Great News!

The RTA Board today voted to provide the CTA with $54.3 million in state operating assistance. The CTA will use the money to close an expected $55 million shortfall in this year’s budget. With this funding, I will recommend that the Chicago Transit Board act at its July 13th board meeting to cancel planned service cuts, fare increases, and layoffs for 2005.

I am grateful to RTA Chairman Jim Reilly, the RTA board, and state lawmakers for their commitment to increase investment in public transportation. Transit is so critical to our economy and the quality of life of people throughout the entire region.

The RTA board action also provided additional RTA funds for Pace, highlighting the need for increased investment across the region. I will continue to work with my fellow RTA Board members, Governor Blagojevich, legislators, and regional leaders on a permanent transit funding solution so that we can keep the Chicagoland region moving.

CTA storefronts and other properties

Jeff Wegerson asked earlier about vacant storefronts in Edgewater. In the early 1990s, CTA entered into a lease with one company to lease the retail and concession spaces in the Granville, Thorndale, Bryn Mawr and Berwyn stations, and another company for the Loyola, Morse, Lunt and Jarvis stations. The two companies defaulted on their lease payments and eventually vacated the properties. In 2003 we put these properties out to bid and ended up with bids on only three parcels (out of 20 available). We’re going to put the remaining parcels out to bid again soon. I encourage you to spread the word in the neighborhood to encourage businesses to bid on the properties when the bids are advertised—we sure could use the revenue, and the community deserves to have vibrant businesses in these spaces. For everyone throughout the system, we are constantly looking for quality businesses to locate at CTA stations. Please let me know if there are specific people you would like to receive requests for bid.

Some of you also asked additional questions about specific property transactions. These are important issues, and I asked CTA’s real estate managers to look into these questions immediately. Here’s what I’ve found out so far.

First, for each and every one of the properties listed below, the purchase price reflects the value of one or more independent appraisals. The board also makes a formal determination that the property is not needed for transit purposes.

Church and Clark in Evanston. CTA sold a narrow parcel along Purple Line tracks for $72,000, and leased the remaining property to Evanston for $50,500/year, with annual CPI increases and a re-appraisal every ten years. Note: The Cook County Recorder’s website fails to reflect the full purchase price of this transaction.
79th and Western. ½ of a part of an alley abutting CTA property, sold for $13,000. Note: The Cook County Recorder’s website fails to reflect the full purchase price of this transaction.
2650 N. Clark. Former CTA bus garage, sold for $14.35 million with the buyer responsible for all environmental clean up costs.
North and Cicero. Former CTA bus garage, sold for $3.29 million.
69th and Ashland. Former CTA bus garage, sold for $2.3 million, and purchaser was responsible for all environmental clean up costs.
Howard Street station. Former CTA bus turnaround and Park & Ride lot. CTA sold for $3 million, with a portion of property dedicated to future renovation of Howard Red Line station.
5963 N. Lincoln. Former CTA bus turnaround, CTA sold for $390,000.
63rd and Cicero. Former CTA bus turnaround, CTA sold for $365,000.

RTA selects new Chairman

Tuesday the RTA board met to elect a new Chairman, Jim Reilly. I was delighted to support his election. As a state legislator Jim was one of the original drafters of the RTA Act. As they say, he was “present at the creation.” I believe that history will give him a valuable perspective as he returns 22 years later to dive back into the minutiae of the RTA Act to see what’s working and what needs to be changed.

Jim also understands the tremendous importance of transportation to our region and to the State of Illinois. His experience in the General Assembly and working for Governor Thompson and Governor Edgar will be a strong asset as the three service boards work with RTA to secure the resources we need to maintain and expand our network.

This week’s news reported that the State of Illinois received $1.65 billion in tax revenues from over 91 million tourists in 2004 – and the bulk of that was spent in Northeastern Illinois. In Jim’s former role as head of McPier and the Chicago Convention and Tourism Bureau, he has been a leader in making the Chicago area one of the world’s top travel destinations. But he also knows that cities like Las Vegas, Denver, Phoenix, and Atlanta are fierce competitors, and that they are ALL building brand new public transportation systems to compete with Chicago.

This is a defining moment in the history – not just of the RTA – but of the entire Chicago region. We must come together and make the investments necessary to maintain and enhance our world-class transportation system. If we do, the region and the State of Illinois will continue to reap the fruits of one of the world’s great metropolitan regions – strong economic growth, rich cultural attractions, and a clean environment. If we do not, we will lose ground to other cities that are making those investments, and we will have squandered the assets so carefully built by generations before us.

Under Jim’s leadership I am hopeful that we can guide the RTA and our region successfully through the challenging times ahead.

CTA board meeting update

The CTA board met today, and we are heartened by the fact that Governor Blagojevich and state legislators responded to the urgency of our situation and have appropriated $54.3 Million dollars to help CTA close its funding gap for 2005.

We expect that the grant agreement between the Illinois Department of Transportation and RTA will direct this one-time grant to the RTA for re-distribution to the CTA. Once the RTA assigns the $54.3 million dollars to CTA as state lawmakers intended, I will recommend that this board take action next month to rescind the service cuts scheduled for July 17th.

Lawmakers’ response to our situation is encouraging because it is a recognition how important CTA is to the vitality of mass transit in Northeastern Illinois. However, as we sit here today, we are painfully aware of the fact that this $54.3 million dollars, however much appreciated, is not the answer to our long-term problems. It is a band-aid to slow the bleeding but you cannot treat a gaping wound with a band-aid.

The emergency funding from the state will help CTA address the shortfall in our 2005 operating budget. But in just a few short weeks, CTA staff will present this board with the FY 2006 budget proposal and I can tell you now, there will be a huge projected deficit.

CTA faces a structural deficit, not a one-time shortfall. CTA’s public operating funding of $442 million has not changed since 2002. In the past three years, fuel prices have increased 111 percent, health care costs 43 percent, and CTA’s collectively bargained wage rates have increased 8 percent. This is just a snapshot of the 22-year erosion of CTA’s funding, in which CTA’s purchasing power has declined nearly one percent each year, every year.

That is one of the reasons that we welcome an audit by the Illinois Department of Transportation and a review by the State’s Auditor General. We are absolutely certain this audit will help us make the case for a long-term funding solution for CTA. We are grateful for this one-time grant but mindful of the serious budget deficits we will continue to face until this situation is addressed.