The $2.5 billion initiative stands to improve overall experiences and travel times for CTA, Metra and Pace riders, while also helping to lower each agency's operating costs – all while placing no additional burden on riders or taxpayers.
"System-wide, riders are suffering from an aging infrastructure that's only deteriorating further because there just aren't enough funds to properly repair what needs to be fixed," said John S. Gates, Jr., chairman of the RTA board. "We recognize the need to show a strong commitment to providing safe, reliable and affordable public transportation throughout the Chicago area and believe this plan provides the necessary funding to do that."
Gates and RTA Executive Director Joseph Costello introduced the plan at the RTA's board meeting on Friday, Sept. 14. It calls for issuing a series of bonds over the next five years, averaging about $500 million in capital improvement dollars each year. While each agency would be able to prioritize the projects to fund, the RTA has an existing list of backlogged projects it will reference before approving expenditures.
"We must make the kind of investments necessary to reduce the nearly $100 million we spend each year simply maintaining the system," Gates said.
The RTA would take advantage of its strong AA bond rating to secure the funds. The RTA's bond rating is lower than that of the State or any of the service boards so it can be competitive in the financial markets. Projected growth in RTA revenues would more than cover the debt service.
The CTA, Metra and Pace are facing a massive shortfall in state and federal funding for capital projects over the next five years. Only $700 million has been budgeted for improvements with those agencies each year – far less than the $1.3 billion needed just to keep the system from getting worse.
In seeking approval to issue the bonds, the RTA is also proposing streamlining the funding process for public transportation. The RTA is proposing moving from a complex funding formula to a vastly simpler, more regional approach, which will allow the service boards to maintain their current revenue.
This proposal calls for dividing bonding funds in the same manner as dividing of public funds – CTA receiving 56 percent, Metra 32 percent and Pace 12 percent. These are the same proportions received in 2012.
"It is my hope that by streamlining and simplifying the funding process, we can provide greater certainty as each agency develops its budget," Gates said.
The RTA plan will be introduced in the January 2013 legislative session.