Performance-Based Budget Focuses on Improving Customer Experience Despite Belt Tightening Fare Increase Proposed
In proposing his budget recommendation for 2009, Chicago Transit Authority President Ron Huberman said today that the CTA will manage its way through the economic downturn with a performance-based budget that focuses available resources on continued improvement in the customer experience. Huberman said service will be maintained at 2008 levels. With resources directed at operations, administrative and support staffing will be reduced by 396 positions compared to 2008. In addition, due to a reduced capital program, 236 positions that were funded by capital projects will be eliminated, for a total workforce reduction of 632. Huberman said he also has made the difficult, but fiscally responsible, decision to recommend a fare increase for 2009.
Ongoing challenges such as the slowing economy and significantly higher prices for fuel, power and materials impacted the budget for 2009. Although new State funding mechanisms are in place, anticipated revenues will not achieve desired levels until the economy improves. Likewise, unanticipated free ride programs reduced projected fare revenues. These factors are exacerbated by the lack of a State capital program, which adversely affects the CTA’s bottom line. Without designated capital resources to replace aging equipment and infrastructure, the CTA has to devote additional operating funds to make necessary maintenance and repairs.
“My focus for the coming year continues to be making the CTA customer experience the best that it can possibly be, and we have concrete plans in place to make sure that happens. This is no easy task in a year where the capital resources needed to manage our aging infrastructure continue to decline,” said Huberman. “Given the difficult economic environment, and building on our performance management initiative, we instituted a new performance-based budgeting process to understand the value we get for every dollar we spend.”
The proposed 2009 operating budget is $1.324 billion, which is $115.0 million higher than 2008. The CTA expects to generate $601.1 million in fares and other revenue and anticipates $723.3 million in public funding.
The new performance-based budget process examined the activities of each organizational unit to understand which could be made more efficient, reduced or eliminated. The process was guided by two key principles: first, that safety would remain the top-most priority, and second, that service levels would remain the same as last year. Quality service was the central focus for all departments.
The proposed budget also includes an across-the-board fare increase, to begin in January 2009, which would generate an estimated $42.1 million. Under this proposal, cash fares would be raised by $0.25 and pass fares will be raised. This is the first time that pass fares will increase since 1998 and, adjusting for inflation, the price will still remain below 1998 levels. Reduced fares will remain the same so that the most vulnerable riders will not be affected.
“None of the belt-tightening measures will impact service or diminish our continued investment in improved customer satisfaction,” said Huberman. “Bus bunching and big gaps will continue to be reduced. A growing fleet of new buses will provide smoother, more comfortable trips while being more energy efficient and environmentally sound. Train rides will be faster and more reliable as slow zones are removed and new construction is completed. The continuation of our clean program will help ensure that our fleet stays clean. The system-wide expansion of Bus Tracker and our new digital signage will give customers timely information for their trips. Finally, even greater emphasis on customer communications, both day-to-day and during emergencies, will ensure customers have the information they need.”
Focusing resources on customer satisfaction was one factor in the significant ridership increases experienced in 2008, the greatest growth that the CTA has seen in almost 35 years, he added.
This proposed 2009-2013 Capital Improvement Program (CIP) totals $3.0 billion, with $2.9 billion in projects focused on the goal of eliminating slow zones, renewing the CTA’s assets, overhauling and replacing the fleet, and bringing the system to a state of good repair. In addition $40.0 million is programmed for the completion of the Brown Line Capacity Expansion Project, a vital system expansion.
This includes a projection of $300.0 million each year during 2010-2013 from a successor to the Illinois FIRST program. The RTA has advised the CTA to anticipate that a State capital funding program will be in place by 2010.
The program does not divert scarce capital funds to balance the operating budget. The transfer of capital funds to operating would cause additional critical projects necessary for continued progress to a state of good repair to be delayed or cancelled.
Funding identified in the CIP will only partially meet the CTA’s needs to bring its system into a state of good repair. An estimated $6.8 billion remains unfunded over the five-year period of this CIP. This is due to the continued aging of assets and the lack of a new State capital program. Although a proposed new State funding program is projected to begin in 2010, projects which may be funded with these capital dollars will remain a part of the CTA’s unfunded need until a State program is passed and funds are appropriated.
In addition, to meet the needs of future growth in the region, the CTA is requesting $4.3 billion for expansion projects such as the Circle Line, and the Red, Orange and Yellow Line extensions. Maintaining the existing bus and rail system is a top priority; however it is also important to improve the connectivity and usefulness of the system by adding strategic connections and line extensions. As the bus and rail system operates more efficiently, the population of the entire Chicago region will benefit.
In summary, the budget recommendation reflects the CTA’s continued commitment to improving service. Issues that are most relevant to customers continue to be at the forefront of the CTA’s priorities: safety, better communications, slow zone removal, bus-bunching management, increased cleanliness and better on-time performance.
CTA customers and the general public will have the opportunity to provide comments to the Chicago Transit Board on the President’s 2009 Budget Recommendations at a public hearing at 6:00 p.m., Wednesday, October 29 at CTA Headquarters, 567 W. Lake Street, Chicago.
The Chicago Transit Board will consider the proposed budget at a November meeting. It will also be presented to the Cook County Board in November, as required by the RTA Act. The Chicago Transit Board must submit a budget to the RTA by November 15th and the RTA must approve budgets for the service boards by year end.
Written and oral comments will be taken into consideration prior to Chicago Transit Board action. This input will be welcomed at the hearing or by correspondence addressed to Gregory P. Longhini, Assistant Secretary of the Board, Chicago Transit Authority, P.O. Box 7567, Chicago, Illinois 60680-7567. E-mail comments may be submitted by writing to firstname.lastname@example.org. The deadline to submit comments is Wednesday, November 5, 2008.
The proposed budget is available for public review at the CTA's General Office, 567 W. Lake Street, Chicago, Illinois, 60661, second floor, weekdays between 8 a.m. and 4:30 p.m. Regular and large print copies are also available at this location. Copies will also be available at the main office of the Regional Transportation Authority, reception desk, Suite 1550, 175 W. Jackson, Chicago, Illinois 60604. A copy of the proposed budget is also posted on the CTA's web site at www.transitchicago.com. A list of libraries and additional locations where the document will be available is below.
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Proposed 2009 CTA Budget (2MB PDF)
Proposed Fare Structure
Copies of the budget proposal will also be available at the reference desks of the following libraries:
Chicago Public Library - 3 Regional Locations
Harold Washington Public Library
400 S. State Street, 10th Floor
Chicago, IL 60605
Sulzer Regional Library
4455 N. Lincoln Avenue
Chicago, IL 60625
Woodson Regional Library
9525 S. Halsted Street
Chicago, IL 60628
Evanston Public Library
1703 Orrington Avenue
Evanston, IL 60201
Evergreen Park Public Library
9400 S. Troy Avenue
Evergreen Park, IL 60805
Oak Park Public Library
834 Lake Street
Oak Park, IL 60301
Riverdale Public Library
208 W. 144th Street
Riverdale, IL 60827
Skokie Public Library
5215 W. Oakton Street
Skokie, IL 60077