RTA passes balanced budget without service cuts

Metra, Pace and CTA riders shouldn't have to fear fare hikes or service cuts next year thanks to a balanced budget passed by the Regional Transportation Authority Thursday.

The RTA board of directors passed a balanced 2011 budget contingent, of course, on funding remaining firm at the state and federal levels.

Signaling a commitment to financial stability, the board also promoted Joseph Costello to executive director, after the former chief financial officer had served as acting executive director since the departure of Stephen Schlickman in October.

Costello said “a little bit more public funding,” in the form of a projected increase in sales-tax revenue as the economy improves, will enable the RTA to pass on “a modest increase in funding for CTA, Metra and Pace.”

Key to balancing the $2.3 billion budget was shifting $258 million in federal capital funding to operations, a move Costello called “allowable,” although it remained a “concern.” The budget could also be thrown off by any cuts in the General Assembly or Congress.

“There's a great deal of uncertainty,” Costello said. “The state continues to postpone money to us.” He said Illinois, as it puts off paying its bills, was $225 million in arrears on promised RTA payments, although that was actually “an improvement” from earlier deficits.

“None of this is new news,” Costello said, “but they continue to be major concerns.”

The budget is actually down slightly from the $2.4 billion budget passed last year and allocates $1.33 billion to the CTA, $634 million to Metra, $183 million to Pace, $121 million to paratransit and $34 million to the RTA.

The board also approved a backup plan in effect serving as a cosigner on a deal for the CTA to buy 300 new rail cars for $1.5 million apiece. The CTA is borrowing against future federal capital funding to purchase the cars, and the RTA committed to filling the gap in the event of any future shortfall.

Board Chairman John Gates Jr. said the pressing financial issues facing the RTA made Costello “the right man at the right time” to step up to executive director. “The type of person who seems most qualified to lead this agency going forward is someone who's got some very strong financial skills,” Gates said.

Costello has been with the RTA since 1995 and has been credited with solidifying the RTA's finances and bond ratings.

The board also honored outgoing Director Judy Baar Topinka with a congratulatory resolution as she prepares to take office as state comptroller. Costello said he was hopeful Topinka would end the unpredictable “roller coaster” of payments from the state to the RTA.

“I will try and see what we can do in the comptroller's office to keep you all afloat,” Topinka responded.