The Chicago Transit Authority generated approximately $19.4 million in revenue as the result of an innovative financing agreement to lease Qualified Technological Equipment (QTE) to an equity investor. The agreement is an example of the CTA's aggressive efforts to use innovative financing techniques to increase revenue.
Authorized at its October 2002 Board meeting, the lease agreement involves CTA equipment valued at approximately $170 million and includes portions of the CTA's Control Center, Automated Fare Collection System, rail and bus communications systems and the rail control/signaling system. Also included is CTA's Supervisory Control and Data Acquisition (SCADA) system, which keeps detailed records of CTA's rail system.
?Leaseback arrangements are a way for the CTA to gain valuable revenue by transferring tax benefits it is unable to use as a tax-exempt entity," said Chicago Transit Board Chairman Valerie B. Jarrett. ?Prior transactions have been successful and effective ways of generating income for the Authority."
CTA President Frank Kruesi said, "Our financial and legal teams did an excellent job putting together this QTE transaction to help us secure additional revenue. In this challenging economy, it is more important than ever to find ways to control costs and increase revenue and our financial staff consistently meets that challenge."
This is the seventh innovative financing transaction the CTA has entered into since 1995. Together, the transactions have generated nearly $119 million in revenue for the CTA.# # #