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Metra yesterday unveiled a $2.4 billion modernization plan and outlined its proposed 2015 budget that includes a 10.8 percent fare increase.The fare hike across all fare types will help fund the modernization plan, which calls for replacing Metra's aging rail cars and locomotives, and address ways to maintain safe and reliable service, Metra officials said in press releases.The proposed 2015 budget includes $749.1 million for operations and $328.9 million for capital needs. Part of the fare increase will be used to cover debt service on a bond issue of $100 million, which would be the first in Metra's history, or similar financing to pay for the modernization program, agency officials said.
The modernization proposal calls for phased in purchases of new modern passenger cars and locomotives, which would renew a fleet in which more than 40 percent of the cars date from the 1950s to the 1980s, Metra officials said.
To fund the program, the agency would issue its own bonds or employ similar financing, starting with $100 million in 2015 to be flowed by similar amounts in 2017, 2018 and 2022.
"The majority of our rail cars are older than the majority of our daily commuters," said Metra Chairman Marin Oberman. "While nobody ever likes fare increases, Metra’s fares are significantly lower than our peer railroads in major cities and have not kept pace with inflation."
The modernization proposal assumes that current state and federal funding sources will total about $710 million of the $2.4 billion program over the next 10 years. With Metra financing covering another $400 million, the agency will need an additional $1.3 billion over the next decade. To cover that amount, Metra will aggressively pursue additional federal and state funding, new financing strategies and alternative financing mechanisms, agency officials said.
While part of the fare increase would fund the modernization effort, the set would be used to help cover expenses, which are projected to grow by $51.5 million next year. That includes $18.5 million for labor and fringe benefits; $6 million in added maintenance expenses due to aging equipment; $9.6 million in other expense growth; $8.4 million for the financing proposal; and $3 million to cover implementation of the federally mandated positive train control (PTC) system.
As part of the 2015 budget, Metra would restore a discount on 10-ride tickets that was eliminated in 2013. Fare changes, including the increase, would begin Feb. 1.
The capital budget would allocate $92 million to rolling stock, $36.9 million to tracks and structure, $131.6 million for signal, electrical and communication work (including $123 million for PTC), $44.5 million for facilities and equipment, $9.4 million to stations and parking and $14.5 million to support activities.
The budget plan will be the subject of a series of public hearings before the board votes Nov. 14 on a final budget.
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