaling, Fringes (Fringe Benefit Expendi- In this document, the fund balance refers switching, and communications equip- tures)—Pay or expenditures to or on be- to the unreserved/undesignated funds in ment, passenger stations, information half of employees in addition to salaries the Agency and general fund. systems, and roadways, upon which the and wages, including sick pay, vacation continuance and growth of transit depend. 132 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

In-Kind Service—These services are Linked Trip—A single, one-way trip Non-Ambulatory Disabled—A per- provided at no cost to a Service Board. without regard for the number of vehicles son who has a disability that requires use For example, the City of Chicago pro- boarded to make the trip (i.e., a home- of a wheelchair. vides free of charge dedicated security to-work trip taken by boarding a bus, Northeastern Illinois Planning forces to the CTA. to a train, to another bus represents one Commission (NIPC)—NIPC is the of- Intelligent Bus System (IBS)—A linked trip or three unlinked trips) ficial comprehensive planning agency bus communications system that uses Maintenance Expenditure—Expen- for the six-county Chicago metropolitan advanced technology to monitor and ditures for labor, materials, services, and area. NIPC was created by the Illinois improve performance on various levels. equipment used to repair and service General Assembly in 1957 and assigned Pace’s new bus communications system transit and service vehicles and facilities. three broad responsibilities: to conduct includes radio voice and data communi- Mobility Limited—An individu- research required for planning for the cations, Computer-Aided Dispatching al who has a physical impairment, in- region; to prepare comprehensive plans (CAD) and Global Positioning Satellite cluding impaired sensory, manual, or and policies to guide the development of (GPS)-based Automatic Vehicle Location speaking abilities that result in function- the region; and to advise and assist local (AVL) functions. al limitations. governments. Intelligent Transportation Systems Modified Accrual Basis—A type of Operating Assistance—Financial (ITS)—The application of advanced sen- accounting whereby revenue and other assistance for transit operations (as op- sor, computer, electronics, and commu- financial resource increments (e.g., bond posed to capital) expenditures. Such aid nication technologies and management issue proceeds) is recognized when they may originate with federal, state, or local strategies in an integrated manner to in- become both “measurable” and “avail- governments. crease the safety and efficiency of the able” for finance expenditures of the cur- Operating Budget—The planning of surface transportation system. ITS is a rent period. “Available” means collectible revenue and expenditures for a given peri- national effort designed to promote the in the current period or soon enough od of time to maintain daily operations. use of advanced technologies in multi- thereafter to be used to pay liabilities of Off-Peak—Non-rush hour time pe- modal transportation. the current period. Similarly, expendi- riods. Interest—The charge for borrowing tures (e.g., debt service payments and a Paratransit Service—Any transit ser- money, typically expressed as an annual number of specific accrued liabilities) are vice that is not conventional fixed-route percentage rate. only recognized when payment is due be- bus or rail service, including Dial-A- ISTEA ( Intermodel Surface Trans- cause it is only at that time that they nor- Ride, fixed-route deviation, shared-ride portation Efficiency Act of 1991)— mally are liquidated with expendable taxicab, and vanpool services. ISTEA amended the Federal Transit Act available financial resources. Passenger Mile—A single passenger introducing new sources of flexible funds Moving Beyond Congestion ( MBC) traveling one mile. and increasing the funding authorized for —Jointly with the Chicago Transit Au- Peak Period—Morning or evening public transit. thority, Metra and Pace, the Regional rush hour. Joint Self Insurance Fund ( JSIF)— Transportation Authority is leading a Principal—The amount borrowed or The RTA provides excess liability insur- strategic planning effort to maintain, en- the amount still owed on a loan, separate ance to protect the self-insurance pro- hance and expand the northeastern Illi- from the interest. grams maintained by the CTA, Metra, nois region’s transit system and to solve Positive Budget Variance ( PBV)— and Pace. The service boards are obligat- the current transit funding challenge, en- Calculated as the difference between a ed to reimburse the JSIF for any damages sure financial viability and accountabil- Service Board’s budgeted and actu- paid plus a floating interest rate. ity, and meet the region’s growing and al deficit, a positive budget variance Labor Expenditure—The cost of changing transportation needs. results when the actual deficit is less wages and salaries (including overtime) New Initiative—A new program or than budgeted. Since the RTA funds to employees for the performance of service that the RTA may approve sep- the budgeted deficit, a PBV represents their work. arately from the Agency’s or a Service available funds for the Service Boards. Line Item—An appropriation that is Board’s regular budget. The RTA may itemized on a separate line in a budget. attach special criteria to measure the success of a new initiative. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 133

Program (verb)—To commit funds, Revenue Car Mile—Car mile dur- the Governor of the State as part of the for a given capital purpose, without nec- ing which the vehicle is in revenue ser- RTA’s SCIP. Effective January 1, 2000, essarily appropriating these funds for ex- vice (i.e., picking up and/or dropping off the Act was amended to authorize the penditure. When the RTA Board passes passengers). RTA to issue an additional $260 mil- its official budget document, certain Reverse Commute—City-to-sub- lion of SCIP bonds in each year for the funds are “programmed” so that they urb commute. This phrase refers to the period of 2000 through 2004. may be obligated (i.e., contracts signed) fact that most riders commute from the Series B Bonds—State Transportation during the upcoming year; these funds suburbs to the city. Bonds used as all or a portion of the local may be expended during the upcoming Ridership (unlinked passenger share required to match federal funds for or subsequent years. trips)—Each passenger counted each public transportation capital projects. Program (noun)—Groupings of ex- time that person boards a vehicle. Service Boards—The term refers to penditure accounts with related expen- Rolling Stock—Public transporta- the region’s three transit operators: CTA, ditures (i.e., operations, maintenance, tion vehicles including commuter rail Metra and Pace. administration, and capital program). cars, locomotives, rapid transit cars, bus- Signal Priority—Transit signal prior- Public Transportation Fund(s) es, and vans. ity either gives or extends a green signal to (PTF) —Each month the state transfers RTA Sales Tax—1 percent in Cook transit buses under certain circumstances from its General Revenue Fund into the County, 0.25 percent in the collar coun- to reduce passenger travel times, improve Public Transportation Fund an amount ties of DuPage, Kane, Lake, McHenry bus schedule adherence, and reduce bus equal to 25 percent of the RTA Sales and Will. 85 percent of the sales tax is operating costs. Tax collected in the previous month. All fully distributed to the Service Boards Special Service—A transportation funds deposited in the Public Transpor- by the RTA according to formulas estab- service, as defined by the FTA, specifical- tation Fund are allocated to the RTA to lished by the RTA Act. 15 percent of the ly designed to serve the needs of persons be used at its discretion for the benefit of Sales Tax is retained by the RTA, a por- who, by reason of disability, are unable to the Service Boards. tion of which is distributed to the Service use mass transit systems designed for the Public Funding—Funding received Boards at the RTA’s discretion. use of the general public. from the RTA. Generally refers to fund- SAFETEA-LU (Safe, Accountable, Subscription Service—Special ser- ing for operating expenditures. Flexible, Efficient Transportation Eq- vices for users who ride on a frequent Purchase of Paratransit Service— uity Act: A Legacy for Users)—Signed and regular basis and follow a prescribed The amount of money paid to contractors into law on August 10, 2005, this legisla- schedule (a minimum of three times per to provide door-to-door transportation tion provides $286.4 billion in guaranteed week between the same origin and des- to certified participants in the ADA para- funding for federal surface transporta- tination). transit Service program. tion programs through federal fiscal year Subsidy—Funds received from an- Recovery Ratio—System-generat- (FFY) 2009 of which $52.6 billion is for other source that are used to cover the ed revenues divided by system operating federal transit programs over six years. cost of a service or program that is not expenditures as allowed by the RTA Act. Sales Tax Designated for Capital or self-supporting. This ratio is calculated for each of the Ser- Transfer Capital-Statutory—The dif- System-Generated Revenue (total vice Boards and for the RTA region as a ference between a Service Board’s en- operating revenue) —Total revenue gen- whole. The RTA Act mandates that the titlement (from the 85 percent of the erated from operations includes farebox RTA region must attain an annual recov- RTA Sales Tax) and its budgeted or ac- revenue, local subsidies, state fare subsi- ery ratio of at least 50 percent. tual deficit, whichever is greater. These dies, advertising, interest and all other Reduced Fares—Discounted fares for funds, which are over and above oper- income (excludes RTA and federal sub- children age 7-11, grade and high school ating needs, are generally used for capi- sidies). students (with CTA ID), seniors 65 and tal purposes. Taxi Access Program—Certified older (with RTA ID), and riders with Strategic Capital Improvement participants in the ADA paratransit ser- disabilities (with RTA ID) except para- Program (SCIP) Bonds—The RTA vice program can purchase taxi vouchers transit riders. was authorized under the RTA Act to valued at up to $13.50 at a reduced price issue $500 million of bonds for pub- to pay for one-way taxi rides that origi- lic transportation projects approved by nate within the City of Chicago. 134 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

TEA-21 (The Transportation Equi- ty Act for the 21st Century)— Signed into law on June 9, 1998. this legislation provided a six-year reauthorization of the federal transit program and the necessary contract authority needed to fully fund the fiscal year 1998 obligation limitations contained in the fiscal year 1998 Department of Transportation Appro- priations Act. T-FLEx (Transit Finance Learning Exchange)—A strategic alliance of transit agencies formed to leverage mutual strengths and continuously improve transit finance leadership, development, training practices, and information sharing. Its purpose is to transform the finance function into a value-added business partner within each transit authority. Members meet twice annually in a facilitated work- shop environment to develop and share best practices in active roundtable work sessions. Total Vehicle Miles—The sum of all miles operating by passenger vehicles, including mileage when no passengers are carried. Unreserved Fund Balance—The balance of funds that have not been reserved, designated or programmed into the budget, financial plan, or capital program. Vanpool—Pace’s VIP (Vanpool In- centive Program) is a service where a group of 5 to 15 people commute to and from work together in a Pace-owned van. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 135

Supplemental Data

National Economic Projections RTA Region and 3.2 percent, respectively, while the During the third quarter of 2006, the The following sections summarize populations of Lake and DuPage coun- Gross Domestic Product (GDP) grew population and employment trends in ties increased at annual rates of 1.8 per- at an annual rate of 2.2 percent, follow- the six-county RTA region. These trends cent and 0.5 percent, respectively. Cook ing 5.6 percent and 2.6 percent annual have a significant impact on public trans- County experienced a population decline growth rates during the first and second portation ridership, as well as sales tax at an annual rate of 0.3 percent. During quarters of 2006, respectively. The GDP revenue. this period, the population of the entire is the value of the output of goods and RTA region grew at an annual rate of 0.7 services produced by labor and property Population percent. located in the U.S. Exhibit 8-3 highlights As shown in Exhibit 8-6, the pop- In 2005, Cook County accounted for the annual real GDP growth from 2002 ulation of the RTA region grew by 3.4 63 percent of the 8.4 million people liv- through 2007. The GDP climbed con- percent (from 8.1 million to 8.4 mil- ing in the RTA region. DuPage Coun- sistently from 1.6 percent in 2002 to 3.9 lion) between 2000 and 2005. Popula- ty’s population comprised 11 percent of percent in 2004, before declining to 3.2 tion growth in the RTA region grew at a the region, followed by Lake County percent in 2005. GDP growth is expect- slightly slower pace than the overall pop- and Will County (8 percent each), Kane ed to increase to 3.5 percent in 2006, but ulation of the U.S., which increased by 5.3 County (6 percent), and McHenry Coun- then fall to 3.0 percent in 2007. percent during this period. ty (4 percent). The population distribu- In 2006, the national unemployment Since 1990, most of the region’s pop- tion for 2005 is illustrated in Exhibit 8-8. rate declined from 4.6 percent in Sep- ulation growth has occurred in the tember to a five year low of 4.4 percent suburbs. Exhibit 8-7 illustrates the annu- Employment in October before rising to 4.5 percent alized population growth rates for each Exhibit 8-9 provides a comparison be- in November. Exhibit 8-4 shows the U.S. of the region’s six counties from 2000 to tween the national unemployment rate, annual unemployment rate from 2002 2005. The highest growth rate occurred the unemployment rate in the State of through 2007. The unemployment rate in Will County, where the population in- Illinois, and the unemployment rates in grew from 5.8 percent in 2002 to 6.0 per- creased at annual rate of 5.1 percent. The each of the counties of the RTA region be- cent in 2003, before declining to 5.5 per- populations of Kane and McHenry coun- tween 2002 and 2006. During this period, cent and 5.1 percent in 2004 and 2005, ties grew at annual rates of 3.6 percent the unemployment rate in each county of respectively. The national unemploy- (1) (1) ment rate is expected to continue to de- Exhibit 8-3: U.S. Real Gross Domestic Product Exhibit 8-4: U.S. Unemployment Rate (percent change) (in percent) cline to an annual average of 4.7 percent 5 in 2006 before increasing slightly to 4.8 percent in 2007. 6.0 Exhibit 8-5 shows the annual trend in 4 3.9 5.9 5.8 the growth of the U.S. Consumer Price 3.5 5.5 Index (CPI) from 2002 through 2007. CPI 3.2 3.0 annual growth of 1.6 percent in 2002 tied 3 5.3 5.1 1998 for the smallest CPI increase in more 2.5 than 35 years. Improving overall econom- 4.8 4.7 ic activity resulted in a consistent CPI an- 2 4.7 1.6 nual growth from 1.6 percent 2002 to 3.4 percent in 2005. CPI growth is expected to peak at 3.5 percent in 2006 before de- 1 4.1 clining to 2.5 percent in 2007.

0 3.5 2002 2003 2004 2005 2006 2007 2002 2003 2004 2005 2006 2007 (1) U. S. Dept. of Commerce, Congressional Budget Office (1) U.S. Dept. of Commerce, Congressional Budget Office 136 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

(1) Exhibit 8-5: U.S. Consumer Price Index the highest in the region. Cook Coun- Exhibit 8-7: RTA Region Population (percent change) 2000 –2005 Annualized 4.0 ty’s October 2005 unemployment rate 6 Growth Rates (in percent) of 3.9 percent was 0.3percentage points Source: U.S. Census Bureau 3.5 3.4 3.5 higher than that of the state of Illinois 5.1 5 but 0.2 percentage points lower than the 3.0 national ﬁgure. 2.7 2.5 Suburban jurisdictions have led the re- 4 2.5 3.6 2.3 gion in employment growth since 1980. 3.2 In 2000, employment in the ﬁve collar 2.0 3 counties accounted for one-third of the 1.6 1.5 RTA region’s total. Cook County, which in 1980 accounted for 79 percent of the re- 2 1.8

1.0 gion’s employment, accounted for only two-thirds of employment in 2000. Re- 1 0.7 0.5 gional employment has increased from 0.5 3.7 million in 1980 to 4.3 million in 1990 -0.3 0.0 0

and to 5.0 million in 2000 (Exhibit 8-10). y 2002 2003 2004 2005 2006 2007 ll Wi Lake Kane

The trends in employment by eco- Region DuPage Cook (1) U.S. Dept. of Commerce, Congressional Budget Office McHenr nomic sector in the RTA region are illus- the RTA region except Cook was typical- trated in Exhibit 8-11. Between 1980 and ly lower than that of the State of Illinois. 2000, the greatest growth has occurred Sales Tax Trends Through 2005, the unemployment rate in in the service sector. The manufacturing The RTA Sales Tax is the equivalent Illinois was consistently higher than the sector experienced the highest loss during of one percent on sales in Cook County national rate. In October 2006, the state- this period. In 2000, services comprised and one quarter percent on retail sales in wide unemployment rate was lower than 34 percent of employment, retail trade the collar counties. Sales tax collections the national unemployment rate. 15 percent, manufacturing 13 percent, grew at a healthy pace from $532 million From 2002 to 2003, the unemploy- government 11 percent, and ﬁnance, in- in 1996 to $650 million in 2000. However, ment rate worsened on a national, region- surance, and real estate 10 percent. Com- between 2000 and 2003, sales tax collec- al, and local level. Between 2002 and 2005 bined, wholesale, transportation and tions ﬂuctuated between $648 and $655 the gap between Illinois and U.S. unem- public utilities, construction, and other million. In 2004, sales tax collections in- ployment rates remained nearly steady comprised the remaining 17 percent. creased $21 million to $676 million. In at seven tenths of a percentage point. The RTA region experienced steady 2005, sales tax collections increased 25 Among the six counties in the RTA re- growth in per capita income from 1980 million, the largest annual increase since gion, DuPage and McHenry counties’ to 2000. Within the region, per capita 2000. Over the ten-year period, growth October 2006 unemployment rates of income was highest in DuPage and Lake in sales tax collections has been greatest in 2.7 percent and 2.8 percent, respective- Counties in 2000 and lowest in Kane the collar counties followed by Suburban ly were the lowest in the region, while and Will counties, as illustrated in Ex- Cook County and the City of Chicago. Cook County’s rate of 3.9 percent was hibit 8-12. More recently, however, growth in sales tax collections in the City of Chicago has Exhibit 8-6: Population Trend by County (in thousands) exceeded that of Suburban Cook County. 2000– 2005 1990 2000 2005 % Change Collections in Suburban Cook County Cook 5,104 5,377 5,304 (1.4) continue to account for more than half of DuPage 786 904 929 2.8 total collections, while collections in the Kane 320 404 482 19.3 City of Chicago account for slightly less Lake 520 644 703 9.2 McHenry 185 260 304 16.9 than one third of the total. (Exhibit 8-13). Will 359 502 643 28.1 Total 7,274 8,091 8,365 3.4

Source: United States Census Bureau. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 137

Exhibit 8-8: 2005 RTA Region Population Distribution by County Ridership Trends DuPage–11% Total RTA ridership fell from 535 McHenry–4% million in 1996 to 529 million in 1997 re- Lake–8% sulting from signiﬁcant declines in CTA ridership. Total RTA ridership increased Kane–6% annually from 1997 to 2001 despite a decline in Pace ridership during this period. Will–8% Cook–63% Reﬂecting the overall downturn in the

Source: United States Census Bureau economy, total RTA ridership declined in both 2002 and 2003. Metra and Pace lost Exhibit 8-9: Unemployment Rates 2002 –2006 (in percent) October riders in 2002, while the CTA lost riders 2002 2003 2004 2005 2006* United States 5.8 6.0 5.5 5.1 4.1 in 2003. Regional ridership changed lit- State of Illinois 6.5 6.7 6.2 5.7 3.6 tle from 2003 to 2004 reﬂecting stagnant Cook County 7.4 7.4 6.6 6.5 3.9 ridership on all three Service Boards. DuPage County 5.5 5.5 4.9 4.7 2.7 In 2005, however, the CTA, Metra, and Kane County 6.5 6.7 5.9 5.7 3.1 Lake County 5.5 5.7 5.5 4.5 3.3 Pace achieved signiﬁcant ridership gains McHenry County 5.7 6.0 5.2 5.1 2.8 as the economy rebounded and gas pric- Will County 6.1 6.2 5.9 5.5 3.0 es climbed. (Exhibit 8-14). Source: Northern Illinois Planning Commission (NIPC), Illinois Department of Employment Security. (*) Not seasonally adjusted Exhibit 8-12: Region Per Capita Income (dollars in thousands) 50 Exhibit 8-10: Employment Trends by County (in thousands) 46.6 46.6 1980 % of Total 1990 % of Total 2000 % of Total 46 2000 Cook 2,913 78.6 3,135 72.5% 3,350 66.7 1990 DuPage 289 7.8 509 11.8% 709 14.1 42 1980 Kane 134 3.6 175 4.0% 242 4.8 Lake 211 5.7 299 6.9% 419 8.3 38 McHenry 57 1.5 84 1.9% 118 2.3 33.7 Will 102 2.8 125 2.9% 185 3.7 34 31.6 Total 3,706 100.0 4,327 100.0% 5,023 100.0 29.9 30 Source: U.S. Department of Commerce-Bureau of Economic Analysis. 26.7 26 Exhibit 8-11: Employment Distribution by Industry (in thousands) 1980 % of Total 1990 % of Total 2000 % of Total 22 Services 862 23.3 1,273 29.4 1,694 34.4 18 Retail 573 15.5 666 15.4 715 14.5 Manufacturing 812 21.9 667 15.4 639 13.0 14 Government 477 12.9 501 11.6 529 10.7 Finance, Insurance and Real Estate 334 9.0 437 10.1 492 10.0 10 y e Wholesale 268 7.2 297 6.9 290 5.9 ill W ane La ke Cook Transportation and Public Utilities 205 5.5 246 5.7 285 5.8 K DuPag McHenr Construction 144 3.9 204 4.7 234 4.8 Source: U.S. Dept. of Commerce, Bureau of Economic Analysis Other 31 0.8 36 0.8 43 0.9 Total 3,706 100.0 4,327 100.0 4,921 100.0

Source: U.S. Department of Commerce, Bureau of Economic Analysis. 138 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

Exhibit 8-13: Sales Tax Collections 1996 –2005 (dollars in thousands) 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Chicago $ 165,051 $ 163,366 $ 176,816 $ 187,966 $ 199,056 $ 197,370 $ 195,417 $ 198,383 $ 205,355 $ 214,134 Suburban Cook 292,319 313,113 314,886 333,513 354,307 357,522 353,999 356,386 363,792 373,317 Total Cook $ 457,370 $ 476,479 $ 491,702 $ 521,479 $ 553,363 $ 554,892 $ 549,416 $ 554,770 $ 569,147 $ 587,451 DuPage $ 34,370 $ 36,482 $ 39,278 $ 41,764 $ 42,741 $ 42,498 $ 40,961 $ 40,916 $ 42,785 $ 44,495 Kane 9,044 9,301 10,011 10,761 11,589 11,796 12,256 12,828 13,954 15,328 Lake 17,929 18,980 20,413 22,238 23,985 25,017 24,913 24,969 26,150 27,348 McHenry 5,096 5,329 5,760 6,528 6,942 7,122 7,373 7,599 8,160 8,635 Will 8,495 8,925 9,540 10,744 11,664 12,197 12,766 13,906 15,432 17,138 Total Collar $ 74,934 $ 79,017 $ 85,002 $ 92,035 $ 96,921 $ 98,630 $ 98,269 $ 100,218 $ 106,482 $ 112,944 Total $ 532,304 $ 555,496 $ 576,704 $ 613,514 $ 650,284 $ 653,522 $ 647,685 $ 654,988 $ 675,629 $ 700,395

Exhibit 8-14: Passenger Ridership 1996 –2005 (in millions) 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 CTA Bus 303.3 289.2 291.7 300.2 303.3 303.1 304.8 293.7 296.2 305.6 CTA Rail* 124.0 130.0 132.4 141.7 147.2 151.7 152.4 150.3 148.8 155.0 Total CTA 427.3 419.2 424.1 441.9 450.5 454.8 457.2 444.0 445.0 460.6 Metra 70.6 72.3 74.5 76.6 78.8 79.2 76.8 74.8 74.4 77.0 Pace 37.5 37.9 39.3 40.2 38.6 37.0 34.8 33.7 34.1 36.9 Total RTA 535.4 529.4 537.9 558.7 567.9 571.0 568.8 552.5 553.5 574.5

*CTA rail ridership excludes cross-platform transfers. RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan 139

Six– County Region and County Seats 140 RTA 2007 Budget, Two-Year Financial Plan and Five-Year Capital Plan

The GFOA Distinguished Presentation Award The Government Finance Officers Association of the United States and Canada (GFOA) present a Distinguished Budget Pre- sentation Award to the Regional Transportation Authority, Il- linois for its annual budget for the fiscal year beginning January 1, 2006. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications device. This award is valid for a period of one year only. We believe our current budget book continues to conform to program requirements, and we are submitting it to the GFOA to determine its eligibility for another award.