To:	Chicago Transit Authority Board

From:	Dennis Anosike, Chief Financial Officer

Re:	Financial Results for September 2007

Date:	September 12, 2007


CTA incurred a deficit of $2.3 million for the month of 
September and $11.6 million for the year to date period.  
The deficit for the month is primarily due to postponement of 
service reductions and fare increases that were slated for 
implementation on September 16, but postponed until 
November 4th.  

Governor Blagojevich provided RTA with an advance of the 
State’s 2007/2008 fiscal year appropriation for reduced fares 
as a temporary solution to provide additional time for the 
state legislature to pass a long-term funding solution for 
transit. As a result, CTA postponed the elimination of 39 bus 
routes, fare increases and layoffs of more than 600 employees 
originally planned for September 16th to November 4th. 

Sales tax for the RTA region equaled $424.7 million through 
July 2007. This is $2.5 million more than budget but was 
$0.2 million less than the prior year. Sales tax distributed 
to CTA from the formula equaled $170.0 million and was higher 
than budget and prior year by $3.1 million and $1.4 million, 
respectively. However, RTA funds budgets, so this overage 
will be retained by RTA.

Ridership for the month of September was 43.1 million and was 
2.2 million higher than budget and was on par with prior year. 
Ridership for the year was 373.3 million and was 0.1 million 
lower than budget but was 2.9 million or 0.8% higher than 
prior year. Average weekday ridership was higher than 
September 2006 by 1.7% due to high bus ridership offset by 
lower rail.  Saturday and Sunday ridership for the month was 
higher than prior year by 3.4% and 7.2%, respectively.  For 
the first nine months, average weekday ridership was 0.6% 
higher than prior year. Average Saturday and Sunday ridership 
was 0.9% and 3.0%, respectively, higher than the prior year 
to date due to strong ridership on the bus system. Ridership 
taken with passes was up 2.5% from September 2006 and 6.6% 
for the year to date.  

Bus ridership for the month of September was 26.7 million. 
This was 3.3 million or 14.2% more than budget and was 
0.8 million or 3.1% higher than September 2006.  Rail 
ridership for September was 16.4 million and was 1.2 million 
or 6.6% less than budget and 0.8 million or 4.6% less than 
prior year.  For the year to date, bus ridership was 
229.9 million and was 9.6 million or 4.5% more than budget 
and was 7.5 million or 3.4% more than prior year. Rail 
ridership was 143.4 million and was below budget and prior 
year by 10.1 million or 6.6% and 3.5 million or 2.4%, 
respectively.  

Public Funding Required for Operations for the month was 
$34.9 million resulting in a $2.3 million budget deficit for 
the month. For the first nine months, CTA has a budget deficit 
of $11.6 million. 

Recovery Ratio, which measures the percentage of operating 
expenses CTA funds from internally generated revenues, was 
59.80% for the month and was unfavorable by 2.20 percentage 
points primarily due to the higher expenses than budgeted.  
For the year to date period, recovery ratio was 51.9% and was 
1.66 percentage points lower than budget.

Operating Expenses for the month equaled $79.7 million and 
were $2.1 million more than budget. For the year to date, 
operating expenses were $825.5 million and were $0.5 million 
or 0.1% less than budget.  The current month overage is 
primarily a result of deferring the service cuts, 
maintenance cost associated with an aging fleet, higher fuel 
costs, and preparation costs for the fare increase and service 
cuts.

Labor Expense was $55.9 million for the month of September and 
$605.1 million for the year to date. This was below budget for 
the month and year to date by $0.6 million and $12.3 million, 
respectively, due to elimination of administrative and support 
positions, vacancies and other cost controls.

Material Expense was $6.2 million for the month and was over 
budget by $0.7 million or 12.5%. For the year to date, material 
expense was $61.0 million and was $3.6 million or 6.3% more 
than budget. Compared to the prior year to date period, 
material expense is $3.9 million or 6.7% higher. The higher 
material expense is primarily due to the postponement of the 
service cuts, rail fleet maintenance required due to delays in 
the quarter and mid life overhauls. In particular, axle and 
wheel assemblies on the 2600 series rail cars and brakes and 
brake calipers are currently being replaced.  Material for rail 
operations is $6.4 million more than budget for the year to date. 

Fuel for Revenue Equipment was $5.1 million for the month and 
$52.9 million for the year. This exceeded budget for the month 
by $0.8 million and the year to date period by $7.7 million 
primarily due to higher miles and fuel prices.  The current month 
variance also reflects postponement of the service cuts. The 
gross average price paid per gallon for the month was $2.68. The 
fuel swap increased the average price by $0.13 bringing the net 
cost per gallon to $2.81. The budget assumed an average price of 
$2.50 per gallon. 

Electric Power for Revenue Equipment was $2.4 million for the 
month and $21.6 million for the year. Power expense was on par 
with budget for the month, but was $0.9 million more than budget 
for the year.  The year to date unfavorable variance is primarily 
due to the cold weather in February.  

Provision for Injuries and Damages Expense was $2.1 million for 
the month and $18.8 million year to date and is on par with budget. 

Purchase of Security Services was $2.5 million for the month and 
was $0.4 million less than budget. Year to date security expense 
is $23.3 million and was $3.2 million less than budget due to lower 
contractual rates for guard service than anticipated in the budget.

Other Expenses equaled $5.5 million for the month and were 
$1.6 million higher than budget due to costs associated with the 
fare increase and service cuts such as maps, newspaper ads, etc. 
Additionally one time costs for facilities maintenance (elevator 
floor, fencing and glass replacements) and rail car floors 
sealants also contributed to the overage. Year to date other 
expenses were $42.8 million and were $2.8 million more than budget 
due to the aforementioned items. 

System-Generated Revenue was $44.7 million for the month and 
$402.3 million for the year to date. This was $0.2 million lower 
than budget for the month and $12.1 million lower than budget for 
the year principally due to lower fare, advertising, and investment 
income.
    
Fare Revenue was $37.7 million for the month and was below budget 
by $0.8 million. The average fare for the month was $0.87 per ride 
and was $0.06 lower than budget due in part to the postponement of 
the fare increase and customers opting for fare media that offers 
a lower cost per ride based on their travel patterns. Year to date 
fare revenue was $344.1 million and was $10.7 million lower than 
budget.  Compared to prior year, fare revenue is $2.3 million lower 
for the month and $5.8 million lower for the year to date. 

Reduced Fare Reimbursements were $3.3 million for the month and 
$24.7 million for the year to date period. This was $0.8 million 
more than budget for the month and $1.0 million higher than budget 
for the year. The favorable variance for the month and year to date 
is due to higher than budgeted reduced fare ridership and 
reimbursement.  

Advertising, Charter and Concessions Revenue equaled $2.0 million 
in September and was $0.1 million less than budget due to timing 
difference for revenue from contracted services. Year to date 
revenue for this category was $17.2 million and was $1.7 million 
lower than budget as the new contract for advertising revenues for 
platforms and vehicles was not approved until mid-January. The 
contract with the prior vendor expired on December 31, 2006.
 
Investment Income was $0.7 million for the month and $6.5 million 
for the year to date. This was $0.3 million less than budget for 
the month and $2.5 million lower for the year due to a lower cash 
balance.

Statutory Required Contributions were $0.0 million and were on 
par with budget. 

All Other Revenue was $1.1 million for the month and $9.8 million 
for the year to date. This was $0.2 more than budget for the month 
and was $2.0 million more for the year to date period due to higher 
revenue from rentals, scrap sales, non capital grant expenditure 
reimbursements and Chicago card sales.

Non STO full-time employees were capped by the Board at 5,302. 
Subsequently President Huberman eliminated 75 positions in June 
and July reducing the 2007 budgeted positions to 5,227 positions. 
As of September 30, CTA was under the cap by 158 employees.