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


CTA’s financial results as of July 2008 show a deficit of $2.6 million
for the month and $3.5 million for the year. The financial results 
incorporate the amended budget approved at the July board meeting. The 
current deficit is primarily driven by lower reduced fare 
reimbursements. Subsequent to CTA’s 2008 budget amendment, the Governor 
cut the Reduced Fare Reimbursement as part of his strategy to 
eliminate the State’s 2009 budget deficit. This will result in an 
$18.5 million revenue shortfall in CTA’s 2008 budget and combined with 
the seniors, disabled and veterans ride free program, will reduce 
revenue to the CTA by over $40.0 million in 2008. Had the state not 
cut this funding, CTA would be on track with balancing its budget.

Sales tax for the RTA region equaled $296.8 million through May 2008. 
This is $9.0 million or 2.9% less than budget, but is $1.4 million or 
0.5% more than the prior year. Sales tax distributed to CTA from the 
formula equaled $118.5 million and was less than budget by $1.8 million 
but was $0.2 million more than prior year.  

Ridership for the month of July was 46.6 million and was 0.9 million 
less than budget but was 4.3 million or 10.2% more than July 2007.  
Ridership for the year was 302.5 million which is 15.0 million or 
5.2% higher than prior year.  For the year, the number of free rides 
increased by 10.9 million rides over prior year; primarily due to the 
seniors ride free program initiated by the Governor.

Bus ridership for the month of July was 28.7 million. This was 
0.1 million more than budget and was 3.3 million or 13.0% more than 
July 2007.  Rail ridership for July was 18.0 million and was 
1.1 million less than budget and was 1.0 million or 6.1% more than 
prior year.  For the year to date, bus ridership was 189.4 million 
and was 0.1 million more than budget and was 12.1 million or 6.8% more 
than prior year. Rail ridership was 113.0 million and was 1.1 million 
less than budget and was higher than prior year by 2.9 million or 2.6%.  

Public Funding Required for Operations for the month was $57.9 million 
or $2.6 million more than budget resulting in a $2.6 million budget 
deficit for the month. For the year to date, public funding was 
$387.3 million which is $3.5 million more than 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 50.49% for the month 
and was unfavorable by 0.40 percentage points primarily due to the 
loss of reduced fare reimbursement revenues that were anticipated in 
the budget.  For the year, recovery ratio was 48.44% and was 
unfavorable by 0.23 percentage points. 

Operating Expenses for the month and year equaled $102.5 million and 
$698.9 million respectively; and were favorable to budget as the 
budget balancing plan implemented by President Huberman is being 
achieved. 

Labor Expense was $73.5 million for July and $509.9 million for the 
year. This was $1.7 million less than budget for the month and 
$0.6 million lower for the year primarily due to vacancies, overtime 
reductions and timing differences between actual and budget for paid 
time off. 

Material Expense was $8.5 million for the month and was on par with 
budget.  For the year, material expense was $51.0 million and was on 
par with budget.  Compared to prior year, material expense is 
$2.9 million or 6.1% higher.  

Fuel for Revenue Equipment was $8.4 million for the month and 
$50.9 million for the year. This was $0.5 million more than budget 
for the month, but was on par with budget for the year to date.  
The gross cost per gallon for the month was $4.15 but after adjusting 
for the fuel hedge the net cost per gallon was $3.81, a savings of 
$0.34 per gallon. The amended budget assumes an average price of 
$3.87 per gallon. 

Electric Power for Revenue Equipment was $3.2 million for the month 
and $18.8 million for the year.  Power expense was $0.5 million more 
than budget for the month but was $1.6 million less than 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 budget. 

Purchase of Security Services was $2.4 million for the month and was 
$0.7 million less than budget. Year to date security expense is 
$17.3 million and was $1.2 million less than budget.

Other Expenses equaled $6.5 million for the month and were 
$0.1 million less than budget.  Year to date, Other Expenses were 
$37.0 million and were $1.7 million more than budget due to timing 
differences.

System-Generated Revenue was $44.6 million for the month and 
311.6 million for the year. This was $4.1 million less than budget 
for the month and $5.0 million less for the year primarily due to 
the loss of reduced fare reimbursement revenue.
    
Fare Revenue was $41.8 million for the month and $271.6 million for 
the year. This was $0.1 million lower than the amended budget. The 
average fare for July was $0.90 per ride and was $0.02 higher than 
budget due to a higher average fare on pass rides. Compared to prior 
year, fare revenue is $2.1 million higher than July 2007 and 
$6.7 million higher for the year. 

Reduced Fare Reimbursements were ($0.3) million for the month and 
$15.1 million for the year. This was $2.8 million less than the 
amended budget due to the loss of reduced fare grant from the State 
of Illinois.
 
Advertising, Charter and Concessions Revenue equaled $2.2 million 
in July and was $0.2 million less than the amended budget. Year to 
date, revenue for this category was $16.3 million and was 
$0.2 million less than budget.
 
Investment Income was $0.2 million for the month and $2.9 million 
for the year. This was $0.4 million less than budget for the month 
and year due to a low cash balance. 

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 $0.8 million for the month and $5.6 million 
for the year. This was $0.5 million less than budget for July and 
$0.8 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 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.