There was a standing-room-only crowd in the party room above the skating rink at the Ridgeland Commons park-district facility in Oak Park. Beach balls and sequined fish and dolphins slowly gyrated above signs that read NO MORE CUTS, MODERNIZE THE EL, COMMUNITY INPUT/LET THE PEOPLE SPEAK. Surrounded by assorted village presidents, state legislators, and community activists from Oak Park and the west side, Robert Belcaster slumped in his chair and in a low, gravelly voice periodically drowned out by the rattle of the nearby el trains delivered a message nobody wanted to hear: the CTA has no money and no prospects for new revenues. And only massive transfusions of money can keep the Lake Street el--and much of the rest of the city's rail system--alive.
As members of the Lake Street El Coalition presented their arguments--the line serves two industrial parks, thousands of people depend on it to get to work, it's a lifeline to the village of Oak Park and surrounding communities--Belcaster knocked the rationales back lazily, like a major-league batter facing a lineup of high school pitchers. There was no massaging, no promise of compromise. No, he wasn't interested in working with the coalition just to save the Lake Street el--it should form a citywide coalition and try to get funding for the whole elevated system. The Lake Street el is a money loser, he told the crowd. And his job is to watch the bottom line.
Amid a host of general problems with the CTA, the Lake Street el stands out. Belcaster's handling of this one is indicative of his general views on the role and responsibility of the CTA.
There have long been rumors that the Lake Street line is doomed. Essential track repairs have been left undone; almost one-third of the track has speed restrictions because it's in terrible shape. Years before Belcaster came to office the decision was made, without benefit of public hearings, to disconnect the Lake Street from the Dan Ryan line and link it to the even more costly and dilapidated Englewood-Jackson Park line, presumably as a prelude to closing them both.
The Lake Street el has been steadily losing ridership over the last several years, largely due to the slowness of the trains and some well-publicized criminal activity. A CTA memo of July 28 predicted that without immediate action "as early as next summer some sections of the track will not meet [safety] criteria" and "may have to be taken out of service." Oak Park village trustee Marc Blesoff got a copy of this memo and made it public, an act that finally brought attention to the line's probable fate.
A report from the Neighborhood Capital Budget Group states that "track ties on the Lake Street Line were last renewed in the mid-sixties, with some of the track ties older than the 'expected useful life' of 25 years. The project to do this work has been requested, and deferred, in the CTA CIP [Capital Improvement Program] since 'the mid-eighties, and has been deferred each year' since. Between 1988 and 1992, 'band-aid' measures have been utilized to 'keep the track safe for reduced train service.'"
Faced with the failures of his predecessors, Belcaster is just saying no to Band-Aids. The result will almost certainly change the face of Chicago transit.
The CTA home office fills a large portion of the seventh floor of the Merchandise Mart, where riders may rest assured that no money is being wasted on wall coverings or carpeting--both are rather shabby. Belcaster occupies a large anonymous office in a somewhat tonier section of the suite. Stacks of pictures lean against the walls. "One day I'll get a guy up here to hang these," he says.
Appointed last February 3 ("It feels like a lot longer"), Belcaster is the first head of the CTA with the title of president; his predecessors were executive directors. The change reflects his more businesslike approach to transit. The native Chicagoan came to the CTA after 29 years in the real estate business; he's the retired managing director of Tishman Speyer Properties, a major player downtown.
His brief official resume notes: "A graduate of the University of Illinois, Belcaster serves on the board of the Chicago Housing Authority, sits on the Public Building Commission, and headed an advisory commission that helped Cook County create a Capital Planning Office to manage its $600 million construction portfolio. He plans to transfer that private-sector acumen to government and steer the CTA like a sound business with a renewed emphasis on service to the customer."
Belcaster's office is one of the few areas in CTA headquarters where smoking is still allowed; his raspy baritone is a testimony to his heavy habit. His dark eyes are hooded, and he looks as though he's chronically short of sleep. He wears expensive suits, and his silver hair is in a banker's cut. His voice, with its tough-guy accent, is a soft growl that's often hard to hear as he expounds on the city's rail system.
Bryan Miller: How did you come to be president of the CTA?
Robert Belcaster: I got out of the real estate business in October of 1990, and after [Cook County Board president Richard] Phelan got elected he asked me to help him reorganize how they buy all their construction contracts at the county. I worked with Dick for about seven or eight months, and we did a pretty good job, I think, of reorganizing. And then I started working with the Public Building Commission to reorganize how they did their school purchases. That was sort of part-time work.
Then, believe it or not, one day, on a Sunday, a package was delivered to my house, about that thick. [He holds his thumb and forefinger four inches apart.] No cover note, no identification--it was all CTA budgets. I threw it into a garbage can. I figured it had to be for somebody else. [He laughs.] To this day I don't know who sent it to me. Then about five weeks later I had a conversation with [CTA board chairman] Clark Burrus, and he said, "I want you to run the CTA." I said no. Then there was something in "Inc." that said I was taking the job. [He laughs again.]
BM: So then you had to do it?
RB: I had to do it! As I came to understand it, and how it plays into real estate and how it plays into the whole value of the city of Chicago, I thought it was a wise thing to do, because I felt that transit was at a pretty low ebb in terms of believability and its image was fast going downhill. I don't think it was perceived as honest--I don't think the public felt they were getting honest responses to their concerns or problems. It looked like transit was in a spiral--raise fares, cut service, raise fares, cut service--and it would fulfill its own prophecy.
There was a great deal of self-interest involved. I still have seven or eight office buildings downtown, and I own real estate in other parts of the city, and so therefore I felt that it was really important to do what I could to settle this thing down. I think we have raised the image or at least raised the discussion in a more positive way. I hope that that continues, because one thing we've tried to be is extremely honest. Honesty is important--I think people relate to it. And besides I can't remember lies. I'm really not very good at them. That's an old cliche, but I really can't. We probably have a thousand issues that we're trying to deal with, and if you try to create a story for each one of those major issues you'll go crazy. So my feeling is you just have to be 100 percent honest.
BM: What's your relationship with Clark Burrus?
RB: Good. It's a good relationship. He's not day-to-day. He's on the board; the board selects its own chairman. Since Clark knows the system and has been on the board since 1983, they selected him. The board establishes policy--we'll bring an idea to the board, and they either bless it or don't bless it. I handle the day-to-day business.
BM: What was the biggest challenge you faced when you took this job?
RB: The CTA has been criticized over the years for what has been deemed to be a lot of excessive employment--or fat, some people call it--at the home-office level. We've tried to stem that criticism. At the moment we have about 340 jobs less than we had at the beginning of the year. When you look at the fact that we had about 1,500 jobs to start with, 340 is a lot of pain.
Of the remaining jobs, many are accounted for because of our 24-hour operation. We need managers in our bus barns and in our terminals on a 24-hour basis. So when we looked at our working numbers and tried to compare them, for example, to a public-works department or other departments in the city, there's some invalidity in the comparison. We have to run so much 24 hours.
So when I look at that I finally get down to a very comforting level. What I've been trying to look at is whether or not we could look at ourselves much like private industry does, with so many people per million dollars of expense. For example, a bank. In days past you said one person per million [dollars in assets]. Then they moved it to one person per 5 million, then they moved it to one person per 10 million, now they're at one person per 25 million. And I'm suggesting that in transit we should be able to get to one person per million. That would be about an 800-person staff. But you have to add to that the double shifts.
There's only so much room that we have inside of our operating budget. We get so much from fares, we get so much from subsidy. Therefore all we've got to start the year is a pot of money. How do we most effectively spend that pot of money? For me, the answer is: There are certain fixed issues we can't touch. For example, security. I would never say we should cut security, because if there's one thing we can't do it's create a perception of a problem. We have a very secure system right now; we're the best in the country in terms of security. That's robberies and thefts per passenger. One passenger of every 61,000 in the el system is subjected to some form of a crime, and one passenger out of every 380,000 on the bus is subjected to a crime. It's interesting that the bus is much more safe than rail.
BM: Why is that?
RB: I think the reason is that for the number of people we move on rail, one ticket agent or conductor is now overseeing 800 people. On the bus it may be 60 or 70 people. So it's something we're working on--we're refocusing more of our attention onto the rail line, and we're doing very well. These numbers are twice as good as they were ten years ago. Ten years ago one person for every 30,000 el riders was subjected to a crime.
So there are certain things you can't touch. We have a DBE department, a disadvantaged-business-enterprise department. We're required by federal law to make sure that contracts are fairly administered. I can't cut that up. I need an internal-audit department. So I'm suggesting that what we're doing now is taking our expected revenues for 1993-1994 and putting against them this top-dollar budget, asking "What can't we touch?" After that, as far as I'm concerned, everything's negotiable.
Then you get, finally, to a number of dollars that we can put against service delivery and our other costs. We want to debate service, and we want to debate what kind of service we can provide in the coming years. I want people to no longer argue these fixed costs, if you will. People argue, "You can cut, you can cut, you can cut." And I want to get people's attention on the fact that we can't cut beyond certain levels and operate legally.
Once we've done that we can talk about service. And if our service is inadequate because of our funding capacity, then we've got to get more funding. It's not an answer of raising fares and cutting service. I think that's just self-defeating. That isn't the direction I want this company to go. I want to take the opposite approach, that says "We're doing a good job managing, this is what it takes to manage the company. It's as tight as we can get it. We've eliminated as much fraud as we can. Now we're down to a number. And if it's inadequate let's press our legislators for more funding."
I have to look at the capital side and say "What does it take to keep that el system going, and what does it take to keep the bus system going?" For that we need more capital-improvement dollars. That's another part of the equation--and that to me is a very difficult part. We need a lot of money.
I was at [a public meeting with] the Lake Street El Coalition the other day, and they asked, "How much money do you need?" And we got into a rather heated argument over whether or not we, CTA, would work with the Lake Street El Coalition. The issue for us is, we can't just work with the Lake Street El Coalition. We have to work with a citywide coalition that deals with the entire transit issue. I could never go down to the state legislature or to Washington and say, "I want funding for the Lake Street el." They'd laugh me right out. If I go in and say, "We're talking about funding for transit in Chicago, and here's why, and here's where we serve," I have a shot at it. But the concept of going in for something that specific or parochial won't work. So I encouraged them to put a whole coalition together.
We had an engineering assessment of the el system, and some people seem to think we've been hiding this report. So at the meeting I showed them a photograph of the report. I think everybody thought the report was something like a school notebook binder or something. Well the report is 438,000 pages. It requires a great deal of analysis--we had five different CTA teams of people working and analyzing what this thing says, and trying to come up with some means of prioritizing the expenditures that are required on the el system. It is a daunting task, I will tell you that. It is not simple. I think a lot of people were surprised by the depth at which we looked at the whole system, and once we analyze this we will understand every column, every major connection, that's going to need replacing in the next five years. I think that's an important piece of work. Getting the answers out of it is not going to be easy, and prioritizing it is going to be very difficult.
BM: Is the CTA a bigger mess than you had anticipated when you accepted the position?
RB: I wouldn't say a bigger mess, because I don't know how to define "mess."
BM: More problems?
RB: I think so. I think it was viewed, both at the city level and within CTA, as primarily a problem of funding day-to-day operations. And to a great extent that is true. We're forced to look at how we fund in a rearview mirror. At budget time, which is what we're in now, we would look at 1993, let's say. And we make an intelligent estimate, based on the state of Illinois' office of budget and management, as to how much sales tax we're going to get in this region next year. Well, in 1991 they were wrong, in 1992 they were wrong, and I think they'll probably be wrong in 1993. In the last three-year period the sales tax was overstated by $75 million. And then there's a state match that goes against that, so when you take the two together it was $100 million.
So that means CTA had to figure out how to deal with $60 million less than had been planned on. Here's the problem: You don't find out until midyear what the sales-tax actual results are. So in May of 1992, for example, we began to understand that we were in fact short $25 million--and as it turned out it was $28 million. How do you go to the public and explain that while we committed to service in January of this year, now we're in June and the RTA tells us we're $28 million off the mark? And the CTA share of that is $15 million or so that we have to cut out of "service" or someplace. By the time you can react to it, have a public hearing about it, or even go to your board about it, chances are you're in August--and you can't do a knee jerk here. By the time September rolls around that means you've got four months to cut all those millions. That's the problem we face this year. And the only way I could shave that kind of a number in four months would be to shut down after Thanksgiving. That's the only way you can save that much money. And that would of course be a little draconian.
They did that in Boston about six years ago. They just couldn't get any sympathy for either their operating or their capital costs, so the board made a decision: We will operate as long as we can make payroll. They made payroll until mid-November and then shut down. About four weeks later the legislature convened in a special session and got them taxes and restructured and got them going forward. Will we ever get to that point? God, I hope not. It took them a long time to undo those problems, but Boston has come out of it a much stronger system. Because at some point you have to say, "You've got to right the last 20 years of underfunding." And that's what we're facing. [In fact, on November 30 Belcaster threatened to shut the entire CTA system down next spring if his 1993 budget bailout plan wasn't approved by the Regional Transportation Authority.]
So, yes. The problems are deeper than I expected. And as you begin to bring them to the surface, the solutions are very elusive. Very elusive. And I don't know the solutions. I can assure you though that we have too much service for the revenue, and we have too much infrastructure for the available capital. I couldn't begin to dream what the priorities are. That's going to take a lot of work and a lot of public debate.
BM: You mentioned that spiral--you get a fare increase and service cuts. But there's also decreased ridership every time the fare goes up and the service cuts go down. So aren't you saying there are going to be more ridership cuts?
RB: No, not necessarily. For example, we did something that the riding public might not even realize. It was a very correct thing to do, and it was very quietly done. At off-peak hours on the el system--define off-peak [as] nonrush--the typical way to operate was that the trains left their terminals every five minutes. One made an A stop; one made a B stop. And you did this until you got to all-stops. Well, that means that if you're waiting for a train at off-peak times and you miss one, you're waiting for the next ten minutes. So what I asked was, "Doesn't it make more sense to have six eight-car trains than to have eight six-car trains? Why don't we put [fewer] trains out that are longer--it still takes two people to operate them--and put [on] all the stops, but let's move them at seven and a half minutes?" So that instead of a ten-minute wait you've got a seven-and-a-half-minute wait, but the trains are larger. We've done that since March, and I don't think anyone's noticed it. No complaints, because the fact is that everybody waits less--and because we've only got two tracks the A train can't pass the B train. So your service is just as quick, but you wait less. I think that's an alteration of service to save money as opposed to a service cut. I think it's a service enhancement, frankly.
Take that further. Could we start to have semiexpress trains during rush hour that are neither A or B so that from a Jefferson Park, for example, or from some major transit plaza at 95th Street you run a semiexpress? And when it stops at other major transit plazas, then we bring bus lines together at that transit plaza to accommodate transfers.
So what I'm saying is, we've got to alter service. Yes, it may change some people's habits. But long term it seems better to be as efficient as you can on the delivery side. If you take an $800 million budget--just as a number--if $100 million is fixed costs and we're comfortable that we can't do any better than that, then all that is left for service is $700 million. And the question now is, how can I deliver the greatest, most efficient service for that $700 million? It's a different way to look at transit. I think we're breaking the traditional mold of transit thinking.
We have to look at how we can fashion that service. Do we have too much owl service, for example, on the el system? Would we save money by bringing in more buses at owl time? Can we reconfigure our staffs, so we have less stations but more service, faster service? It's all of those questions that we're really getting into as I learn more and more about the problems. We've got a lot of duplications of service. We and Metra duplicate in many cases. In some cases we and Pace duplicate. We're working together to take out those duplications. One of us should serve, not both of us. But in some cases all three of us serve. It makes no sense.
That's not to suggest that a consolidation is in order, because a consolidation would lose the priorities. That's the problem I had with [RTA chairman Gayle] Franzen's idea of consolidation. The city's priorities versus the suburban-growth priority versus Metra's need for infrastructure, our need for infrastructure--they would now all be decided by a single body that would be responsible for all of it. As opposed to: we're responsible to the city of Chicago to make it work and to Metra to feed them into a core, whether it's our core or some suburban cores. Cooperation's a good idea, but the idea of consolidation remains, in my view, a very bad idea, because large bureaucracies tend to be much less sensitive than smaller ones. I think that's true everywhere I look.
To me it comes down to accountability--not only to our ridership, but then accountability internally of our workers to our riders. We have turned the organization chart upside down so the customer's on top. And I'm trying to convince the executives and the staff that if you don't support that effort, then you don't have a job.
BM: There's been a lot of turnover at the top at the CTA, and there has been criticism that this constant churning has made it difficult for reforms to get through. People lower down say, "Well, this guy is going to be out in six months--why should I stick my neck out working for his program?"
RB: Right. Quiet resistance. Now that's the bureaucrat. One of the first things we did--and I take very little credit for this--is that last year the board hired Booz, Allen & Hamilton and a firm called Washington, Pittman, and McKeever to analyze the organization of CTA and come up with some recommendations. Once I accepted this challenge, I had a lot of input into the Booz-Allen report. We fashioned the company, the organization, into something much more like a private company.
I was at a dinner just the other night with Bob Crandall from American Airlines, and he started out by saying that the one nice thing about American is that the way it's set up he's totally unnecessary. He's the chairman of the board. And I have said the same thing here. In the past maintenance bus had a head, operations bus had a head, administrative bus had a head--and the same was duplicated in rail, and the same thing was duplicated in materials management. It was a horrible organization. We had an executive director and 13 direct reports, and then you had a line underneath 'em and off to the side another 10 direct reports. When I walked into this job there were 25 people reporting to me. That's impossible. When the guy at the top changed, the organization went into paralysis because there was really no teamwork or cooperation, except in the field. We've changed that. The way it's now organized we've combined bus, rail, and--inside bus and rail--maintenance and operations. And now I've got only three people reporting to me, plus the MIS [Management Information Systems] department and the planning department. So that's a total of five. Mr. Elonzo Hill's in charge of all service, and Ms. Nuria Fernandez is in charge of all capital and construction. Tom Stevens is in charge of all administration. So the fact of the matter is this job is much less important from the operating point of view than it ever was before. That's what I think Crandall was trying to say. He's a manager, he's the guy who gets financing; you make the major decisions; you work with the board. And that's what we're about here.
So as far as I'm concerned, the way it is now organized this job could become vacant in the morning and nobody in the Merchandise Mart would feel or notice any difference. And I think that's appropriate. It has to be that way. Because you can't have this other means of operating. For example, when you had a budget crisis two years ago, a year ago, the executive director would call in these managers and say, "You've got to whack your departments by 10 percent." Well that's absurd! The pain shouldn't be spread like butter over a pan. If you're dealing with cuts, you have to be very selective. And you have to be very creative in taking other approaches before you get down to the cuts in service. And that's what we're about. We're trying to come up with, how do you take these limited amounts of operating resources and set priorities in place? I'm trying to raise the discussion level and raise the whole level of transit issues for Chicago.
Look at downtown. Our zoning in Chicago is such that we've got about 85,000 parking spaces. We've 900,000 workers. With that few parking spaces it is physically impossible to move 900,000 people to and from work without public transit. Metra moves in about 125,000 on its trains. So between cabs, walkers, and the CTA, you've got to get the other 775,000. And we move the bulk of them.
This is not LA. LA's got seven million parking spaces; even without a public-transit system at least they'd have a chance of operating. The suburbs without a public-transit system have a chance of operating; their office centers are set up with significant parking. So there's a different need priority that becomes immediately understandable. Part of what I think we're going to be about in the next short period of time is working with the business groups in Chicago to make them understand, as I now understand, the significance of the public-transit issue. I think it is a strong business issue, and I don't think the business community has done very much about it.
We're also reaching out to neighborhood organizations. We're not waiting for them to come knocking on our door. We're trying to organize around neighborhood concerns--we're not just a downtown system, although in many cases because of the geometry of Chicago the downtown happens to be the center of a half wheel. The expressway system, everything moves through downtown, so we have to be very conservative how downtown is served.
We set up a noon shuttle in the Loop. We wanted to see if we could move such a program through our planners in a fairly short period of time. In the past it would take nine months or ten months to change service or come up with new routes. I think we did this one in three weeks, from the idea to implementation. We got the routes established, the signs up--it was done rather quickly. We're going to be expanding the shuttle's hours for Christmas--from 11 in the morning until the stores close.
We intend to take that [concept] forward and try to move from transit plazas--whether it's Jeff Park or 95th Street--to shopping zones. When Midway comes on line, I can see a shuttle that goes from the last stop to Ford City. We want to start encouraging shuttles as a means of getting the transit plazas, because long term, I think, we're gonna have to encourage those kinds of movements.
Toronto has finally figured that out--transit plazas are very significant. In fact, in their transit plazas the bus actually pulls inside the plaza; you get off the bus and directly onto a train without going through ticket agents or anything else. We may have to start something like that, that encourages more use of the el system and therefore makes both more efficient--the el and the bus.
On average--on average--it costs CTA $2.47 for an el rider. The best line we have is $1.17 per ride, and the worst line we have is $10.02 per ride. That's owed to its strong maintenance need and the amount of service we have per rider. Obviously the less riders you have, the higher the cost. When we look at the total CTA--that's bus and rail--that $2.47 el number drops to about $1.45. So to create a ride on CTA is $1.45. And that's after we cut these 340 jobs I talked about, that's after you have $12 million out of other costs.
We think we're being fairly efficient at $1.45. If you look at us compared to what they call the "peer group"--this is something that Uncle Sam established, where CTA is compared to other transit companies in the United States. They've set up our peer group so that you have bus and el; it would be unfair to compare CTA to Kansas City, where they just have bus. Within our peer group, which is eight cities--San Francisco, Boston, Philadelphia, Washington, Atlanta, LA, Chicago, and New York--the average cost to give a ride is $1.64. Ours is $1.45. The highest of that peer group is $2.05; the lowest is $1.31. So we're right near the bottom. We have a very large system, and a very old system on the el side.
I don't think that's bad. I think that's very good. I don't think we're being inefficient. The problem is, we're required by state law to collect 50 percent of our costs from the fare box. Call it 72 cents. People want to know why we were uncomfortable with last's year's pass--here's the reason. The pass price was $60. The average use of the pass was about 132 times, best we could tell--our equipment is not real sophisticated. Call that nominally 50 cents a ride. Pass user's paying me 50 cents; I need 72 cents just to match up with state law. A very heavy user is down to 15, 20 cents. So we said we've got to do two things. We don't want to hurt the legitimate user of CTA--that's not what we're talking about. We want to knock off any fraud. We'll minimize it with a quarter. So that's one reason for the quarter.
But the second reason for the quarter is to eliminate what I'm going to call the indiscriminate use of CTA. Let's say you take a trip on, say, the 151 bus at rush hour, getting on at Wabash. You will see people come off the el, come down to that bus with their pass, and ride it from Wabash to State Street. We were getting a lot of registries of fares on our bus system because every time a passenger gets on we register a fare. Our equipment never let us know whether that was a one-block trip or a 50-block trip; one registry is one registry. Being good consumers, people won't pay a quarter to go a block--I can guarantee you that!
BM: But don't people buy passes largely as a convenience, so that they don't have to fish for tokens or change? Now they have to make sure they have a constant supply of quarters.
RB: Right. Now you get to the other issue: convenience, the reason you buy a pass. But there's got to be a fair relationship between the price of the pass, the sophistication of our equipment, and the value of the bargain. If we're providing real value at $1.45 per ride, then we have to somehow be fairly compensated. Look at other cities. In San Francisco when you get on their system, you pass a [debit] card through this sophisticated piece of equipment, and it registers on your card where you got on. When you get off the system you register that card again. It now knows where you got off--and it will deduct the value of that trip.
People have talked about debit cards, or credit cards, and other things that they think that we should have. In San Francisco you might pay $3.50 to go across the bay. It depends on the time of day, it depends on a lot of other things.
BM: I was going to ask if you'd thought about pricing rides according to the time of day.
RB: Our equipment can count. It can't do anything more than that.
BM: But if you've got someone who's riding on a half-price fare, isn't that pretty obvious?
RB: But again you're distorting it with the pass. We've researched so many different marketplaces. We'd thought about a rush-hour pass, for example, and then at other times either pay a reduced fare or something else. But that got very confusing because you've got all kinds of shift workers in Chicago--it's not just people that come to work during rush hour. A lot of people come to work at midday, a lot of people come to work at night. If you're fair to one group, you're going to be unfair to another group. We try to balance those needs.
I assure you that we will come out next year with something that will be an unlimited pass--and it'll probably have the option of this 25-cent surcharge. A lot of people have realized that it's not a bad thing. What has occurred since we put on the surcharge is interesting. Our monthly pass sales--albeit that a couple of months ago they were $60 with unlimited rides, now they're $45 plus the quarter--have stayed virtually flat. In August we sold 52,800 passes; in September we sold 52,500 passes. That is not a measurable difference. The change, however, is in the weekly [passes]. Weekly has gone from 82,000 in August to about 40,000 in September. [As part of its deficit-slashing plan, the CTA has proposed raising the price of the basic pass to $82 and the price of a pack of tokens to $12.50, as well as discontinuing the weekly pass.]
We're asking our patrons for some forbearance in putting up with this lousy quarter, so that we can get some honest counts and understanding about where we need service and what times of day we really need service, and begin to try to take this service number that we have to deal with next year and make it as efficient as we can. It seems to me that's the charge of this company: Live within your means and move toward more efficient service.
We are required by Illinois law to produce 50 percent of our income through the fare box, as I said. Our peer-group average is 40 percent. The best of that is Boston, where they have to pay 24 cents of their operating dollar. The worst is us. If I had a 10 percent differential in my budget, it would mean $80 million less that I would have to collect at the fare box.
The second part of our problem is that the other part of the budget is not guaranteed by the state or the feds. Of the remainder of our budget, 5 percent comes from the federal government; about 11 percent comes from the state's general funds; and 28 percent comes from local sales tax. If you add that up it comes to less than 95 percent. We try to collect 52 percent at the fare box, but we're still 5 percent short.
Then we have another culprit: lawsuits. We are sued an average of 300 times a month, although we have a very safe system. As a consequence of that our lawyers and actuaries and those guys have been requesting that we fund into a damage reserve, because we're self-insured. It's something like $40 million a year. That's 5 percent of our budget. So on top of my legitimate operating expenses, we have another 5 percent that we have to fund out of cash flow. That means I've got 105 percent of my costs and only 95 percent of my income. Well at that point something's got to give.
The argument around here has been that we just have to find more funding. We can't raise fares--you raise fares, you lose riders. We also have to create a greater balance against the automobile. What do I mean by that? You go to Hong Kong, for example. During rush hour it costs you $52 to cross a bridge in your car--$52. In New York it's $2.50 to cross a bridge, and it's about 40 bucks to park. We have not balanced those two issues very effectively. It is still quite inexpensive to bring a car into downtown Chicago or into other business zones in the city.
You look at Europe--everybody says Europe's got wonderful transportation systems. They do. However, in Europe they charge three dollars and 60 cents tax per gallon of gasoline. Something between 10 and 15 percent of that tax goes directly to transit. We have to have a different view of transit, specifically in Illinois, if we are going to get to the solution of fairly pricing the amount of service that's necessary. We're just going to have to find a way to pay for it.
We have to convince not only our riders that we've honestly presented our problems, but also the legislators that there is no fat, that we're down to the issues of the cost of service on the street--and we now need help. That's really what we're lining up. We've done our housecleaning, we've done our internal look at costs, and I don't think we can do a heck of a lot more.
BM: You've taken care of the home office, but what about out on the street? Is there any particular reason why, for example, you need a conductor on most el trains? Couldn't you set it up so that the driver could operate the doors on both sides?
RB: When Southwest comes on, the new transit line, we will do that. We have a union-work-rule issue that if you have a past practice it requires an arduous negotiation with the union to get rid of it. There also is an issue in federal law, in the Transportation Act, paragraph 13-C, which has been embodied in Illinois law, and it's a very difficult provision. It effectively guarantees no layoffs, and it has been difficult for other cities that have tried to create efficiencies.
BM: So you have federally mandated featherbedding.
RB: Well, I wouldn't call it featherbedding, but I guess some people might. On the Southwest line things have been efficiently designed--the stations have but a single agent, while the larger stations will have an automated fare system. We're trying to bring it into the 21st century, and then follow that with a major purchase of equipment. But because we're so large, the numbers are really staggering for everything we do. To bring new fare equipment into the el system is about a $50 million expense, and if we try to make the buses more efficient we would have another $100 million. So $150 million for new equipment. I would probably argue that there are better ways to spend that money, unless I can create significant savings. I think we can on the rail system. I'm not convinced we can on the bus system.
BM: Do you have any kind of patronage problem?
RB: No. As I said, we're down 340 at the home office, but I have not received any complaints or calls from aldermen or legislators or anybody else saying, "That was my guy" or "That was my gal." No. And besides that, I wouldn't listen to it. We have well-established procedures for hiring new union people. We have a lot of turnover here, especially now--about 5 or 6 percent a year.
BM: Can you make any cutbacks through attrition?
RB: Yes. But it takes a certain amount of time to produce a bus route. A bus garage has 18 routes. Probably 8 percent have to be 24 hours; that requires three drivers and sometimes four. There are just certain fixed things you can't do much about.
BM: Like pay scales.
RB: Pay scales are all negotiated. We've got a negotiation coming up with the union in 1993, and we have a lot of issues that we're going to be getting into. But, yes, the next charge is to make the field as efficient as possible. And to the extent there's fraud--and there is still fraud, I guarantee you; at the agent level there are still little scams that people play--we're going after it. That's one of the reasons we want better fare equipment on the rail lines, because we want to avoid fraud. "Shrinkage," I think, is the nice word, but I call it stealing.
BM: I used to take the Ravenswood downtown every day, and there was one agent who would always hit the "transfer" button when I gave him my fare. I reported him three times but nothing ever happened--no one seemed very interested.
RB: The reports now are being taken care of pretty quickly. We are getting pretty tough. And if it's an honest mistake, that's one thing. But if we find a person who is stealing, I guarantee you, we'll can 'em. We've done it already.
BM: There were complaints that whistle-blowers were canned when you had cutbacks. Is there any truth to that?
RB: I think there might have been in the past. We now have somebody that's called an ombudsman, and people can go to him with complaints. If they want anonymity, they can have it. They can report anything. I encourage that. And if somebody raises an issue with me, I will listen. I don't deal in retribution. If there's an ill, I want to correct it. Here, I'll give you a whistle. [He gets up and goes to a closet, rummages in a box, and returns with two white whistles stamped "CTA WHISTLE BLOWER."
When I heard about the whistle-blow- ers--it was about the second day after I got here--I ordered 1,500 whistles with what you see on them. And I paid for them, not the CTA!
BM: Do you ride the CTA every day?
RB: Not every day.
BM: How often do you ride it?
RB: Any day I come to work I take the CTA. Yesterday I think I was on it three times. And I'll take it around, because I want to see what's going on the best I can.
BM: You're not one of those infamous CTA executives in limousines.
RB: When I walked in the door there were 192 company automobiles. There are now 7. There were lots of drivers--I think we have one, and that's for emergencies. You can have a car now if you have 24-hour-call responsibilities, and I think that's 100 percent appropriate. If it were my own company I would do the same thing. More of our people are using the system. Everybody here knows my feeling on it. I use it. I figure they should use it.
BM: I've been talking to people who depend on the CTA to see what things are important to them. And they all said, "Ask him why I can't buy tokens at the el stop anymore! I have to go to the currency exchange, and it's way out of my way, and they ration them."
RB: First of all, the practice of selling them at the agents was only in effect 15 months before we stopped it. Here's the problem on the el system: In order to have enough tokens to sell that person needs 500 tokens on the counter. If as they sell those tokens they take the cash and put it into their secure safe, that safe can't be opened by that agent. Now when they run out of tokens to sell, they have to call to get more tokens. But the agents have to pay $500 for those tokens out of their receipts. So in order for you to keep 500 tokens on the counter you then have to keep the cash on the counter or in the cash box--not in the safe. It didn't take the robbers too long to figure this one out. In that 15-month period, our robberies at the agent level went up 400 percent. We had two deaths; four robbers got killed. And I said, "That's enough."
Until we can come up with a way to debit the agents and keep this all secure, we can't sell 'em. The other thing is, they steal tokens. The tokens have a street value. On the street they're worth about 50 cents. So a guy can walk in, steal $500 worth of tokens, and that's a $250 profit.
I agree with your friends, but by the same token it was too risky, and the police were critical of us from the day we started it. Our agents were sitting ducks. And since we stopped it? Guess what? Robberies are down, because 25 bucks is all you can get from an agent now. Nobody's going to try to rob an agent for $25, especially at gunpoint. It just ain't worth it.
[Selling tokens] is a problem, and solving it is going to be difficult. I think we may go more toward dispensers that will allow you to put in maybe $6, or whatever it takes to get a half roll of tokens. But everything takes a long time around here. We've got 142 stations and an average of three turnstiles per station. It's just a massive amount of work to get anything changed.
BM: Work and expense. So much still seems so 19th-century in terms of the things you can do and the things you can't do.
RB: It's also hard to go to the public and say I want to spend $100 million in capital--not operating expenses, but capital. And capital is hard to get. And I'm going to spend it on fare equipment instead of--what? Better cars, better buses?
That's why I want to see a very strong analysis on a benefit basis. And historically there was no analysis. Everybody sort of looked at the federal government's grant money as being free money. You get it, you don't pay debt service on it, so therefore it's free. And I say, wrong. Wrong. As taxpayers we pay rent on that money in Washington. It's one of the reasons the deficit is up.
Analysis is an arduous task, but it's starting to pay dividends. It'll help us with priorities and where to spend money and why. Whereas in the past it was all "we need" or "we want." And I don't think that's good enough. You have to justify how you spend money. It'd be no different than you putting an addition on your house. It'll cost you something--either equity or debt--and you've got to decide if it's worth it. And if it's not worth it you shouldn't do it.
BM: Tell me something about the new downtown circulator.
RB: We're not really involved in the circulator. That was new-start money from the federal government. We frankly couldn't have tapped into that pot of money.
I like it a lot. I like it for CTA, and I'll tell you why. We are going to be forced under the Clean Air Act by 1996 to dramatically reduce our emissions, especially in the downtown zone, where there's a noncompliance issue right now. Today, as we sit here, we've got 132 bus routes, and 39 of those routes go through downtown. Well, if you've ever been on State Street at rush hour you know that they line up tail to nose.
BM: I've never seen the charm of outdoor cafes on State Street, of sipping espresso in the fumes.
RB: Oh, you're absolutely right. It's terrible. So I really encourage the circulator because I want our buses then to short-circuit their routes into downtown and to hook up with the circulator at mini-transit plazas, so that we can feed people into it.
BM: What's its planned route?
RB: They're still arguing over that. I think they've established the east-west route from connecting the stations at Clinton and Canal, and then they're going up to Kinzie, through Cityfront Center and Grand Avenue over to Navy Pier. Then the question is whether they'll use Michigan Avenue or State Street as a north-south route, and then how do you get to McCormick Place? Or does the circulator provide that? I think those issues are still to be determined.
BM: Will the CTA run it?
RB: No, it's really not a part of us. It's being set up as a separate system. Someday will it be? Who knows? I would guess that when you start to look at priorities for future funding, sooner or later it may start to look like it's a part of us, or a part of the RTA.
BM: Tell me about the Lake Street el.
RB: [He sighs heavily.] Everybody singles out the Lake Street el. I don't think that's fair.
BM: It's a hot issue.
RB: Yeah, I know it's hot, but we have a responsibility to all parts of the city. I certainly understand the issues of Lake Street, I really do. I used to climb on that structure when I was a kid. My dad worked for the city, so every time he got a raise we moved further west. But where I really grew up was around Grand and Sacramento. I used to throw snowballs at trains and stuff.
Ridership is down--some 40 percent. That's a serious problem. There are about 6.5 million riders a year. It's a very costly system because of its age. Its design--from Laramie downtown, that 50-block stretch--requires us to have special narrow buses to run on Lake Street, because of the way the columns are set. The bus has to be eight inches narrower than our other buses, otherwise two buses can't pass. That's very costly. That's a problem.
The best I can tell, over the last ten years Lake Street has gotten about 6 percent of the capital for the el system, and it represents 5.8 percent of the system. So I don't think there has been any obvious disinvestment. I don't think it's just Lake Street, and I tried to explain that to the coalition. The Douglas line needs a lot of work, the south main line needs a lot of work, the Ravenswood line needs a lot of work, the upper section that goes out to O'Hare needs a lot of work, the north main line needs a lot of work. We need a lot of work as a system, and it's not just Lake Street.
To me it's a balancing act, and I'm trying to get some means of prioritizing investments. I look at our total investment need on the el system--just the el system--and we're looking at about $3 billion to bring this up to 1990 standards. But when I look at the total funding that I've got in capital for the next five years--and that includes everything--I come up with about $1.2 billion. I'm under a court order to have buses on a one-mile grid system, minimally, around the city.
BM: A court order?
RB: We were sued, and part of the decree was that we agreed to create a one-mile grid for buses. So CTA started an aggressive purchase of buses.
We've got some 900 lift-equipped buses. I have stated a preference of going forward and trying to get away from the lifts, of going to a ramp system or low-floor buses. Our second test is going on now; we've got a couple low buses in town, and we're seeing if we can really operate in Chicago and what problems might exist. It's a friendlier way for creating accessibility.
BM: Wouldn't it be cheaper just to have special vans?
RB: Well, we've got that too. But that's not what the disabled community's argued for in the Americans With Disabilities Act. They want to be part of the mainline system. So we've got to continue bus purchases.
We've also got two bus barns that are falling apart--maybe three. We've got a shop that's in need of rebuilding, where we service our buses. So we've got bus needs as well. And when I look at the bus needs over the next five years that's in the $700-800 million range.
Well, if I've got a $3 billion need for my rail system and an $800 million need for my bus system, it sounds like $3.8 billion. And I've only got a billion two. So where are you going to prioritize those dollars?
This major new federal funding act that came through--ISTEA, the Intermodal Surface Transportation Efficiency Act--put out a lot of money. The state of Illinois got some $900 million a year over a six-year period, but of that portion that could have gone to transit the state of Illinois decided to transfer nothing. New Jersey transferred 50 percent, plus the road fund gave up $60 million on top of the 50 percent. So we've got to come up with a better way to prioritize between auto and transit. To me that's the major issue going forward: How do we get adequate funding, both on the operating side and on the capital side?
BM: Getting back to the Lake Street el, I've got some papers here that make it look as though the CTA has spent a lot more on the Ravenswood, for instance, than was allocated and less on the Lake Street. Ravenswood duplicates the service on the north-south line for quite a bit of its length, and its ridership is so low that they close it down on Sundays. So why--
RB: Actually they close it on Sundays because the shop at the other end, at the Kimball yards, can then focus on different kinds of work--and that's important.
Actually the ridership on the Ravenswood has gone up yearly. The Ravenswood, for its length, provides about 30,000, 32,000 riders a week. Lake Street is the same length--they're both about nine miles--and it's 22,000. And of those 22,000, about 10,000 start at Harlem Avenue or in Oak Park. So that from a city-needs point of view the Lake Street is providing about 12,000 riders a week--city people.
BM: There is widespread speculation in Oak Park that the fact that it's primarily serving white suburbanites and very poor black people has a lot to do with the reasons you're considering shutting it down.
RB: [He mutters something under his breath.] The Lake Street line has an operating deficit of $24 million a year. Operating deficit. If I'm correct that there are 12,000 city users, that means that other parts of CTA are subsidizing each rider $2,000 a year. Do you think that's fair? Do you think we should subsidize suburban riders?
BM: Don't suburbanites subsidize the CTA through the sales tax and state subsidies? How much money do you get from the suburbs?
RB: Umm . . . the state money is a tough one to call. We get one cent of the 8.75 cent sales tax in Chicago and point-three cents of Cook County's sales tax, times 85 percent. Why? Because the RTA takes 15 percent for its operating and discretionary capital. So call it a quarter of a cent of the sales tax in Cook County. I'd have to have one of the analysts figure out the state figure. But yes, there's definitely a subsidy from suburbanites.
BM: The point was made at the Ridgeland Commons meeting that the Lake Street el is a lifeline for the Austin and Oak Park communities.
RB: Yes, but Mary Nelson [head of Bethel New Life, a west-side activist organization] argued that there are two industrial parks that employed 30,000 people, and another gentleman argued that he had industrial parks that employed 16,000 people. Where's the usage of our system? If we're transporting these workers, where's the use? Where does this lifeline statement come out of reality?
BM: The "lifeline" referred to Oak Park and Austin, not to the industrial parks.
RB: I appreciate that. But part of their big argument was that they had these employment zones--and yet we don't seem to get any usage out of those employment zones. I think it's incumbent on all of us to spread our resources as best we can. If we're subsidizing users to the tune of $2,000 per person per year, that can't be. I can't, at CTA, in good conscience continue to absorb that kind of loss. So, for example, I said, "Would you all be willing to give us a contract? You're asking me to keep something open that's a money loser. Big-time.' The average cost of a ride on the Lake Street el is $6.40. I'll have a discussion with the coalition. Fine. But I wanna be able to get a fair price for what I'm delivering. You want to give me a contract for 30,000 riders a week?
BM: What are you going to replace it with?
RB: I don't know.
BM: How are those people going to get downtown?
RB: I don't know. Look--
BM: You were talking about the Clean Air Act--you don't want to add buses, and the el is clean. What about the idea of moving the el to the Chicago & North Western right-of-way?
RB: There's a price tag on that of $130 million to get the right-of-way. That's absurd. No one's going to pay them that, neither Metra nor us. So at what point will reality prevail?
BM: The C & NW tells me they haven't been approached about the right-of-way. They also say that $130 million was the tentative price tag placed on their entire passenger rail system a couple of years ago--not just the right-of-way. Finally they say they'd be interested in cooperating with the CTA and Metra if they were approached.
RB: Well, that's interesting. It's not what we were told. If there's a different story we'll certainly find it out. I'm not going to try to negotiate in the newspaper, but it may be that your phone call will be what gets things moving.
Assuming that's not the answer, can we find some way to cooperate with Metra? Could they increase the length of their trains? Could they make intermediate stops and take the burden off us? I can't give you answers. I just don't have answers. I'm trying to get an understanding not only of the needs of Lake Street, but of all systems. And I'm very sensitive to that as an important issue.
I would take issue with the statement that it's a lifeline. I think that's an overstatement. I think it's an important line, but I don't think it's a lifeline--if a lifeline isn't there you die. And nobody's going to die if the Lake Street el isn't there.
BM: But the community--
RB: Isn't going to die. It's an important, important service, and I agree with that a thousand percent. But the community is not going to die without it.
BM: Would there have been a public hearing in Oak Park if that memo hadn't been leaked?
RB: First of all, it wasn't a hearing. It was a meeting. I had met with [Oak Park village president] John Philbin and six other suburban mayors from that zone sometime in May. It was a long session. And we agreed that I should know more before we came back for another session. In the meantime I met with [state senator] Judy Topinka and other people in that zone, trying to comprehend what the heck was going on--because I'm not prone to knee jerk. I may come up with some crazy ideas once in a while, but I don't knee jerk. I like to know what I'm walking into before I walk in.
So we had scheduled the fall for a follow-up session in May. [Oak Park village trustee Marc] Blesoff's getting hold of this memo--which I frankly think was presented way out of context, and I told him so at this meeting--to imply that we were "shielding something" or trying to "hide this memo from the public" is just nonsense. It was a draft memo--it related to one line, 6 miles out of 255 miles. And we're trying to understand what you need for 255 miles, and not just 6. This was a logical follow-up to that meeting in May, and we would have had it anyway.
BM: What are the chances of saving the Lake Street el?
RB: My answer is still the same as it was when I met with the coalition: I cannot say that line will be closed, and I can't say that it will be open. We need a massive capital infusion for the entire rail line, not just the Lake Street el. And we don't want to make any promises we can't keep.
BM: Is there anything that we haven't covered that you'd like to mention?
RB: Nah, I think we've covered it all. I just want to emphasize that we're just much more responsive than we used to be, and we really have much more responsiveness at the operator level--the conductors, the drivers, the motormen. I don't get a warm, fuzzy feeling when I get letters of complaints about the attitudes of our drivers. I don't like it one bit. We're still working on it, but the word is getting down.
It's not enough to say, "Well, we're better than New York." OK, we're better than the rest of our peer group. I don't really care that we're better than the other members of our peer group. That's like saying there are ten guys in the hundred-yard dash, and the fastest one comes in at one minute. So you won, but it's still not a very good time. I want to wring out every bit of service we can.
What we're about now is that this is a service company. It's an attitudinal change, from "Here we are, use us if you want to" to "We want you to use us." It's getting that change through to the 12,000 field people and the 1,000 people who support them that's the challenge. Can we do it? Yeah, I think so.
Art accompanying story in printed newspaper (not available in this archive): photos/Lloyd DeGrane.