President's Report October 10, 2008 Section Title: RIDERSHIP PRELIMINARY SEPTEMBER RIDERSHIP System: Up 4.0 million (5.1%) Bus: Up 2.6 million (5.7%) Rail: Up 1.4 million (4.1%) YEAR-TO-DATE THROUGH SEPTEMBER System: Up 21.8 million (5.3%) Bus: Up 16.7 million (6.7%) Rail: Up 5.1 million (3.1%) Section Title: SMART SPENDING: Steering Through the Economic Slow Down President's 2009 Budget Recommendations Subsection Title: 2009 BUDGET DRIVERS 2009 BUDGET DRIVERS - Fuel - Energy - Materials - Free Rides - Lower Tax Revenues BUS FUEL: $102.8 MILLION - 8% of the budget - $54 million more than in 2008 - 112% up over original 2008 budget Graph: Diesel Fuel Price Per Gallon This is a graph representing diesel fuel price per gallon over time. The X-axis consists of date markers from January 1, 2007 through October 1, 2008 in monthly intervals, and the Y-axis shows diesel fuel price per gallon. At the left of the graph, a line indicates that prices gradually rose from approximately $2.50 to a May, 2008 peak at over $4.50, and then with a decline to near (but just beneath) $3.50 for October, 2008 ENERGY: $40 MILLION 3% of the budget Increase impacted by 2008 rate hike 34% up over original 2008 budget Graph: Traction Cost Per Kilowatt Hour This is a graph representing the cost of traction power per kilowatt hour over time. The X-axis is for time, ranging from January 2007 through November 2009 and the Y-axis is the cost in dollars. The line on the graph indicates prices per kilowatt hour hovering around $0.07 until May of 2008 where an increase to between $0.09 and $0.10 occurred. The line continues between $0.09 and $0.10 through the end of the graph after November 2009. An increase of 25% is indicated. MATERIAL: $94.8 MILLION - 7% of the 2009 budget - Inflationary pressure driving up cost of materials (especially in construction) - Continue to look at smarter ways to purchase materials - 31% up from original 2008 budget - Material costs increased from 2007 to 2008 budget - Steel up 18% - Sheet metal up 8.5% - Wire and cable up 6.2% - Asphalt up 28% 2009 FREE RIDES Free rides for 2009 estimated at $35.8 million Military Service Program, Total Weekly Rides August 1: 5,954 August 11: 7,998 August 18: 8,544 August 25: 13,042 September 1: 14,124 September 8: 15,588 September 15: 16,746 Average CTA Senior Free Rides By Day (Program started March 17th) March 1, 2008: 28,256 April 1, 2008: 71,357 May 1, 2008: 82,142 June 1, 2008: 87,695 July 1, 2008: 90,234 August 1, 2008: 91,903 September 1, 2008: 94,637 People w/Disabilities Ride Free Program (numbers not yet available) 2008 TAX REVENUES - 2008 budget projections for the Cook County Sales Tax are in line at mid-year - Proceeds from the Chicago Real Estate Transfer Tax fell well below projections Sales Tax, January to June 2008 RTA Projected: $146,064 Funds received: $145,209 Chicago Real Estate Transfer Tax, April to September 2008 RTA Projected: $42,000 Funds Received: $22,061 (preliminary estimate for September) Section: 2008-2009 PROPOSED BELT TIGHTENING SMART SPENDING - Departments received a “mark” as much as 20% lower than the 2008 budget (non-safety) - Departments required to examine the service they provide for the dollars spent - Final product includes performance goals for 2009 - Bottom line: We’re providing the same service with 396 fewer employees - In addition there is a reduction of 101 capital positions and 135 FTEs associated with construction projects Examples of Leaning the CTA - Analyzed and “leaned” key operations - Eliminated 396 positions Procurement and warehousing - Abolished outmoded inventory control function and replaced with private sector model - 2008 department headcount: 233 - 2009 department headcount: 198 (down 15%) - $1.7 million savings Bus Maintenance - Focus on industry lean model - Leveraged Federal money to lease new buses - Down 98 employees in bus maintenance personnel - $7.7 million savings in bus maintenance material and personnel Subsection Title: REVENUE VS. EXPENSES 2009 PROJECTED REVENUE VS. EXPENSES Revenues Other Revenues: $65.8 Reduced Fare Subsidy: $16.1 Fares and Passes: $476.81 Real Estate Transfer Tax: $67.5 Formula: $155.3 Discretionary: $198.1 Sales Tax: $302.4 Total: $1,282.2 Note: Other Revenues = Investment Income, Statutory Contributions and Advertising, Charter and Concessions Expenses Additional Expenses: $196.2 Bus Fuel/Power: $142.8 Material: $94.8 Labor: $890.6 Total: $1,324.4 Note: Additional expenses: Injuries/Damages, Security, Pension Obligation Bond Debt Service, Utilities, Maintenance/Repairs, etc. 2009 REVENUE VS. EXPENSES - Without belt tightening in ‘08/’09 the deficit would have been twice as large Bar Chart shows: 2008 belt tightening: $36.3 million $1,324.4 billion expenses in labor, fuel, power, revenue equipment, material, and other expenses $42.2 million deficit $723.3 million Public Funding revenue (Sales Tax, Real Estate Transfer Tax. And Formula and Discretionary Funds) $558.9 million System Generated revenue (Fares and Passes, Reduced Fare Subsidy, Advertising, Charter and Concessions, Investment Income, Statutory and Other Revenues) $1,282.2 billion total revenue Subsection Title: RECOMMENDED OPERATING BUDGET 2009 BUDGET BY FUNCTION 67% labor 8% bus fuel 7% material 3% security 3% power 2% injury/damages 10% other IMPACT OF LABOR CUTS 3% up - contractual wage increase 1.6% up - 2009 labor costs AGGRESSIVE HIRING PLAN SAVES MONEY - Doomsday resulted in operator shortages which led to significant OT expenditures Active Scheduled Transit Operations positions vs. Unscheduled Overtime Hours Worked Full and part-time operators hired August 2007 - 6,157 operators, approximately under 30,000 hours of overtime September 2007 - 6,120 operators, approximately under 35,000 hours of overtime October 2007 - 6,065 operators, approximately 30,000 hours of overtime November 2007 - 6,063 operators, between 25,000 and 30,000 hours of overtime December 2007 - 6,035 operators, approximately above 35,000 hours of overtime January 2008 - 5,957 operators, approximately over 30,000 hours of overtime February 2008 - 5,900 operators, approximately over 35,000 hours of overtime March 2008 - 5,864 operators, approximately under 45,000 hours of overtime April 2008 - 5,878 operators, between 30,000 and 35,000 hours of overtime May 2008 - 5,941 operators, approximately over 35,000 hours of overtime June 2008 - 5,982 operators, approximately under 35,000 hours of overtime July 2008 - 6,089 operators, approximately under 35,000 hours of overtime August 2008 - 6,177 operators, approximately 25,000 hours of overtime 754 operators hired in 2008, 42% decrease in Scheduled Transit Operations overtime PENSION OBLIGATION LIABILITIES Pension obligation bond debt service 2009 - $131.4 million 2010 - $131.4 million 2011 - $131.4 million 2012 - $141.4 million 2013 - $156.6 million CLOSING THE GAP 2009 REVENUE VS EXPENSES Fare increase to close the gap Chart: $42.2 million deficit $723.3 million Public Funding revenue (Sales Tax, Real Estate Transfer Tax. And Formula and Discretionary Funds) $558.9 million System Generated revenue (Fares and Passes, Reduced Fare Subsidy, Advertising, Charter and Concessions, Investment Income, Statutory and Other Revenues) $1,282.2 billion total revenue $1,324.4 billion expenses in labor, fuel, power, revenue equipment, material, and other expenses CTA HISTORICAL PASS STRUCTURE A line graph shows the price per pass over time. 30-Day Pass ($75) Graph shows price going from between $80 and $100 in 1998 down to $75 in 1999, whicn continues through to 2008. 7-Day Pass ($20) Graph shows price unchanged since 1998. 5-day Pass ($18) Graph shows price unchanged since 1998. 3-day Pass ($12) Graph shows price unchanged since 1998. 2-day Pass ($9) Graph shows price unchanged since 1998. 1-day Pass ($5) Graph shows price unchanged since 1998. Rail Transit Card & Bus Cash base fare ($2.00) Graph shows price at $1.50 from 1998 to 2003, then up to $1.75 in 2004, then up to $2.00 in 2006 which continues through to 2008. Bus & Rail Chicago card & Bus Transit card base fare ($1.75) Graph shows price at $1.50 from 1998 to 2003, then up to $1.75 in 2004, which continues through to 2008. Transfers ($0.25) Graph shows price at $0.30 from 1998 through to 2003, and going down to $0.25 for 2004 through to 2008. PROPOSED FARE STRUCTURE Chart shows CTA fare types, then current fare structure (effective 1/1/2006) and the proposed fare structure (effective 1/1/2009). Full Fare Transit Card Bus Current: $1.75, Proposed: $2.00 Full Fare Transit Card Rail Current: $2.00, Proposed: $2.25 Full Fare Chicago Card Bus Current: $1.75, Proposed: $2.00 Full Fare Chicago Card Rail Current: $1.75, Proposed: $2.25 Full Fare Cash (bus only) Current: $2.00, Proposed: $2.25 Transit Card or Chicago Card Transfer (transfer fare allows two additional rides within two hours of the first boarding) Current: $0.25, Proposed: $0.25 Chicago Card Bonus (for every $20 purchase of pay-per-use fares, $22 value is added to the card) Current: 10%, Proposed: Eliminated 1-Day Pass Current: $5.00, Proposed: $6.00 2-Day Visitor Pass Current: $9.00, Proposed: Eliminated 3-Day Visitor Pass Current: $12.00, Proposed: $15.00 5-Day Visitor Pass Current: $18.00, Proposed: Eliminated 7-Day Pass Current: $20.00, Proposed: $24.00 Full Fare 30-Day Pass Current: $75.00, Proposed: $90.00 U-Pass (available through participating universities only, price change effective 2009 fall term) Proposed 20% increase over current rates Reduced Fare Transit Card or Chicago Card (offered to eligible customers only) Current: $0.85, Proposed: Unchanged Reduced Fare Cash (bus only) Current: $1.00, Proposed: Unchanged Reduced Fare Transit Card or Chicago Card Transfer Current: $0.15, Proposed: Unchanged Reduced Fare 30-Day Pass Current: $35.00, Proposed: Unchanged (end Smart Spending: Steering through the Economic Slow Down section) Section Title: CTA/I-GO JOINT FARECARD Advertisement with text: "One card, three ways to go. A seamless way to travel through the city using just one card. Bus, train and now 200 I-GO cars. Get your card today! (773) 278-4446 - igocars.org - transitchicago.com" [cta logo] [I-GO logo] NEW CARD PROVIDES TRAVELER OPTIONS - CTA and I-GO Car Sharing announce a joint smart card - Can be used to gain access to I-GO vehicles and ride the CTA - Provides strategic connections - Program part of CTA’s commitment to promote the use of public transportation NEW OPTION AVAILABLE AT YEAR'S END - Register online for both services - Single card works on CTA buses and trains and unlocks their reserved I-GO vehicle - Current Chicago Card Plus cardholders and I-GO members who wish to take part in the program will need to re-register in order to be considered - Chicago Card Plus is an electronic farecard with its balance maintained in an online account - New joint card will work the same way