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PROPOSED OPERATING and CAPITAL PROGRAM and BUDGET 1 PROPOSED OPERATING AND CAPITAL PROGRAM AND BUDGET 2017 metrarail.com UP-N o T ILLINOIS / WISCONSIN STATE LINE Kenosha Winthrop Harbor METRA BOARD McHENRY Antioch NCS LAKE Zion OF DIRECTORS MD-N Lake Villa UP-NW Fox Lake Harvard Ingleside Round Lake Beach Martin J. Oberman Long Lake Washington St. Waukegan Chairman McHenry Round Lake (Grayslake) Grayslake Prairie Crossing North Chicago N Chicago Prairie Crossing Great Lakes Woodstock Libertyville Lake Bluff LAKE Jack E. Partelow Mundelein MICHIGAN Lake Forest Vice Chairman Crystal Lake Cary Lake Will County Pingree Rd. Vernon Hills Forest Fort Sheridan Prairie View Highwood Fox River Grove Buffalo Grove Highland Park Deerfield Ravinia John Plante Barrington Braeside Lake Cook Wheeling Treasurer Rd. Glencoe Northbrook Hubbard Woods KANE COOK Palatine Suburban Cook County Prospect Winnetka Heights N. Glenview Indian Hill Arlington Park Kenilworth MD-W Arlington Heights Glenview Wilmette Big Timber Central St.(Evanston) Rodney S. Craig Mt. Prospect Golf Elgin Cumberland Des Plaines Davis St.(Evanston) O Dee Road Morton Grove Secretary National St. 'Ha Main St.(Evanston) re Trans Park (Elgin) Bartlett fe Ridge Edgebrook Rogers Park Hanover Park Schaumburg r Suburban Cook County Roselle Edison Park Medinah R Forest Glen Itasca ood Dale osemon Norwood Park t W Schiller Par Gladstone Park Mayfair Bensenville Jefferson Park Frankli k k Ravenswood n r Irving Par a DU PAGE k P Park Manuel Barbosa n Grayland River Grove Elmwood Park so ve. Mont Clare n Mars A d Clybourn Galewood o Healy Ha Director o n UP-W t r est Chicago e r Elmhurst t Franklin Park Villa Park Mannheim k k Berkeley r es CHICAGO W a Lombard Grand/ W Mayw Oa P Rive Fores Kane County Glen Ellyn Cicero Winfield k d College Elburn r Wheaton o a o ve. P A La Fox Van Buren Geneva Kedzie ergne ose r wyn Bellw Museum Campus/11th St. V r el Cicero ed 18th St. La n t M Be er Harlem t Riverside es McCormick Place Romayne C. Brown Hollywood W Hals ville estern Springs 27th St. r W k r 35th St./ Hinsdale a Director Clarendon Hills (Downers Grove) (Downers Grove) 47th St. P ve. ÒLouÓ Jones A Nape 53rd St. Route 59 ve. ess 55th-56th-57th St. Aurora r A d Cook County Brookfield Summit 59th r Lisle Islan e ong 63rd ony n Maw hor Stone y k C St Br h S ar out P La Grange Rd. or estmont S s Main St. view Belmont Highlands ind r Wrightwood 75th W W 79th St. est Hinsdale Ashburn 79th Fai Brainerd 83rd St. BNSF W 83rd Norman Carlson Willow Springs Oak 91st St. Gresham 87th 87th St. Lawn 95th St. 91st St. 93rd St. 95th St. Chicago Ridge 99th St. 95th St. Director 103rd St. 103rd St. 107th St. 107th St. Worth 111th St. Washington Hghts. 111th St. (Pullman) WILL 115th St. Lake County Palos Heights 119th St. 115th St. (Kensington) . e n e Lemont 123rd St. St e e Prairie Av t Palos Park k Ridg a Av a ullma d t Vermont St. (Blue Island) ine St c O SS slan Ra W. P hland Hegewisch 143rd St. I urr ewar 137th St. To S. Robbins B St (Orland Park) lue As Bend B 144th St. Don A. De Graff Midlothian (Riverdale) 1 153rd St. 47th St. (Ivanhoe) Oak Forest Director (Orland Park) (Sibley Blvd.) Lockport Harvey Tinley Park Suburban Cook County Hazel Crest 179th St. Calumet New Lenox(Orland Park) Tinley Park/ HC 80th Ave. Homewood Hickory Creek Flossmoor Joliet Mokena-Front St. Ken Koehler Olympia Fields RI 211th St. (Lincoln Hwy.) Director Laraway Road Matteson (New Lenox) McHenry County Richton Park ME University Park ILLINOIS / INDIANA STATE LINE Manhattan Brian K. Reaves SWS Director Suburban Cook County John P. Zediker Director DuPage County PROPOSED OPERATING and CAPITAL PROGRAM and BUDGET 1 MESSAGE FROM THE EXECUTIVE DIRECTOR/CEO AND THE BOARD OF DIRECTORS As we do each year, Metra began the 2017 budget process by looking for ways to reduce costs and maximize efficiencies that can have a positive impact on our bottom line.This year, we found $5.3 million in cuts to the current operating budget, bringing the total efficiencies achieved by Metra in the past seven years to $24.8 million. In 2017, we also plan to benefit from previously negotiated diesel fuel prices locked in in 2016, with a projected savings of $9 million. Other factors impacting the operating budget are the projected $11.6 million increase in employee health care costs in 2017, combined with an average 3 percent increase in employee wages. In 2017, we also expect a $4.7 million increase in training and mechanical costs, a $2.6 million increase in PTC operating costs, a $2.8 million increase in materials and services costs and a $1.2 million increase for the Safety and Police Departments. These changes will increase operating costs in 2017 by $21.4 million to $781.2 million – an increase of 2.8 percent over 2016. Fares only cover about half of the operating budget, with the rest primarily coming from the RTA sales tax collected in the six-county region (partially matched by state). The $21.4 million in operating cost increases will be offset by an additional $21.8 million Metra is expected to receive from the RTA sales tax in 2017. Last year, we said that without a new state bond program, we may need to raise fares even higher than we had projected to fund our capital budget. By finding budget efficiencies and carefully prioritizing our capital needs, we are proposing a 5.8 percent increase in fare revenue for 2017 – with 100 percent going toward capital improvements. In all, we expect to invest $279.5 million in 2017 on capital projects, up from $251.1 million in 2016. Our 2017 Preliminary Capital Budget includes $90.4 million for rolling stock to continue our program to rehabilitate 18 locomotives and 43 railcars annually and a portion of funding to purchase 21 new railcars. Other major capital investments include: $23 million to continue the multi-year effort to replace aging Union Pacific North Line bridges over 22 streets on the north side of Chicago; $20 million to expand the 49th Street rehabilitation facility and increase by 30 percent the number of railcars Metra can rehab each year; and $30.5 million to continue to install PTC. This is the minimum capital investment. This is the minimum capital investment we need for our system to function reliably. Even with the increased fare revenue, we’re still far short of our capital needs. In fact, over the next 10 years, we need to spend nearly $1.2 billion annually on capital projects: $550 million annually to maintain our existing system and $600 million annually to return to a state of good repair. That’s $11.7 billion over the next decade. In each of the next four years, we project that we will have less than $300 million annually available to spend on capital projects – about $900 million less than we need to spend each year. We have consistently said that if we can find ways to avoid higher fares, we will do it. However, we have no other option at this time unless we cut capital spending, reduce service or find even more new sources of revenue. Despite the impact a fare increase will have on our customers, we have a responsibility to provide a safe and well-run system today and for the next generation. Executive Director/CEO DON ORSENO and the BOARD OF DIRECTORS 2 PROPOSED OPERATING and CAPITAL PROGRAM and BUDGET TABLE OF CONTENTS Message from the Executive Director and Board of Directors 1 A Look Back at 2016 3 System Overview 6 Funding Overview 7 Ridership 8 Fares 9 Organization 11 Oversight 16 Other Major Initiatives 17 Capital Program 19 Non-Capital Programs 20 2016 Budget Overview 23 Appendix 25 PROPOSED OPERATING and CAPITAL PROGRAM and BUDGET 3 A LOOK BACK AT 2016 Metra’s goals in 2016 were to maintain the safety and reliability of our system, become a more customer-focused, transparent and accountable agency and effectively manage and maximize our limited financial resources. And, while 2016 was not without setbacks, as we look back on our progress over the past year, we believe we have made steady strides toward restoring trust in our agency and enhancing service for our customers. KEEPING OUR SYSTEM SAFE AND RELIABLE At its core, the $2.4 billion Modernization Plan approved by the Board in 2014 was meant to enhance the safety and reliability of the system by funding Positive Train Control (PTC), a new, federally mandated (but unfunded) safety system, and modernizing the agency’s fleet. PTC is a computerized system that prevents certain types of train-to-train collisions, helps avoid derailments and other accidents caused by excessive speed and increases safety for railroad workers. Metra has begun testing the system on some lines with plans to finish installation on most lines by 2019. In all, PTC is expected to cost Metra between $350 million and $400 million to install and $15 million to $20 million annually to operate. To date, Metra has spent $95 million in capital funding on PTC and has $208 million under contract. Additionally, Metra has applied for $20.5 million in Fixing America’s Surface Transportation Act grant funding to assist in financing the installation of PTC. We have also seen steady progress on other portions of our Modernization Plan. Since the plan was announced, Metra has rebuilt 68 railcars and seven locomotives.
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