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by Angela Cotey, Associate Editor
Insufficient capital funds, outdated rail cars, fare hikes, budget shortfalls, constrained capacity and a long list of state-of-good-repair needs — those are just a few of the concerns weighing on the minds of Chicago Transit Authority (CTA) execs and the more than 600,000 riders who board the agency’s trains daily.
The problems facing CTA aren’t unique; other transit agencies are dealing with many of the same issues, especially in today’s unstable economy. But when you’re operating a more than century-old rail system in one of the country’s largest cities, those problems are magnified. The older the system, the greater the maintenance needs. The greater the maintenance needs, the larger the capital funding requirements. And the more passengers you carry, the more people you’re apt to frustrate, especially when times are tough.
Ron Huberman knows that all too well. The CTA president came onboard in May 2007 as the authority’s first new leader in almost a decade. He inherited a more than $158 million 2008 budget shortfall, a financially drained pension fund, a faltering retiree health care program, a host of rail safety and service issues, and thousands of unhappy riders.
A former Chicago police officer and mayor’s chief of staff, the 36-year-old Huberman might not fit the profile of a typical transit agency chief, but he brings a different perspective to the table.
“I have a fresh set of eyes and can see things through the customer lens,” says Huberman.
And that’s helped the agency become more customer focused. To CTA, that doesn’t just mean adding to its customer service staff; it means making serious improvements to all aspects of the operation because, ultimately, everything impacts passengers. In the hopes of knocking a few items off its laundry list of “address me now” issues, CTA is focusing on the basics and far beyond — from cleaning up rail cars and upgrading track, to finding better ways to communicate with riders, to resolving budget woes and lobbying for funds to improve and expand service.
“As a culture, we need to continue to evolve to be more customer centric,” he says. “We’ve made a lot of strides, but we still have a long way to go.”
Stride No. 1: Getting CTA’s finances in order.
“One year ago, we had four large crises,” says Huberman. “We had a $100 million-plus hole in our operating budget each year, our pension fund was dropping like a rock, our retiree health care account was drying up and we hadn’t had a new capital program in over eight years.”
Huberman might not have had transit management experience prior to taking the reins at CTA, but he was no stranger to crisis management. From 2005 to 2007, he served as
Chicago Mayor Richard Daley’s chief of staff, where he directed the operations of 49 departments and 39,000 employees, and oversaw a $5.7 billion annual budget.
From 2004 to 2005, he was executive director of the city’s Office of Emergency Management and Communications, where he helped oversee Chicago’s police and fire departments. And prior to that, Huberman was a Chicago police officer.
Huberman & Co. were prepared to make some drastic cuts in light of the dire budget situation. Thankfully, they didn’t have to. In January, the state legislature passed House Bill 656, a sweeping reform bill that resolved three of CTA’s four financial issues.
The legislation deposited more than $1 billion in pension obligation bonds into the pension fund, bringing it to 60 percent funded. In addition, CTA’s contribution increased from 6 percent of payroll to 12 percent, and employee contributions increased from 3 percent to 6 percent.
The legislation also changed the CTA retirement age from 55 to 64, and established a retiree health care trust to be funded by not only retirees, but active employees, as well. The authority will fund the initial health care trust, which then will be managed by an independent consultant.
The bill provided additional operating funds for CTA and other regional transit agencies by increasing the amount of the sales tax they receive by a half percent. And, it authorized the city of Chicago to increase the real estate transfer tax to help support CTA.
Although the bill helped stabilize CTA’s finances, the agency still is facing a few financial hurdles.
Like many transit agencies, CTA now is dealing with lower-than-anticipated sales tax revenue due to the economic downturn. Plus, the housing market downfall has lowered the real estate tax collections.
The funding legislation also included a mandate by Gov. Rod Blagojevich that CTA provide free rides to senior citizens, and the state legislature and general assembly expanded the program to include low-income disabled people, active military personnel
and disabled military veterans. Blago-jevich then vetoed a reduced-fare reimbursement program that would have offset a portion of the lost ticket revenue. The free ride program is estimated to cost CTA $35.8 million in 2009.
The authority’s financial situation is being further exacerbated by the lack of a state capital program (the last program expired in 2004). CTA needs $6.8 billion in capital funds to bring the system to a state of good repair, says Huberman, and until dedicated capital dollars are available, the agency will have to shift some operating funds to the capital budget to make necessary infrastructure and equipment repairs.
As a result, CTA last month unveiled a $1.3 billion 2009 budget proposal that calls for cutting 396 administrative and support staff positions, as well as 236 jobs that were funded by capital projects. The authority also has proposed raising base fares 25 cents and increasing pass prices accordingly.
The funding issues still facing the agency, and subsequent fare hike and job cut proposals, might not seem reflective of an agency that’s come a long way financially in the past year. However, in comparison, the 2008 budget (proposed before the new transit funding bill passed) called for laying off 2,400 employees, raising peak-period fares to $3.25 and cutting almost half of the agency’s bus routes to offset a $158 million shortfall.
“We’re in substantially better financial shape,” says Huberman. “We just have to manage leaner.”
The transit funding bill not only helped stabilize CTA’s budget, it’s taken enough pressure off CTA execs to enable them to address the agency’s other pressing issues.
“We’re focusing on the 101s,” says Huberman. “Service improvement, reliability and cleanliness.”
To that end, CTA is focusing on cleaning rail cars, improving signage and communications, reducing mean miles between defects and eliminating slow zones.
The agency aims to deep-clean rail cars every 21 days (meaning they steam-clean seats and scrub floors). CTA also is experimenting with different soaps and formulas, and recently began using a “gum buster” tool that dissolves gum under seats within seconds; rail car and bus cleaners previously spent hours at a crack scraping gum off seats with razor blades.
“People will forgive us for an old system. They won’t forgive us for a dirty system,” Huberman said during a March 4 presentation before the City Club of
Chicago. “It signals we don’t care, that we don’t take pride in the organization.”
Customers aren’t very forgiving of poor communication, either. Last month, CTA announced a series of initiatives and new tools designed to improve passenger communications. For starters, the authority created a planner service alert program under which riders can sign up to receive electronic information about scheduled service changes based on current construction projects.
In late 2008, CTA plans to unveil a new Web site that will be easier to navigate and feature the most-needed information — such as maps, schedules, alerts, fare information and the Google Trip Planner — on the home page. The new site also will feature a service tracker to provide the current status of all CTA rail and bus lines.
Coming in 2009: digital signage at rail stations that will provide up-to-date travel information and estimated train arrival times. The agency also is revamping signage to make it easier to understand.
CTA is working to improve emergency communications, too. The authority plans to establish a tactical communications unit responsible for providing emergency service impact information to riders, launch an emergency alerts program that will send emails to subscribers regarding major delays or service disruptions along their selected routes, distribute brochures at rail stations that outline emergency evacuation plans and establish a hotline to provide service information during emergencies.
In addition, CTA has produced an updated rail system evacuation video. Available on the authority’s Web site, the video also identifies safety features already in place on trains and in tunnels, including improved lighting, enhanced signage, and emergency intercoms and telephones.
Rail system reliability also tops CTA’s “101” list, and the agency has several capital projects and programs under way to address it.
“We’re spending a significant amount of money on improving the quality of our track and components of our system to provide a consistent ride,” says Huberman.
Next year, the authority expects to take delivery of prototype rail cars as part of a $641.3 million order CTA placed with Bombardier Transportation in May 2006 for 406 rail cars. The contract includes an option that could bring the total number of cars to 706.
The cars will replace older vehicles, some of which went into service in the late 1960s. The vehicles will feature onboard diagnostics, providing shop personnel real-time information so they can troubleshoot problems and develop repair strategies. The cars also will include cellular modems to enable CTA’s Control Center to communicate directly with passengers in real time via audio and text messages using speakers and six visual displays in each car.
In the meantime, the agency is focusing on improving the reliability of its existing fleet. Earlier this year, the rail maintenance department developed a plan to increase the mean miles between reported rail vehicle defects. The department placed an increased emphasis on preventive maintenance programs, created improvement plans to eliminate the most frequently occurring defects and implemented overhaul plans to replace components prior to the end of their anticipated service life. In addition, each car now is inspected for worn or defective components every six weeks.
CTA also has installed a new maintenance management data collection system that maintenance workers use to determine which defects occur most frequently, and implemented new maintenance procedures to improve or replace those components.
The program is helping. Mean miles between reported rail vehicle defects increased from 2,659 in January 2008 to 3,963 in August, according to CTA.
Reliability will get a boost with some signal upgrades, as well. CTA is in the midst of a $172.8 million project to upgrade the cab signal system on the Blue Line from the Forest Park terminal to Jefferson Park on the O’Hare branch, as well as replace traction power cables. The upgrades will enable CTA to operate trains at continuous speeds along the line.
The authority also is spending $48.2 million to install a new signal and train-control system along the Loop elevated tracks at two of the rail system’s busiest junctions: Van Buren/Wabash and Lake/Wells, where several lines enter and exit the Loop. Once the project is complete in 2009, trains will operate at faster speeds and intervals through the junctions.
For the past year, CTA also has been trying to eliminate slow zones. In
October 2007, the number of slow zones — where train speeds are restricted to 15 mph due to poor track conditions — hit a high point of 22.3 percent of the rail system. The authority since has been replacing track, as well as replacing wood ties with longer-lasting wood ties; as of last month, slow zones had been reduced to 8 percent.
By year’s end, CTA expects to finish slow-zone elimination work on the O’Hare branch of the Blue Line; by next summer, slow zone work should be complete on the Brown and Red lines. The agency is spending more than $300 million to eliminate slow zones.
The authority is budgeting much more than that to expand capacity on the Brown Line. The $530 million improvement program is CTA’s largest capital project. Scheduled to be complete in December 2009, the expansion calls for upgrading or replacing traction power, and signal and communication equipment to improve reliability. The project, which began in 2004, also will relieve congestion, increase capacity and accommodate growth. CTA is lengthening station platforms to accommodate eight-car rather than six-car trains and rehabilitating 18 stations to make them ADA accessible.
CTA likely won’t be announcing any other large capital projects until a new capital funding bill is approved.
Huberman is optimistic that legislation will be approved in the coming year, especially since transit capital funds likely would be awarded as part of a larger package that includes new funds for roads, bridges and schools.
“There will be dollars specifically for transit, but it won’t be a transit-
specific bill,” he says.
And once new funds are available, CTA will manage them closely.
“We have to make sure that the money goes farther,” Huberman told the City Club of Chicago.
Rather than deferring maintenance projects until something absolutely has to be repaired or replaced, CTA managers propose keeping up on maintenance cycles and, ultimately, fixing track and equipment at a much lower price tag. For example, the agency recently spent $100 million to replace track and ties along the O’Hare branch of the Blue Line; if CTA had kept up with general maintenance and replaced every fourth tie every other year, the full replacement wouldn’t have been necessary.
CTA won’t solely rely on legislation to fund capital projects. The agency expects to generate some dollars of its own through a concessions program, transit-oriented development and electronic advertising that it’ll use for state-of-good repair projects.
“I don’t want to create a misperception that we can finance our own capital, but we’ll save where we can, and leverage every dollar we can from other sources to pump into capital,” Huberman said during his City Club speech.
The authority needs all the capital funds it can get. Not only has CTA outlined $6.8 billion in needed repairs for its century-old system, but another $4.3 billion is needed to expand rail service. Proposed projects include the Circle Line, which would link all of CTA’s and Metra’s rail lines in an area bounded by 39th Street, Fullerton Parkway, Western Avenue and Lake Michigan; a Yellow Line extension from its existing north terminal at Dempster Avenue to a new terminal near Old Orchard Road; an Orange Line extension from its existing south terminal at Midway Airport to a new terminal at or near the Ford City mall; and a Red Line extension from its existing south terminal at 95th Street to a new terminal at 130th Street, possibly connecting with the Northern Indiana Commuter Transportation District’s South Shore commuter-rail line and Metra’s proposed Southeast service commuter-rail line.
In the meantime, CTA will continue to carry out the customer service, operational and reliability improvements under way. After all, you have to master the basics before you can move on to the next course.
“We’re operating in an environment where we have to be innovative to improve service even with a lack of capital funds,” says Huberman. “We have to focus on continuous improvement, figure out reasons for delays, figure out how to maintain our signal system, find better ways to spend money and challenge our managers.”