The proposed budget provides $781.2 million for operating costs and $279.5 million for capital improvements in 2017. The budget would increase fare revenue by 5.8 percent and spend the resulting $16.1 million on what the agency calls its huge capital needs.
"Last year, we said that without a new state bond program, we may need to raise fares even higher than we had projected to fund our capital budget," said Metra Executive Director/CEO Don Orseno. "By finding budget efficiencies and carefully prioritizing our capital needs, we are proposing a 5.8-percent increase in fare revenue for 2017 – with 100 percent of the proceeds going toward capital improvements."
Metra said the preliminary $279.5 million capital budget would fund the bare minimum of projects required to keep the system functioning reliably. The capital budget includes $90.5 million for rolling stock to continue our program to rehabilitate 18 locomotives and 43 railcars annually and a portion of funding to purchase 21 new railcars. Other major capital investments include: $23 million to continue the multi-year effort to replace aging Union Pacific North Line bridges over 22 streets on the north side of Chicago and rebuild Ravenswood Station; $20 million to expand the 49th Street rehabilitation facility to increase by 30 percent the number of railcars Metra can rehab each year; and $30.5 million to continue to install Positive Train Control (PTC).
For 2017, Metra is expecting to receive $175 million from federal sources and $72.4 million from the RTA for its capital needs. It is anticipating no new capital money from the state of Illinois.
Metra officials said the fare increase would generate an additional $16.1 million in revenue in 2017, 100 percent of which will be used to fund capital improvement projects. Metra notes its extensive backlog of capital projects requiring $11.7 billion or $1.2 billion annually over the next decade just to achieve and maintain a state of good repair.
"Yet, in each of the next four years, Metra projects that it will have less than $300 million annually available to spend on capital projects – about $900 million less than the agency needs to spend each year," Metra wrote in a release about the preliminary budget.
The 2017 Preliminary Operating Budget, which covers the day-to-day costs of running the railroad, increases costs by $21.4 million or 2.8 percent over 2016. Key drivers of 2017 operating cost changes include a projected savings of $9 million in diesel fuel prices locked in in 2016, a projected $11.6 million increase in employee health care costs and an average three-percent increase in employee wages. Metra also anticipates a $4.7 million increase in training and mechanical costs, a $2.6 million increase in PTC operating costs, a $2.8 million increase in materials and services costs and a $1.2 million increase for the Safety and Police Departments.
Metra announced in September that it had found $5.3 million in savings and operating efficiencies, which allowed it to reduce its 2017 operating budget. The proposed 2017 budget will be the subject of a series of eight public hearings throughout the Chicago area, with the city of Chicago hearing webcast live on Metra's website.
In other Metra news, Norman Carlson was elected to be the next chairman of the Metra Board of Directors on Oct. 14.
Carlson, an accounting professional, was appointed to the Metra Board of Directors in April 2013 by Aaron Lawlor, chairman of the Lake County Board. He has most recently chaired the board's Audit and Finance Committee, which has overseen a restructuring of the agency's internal audit functions and has championed the agency's move to adopt a more modern and robust accounting and management reporting system.