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Rail News: Passenger Rail

Metra proposes fare hike to cover PTC costs in 2016


Metra has proposed a $945.5 million budget for 2016 that includes a 2 percent net increase in fare revenue to help cover operating costs associated with a new positive train control (PTC) system, the Chicago commuter-rail agency announced yesterday.

The budget proposes $759.8 million for operating costs and $185.7 million for capital improvements, according to a Metra press release. The agency proposed a 2 percent fare hike, which is lower than the 5 percent hike agency officials previously projected they would need for 2016.

“We told our customers that we would do everything we could to avoid or minimize higher fares next year and that is precisely what we have done,” said Metra Chairman Martin Oberman. “At the same time, we are committed to being a responsible steward of public funds and finding ways to continue to invest in our railroad infrastructure with increasingly limited financial resources.”

Metra officials expect the agency will receive $165.4 million from federal sources and $4.7 million from the Regional Transportation Authority for its capital needs. The agency is anticipating no capital funds from the state next year.

Fare revenue typically funds the agency’s operating budget, with a small amount going toward capital improvements. Next year, however, Metra proposes allocating $15.6 million in fare funds to capital costs, which would be $3.2 million more than the 2015 budget.

The remaining $3.3 million in new fare revenue will go toward higher operating costs related to PTC. PTC implementation is expected to cost Metra more than $350 million out of the capital budget. The operating budget also will be impacted, as the agency ramps up the federally mandated safety technology, Metra officials said.

By the time Metra’s PTC system is fully implemented by 2019, the maintenance and operating costs are expected to be $15 million to $20 million a year. The 2016 operating budget will increase 2 percent compared with a year ago, Metra estimated.

In terms of revenue, the budget proposes $19.6 million in sales tax revenue, assuming no change in state funding policy. That increase is partially offset by a $5.4 million reduction in other revenue and an expected $2.4 million reduction in revenue as riders switch to cars due to lower gasoline prices. That leaves a net revenue increase of $11.8 million.

Metra’s proposed capital budget calls for $85.4 million for rail-car and locomotive work; $23.9 million to replace or improve ties, ballast, crossings, bridges and other track and structure work; $36.9 million for signal, electrical and communications work; $17.1 million for facilities and equipment; $13.2 million in station and parking improvements; and $9.3 million in support activities.

About 57 percent of the capital budget, or $106.4 million, is proposed for Metra’s modernization plan for rail cars, locomotives and PTC.

The budget proposal will be the subject of eight public hearings throughout the Chicago area to be held Nov. 4-5.