CTA budget for 2011

[BusHunter]

Here's a link from the Chicago Tribune, about the 2011 budget. I find it amazing that even though all that service was cut last february, they still need to borrow from capital to balance the budget. Also they still flirt with more service cuts in the future, which sound like a real possibility for the 2012 budget. They mention the development of a train tracker which to me would seem a bit unnecessary if they could develop the countdown to the next train at the rail stations. Also there spending money developing the new farecard system partially ran by an outside agency. Although they state they will control fares, it makes me think back to when the mayor leased away the parking meters. Should be an interesting year!!

[Busjack]

Here's a link from the Chicago Tribune, about the 2011 budget. I find it amazing that even though all that service was cut last february, they still need to borrow from capital to balance the budget. Also they still flirt with more service cuts in the future, which sound like a real possibility for the 2012 budget. They mention the development of a train tracker which to me would seem a bit unnecessary if they could develop the countdown to the next train at the rail stations. Also there spending money developing the new farecard system partially ran by an outside agency. Although they state they will control fares, it makes me think back to when the mayor leased away the parking meters....

I don't think that the "train tracker" or "countdown" are different things.

Also, the open card fare system seems to be the opposite of leasing the parking meters, in that CTA keeps all its fares; it is just out of the "printing transit currency" business. It would be more like the parking meter deal if the private agency agreed to a fixed payment in return for being able to set and keep all the fares. CTA's and Pace's advertising deals are sort of like that latter, except that I think that at least Pace reported that its advertising contractor was in default of the minimum payment.

It would be interesting to see whether CTA does come out ahead in the open farecard system, since my reading of that press release indicates that the bank would have to replace the Cubic equipment (based on references to updating the 1997 equipment).

One can also note that while there does seem to be money in the current budget for bus replacements, the narrative only refers to replacing the Novas once they start reaching the FTA service life in 2012.

Of course, I always recommend downloading the primary source (in this case the 2011 Budget Recommendations) instead of relying on a third-hand one.

[Kevin]

I find it amazing that even though all that service was cut last february, they still need to borrow from capital to balance the budget. Also they still flirt with more service cuts in the future, which sound like a real possibility for the 2012 budget.

Among other rising expenses, union employees get another 3.5% wage increase in 2011.

They mention the development of a train tracker which to me would seem a bit unnecessary if they could develop the countdown to the next train at the rail stations.

As Busjack mentions, "Train Tracker" generally refers to the countdown signage at rail stations. I'm not aware of any immediate plans to make train arrival data available via the web or text messaging like Bus Tracker.

Also there spending money developing the new farecard system partially ran by an outside agency. Although they state they will control fares, it makes me think back to when the mayor leased away the parking meters. Should be an interesting year!!

The new open fare system would save CTA money, as they would no longer be responsible for purchasing and maintaining fare collection equipment as well as other expenses related to fare collection. Unlike the parking meter deal, CTA would continue to set the fares and a private bank would be responsible for collection. This new system could also increase customer satisfaction, particularly for less frequent riders. A stop at a vending machine to purchase fare media would no longer be required, as customers could just pay directly with a credit card (or someday perhaps a cell phone) at the turnstyle.

[BusHunter]

Among other rising expenses, union employees get another 3.5% wage increase in 2011.

As Busjack mentions, "Train Tracker" generally refers to the countdown signage at rail stations. I'm not aware of any immediate plans to make train arrival data available via the web or text messaging like Bus Tracker.

The new open fare system would save CTA money, as they would no longer be responsible for purchasing and maintaining fare collection equipment as well as other expenses related to fare collection. Unlike the parking meter deal, CTA would continue to set the fares and a private bank would be responsible for collection. This new system could also increase customer satisfaction, particularly for less frequent riders. A stop at a vending machine to purchase fare media would no longer be required, as customers could just pay directly with a credit card (or someday perhaps a cell phone) at the turnstyle.

The trib should have worded that a little different about the train tracker. Train tracker refers to knowing the physical presence of a train virtually like bus tracker versus knowing where it is as far as time is concerned. On the banking front I still wonder if there would be any hidden fees. What would the bank get out of running such a service? Many banks make there money on overdraft fees and basic hidden fees on a customer. To use a smart card with no rules from a bank to me would seem unrealistic? There's going to be a lot of questions on that topic. So what happens if a customer has no bank account, cellphone or credit card how would they ride? Is there going to be no way to purchase fares on the spot?

[Busjack]

... On the banking front I still wonder if there would be any hidden fees. What would the bank get out of running such a service? Many banks make there money on overdraft fees and basic hidden fees on a customer. To use a smart card with no rules from a bank to me would seem unrealistic? There's going to be a lot of questions on that topic. So what happens if a customer has no bank account, cellphone or credit card how would they ride? Is there going to be no way to purchase fares on the spot?

As to the last question, they said you could purchase a "gift card" issued by a bank, similar to the cards sold at shopping centers, and, I'm sure, not much different from the cards sold at Jewel and Dominick's. Of course, CTA says it will still take cash fares, even though that's now only 6% of bus fares.

One can't tell on what terms the bank with the winning bid will offer its services to CTA, and hence most of your other questions are unanswerable until that time. For instance, when LaSalle Bank took over collecting taxes, I thought it was living on the float, but when it was turned over to Chase, it was revealed that Chase would charge the county treasurer less than what LaSalle was doing.

[BusHunter]

As to the last question, they said you could purchase a "gift card" issued by a bank, similar to the cards sold at shopping centers, and, I'm sure, not much different from the cards sold at Jewel and Dominick's. Of course, CTA says it will still take cash fares, even though that's now only 6% of bus fares.

One can't tell on what terms the bank with the winning bid will offer its services to CTA, and hence most of your other questions are unanswerable until that time. For instance, when LaSalle Bank took over collecting taxes, I thought it was living on the float, but when it was turned over to Chase, it was revealed that Chase would charge the county treasurer less than what LaSalle was doing.

So if I understand this right there will be fare collection machines at rail stations but they will be owned and ran by banks. Any cash would be handled by CTA. Any cash payment would most probably be higher than a standard fare. Overall it looks like another way to eliminate jobs unfortunately.

[Kevin]

Overall it looks like another way to eliminate jobs unfortunately.

Not sure how you draw that conclusion.

[Busjack]

So if I understand this right there will be fare collection machines at rail stations but they will be owned and ran by banks. Any cash would be handled by CTA. Any cash payment would most probably be higher than a standard fare. Overall it looks like another way to eliminate jobs unfortunately.

Not sure how you draw that conclusion.

It might be relevant who collects the money from the current Cubic machines compared to who would collect it from any bank card vending machine. Apparently, according to the CTA scenario, someone would still have to suck the money out of bus fareboxes, although I am not so convinced that cash bus fares would remain viable after the switch.

Also, it might justify reducing personnel in the CTA Accounting Department if instead of having to reconcile receipts, CTA just gets a statement from the bank of fares collected and deposited into the CTA's account (again compare the scenario of Chase Bank handling county tax collections, contrasted to the checks sitting around the office of whoever was Pappas's predecessor).

[jacksone44]

As to the last question, they said you could purchase a "gift card" issued by a bank, similar to the cards sold at shopping centers, and, I'm sure, not much different from the cards sold at Jewel and Dominick's. Of course, CTA says it will still take cash fares, even though that's now only 6% of bus fares.

One can't tell on what terms the bank with the winning bid will offer its services to CTA, and hence most of your other questions are unanswerable until that time. For instance, when LaSalle Bank took over collecting taxes, I thought it was living on the float, but when it was turned over to Chase, it was revealed that Chase would charge the county treasurer less than what LaSalle was doing.

Being a former banker, I could shed one scenario of how this could work:

Given the size and scope of the investment that would need to be made in new fare infrastructure, I could only imagine a large bank bidding on this (BofA, Citi, Chase, Wells, etc.). Citi has a little expierience with this as they are working with the NY MTA. Mastercard also is working with PATH, NJ Transit, and NY MTA as well (www.ridenewyorknewjersey.com). I doubt BofA will bid, even though that's the CTA's current bank.

Currently when a customer buys a good with a credit/debit card, there is an interchange fee charged to the business (a % of the transaction amount) that the bank and the card issuer splits. This fee would unquestionably be charged to the CTA as a way for the bank of make money (and to pay for the cost of the fare infrastructure over time). There isnt going to be a single bank that will bid on this if there isnt going be an exchange fee, which means either:

1. The CTA will eat the cost (500M/yr + rides taken times the exchange fee will be a large cost to eat).

2. Fares will rise to cover the exchange fee.

With the role out of this, there needs to be a hard look at distance based pricing for rides. The current system is beyond broken.

[Busjack]

...

With the role out of this, there needs to be a hard look at distance based pricing for rides. The current system is beyond broken.

Thanks for the explanation of the banking side. However, with regard to distance based pricing, the problems inherent in the current CTA/Pace system would still have to be faced, and Metra having distance based fares seems to be the reason why has been resistant to go to a universal fare card system.

I suppose that one could make people flash the card when exiting the bus. I have seen that done on one system, where that was primarily done with suburban buses only having a front door, and interestingly enough, they converted to a "no transfer system" similar to the CTA's, and abolished zone fares. However, I can't foresee a 3-King Drive bus loading up starting at 95th, and then the driver making sure that everyone scanned their cards when exiting on Michigan Ave. It is somewhat easy to see a driver kicking off someone who didn't pay when they boarded, but if someone wanted to escape after leaving, there wouldn't be an enforcement mechanism, unless the system assumed that everyone was riding between 134th and Evanston unless they scanned out. Then you would really hear screaming.

But, I am sure that if you have a solution, the three transit boards would like to hear it.

[BusHunter]

Not sure how you draw that conclusion.

Well it's simple, if you eliminate the physical cash and replace it with virtual payment, you can eliminate all the physical cash collecting jobs and storage jobs. Why would you need a vault at a garage if there is no cash? Also you could eliminate any fees associated with picking up the money and sending it to the bank. Although CTA says they will continue to accept cash, we don't yet know how much of a addition you will pay on your fare. If it's ridiculous it will be hardly used unless the customer has no other choice. I believe in the long run, cash fares will be eliminated. Then that would in turn eliminate all those jobs, but in the meantime a few jobs could be eliminated when this comes out at CTA with the cash alternative. It's similar to when they got those machines at the rail stations to accept money and spit out transit cards. You keep the money out of the employees hand (less theft) and centralize the majority of it to make collection easier. (cut a few jobs) Don't forget if the banks will control the collecting of the money with their own machines then they will be hiring their own employees to collect it. It sounds to me like CTA is getting out of the fare collection business. But how do they keep themselves from being ripped off by the banks?

[Busjack]

But how do they keep themselves from being ripped off by the banks?

Well, that's always the question when dealing with the banks. One would hope that the rfp includes adequate auditing provisions.

For that matter, passengers complaining that their cards didn't work or that they were overcharged would have to complain to the bank, rather than CTA.

[BusHunter]

Well, that's always the question when dealing with the banks. One would hope that the rfp includes adequate auditing provisions.

For that matter, passengers complaining that their cards didn't work or that they were overcharged would have to complain to the bank, rather than CTA.

A few less jobs at the complaint desk.

[jacksone44]

A few less jobs at the complaint desk.

Given that banks typically have far greater technology (and financial) resources than transit authorities, I would imagine the amount of complaints would go down regarding that...