To: Chicago Transit Authority Board
From: Dennis O. Anosike, Chief Financial Officer
Re: Financial Results for September 2008
Date: November 10, 2008


CTA’s financial results for September 2008 show a deficit of
$3.0 million for the month and $5.1 million for the first nine 
months. The financial results incorporate the amended budget 
approved at the July board meeting. The deficit for the year is 
primarily driven by lower reduced fare reimbursements. Subsequent 
to CTA’s 2008 amended budget amendment, the Governor cut the 
Reduced Fare Reimbursement. The Illinois legislature restored the 
funding but the bill has not been signed by the governor yet. 
Without restoring this funding, CTA will incur an $18.5 million 
revenue shortfall. 

Sales tax for the RTA region under the 1983 formula equaled 
$423.8 million through July 2008. This is $10.8 million or 2.5% 
less than budget and $0.9 million less prior year. Sales tax 
distributed to CTA from the 1983 formula equaled $170.0 million 
and was less than budget by $1.4 million, but was on par with 
prior year.  Real Estate Transfer Tax (RETT) receipts are falling 
well below expectations. The 2008 budget estimated RETT at 
$63.0 million; based on the City’s current forecast, RETT is 
estimated at $47.0 million.

Ridership for the month of September was 47.1 million and was 
0.4 million or 0.9% more than the amended budget and was 
4.0 million or 9.3% more than September 2007.  For the year, 
ridership is 395.2 million which is 1.5 million or 0.4% more than 
the amended budget and 21.8 million or 5.8% higher than prior year.  

Public Funding Required for Operations for the month was $
54.2 million or $3.0 million more than the amended budget resulting 
in a $3.0 million budget deficit for the month. For the year to 
date, public funding was $494.7 million which is $5.1 million more 
than amended budget. This deficit is due to the loss of reduced 
fare reimbursement.

Recovery Ratio, which measures the percentage of operating expenses 
CTA funds from internally generated revenues, was 53.84% for the 
month and was favorable by 1.28 percentage points.  For the year, 
recovery ratio was 49.59% and was favorable by 0.38 percentage points. 

Operating Expenses for the month and year equaled $99.4 million and 
$897.3 million, respectively.  For the month operating expenses were 
$0.2 million more than budget but were $2.4 million less than budget 
for the year.  

Labor Expense was $72.9 million for September and $654.6 million for 
the year. This was $1.0 million more than amended budget for the month 
but was $0.3 million lower for the year. The current month overage 
reflects overtime necessary for the storm and flood damage. With the 
emergency declaration for Cook County for September 14th through 
October 5, 2008, it is expected that FEMA will reimburse CTA up to 
75% of the eligible costs. 

Material Expense was $8.6 million for the month and was $0.4 million 
more than the amended budget due to bus engines.  For the year, 
material expense was $67.3 million and was $0.2 million less than 
amended budget.  Compared to prior year, material expense is 
$6.2 million or 10.2% higher.  

Fuel for Revenue Equipment was $7.5 million for the month and 
$66.4 million for the year. This was $0.2 million less than amended 
budget for the month and was $0.2 million more than amended budget for 
the year to date.  

Electric Power for Revenue Equipment was $2.8 million for the month and 
$25.5 million for the year.  Power expense was $0.2 million less than 
amended budget for the month but was $1.2 million less than amended 
budget for the year to date.

Provision for Injuries and Damages Expense was $0 for the month and 
$14.0 million year to date and is on par with amended budget. 

Purchase of Security Services was $3.0 million for the month and was 
on par with amended budget. Year to date security expense is 
$23.3 million and was $1.2 million less than amended budget.

Other Expenses equaled $4.6 million for the month and were $0.7 million 
less than amended budget.  Year to date, Other Expenses were 
$46.2 million and were $0.3 million more than amended budget due to 
timing differences.

System-Generated Revenue was $45.2 million for the month and 
$402.5 million for the year. This was $2.7 million less than the amended 
budget for the month and was $7.5 million less for the year primarily 
due to the loss of reduced fare reimbursement revenue.
    
Fare Revenue was $42.0 million for the month and $355.8 million for the 
year. This was $0.9 million more than the amended budget for the month 
and $4.7 million more for the year to date. The higher revenue is 
attributed to higher ridership and a higher average fare. The average 
fare for the month of September was $0.89 per ride and was $0.01 higher 
than amended budget.  The average fare for the first nine months was 
$0.90 and compared favorably to budget by $0.01. Compared to prior year, 
fare revenue is $4.3 million higher than September 2007 and $11.7 million 
higher for the year due to higher ridership, slightly offset by a lower 
average fare. The average fare declined $0.02 from prior year primarily 
due to the free ride programs. 

Reduced Fare Reimbursements were ($0.3) million for the month and 
$14.5 million for the year. This was $3.0 million less than budget for 
the month and was $9.4 million less than the amended budget for the year 
to date due to the loss of reduced fare reimbursement.
 
Advertising, Charter and Concessions Revenue equaled $2.3 million in 
September and was on par with the amended budget. Year to date revenue 
for this category was $20.8 million and was $0.3 million less than 
amended budget.
 
Investment Income was $0.2 million for the month and $3.3 million for 
the year. This was $0.4 million less than amended budget for the month 
and $1.3 million less for the year due to a lower cash balance. The State 
of Illinois owes CTA $20.0 million for capital projects. CTA’s cash and 
investment balance at the end of September equaled $13.5 million. This was 
$67.7 million less than prior year and $118.2 million less than the 
beginning of the year.

Statutory Required Contributions were $0.0 million for the month and 
$0.0 for the year to date and were on par with amended budget.  

All Other Revenue was $1.1 million for the month and $8.1 million for the 
year. This was $0.2 million less than the amended budget for September and 
$1.2 million less for the year. This is due to lower revenue from rental 
property, capital grants and miscellaneous revenues. The lower rental 
property revenue reflects the delayed implementation of the real estate 
property management outsourcing.  Miscellaneous revenues are below amended 
budget due to limited tickets issued for vehicles parked at CTA bus stops. 
Lastly, lower revenues from grants reflect the delayed implementation of 
the cold start engine initiative.