SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 3268 words

COMMITTEE: HOUSE TRANSPORTATION AND INFRASTRUCTURE

SUBCOMMITTEE: HIGHWAY AND TRANSIT

HEADLINE: HIGHWAY PROGRAM OVERSIGHT

TESTIMONY-BY: FRANK KRUESI, PRESIDENT

AFFILIATION: CHICAGO TRANSIT AUTHORITY

BODY:
Written Testimony of Frank Kruesi President Chicago Transit Authority

Before the Subcommittee on Highways and Transit of the House

Committee on Transportation and Infrastructure

The Honorable Thomas E. Petri, Chairman

Thursday, November 1, 2001

Good Morning. Chairman Petri and members of the Subcommittee, my name is Frank Kruesi. I am the President of the Chicago Transit Authority (CTA). I am honored to be before this panel today to speak about the Transportation Equity Act for the 21St Century (TEA-21) and its reauthorization.

I would also like to acknowledge and thank the members of the Illinois Congressional delegation who serve on this panel and who have been tremendous advocates for CTA. Notably, I would like to thank Rep. William Lipinski, the dean of the Illinois Congressional delegation, Rep. Jerry Costello, as well as Rep. Timothy Johnson and Rep. Mark Kirk. As this authorizing Committee debated the guiding principles and minimum funding guarantees that became the foundation for TEA-21, I was serving as the Assistant Secretary for Transportation Policy at the Department of Transportation. When I left that post to lead the nation's second largest public transit agency, I worked to fashion a capital spending plan that was consistent with the guiding principles of TEA-21 as envisioned by this Committee.

Thanks to the foresight and wisdom of this Committee, TEA-21 established a level playing field between transit and highways. This groundbreaking principle made it possible for this Committee to authorize a transportation-spending plan that incorporated flexibility and reliability; two central themes in TEA-21 that I have been able in my capacity as President of the CTA to build a strong five-year capital program around.

TEA-21 funding allowed CTA, and many other transit properties around the country, flexibility in utilizing funding resources. This flexibility encouraged the State of Illinois to act on its own spending plan for public transit, a part of Illinois Governor George Ryan's Illinois FIRST Initiative. The $12 billion package set aside $1 billion for public transit. This state funding allowed the CTA to leverage its federal capital funds under TEA- 21 and enabled the agency to realize 25% more federal funding than we received under the Intermodal Surface Transportation Efficiency Act.

The federal funding minimum guarantees under TEA-21 also enables the CTA to plan for future spending with greater accuracy than in the past. Planning enables policymakers to establish priorities and to deliver on promises to the public in a timely fashion.It provides reliability.

It was this very reliability that enabled the CTA to employ innovative financing strategies to accelerate one of our New Start programs, the Douglas Branch, in advance of forthcoming federal funds. This creative debt financing was only available to the CTA because of the flexibility and reliability inherent in the TEA21 enabling legislation set forth by this Committee.

The flexible nature of TEA-21 funding can not be overstated. It encourages state investment. It encourages innovative financing strategies from transit properties and it puts transit on an equal playing field with other transportation spending programs in the federal budget. This formula for and practice of distribution of funds has given rise to one of the largest investments in public transit. I would like to spend some time talking about our own successes with TEA-21 at the CTA.

The Chicago Transit Authority (CTA) is the nation's second largest public transit agency. On an average weekday, the CTA provides 1.5 million rides per day. We operate 139 bus routes and seven rail lines, many of which operate on a 24hour schedule. We have a fleet of 1,916 buses and 1,190 rail cars that serves 39 communities, including, the city of Chicago and 38 suburban communities in Cook County.About 60% of the state's workforce population live within the northeastern Illinois region. CTA provides 79% of all public transit trips within this six-county region.

Ridership on the CTA system has increased 7.5% since a low point in 1997. This trend continues despite the slowing national economy and is even more significant when you consider that for 15 years prior to 1997, CTA ridership steadily eroded. People throughout the Chicago metropolitan area are increasingly turning to public transit solutions to deal with urban sprawl and neighborhood revitalization. This past year, the City of Schaumburg and the City of Elgin -- both communities in the far northwest corridor of the metro region -formally voiced their support for an extension of the O'Hare Branch of the Blue Line to serve their communities. Chicago Mayor Richard M. Daley has also included the extension in his plan to relieve air and ground congestion in and around O'Hare International Airport.

The CTA, along with our sister agencies, Metra and Pace and the RTA, have worked interdependently -- at the federal and state level -- to achieve the common goal of improving transit in the northeastern Illinois region. We have worked to build and maintain a coalition of business, civic and political leaders who support improvements to public transit infrastructure. In this spirit of cooperation, we have worked over the past several years to seek funding that will bolster the transit services we provide. The cooperation among the RTA and the three service boards gave rise to strong bi-partisan support for public transit

This support exists because we all realize that public transit is and must be a part of any regional approach to balancing growth, maintaining mobility for all of the residents of northeastern Illinois and helping our local economy and become more competitive. Internally, the CTA has worked to better serve the public and be more competitive with other modes of transportation by redirecting our operating efforts to a customer-friendly focus. This change is evidenced in our pledge to deliver on-time, clean, safe and friendly service.

Thanks to the bi-partisan support and leadership of United States House of Representatives Speaker J. Dennis Hastert, Illinois Governor George Ryan, Chicago Mayor Richard M. Daley and the entire Illinois Congressional delegation, northeastern Illinois managed to successfully compete for and win authorization of five federal New Start projects. The CTA has two of these projects and Metra has three.

In the 2001 Appropriations bill, through the leadership of Speaker Hastert, a funding pool was identified that is distinct, separate and apart from the funding for which every other New Start project is competing. The pool is funded from surplus funds, which were de-obligated from TEA-21 and re-obligated for CTA, Metra, Hiawatha and Dulles New Start projects. By designating a distinct funding stream called Contingent Contract Authority, none of these New Start ventures are in competition with other New Start projects under consideration in the appropriation process.

CTA's two New Start projects; the Cermak (Douglas) Blue Line Rehabilitation Project and the Brown Line Ravenswood Expansion Project are symbolic of the change occurring at the CTA as we work to rebuild our aging infrastructure, upgrade facilities, increase accessibility and replace aging rolling stock. Together these two lines provide in excess of 100,000 rides each workday. We know that with the TEA-21 investment they will attract even more customers and provide a stronger alternative to driving.

On September 10th we broke ground on the Cermak (Douglas) Blue Line Rehabilitation project. At a cost of $482 million, this is largest capital project ever embarked upon at the CTA. This New Start venture will provide more than five miles of newer, smoother, track, along with renewed structure and eight rehabilitated rail stations over the next four years.

The Douglas Branch of the Blue Line - as it is known locally- dates back to 1896. Age-related deterioration has resulted in high maintenance and operating costs on the line, as well as declining service. The line carries approximately 27,000 riders on an average weekday and serves one of the most economically distressed areas in Chicago. Low-income households make up 30 percent of the total number of households within walking distance from the train line. The line also serves the University of Illinois at Chicago (25,000 students), the Illinois Medical Complex, comprised of four research and teaching hospitals, and is a direct link to the western suburbs and the central business district.

A newly constructed Douglas Branch will promote mobility and give thousands of area residents quicker access to the regional network of rapid transit, buses and commuter trains. This ability to be mobile means people will be able to make better choices in employment, housing, health care, education, and many other critical issues that directly impact daily life. Additionally, the CTA is working with a consortium of local service providers to link local residents who have employable skills with construction contractors working ton the Blue Line. We are committed to making sure that the residents in and around the communities served by the Douglas Branch share in the economic benefits afforded by a project of this magnitude.

In FY2001, the CTA received $14.86 million for the project, leaving $300.32 million needed to fulfill the FFGA. The CTA is seeking $35 million in New Start funds for the Douglas Branch project in 2002.

The second New Start venture is a proposal to expand capacity on the CTA Brown Line. Like our other New Start project, this proposal enjoys the full bipartisan support of Speaker Hastert, and the entire Illinois Congressional delegation. The Brown Line is a 9.3-mile rail line serving the downtown Loop area as well as several communities on the north side of the City of Chicago. Most of the line is elevated and was built between 1900 and 1907.

The Brown Line carries approximately 104,000 riders on an average weekday. Ridership along the line has dramatically increased over the last decade in large part due to renewed interest in revitalizing residential communities and business districts along the line. Ridership on the Brown Line increased by 24% between 1997 and 2000. As a result of the increasing ridership, during peak hour periods we are transporting crush-loads of customers on every car of the Brown Line. Crush- loads throughout peak travel times means we are forced to leave commuters standing on platforms to wait, sometimes for two or three trains to pass them by before they are physically able to board a train to continue their trip. Expanding platforms and upgrading stations will enable the CTA to run two additional rail cars on every run of the Brown Line, potentially carrying a additional 180 people per run.

Only three stations along the Brown Line are ADA accessible today. The New Start proposal seeks to expand the size of platforms and stations to accommodate growing ridership and to make every station accessible to all customers. The total capital cost for this proposal is $475 million, with $245.5 million coming from Section 5309 New Start funds. The CTA is seeking $2 million in New Start funds for the Brown Line project in 2002.

Once completed, CTA expects to accommodate an additional 12,100 new riders on the Brown Line.

Both of these New Start projects hold great promise for the CTA and for public transit in the Chicago metropolitan region. Neither project would be possible without the federal funding provided for through TEA-21. In fact, the CTA would not be in the position it is today without TEA-21 funding. Today, with the commitment of federal funding and strong state and local funding partnerships, we are able to project 68% of the capital monies needed over the next five years to bring our system into a state of good repair. This is in stark contrast to our ability to identify available capital funding in 1998. At that time, we could only identify 19% of the $4 billion needed to bring our system into a state of good repair.

Much like many other transit systems in older, more established metropolitan areas of the United States, the CTA is faced with the challenge of maintaining a state of good repair on an aging infrastructure. However, New Starts programmatic funding, categorical funding and capital investment grant programs have enabled the CTA to dramatically reverse the decades' trend of disinvestment in our infrastructure.

Prior to the passage of TEA-21 in 1998, the CTA was taking stock of its longterm capital needs and reasserting its position in the marketplace with our customers. The system had just survived a budget deficit, realigned its core service to better meet the demands of customers and finally, turned the corner on eroding ridership. Between the mid-1980's and 1996, the CTA had lost nearly 40% of its ridership, resulting in a continuing spiral cause-effect scenario of ridership losses followed by declining revenues followed by reduced service levels.

The loss of ridership was related to several factors: population shifts; changes in employment centers; urban sprawl beyond the inner ring suburbs serviced by the CTA; inconsistent service delivery brought on by a lack of maintenance on rolling stock; declining public subsidies for operating public transit; and lastly a continued decline in the amount of financial resources available to the CTA to improve, upgrade and reinvest in the system's aging infrastructure.

Deteriorating facilities, poorly maintained vehicles, corroding elevated structures and a lack of a general ability to plan for future investment in an infrastructure that was well over a 100 years old in some instances, also contributed to the CTA's continued loss of ridership.

The loss of ridership was really an expression of a loss of faith by the public in the CTA's ability to mitigate the region's traffic congestion and its mission transporting people where they needed to be moved.

In an effort to turn around the CTA system, new management sought to streamline internal operations to reduce operating costs and improve productivity, create new programs to attract riders and increase customer satisfaction, and restructure service delivery on 103 bus routes and 3 rail lines.

The end result was a new CTA. One that was leaner, but fighting to win back the confidence on the riding public. One that was customer-focused, with a mission: connecting people, jobs and communities.

As ridership increases, revenues increase, leading to greater financial stability for the CTA. With increased funding levels, comes the ability to better maintain trains and buses. The better our equipment is maintained the more vehicles we have in service to meet growing demand.

Shortly after the enactment of TEA-21, the CTA publicly announced its State of Good Repair Campaign. Simply stated, the CTA sought to rebuild the CTA's infrastructure to a "state of good repair' and then maintain it there.

The CTA quantified its capital needs. At the dawn of this campaign in 1999, the CTA concluded it would cost in excess of $4 billion to bring the CTA system into a state of good repair.

In 1998, 29% of our bus fleet was beyond its useful life of 12 years old. With the help of federal funding, the CTA has been able to reduce that portion of our bus fleet to 17% this year. We have developed and implemented an aggressive bus replacement schedule. Perhaps more impressive to our customers, we went in the course of one year, from a bus fleet with barely half of its buses air conditioned to a fleet that is now 80% air conditioned. When the temperatures reach 90 and 100 degrees in July and August, an air-conditioned bus makes a difference to someone choosing between public transit and driving.

Today, 80% of our bus fleet is fully accessible and as a result, 111 routes within the CTA bus system are now accessible. By the end of 2003, every bus in the CTA fleet will be air conditioned and fully accessible to every customer.

With the help of TEA-21, the CTA is also rebuilding our rail car fleet. In 2000 and 2001 we renovated 470 series 2600 rail cars and added air conditioning to 142 of our series 2200 rail cars - the oldest cars in our rail fleet. We have also invested in upgrading rail stations to modernize the stations to accommodate growing ridership, to make them accessible and to increase customer comfort and promote safety. In 2001 alone we completed major capital improvements at seven rail stations. This work follows a $69 million renovation recently completed at 21 rail stations to upgrade their facilities to make them fully accessible.

The federal investment in public transit is critical to the on- going success of the CTA. The many customers who use our system each day are responding to that investment by using the system more and more. Today, 68% of our riders are choice riders, people who have access to cars or other forms of transportation but choose the CTA as the preferred method of travel. This is a significant change from just four years ago when less than half of our customers were considered choice riders.

More and more people are making the choice to use transit because of the commitment this Committee made to rebuild public transit nationally.That is all good news for our system and for your investment. More people taking transit, by choice, which means less congestion on our roadways, better air quality, improved productivity at work and a generally improved quality of life for everyone.

Despite all of the rebuilding we have done, and the new equipment we have purchased, we still have significant capital improvement projects to complete. Over the next five years, we have identified $4.2 billion worth of projects necessary to achieve and maintain a state of good repair. Because of your commitment, we have approximately $2.9 billion toward that goal, but $1.3 billion is still needed to meet our goal.

Our long-term capital program will need to address how the physical environment of the CTA may have to be changed as a result of the tragic events of September 11 th. The safety of our customers and employees is and will remain our top priority. We are re-evaluating our security needs in light of recent events. Although it is too early to project what impact new security needs may have on our capital program, it is fair to assume that some significant level of investment will be needed by the CTA - and other transit properties nation-wide to better provide for the safety of its customers and employees.

The need to continuously reinvest in our infrastructure and rolling stock is a paramount issue for future success of public transit, not just in the Chicago metropolitan region, but nation- wide. Re-authorization of TEA-21 at or above its current funding levels is essential to ensure that every American will have the freedom to be mobile, to have complete accessibility, and to strengthen and preserve our local economies.

Again I thank this Committee for its vision and leadership in setting forth principles that treat traditionally competing modes of transportation as equals and fashioning a program that gives every transit agency the ability to plan for its future in a responsible manner.

Mr. Chairman, thank you for the opportunity to address this body this morning. I would be happy to answer any questions from you or other members of the Committee.



LOAD-DATE: November 5, 2001