Metra says proposed 2019 capital budget is far short of needs

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Metra’s board of directors discusses proposed 2019 budget.
METRA web cast image
CHICAGO — Metra has unveiled a proposed 2019 operating budget of $822 million, an increase of about 3.1 percent over this year, but which does not include a fare increase — a decision officials reached last month.

At the same time, the commuter rail agency also proposed a 2019 capital budget of $185.6 million, which officials warned was far short of Metra’s needs and could lead to the system’s deterioration and service cuts unless chronic funding shortfalls are remedied.

“While this budget contains good news for our customers, that good news comes with a warning: Metra cannot continue to operate the system as it now exists — and we cannot grow it — unless we receive the funding we need,” Metra CEO/Executive Director Jim Derwinski said in a statement.

Derwinski said the agency would spend the coming months highlighting the agency’s needs and working with business and Illinois political leaders to address the problem.

Some of Metra’s board members were more blunt. Director Tim Balderman urged that the agency produce an “impact study” showing the effects of potential service cuts or line terminations.

“I think we need to have on the table some of these draconian measures,” Balderman said. “What happens if (cuts are made)?”

Added John Zediker: “We’re at the point where the tree isn’t bearing fruit and needs to be pruned.”

Metra finance chief Tom Farmer said Metra expects operating costs to rise by about $36 million in 2019. The increase was attributed to rising costs for labor, benefits, fuel, rents, materials and other expenses associated maintenance and inspection of equipment and infrastructure.

But officials said the proposed 2019 operating budget reflects only a $25 million increase from $797 million in 2018.

According to Metra, about $11 million of the increase will be covered by an increase in funding, primarily from a regional transportation sales tax. An additional $12 million of that increase will be offset through two actions: First, identifying about $6 million in efficiencies, primarily personnel savings in the engineering, mechanical and administrative departments and cuts to information technology costs.

And secondly, reducing the budget by approximately $6 million, reflecting a normal level of employees who are on a leave of absence and not receiving wages or benefits in 2019. The remainder of the increase will be covered by reducing the amount of fare revenue spent on capital needs by about $13 million, (thus allocating that $13 million to the operating budget), the agency said in a statement.

Metra’s board of directors said that a fare increase for capital needs in 2019 would burden customers after four hikes in a row while only providing a fraction of needed revenue.

Metra cited these capital needs:

— About 40 percent of Metra’s assets are classified as in marginal or worn condition.
— Half of its bridges are more than 100 years old, and at the present rate of replacement of three bridges a year, it would take Metra 150 years to replace the oldest bridges.
— Its cars have an average age of 30 years, the oldest in the nation. The oldest cars in daily service are more than 65 years old.
— Its locomotives have an average age of 31 years, the oldest in the nation. The oldest locomotives are more than 41 years old.

To address those needs next year, Metra’s 2019 capital program contains only $173.6 million in federal funds, $5 million in local regional transportation funds, and $7 million in fare revenues set aside for capital needs.

About half of that budget will pay for priorities such as new and rehabilitated cars and engines, bridges, yard rehabilitation and positive train control. The remaining half will go to routine capital maintenance of tracks, signals, stations, and other facilities.

The proposed 2019 budget will be the subject of a series of eight public hearings throughout the Chicago area. Metra’s board will vote on the final budget in November.
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