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CTA finance report: ridership up, bond sale priced below forecast; staff flags unpaid‑ride counting and fuel exposure
Summary
CTA staff reported ridership increases and a favorable sales‑tax bond sale priced at 4.89%; staff also explained a new methodology that counts unpaid/free rides more accurately and said 75% of fuel was hedged at $2.66/gal leaving limited exposure on 25% of volume.
At the March 11 meeting, CTA finance staff reviewed February financial results and answered board questions about ridership, bond financing, fares accounting and fuel exposure.
Tom McCr summarized that fare and pass revenue came in slightly better than budget because ridership in January exceeded expectations, producing roughly $400,000 positive to budget for the month. Non‑fare revenue was roughly on budget; operating expenses were about $2.8 million negative to budget largely because of winter weather effects on materials and higher security staffing costs. Staff said overall there was nothing in the report that was an immediate concern.
On public funding, staff said final 2025 sales‑tax collections were strong, leaving 2025 about $133 million favorable to budget; 2026 year‑to‑date collections were closer to budget and expected to catch up.
On debt financing, staff reported the board‑authorized sales‑tax bond sale priced on Feb. 5 and was about seven‑times oversubscribed. The new‑money all‑in interest rate was 4.89%, lower than the 5–5.25% modeled; staff said the transaction shortened the capitalized‑interest carry and saved about $5 million on a tender refunding. Project funds closed Feb. 18 and are now available.
Directors questioned how CTA now counts unpaid and free rides. Staff, joined by Molly Poppy (planning), said a revised methodology gives route‑level granularity and counts more unpaid/free rides that previously were not captured. Poppy said roughly "a quarter to 20%" of the counted unpaid/free rides may represent unpaid rides by people who should have paid, while the majority are statutory free or reduced categories (seniors, disabled, students). CTA does not currently have a low‑income reduced fare program; staff said they are exploring options and coordinating with regional partners who are piloting reduced‑fare access programs.
On commodities, staff said about 75% of 2026 fuel volume is fixed at roughly $2.66 per gallon; the remaining 25% is exposed at a spot price near $3.70 per gallon, which could produce an estimated $1–2 million negative variance on a roughly $40 million fuel budget if elevated prices persist.
Board members had no further procedural questions on the finance report. The Finance Committee placed two ordinances (property acquisition and an intergovernmental agreement with City Colleges for commercial‑learner permit training) and multiple contracts on the omnibus for board approval; the board later approved the omnibus.
