Chicago Transit Board August 9, 2006 Thank you Chairman Brown. Good morning. _____________ Reverend Robinson joined me last Saturday when we launched our new Bus Tracker pilot program with a demonstration for Mayor Daley. We are testing the system on the #20 Madison bus route. I will keep you posted on the progress of the pilot and encourage customers to use the web site. _____________ Before you today is an ordinance authorizing execution of a collective bargaining agreement with Locals 241 and 308. It is before you because it was binding arbitration and the CTA is obliged to adhere to it. But, as you know, we were very disappointed with the content of the final agreement and filed a dissenting opinion. Due to our long-term funding problems and the new directive from the General Assembly to increase funding to the Retirement Plan, the CTA had argued for greater efficiency and flexibility in a number of areas, urged restraint in wages and sought greater employee contributions for benefits. Unfortunately, the final Interest Arbitration Award did not do any of those things. In essence, the arbitrator punted and just didn’t deal with the hard issues. Let me be clear. Our employees work hard and deserve fair wages. In every negotiation and arbitration we have been willing to support fair wage increases in exchange for efficiencies. Unfortunately, this time the ruling was very one-sided and while many employees may be pleased with the outcome, it is important that none of us be short-sighted to the impact of this ruling. We can’t afford to close our eyes to that fact that there are serious financial challenges ahead of the CTA and this ruling did nothing to address them and, in fact, made some of them worse. In the long run, the financial viability of the CTA is something that impacts every single one of us. ___________ On July 25th, Chairman Brown and I joined our colleagues from the RTA, Metra and Pace as well as a large group of leaders from government, business, labor and community organizations, to launch the Moving Beyond Congestion initiative that is the cornerstone of the RTA’s strategic plan to improve and expand transit throughout the region. Chairman Reilly of the RTA remarked on the fact that resources are not growing fast enough to keep up with ridership demands. And he acknowledged that the practice of using capital funds for operating expenses to make ends meet is not sustainable and certainly not a recipe for growth. His comments were very timely. As you know, we are in the process of developing our operating budget proposal for 2007 and our next five-year capital plan. As Paul Fish will discuss shortly, our capital needs are, quite frankly, enormous. Although we were fortunate to be able to make significant improvements in recent years, we have to keep up our investments and make more. We operate an extremely large and, in many places, old system that continues to age. It requires continuing substantial investment. ________ I have some good news to report on the Brown Line. Susan Plassmeyer will have a fuller report on the construction activity during her regular report, but I would like the board to know that we are scheduled to reopen the stations at Kedzie and Rockwell next Wednesday, August 16th. This is within the six-month time frame we committed to when we closed them and, in fact, it is actually a couple of days early. _____ And now, as is customary, I have an update for the Board on ridership. I have updates for both May and June 2006 since I did not give a full report at the last board meeting. In May, 43.6 millions rides were provided during the month, an increase of 2.1 percent compared to May 2005. In June, 41.9 million rides were provided during the month, an increase of 0.8 percent compared to June 2005. Systemwide, ridership in May increased by 1.8 percent on weekdays, Saturdays increased by 2.2 percent and Sunday/Holidays increased by 4.4 percent. In June, systemwide ridership increased by 1.6 percent on weekdays, but decreased by 1.7 percent on Saturdays and by 4.3 percent on Sundays. Overall, we have seen growth in ridership on the West Side, which Mike Shiffer will report on later. _____________ In closing, as always, I thank the Board for supporting CTA’s mission of delivering quality, affordable transit services that link people, jobs and communities. I thank you and this concludes my report. President’s Board Report – August 2006 6 1