www.redeyechicago.com/news/cta/chi-rta-boards-citysuburb-split-leads-to-deadlock-on-2014-budget-plan-20130821,0,6321232.story

redeyechicago.com

RTA board's city-suburb split leads to deadlock on 2014 budget plan

By Jon Hilkevitch

Tribune reporter

5:53 PM CDT, August 21, 2013

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Partisan gridlock prevented the Regional Transportation Authority board Wednesday from carrying out its routine annual responsibility to set estimates of funding levels for the CTA, Metra and Pace to plan their budgets for next year.

The move to establish the funding allocations stalled in a 6-6 vote that was split along city and suburban lines. At least 12 “yes’’ votes are needed for approval. The RTA board will try again at its next meeting, on Sept. 13, officials said.

The main obstacle to agreement was opposition to a proposed RTA bond sale among members of the RTA board who are appointed by the city of Chicago.

The RTA is seeking to use some revenue that officials said has been used for past debt service to issue $100 million in new bonds to finance projects that would help bring the transit system to a state of good repair. The CTA would receive $50 million, Metra would receive $45 million and Pace would receive $5 million, Bea Reyna-Hickey, RTA chief financial officer, told the board.

But CTA officials, represented on the RTA board by the Chicago members, object to the plan, saying the CTA, as well as Metra and Pace, have the authority to issue their own bonds. The CTA routinely does so, although Metra and Pace have always relied on the RTA for that function.

“I almost feel like, you know, let the service boards run their operations. If they need debt, then they should go get it,’’ said RTA board member Anthony Anderson of Chicago.

Board member Christopher Melvin Jr., also appointed by Chicago, said, “If you ask the service boards to run their businesses and be accountable, you should look to them to raise their own debt as much as possible. The RTA should be a last resort.’’

The Chicago members balked for an additional reason, stating that debt service on the $100 million in RTA bonds would be paid for by using money that should instead be deposited into a RTA discretionary fund that is separate from the main public funding sources that support transit operations at the three transit agencies.

In the proposed 2014 RTA budget that was temporarily rejected Wednesday, the CTA was slated to receive 98 percent of the discretionary funds and Pace would receive 2 percent.

The proposed 2014 RTA budget contains $1.593 billion for operations and $1.736 billion for capital improvements.

RTA Executive Director Joe Costello defended the budget recommendations made by the RTA staff as “well thought out’’ and he said they should have surprised no one because the plan “had been appropriately vetted with the individual service boards.’’

“While the budget marks were not adopted today, I remain hopeful that a budget agreement will be forthcoming,’’ Costello said.

In another vote, the RTA board deadlocked on a resolution certifying that the CTA was running a budget deficit through the first half of 2013. Seven board members voted in favor of putting the CTA on notice that it needs to explain to the RTA how it plans to eliminate a $13.8 million deficit calculated by the RTA through June 30. Five board members representing Chicago voted no. The measure needed 12 votes to pass.

The CTA last week said the actual 2013 deficit is $10.1 million. CTA officials downplayed the figure, saying it represents only 0.7 percent of the agency’s 2013 operating budget. They said the RTA came up with the higher deficit number by not including increases in public funding that were not known when the 2013 budget was put together late last year.

Costello said the RTA hopes the CTA will have a “solid plan in place’’ by the Sept. 13 RTA board meeting.

jhilkevitch@tribune.com

Twitter @jhilkevitch