CTA keeps lid on expenses, but revenue down in first quarter

While the CTA spent about $23 million less than budgeted in the first quarter of the year, system-generated revenue was $8.5 million less than anticipated for Q1, according to the financial report presented at last week's meeting of the Chicago Transit Authority board.

Reasons cited for the reduced revenue include:

  • Lower than anticipated farebox revenue because of lower ridership from the service cuts.
  • Lower vehicle and platform advertising revenues.
  • Lower revenue from property sales.
CTA revenue Q1.JPG

On the expense side, the CTA reports it cut costs in:

  • Labor expense due to vacancies, lower overtime and higher charges to capital jobs.
  • Materials expense through a "reduction in the bus fleet with scrapping of the 19-year-old buses, lower material usage for rail cars and lower fare card material."
  • Fuel costs with favorable returns from its fuel hedge program. "The average price paid in March was $2.61 per gallon and was under the budget price of $3.25 per gallon."

Karen Walker, the CTA's CFO, continued to warn that the CTA's "working cash balance remains well below the target of three months' operating expense. (While) funds owed to CTA by the RTA and the state is approximately $184.3 million."

That's a lotta cash.

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  • I'm still waiting for the $2.61 a gallon compared to $3.25 budgeted to make up for last year's $4.69 a gallon compared to a market price of maybe $2.25.

    Which again proves that CTA is obfuscating. Last year the budget was $4.50 a gallon, while, as I said, the market price was half that. CTA is not saying what the hedge price is compared to the current market price. Maybe it is a bit lower, but I don't believe that I have seen diesel meeting 2007 standards at the retail pump for much more than $3.25, and that includes taxes, which CTA does not pay.

    At least no one has reported that Karen Walker has had reason to step in front of a Green Line train yet, while someone has reported that the new cars have cameras in front to catch the video if that happens.

  • In reply to jack:

    While no tax is paid, price does include delivery to each garage.

  • In reply to leobaz:

    BFD. The price you pay at the pump includes delivery to the gas station. It just doesn't include what I pay to drive north of Lake Cook Road to the station.

    So, choochoo, what is the delivery charge, compared to the taxes that are not paid?

  • In reply to jack:

    The delivery charge you are refer to is the wholesale delivery charge, ( the fuel is resold). I am talking about the retail delivery charge, (the fuel is used by the consumer) i.e. You ( retail consumer) go to the gas station ( who got the fuel wholesale) to pickup the gas. CTA's ( retail consumer) fuel is delivered to them from the gas station.

    Plus add the fact that CTA like all government units pays their bills with a 90 day net( thus an higher price). Where as you pay instantly.
    ( no markup for have to wait for payment)

  • In reply to leobaz:

    So, again, you haven't given us any numbers.

    And, if the CTA isn't buying in wholesale lots, there certainly is something wrong. I noted (when Archer barn was still open) that they could drive to the Speedway a couple of blocks away and fill up for then about $2.70. Yet, they paid $4.69. If the "retail delivery charge" was $2/gallon, they were getting screwed.

    So, in summary, without numbers, you are saying a lot of nothing.

  • In reply to jack:

    Well Jack as the saying goes highsight is 20/20. While you are right that CTA was paying an excessive amount for diesel that was due to the fact that the price was locked in when it was rising and "experts" where predicting 6.00 s gallon for diesel. So the price was locked in before the ecomony and fuel prices tanked.

    As for the current pricing, the "rack" prices of diesel in march was 2.25 per gallon. per the report CTA paid 2.51. Thus 26 cents for delivery (10%), profit (5%), and credit intrest (2%).

    Current rack prices:
    http://www.csdecisions.com/gas_prices.php

    By the way the speedway is 3.30 today for diesel.

  • In reply to leobaz:

    Thanks at least for proving that the comparison to the budgeted $3.25 for diesel is irrelevant, even though it was the only number Ms. CFO gave.

    I went into it last year with Chris about whether CTA should have held someone accountable for making the bad deal, especially on or after October 2008, when it became obvious that the oil price bubble was bursting. Of course, you seem to agree with Chris that there is no point in doing that, even though Pace said it was able to apply savings in diesel costs to its 2009 budget. Like in Metra's case, it is just taxpayers' money, after all.

  • In reply to jack:

    Jack,

    You are want to fry a person based on hindsight.

    Try this, imagine you are MR. DFP ( diesel fuel purhaser) in May 2008 and for the last six months you have watched fuel go from 3.00 to 4.40 a gallon. ( over a 33% increase) You then recieve this report:

    http://www.eia.doe.gov/bookshelf/brochures/diesel/

    That says that fuel will rise to 4.75 by October 2008 and will fall in December 2009 to 4.11.

    As per the report, taxes add 10% so subtract that but add the 17% for deliver, etc.

    What would you have done in May 2008 to stop try and stop the budget bleeding ?

  • In reply to leobaz:

    I sure than hell would not have locked in 20 months, which is what the CTA did, if we accept your May 2008 date of when the decision was made. And certainly not a contract that was budgeted at $4.50, but kept rising to $4.69 in Dec. 2009, especially if you say that the projected price was $4.11, even if it actually turned out to be $2.25 or so.

    Are you saying that Pace was dummies by somehow arranging it to pay about $2.10 during 2009?

    As I said, it is only taxpayer money. When the brains at CTA speculate their own money, let me know.

    Your hindsight argument just shows that you don't believe in accountability. It is clear that neither CTA nor Metra does. There was an article today in Clout Street about how the RTA complex spends $1 million a year to lobby the legislature to get tax money. After these type of incidents, and no accountability, let's see if the taxpayers willingly fork over again. I know that the apologists will.

  • In reply to jack:

    Since you can't comprehend an open minded view point: It's called spend a little money to try to asave a lot more. ( 300,000 by CTA to try to get senior ride free MODIFIED, a 17 million dollar LOSS per year to CTA alone).

  • In reply to leobaz:

    If you want to talk about spend a little money to save a little, the 2009 budget said "Fuel Expenses: Total diesel fuel costs for 2009 are expected to be $102.8 million, $11.7 million more than 2008

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