Just months after assuring riders that the CTA had financially steadied the ship for years to come, the transit agency reported Wednesday that it is sailing into a $10.1 million deficit for 2013 that could grow even larger by year's end.
The budget hole, which by law must be filled by Dec. 31, is mainly a result of revenue forecasts that grossly overstated the amount of money that will be collected from CTA fares and passes, officials said.
"We will adjust our expenses accordingly and close that gap,'' CTA Chief Financial Officer Ron DeNard told the CTA board. The transit agency's finance team is working on an amended budget, and major changes will take place starting in September, he said.
CTA President Forrest Claypool vowed to eliminate the deficit without imposing fare hikes, cutting service or raiding the transit agency's capital improvement budget to help pay for daily operations.
"Those are all ruled out,'' Claypool said after the agency's monthly board meeting.
But officials at the Regional Transportation Authority, which is responsible for providing financial oversight to the CTA, Metra and Pace, sounded the alarm.
"RTA has seen a trend of great concern to us regarding CTA's 2013 budget, in which its financial results are below what was anticipated in the 2013 budget,'' RTA Executive Director Joe Costello said.
The CTA increased the prices of single- and multiday unlimited-ride passes by 16 to 74 percent this year, contributing to a ridership decline of almost 3 percent and commuters abandoning some of the passes and migrating to pay-as-you-go riding patterns.
The biggest miscalculation by CTA budget analysts involved a nose dive in the use of the seven-day pass since pass prices were increased in mid-January. Seven-day pass sales were below budget projections by $7.5 million in the first six months of 2013, the CTA reported.
Sales of all other passes except the five-day and 30-day passes were also below budget projections.
Overall, system-generated revenue, which includes fares, advertising and rentals of concession spaces, fell short of budget projections by about $39 million, officials said. An unexpected boost in public funding softened the blow, leading to the $10.1 million deficit.
"There are multiple options we are looking at,'' Claypool said. "Obviously we will continue to tighten administrative expenses toward the end of the year.''
He said it's not a big concern, despite the RTA warnings, because the deficit represents less than 1 percent of the CTA operating budget.
Asked how the CTA revenue analysis could have been off the mark by $39 million, Claypool wouldn't say. But he added, "We have decided to be purposely more pessimistic in the second half of the year to avoid any additional surprises.''
Metra and Pace also are running below their fare revenue estimates this year, he said.
Meanwhile, a $6.9 million reduction this year in the reduced-fare subsidy provided by the state added to the CTA's budget woes, officials said.
Claypool and CTA board Chairman Terry Peterson said late last year, after signing a new labor contract with the CTA's largest unions and setting higher prices for passes effective in January, that the transit agency would no longer be lurching from one budget shortfall to the next.
The current budget problem fell short of an all-out crisis because of an unexpected increase in real estate transfer tax revenue from property sales in Chicago and more-than-expected sales tax revenue, officials said.
Those public funding sources to the CTA are up $13.2 million through June and are projected to be a total of $21 million higher than budgeted for the full year, officials said.
Separately on Wednesday, the CTA board approved a plan to use $15.7 million in city financing to install two elevators and make other upgrades to the Quincy station on the Loop elevated structure. The station currently is not accessible to people with disabilities.
The Quincy station, built in 1897 at 220 S. Wells St., has not been renovated since 1988, transit officials said. Construction could begin as early as 2015, officials said.
Also in 2015, the CTA will begin to overhaul its 3200 Series rail cars, under two contracts totaling $12.3 million that the CTA board approved Wednesday. The 3200s, which are about 20 years old and operate on the Brown and Orange lines, will be equipped with new air-conditioning systems, LED signs and, as part of a midlife overhaul, rebuilt propulsion systems, officials said.
A $20.4 million contract was also approved Wednesday to rehab the track and elevated structure on the Blue Line O'Hare branch between the Damen and Logan Square stations. The work, slated to begin next spring, will eliminate slow zones that currently require trains to reduce speed to as little as 15 mph, officials said.