·1· · · · · · · · CHICAGO TRANSIT AUTHORITY ·2· · · · · · · · · · ·MEETING of the ·3· · · · · · · · · CHICAGO TRANSIT BOARD ·4· · · · · COMMITTEE ON FINANCE, AUDIT AND BUDGET ·5· · · · · · · · · · · · ·Held on ·6· · · · · · · · · · · May 13, 2020 ·7· · · · · · · · · · · · · · At ·8· · · · · · · · · ·9:39 o'clock a.m. ·9· · · · · · · · ·Via Webex Teleconference 10 11 12 13 14· · · · · · · ·STENOGRAPHIC REPORT OF PROCEEDINGS had 15· ·in the above-entitled cause via teleconference, 16· ·Director Alejandro Silva presiding. 17 18 19 20 21 22 23· ·Reported by:· Tracy Jones, CSR, RPR, CLR 24· ·License No.:· 084-004553 ·1· ·ATTENDEES: ·2· · · · · PRESIDENT:· · ·DORVAL CARTER ·3· · · · · CHAIRMAN:· · · MR. TERRY PETERSON ·4· · · · · SECRETARY:· · ·MR. GREG LONGHINI ·5· · · · · GEN. COUNSEL:· MS. KAREN SEIMETZ ·6 ·7· ·BOARD MEMBERS: ·8· · · · · DIRECTOR ALEJANDRO SILVA ·9· · · · · DIRECTOR KEVIN IRVINE 10· · · · · DIRECTOR REV. JOHNNY L. MILLER 11· · · · · DIRECTOR ARABEL ALVA ROSALES 12· · · · · DIRECTOR REV. DR. L. BERNARD JAKES 13· · · · · DIRECTOR JUDGE GLORIA CHEVERE 14 15 16 17 18 19 20 21 22 23 24 ·1· · · ·MR. LONGHINI:· All right.· We are now going to ·2· ·be in the next, the Finance, Audit and Budget ·3· ·Committee Meeting. ·4· · · · · · Good morning.· My name is Gregory ·5· ·Longhini, Secretary to the Chicago Transit Board. ·6· ·I would like to note that in accordance with ·7· ·Executive Orders 2020-7 -- 2020-7, 2020-10, and ·8· ·2020-37 issued by Governor J. B. Pritzker and ·9· ·further guidance issued by the Illinois Attorney 10· ·General's office, this meeting will be conducted 11· ·via teleconference through Webex.· The audio for 12· ·this meeting is streamed live at the CTA's website 13· ·along with closed captioning.· Public comment 14· ·speakers have been invited to join the 15· ·teleconference and have been provided with a 16· ·telephone number by our Board -- by our Board 17· ·Secretary to do so. 18· · · · · · Chairman Silva, we are ready to begin the 19· ·meeting. 20· · · ·CTTEE. CHAIR SILVA:· Good morning.· I would 21· ·like to call to order the May 13, 2020, meeting of 22· ·the Committee on Finance, Audit and Budget. 23· · · · · · Will the Secretary call the roll. 24· · · ·MR. LONGHINI:· Yes, sir. ·1· · · · · · Judge Chevere? ·2· · · ·DIRECTOR J. CHEVERE:· Here. ·3· · · ·MR. LONGHINI:· Reverend Jakes? ·4· · · ·DIRECTOR REV. JAKES:· Here. ·5· · · ·MR. LONGHINI:· Reverend Miller? ·6· · · ·DIRECTOR REV. MILLER:· Here. ·7· · · ·MR. LONGHINI:· Director Irvine? ·8· · · ·DIRECTOR IRVINE:· Here. ·9· · · ·MR. LONGHINI:· Chairman Silva? 10· · · ·CTTEE. CHAIR SILVA:· Yes. 11· · · ·MR. LONGHINI:· Director Alva Rosales? 12· · · ·DIRECTOR ALVA ROSALES:· Here. 13· · · ·MR. LONGHINI:· Director Peterson? 14· · · ·CHAIRMAN PETERSON:· Here. 15· · · ·MR. LONGHINI:· We have a quorum of the 16· ·Committee with all seven members present, sir. 17· ·And let the record also show that President Dorval 18· ·Carter and General Counsel Karen Seimetz are in 19· ·attendance.· So, Chairman Silva, we can move on to 20· ·Agenda Item No. 2. 21· · · ·CTTEE. CHAIR SILVA:· Our first order of 22· ·business is the approval of the Committee minutes 23· ·of April 8, 2020.· Will the Secretary call the 24· ·roll. ·1· · · ·MR. LONGHINI:· Yes. ·2· · · · · · Judge Chevere? ·3· · · ·DIRECTOR J. CHEVERE:· Yes. ·4· · · ·MR. LONGHINI:· Reverend Jakes? ·5· · · ·DIRECTOR REV. JAKES:· Here. ·6· · · ·MR. LONGHINI:· Reverend Miller? ·7· · · ·DIRECTOR REV. MILLER:· Yes. ·8· · · ·MR. LONGHINI:· Director Irvine? ·9· · · ·DIRECTOR IRVINE:· Yes. 10· · · ·MR. LONGHINI:· Chairman Silva? 11· · · ·CTTEE. CHAIR SILVA:· Yes. 12· · · ·MR. LONGHINI:· Director Alva Rosales? 13· · · ·DIRECTOR ALVA ROSALES:· Here. 14· · · ·MR. LONGHINI:· Director Peterson? 15· · · ·CHAIRMAN PETERSON:· Here. 16· · · ·MR. LONGHINI:· The minutes are approved with 17· ·seven yes votes, sir.· And we can move on to 18· ·Agenda Item No. 3. 19· · · · · · · · · ·(Whereupon, a discussion was had 20· · · · · · · · · · off the record.) 21· · · ·MR. LONGHINI:· I'm sorry.· Director Silva, 22· ·please proceed on to Agenda Item No. 3. 23· · · ·CTTEE. CHAIR SILVA:· Our next order of 24· ·business is the finance report. ·1· · · · · · Jeremy. ·2· · · ·MR. FINE:· Thank you. ·3· · · · · · Good morning.· This is Jeremy Fine, your ·4· ·CFO, and I wanted to give a rundown of March ·5· ·results. ·6· · · · · · The stay at home order went into effect ·7· ·on March 21st.· So ridership and related revenues ·8· ·began to feel the full effect after that date. ·9· ·With regard to March revenues, we see farebox was 10· ·down to budget by almost $13 million.· Our passes 11· ·were down to budget by almost $7 million.· And 12· ·again, you know, that drop was seen, you know, as 13· ·we went into the stay at home order. 14· · · · · · Reduced fare subsidy was at budget.· From 15· ·a cash flow perspective, we did receive a portion 16· ·of the payment, $12 million, from the State within 17· ·the last week or so. 18· · · · · · Non farebox is down about $100,000, but 19· ·again, just as other ridership related revenues 20· ·are being impacted, we'll keep an eye on this as 21· ·we move forward as the stay at home order goes -- 22· ·continues into effect into April and May. 23· · · · · · So total revenue was down approximately 24· ·19.5 million.· Free rides were down about ·1· ·1.2 million or about $25 percent, while ridership ·2· ·in general was down closer to 40 percent. ·3· · · · · · Turning the page to the year-to-date ·4· ·revenues, we see the vectors relatively the same ·5· ·across categories, but we see the year-to-date ·6· ·total revenues were down about $20 million or ·7· ·22 point -- $20.2 million to budget.· Again, ·8· ·19.5 of that was due to March alone. ·9· · · · · · With regard to expenses for the month of 10· ·March, we see labor slightly negative to budget by 11· ·about $480,000 due to COVID related costs.· We see 12· ·materials negative to budget by about $830,000 13· ·primarily due to COVID related costs but also due 14· ·to timing of material purchases. 15· · · · · · Fuel was positive to budget by about half 16· ·a million dollars due to lower spot pricing for 17· ·the portion that we do not pre purchase as well as 18· ·consumption, because you don't idle as much in 19· ·heavy traffic.· We also saw a positive benefit on 20· ·power by about half a million dollars, and we see 21· ·injuries and damages and security services 22· ·essentially flat to budget, and other expenses 23· ·positive to budget by about $440,000. 24· · · · · · So overall total for March for expenses, ·1· ·we were positive to budget by about $250,000.· But ·2· ·again, due to the drag of the revenues, we see the ·3· ·net against revenues down a little over ·4· ·$19 million. ·5· · · · · · On a year-to-date expense basis, we see ·6· ·the vectors relatively the same across the ·7· ·categories, and we see total expenses down ·8· ·approximately $740,000.· And again, net against ·9· ·revenues were down approximately $21 million 10· ·year-to-date. 11· · · · · · Public funding for 2020, we see that down 12· ·about 9.5 million.· Sales tax, which we received 13· ·the first payment for the calendar year 2020, we 14· ·received the January payment, which was down 15· ·slightly to budget by about 334,000.· That's, you 16· ·know, again for January time period.· Sales tax 17· ·for March, which we'll again see the first effects 18· ·of the COVID outbreak and the stay at home orders, 19· ·will be received in June.· So it will be later in 20· ·the summer when we start seeing the full effect on 21· ·the sales tax receipts from the pandemic. 22· · · · · · PTF through April, so January through 23· ·April, is down about 1.6 million.· RET for January 24· ·through March is down about 6.6 million.· We do ·1· ·continue to see a little bit of benefit of real ·2· ·estate closings that were in the pipeline prior to ·3· ·the pandemic.· But again, we'll keep an eye on how ·4· ·that continues to manifest as the -- as the stay ·5· ·at home order remains in effect. ·6· · · · · · PTF rev was down about 1 million, so ·7· ·again about 9.5 million down on public funding on ·8· ·a year-to-date basis. ·9· · · · · · With regard to the cash position, you 10· ·know, again, we benefited from the fact that the 11· ·reduced fare reimbursement from the State was 12· ·received, we usually receive a portion of it 13· ·earlier around this time, and then there's a 14· ·true-up payment, you know, in the fall.· So that 15· ·additional cash infusion, along with an advance of 16· ·PTF funds from the RTA, allows us to cover our 17· ·costs in the near future here as we continue to 18· ·wait for the federal funding to come online.· We 19· ·are in the final stages to receive approval to 20· ·start receiving those fundings, and again, we 21· ·expect that hopefully within the next week or so 22· ·as the federal government continues to work 23· ·through that process. 24· · · · · · So again, that is a substantial amount of ·1· ·funding in the form of the CARES Act.· But again, ·2· ·that is replacing lost revenue, as we highlighted ·3· ·here, for the month of March.· That will obviously ·4· ·continue into April and May and beyond.· And so it ·5· ·is very critical for us to continue to receive the ·6· ·public funding subsidies that we receive from the ·7· ·State and other local governmental institutions as ·8· ·we move forward because, again, that federal ·9· ·funding is a nice lifeline and a bridge but, 10· ·again, it's just replacing lost revenues whether 11· ·they're being, you know, farebox revenues or other 12· ·expenses that we're covering with regard to COVID. 13· ·But again, it's critical for us to continue to 14· ·receive those State funding strips. 15· · · · · · With regard to the commodities on the 16· ·final page of the report, we were able to lock in 17· ·50 percent of the fuel needed in 2022 at $1.88, so 18· ·it was actually a little bit better than what we 19· ·had discussed at the prior Board meeting.· So we 20· ·were able to lock in $1.88, which was very 21· ·favorable to the historically low rates that we 22· ·had previously locked in at.· So that will provide 23· ·us almost $3 million in savings vis-à-vis the 2021 24· ·budget, or almost $10 million of savings versus