CTA Continues Efforts to Trim Costs and Improve Efficiency

December 12, 2006
12/12/06

The Chicago Transit Authority has implemented more than 100 recommendations developed in partnership with AECOM Consult which are expected to save nearly $10 million in operating costs and add $37.9 million of revenue to CTA's bottom line in 2007. Two years ago CTA engaged the service of AECOM Consult to perform a management and operations review of CTA's efficiency and business practices to further increase efficiencies. Following the review, 246 recommendations were developed that if fully implemented were estimated to represent $159 million in annual savings. So far, CTA has implemented 123 of AECOM's recommendations and others are in various stages of analysis and implementation.

A number of the recommendations require changes in CTA's collective bargaining agreements with employee unions, or a change in state legislation before they could be implemented. Recommendations falling into that category were estimated to provide $111 million of the $159 million of projected annual savings. For example, although CTA is in agreement with AECOM's recommendation that subcontracting would reduce expenses, the agency is currently prohibited from subcontracting many activities by the terms of its collective bargaining agreements.

?Pursuing efficiencies is an ongoing process," said Chicago Transit Board Chairman Carole Brown. ?Our customers and the taxpayers deserve continuous improvement from CTA as we balance the demand for service against available funding."

?AECOM has commended the many initiatives CTA has already implemented to significantly reduce costs and improve efficiency. Following their intensive review of our operations and management, AECOM concluded that CTA is cost effective relative to other major transit systems," said CTA President Frank Kruesi. ?We will continue in our efforts to keep costs down and implement those recommendations that are not restricted."

Efficiency measures implemented include renegotiating benefit costs which is expected to save the agency $2.8 million annually. CTA has also implemented its fare media strategy through the use of Chicago Cards which is expected to generate $37 million in additional revenue for CTA.

The Maintenance Management Information System, or MMIS, continues to be implemented throughout CTA. MMIS is a computerized work-order system that tracks vehicle parts and maintenance time. CTA staff developed the program rollout, which has also been endorsed by AECOM as a project that will contribute to improving efficiency and reduce costs.

CTA has also capitalized on several joint procurement initiatives that allow CTA to leverage more favorable pricing and discounts in various contracts such as those for the purchase of refuse trucks, and software purchases and licensing. In addition, CTA appointed a director of real estate and consolidated the department to focus on optimizing CTA's assets and improve the marketability of its property.

Since 1997, CTA has pursued major efficiency initiatives that cumulatively have saved over $1 billion.

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