Recently I was riding on the Metra, the commuter rail system that connects the suburbs to downtown Chicago. I picked up “On the Bi-Level”, the flyer that Metra management makes available to riders and was browsing through it when I came upon this innocuous sounding statement:
I certainly will not argue that Metra is without challenges. Perhaps the biggest challenge, and one that will impact many of our plans, is our needs for more capital money to invest in our system. We estimate Metra will need about $9.7 billion over the next decade to achieve a state of good repair on the system, and we expect to receive about a fourth of that amount from traditional federal and state sources. Riders need to understand that fares help us cover our operating costs but have never been a significant source for capital expenses – we must rely on Washington and Springfield for that funding.
Within the utility community there is a concept called “generation equity”. This implies that you need to spread the burden of replacement and renovation across the life cycle of users, rather than hitting them all on the first riders, such as in the case of a train line. On the other hand, you cannot just ignore ongoing capital costs and let the system run into ruin by paying the minimal upkeep costs every year.
In this article, Metra lays bare the facts that:
- Fare costs (riders) only “help” them cover their operating costs
- Funding from other sources (and debt) helps them cover the rest of their operating costs
- Then they rely on largess from the state or Federal governments for about a fourth of their capital costs
- And who knows where they are going to get the rest of the funds for capital replacement
In fact, it would be impossible for Metra to re-build the train lines that they have today in the current regulatory and legal environment. Permits, lawyers, litigation, politically favored contractors, and a welter of archaic tools and practices would make the costs impossibly high and the deadlines incredibly long. By “capital” costs, they are generally talking about replacing bridges, stations and sections of existing track rather than “true” expansion, although they do occasionally add some incremental lines or stations.
Cross posted at LITGM