Pace directors are happy with budget outlook

After months of financial gloom, Pace is predicting a year without budget angst.

Pace directors on Wednesday got a look at the preliminary $183 million operating budget for 2011, which predicts a 3 percent increase from 2010.

"It's a very stable outlook," Deputy Executive Director of Internal Services Terry Brannon said. "It's a very happy situation we're in from a funding perspective that should not call for any action with fares or services."

Early this year in order to contain a $6.5 million budget gap, Pace eliminated 15 low-ridership routes and reduced others, and instituted furlough days, a hiring freeze and raised health care contributions for some employees in order to balance its budget.

The agency had planned to cut more routes, but protests from riders led officials to soften the blow.

Now it appears Pace will end 2010 with about $500,000 in the bank.

This year, disappointing ridership linked to unemployment, rising expenses and low sales tax revenues - a major source of funding - contributed to the shortfall.

In 2011, Brannon forecasts that continued lackluster ridership and ad sales, along with expected problems recouping state subsidies to half-price fares for seniors, would hinder revenues.

But he anticipated that the continued effect of the 2010 cutbacks and low inflation, along with manageable increases in fuel and health care costs will keep Pace in the black.

"We've had some tough decisions to make in the last year," Pace Chairman Richard Kwasneski said. "We've got another tough year ahead. Hopefully, better days are coming."

Pace also operates a paratransit service for disabled riders in Chicago and the suburbs.

In 2011, the proposed budget is $120.7 million, a 4.4 percent increase from 2010.

Officials expect a $9 million shortfall but anticipate the Regional Transportation Authority, which has financial oversight of Pace, the CTA and Metra, will be able to make up the difference.

The agency's capital budget, which largely comes from federal sources, is estimated at $40 million in 2011.

The bulk of that will be spent on vehicles, including 24 fixed route buses, nine paratransit buses and 143 vanpool vehicles.

The Pace board will vote on all three budgets in October.