CTA Outlines Contingency Plan

May 24, 2007

Service Reductions and Higher Fares Proposed for September

In order to comply with a directive from the Regional Transportation Authority to submit a contingency plan to balance its 2007 budget, Chicago Transit Authority President Ron Huberman today outlined his recommendation. After carefully evaluating multiple scenarios, Huberman said he intends to recommend a plan that would combine further administrative cuts and efficiencies with higher fares, a 13% reduction in bus and rail service, and the transfer of nearly
$57 million in capital funds that had been intended for renovating buses and rail cars. If approved by the Chicago Transit Board, these measures will bridge a $97.5 million gap in the CTA's 2007 budget.

At the direction of the RTA ?the financial oversight body for regional transit agencies ? the CTA developed a 2007 budget that anticipated an additional $110 million in public funding. The RTA recently asked the CTA to submit a plan detailing the steps the agency would need to take to balance its budget if the funding anticipated by the RTA is not available. The plan must first be approved by the Chicago Transit Board.

"Over the past few weeks, we have researched and evaluated a series of options. All of the choices are painful because we have to reduce our costs by nearly $100 million over the course of a few months. But after careful analysis, I am recommending the approach I believe most fairly distributes the impact on our customers. Of all of the options available to us, this plan puts the least direct burden on our riders," said Huberman.

Huberman said his recommendation also adheres to three guiding principles laid out by the Chicago Transit Board to maintain as much availability as possible for transit dependent customers; maintain regional connections where possible; and spread the burden of cost reductions in an equitable manner. It also is the plan most compatible with federal Title VI guidelines that ensure minority routes are not disproportionately impacted and Environmental Justice analyses regarding impacts on populations that are below the poverty level.

Each of the potential plans that Huberman evaluated assumed at least $5.6 million in new administrative cuts and efficiencies on top of the $12.5 million in administrative cuts announced earlier this month. The new administrative cuts and efficiencies include:

  • Defer pay increases for non-union employees;
  • Graduated furlough days for non-union employees earning $50,000 or more;
  • Eliminating 27 positions;
  • Expanding a program to charge for under 'L' parking.

The remainder of the shortfall would be made up through a combination of service reductions, higher fares and borrowing capital funds to support operations.

Under the plan recommended by Huberman, only routes that currently operate on Sundays would be retained.

  • Service would be suspended on 63 bus routes, but the remaining 91 routes would continue to operate at current levels.
  • Rail service would be suspended on the Purple Express rush hour service and on the Yellow Line. All other rail routes, including the Purple Line, would operate at current service levels.

Fare increases for individual rides would range from 25 cents to $1.25, depending on the time and mode of travel.

  • Rail fares would be priced higher than bus fares.
  • Higher fares would be charged during rush periods. $2.75 for bus. $3.25 for rail.
  • In off-peak hours, cash fares would rise to $2.25 for bus and $2.50 for rail.
  • Transfers would double from 25 cents to 50 cents.
  • Prices for unlimited ride passes would increase an average of 63%

Finally, capital funds of $56.9 million would be transferred to the operating budget. As a result, bus and rail car renovations would be delayed.

Huberman said he is recommending this approach because of all the scenarios evaluated, it lessened the immediate impact on customers. 58% of the necessary funds would come from a transfer of capital and only 15% from service reductions and 21% from fare increases. Every scenario included 6% from administrative reductions.

"While there is no way to cut nearly $100 million from our budget without impacting riders, this plan is the least drastic of the options available to us," said Huberman. ?Borrowing from capital is a band-aid approach that creates another set of problems with deferred maintenance, but it allows us to forestall even deeper service cuts and fare increases that would accelerate a downward spiral of ridership losses. That has happened to the CTA in the past and, once it begins, it is very difficult to climb back out."

He said that CTA remains committed to carefully managing its operations and improving efficiency. Administrative cost cutting measures have already shaved $12.5 million from the initial deficit of $110 million. Huberman is also implementing a Performance Management Initiative at the CTA that will set standards for every employee and hold managers strictly accountable for the performance of their departments.

CTA riders and the general public will have the opportunity to provide comments to the Chicago Transit Board on the proposed plan at upcoming public hearings.

Tuesday, June 5, 6:30 p.m.
Sherman Park Fieldhouse
1301 W. 52nd Street
Chicago, IL 60609

Wednesday, June 6, 6:30 p.m.
Michelle's Ballroom
2800 W. Belmont Avenue
Chicago, IL 60618

Monday, June 11, 6:30 p.m.
University of Illinois at Chicago
Student Center East
750 S. Halsted, Room 302
Chicago, IL 60607

Wednesday, June 13, 9:00 a.m.
CTA Headquarters
567 W. Lake, Chicago, IL 60661

In addition, public comment may be submitted to the board by email at ctahelp@transitchicago.com or writing to the following address: Chicago Transit Authority, P.O. Box 7567, Chicago, IL 60680, Attention: Gregory Longhini, Assistant Secretary, Chicago Transit Board. All written comments are due by June 11, 2007.

Reference Links:

CTA 2007 Contingency Plan presentation ? 5/29/07 (1.5MB PDF)

List of Proposed Service Reductions (PDF)

Fare Structure for Proposed Budget Balancing Option (PDF)

RTA letter (PDF)

Impacts of Proposed Budget Balancing Option (PDF)

CTA Announces $12.5 Million in Administrative Cuts - press release

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