Pace Takes Legal Action Against RTA To Provide Adequate Suburban Transportation Service

    ARLINGTON HEIGHTS, Ill.--Jan. 11, 2002--In response to the Regional Transportation Authority's rejection of Pace's 2002 proposed budget, the suburban transportation service has filed a lawsuit against the RTA contending that the RTA has set budget marks and farebox recovery rates which make it impossible for Pace to adequately serve its suburban constituents and may again require the suburban transit agency to make detrimental cutbacks to suburban transportation.
    After spending months trying to work with the RTA, the Pace Board of Directors found no other recourse than to file a suit against the RTA when the RTA Board rejected Pace's pleas and disproportionately set Pace's farebox recovery rate (percentage of operating costs covered by riders' fares) at 40% and continues to block Pace's attempts to use available federal funding through "capital cost of contracting (ccc)."
    Pace alleges the RTA's actions have particular negative impact on service provided to the collar counties, much of which is provided by private service contractors at lower recovery rates. For the FY 2000 budget, the RTA increased Pace's recovery rate by an unprecedented 10%, and virtually eliminated Pace's ability to provide new services in the collar counties. None of the collar counties can achieve a 40% recovery rate due to the low-density market.
    Facing the third year of budget cutbacks, route eliminations and possible fare increases, Pace had identified a mutually beneficial solution to the 2002 budget by pursuing a federal capital cost of contracting grant with the Federal Transit Administration. This federal funding source would come from Pace's resources, and have no financial impact on the RTA or other service boards. The ccc program allows Pace to receive federal dollars for the capital expenses incurred by private contractors to run Pace service. The RTA would not allow this to be part of the 2002 budget they passed in December, and continues to block attempts by Pace to acquire these available federal dollars.
    Pace charges that the RTA's budget decisions and actions unfairly prevent the agency from adequately serving the residents and employees of the northeastern Illinois suburban region. "We're here to provide public transportation service to the suburbs, and we recognize the need to grow and develop service in the collar counties and other vital markets," said Aaron Shepley, Pace board member representing McHenry County. "At this point, we can't even get people from point A to point B because the RTA has tied our hands behind our back."
    During the past two years, Pace has eliminated service, reduced service on routes, implemented two fare increases within 16 months of each other, and made other administrative cutbacks in order to meet the unrealistic mandates of the RTA, Pace claims. In addition, Pace has tremendous demands for services in the suburbs to meet the needs of the elderly and persons with disabilities. These services are expensive and have a low recovery rate. Because of the RTA's budgetary restrictions, Pace must rely on suburban communities to subsidize these services. This amounts to a double taxation, as these communities pay sales taxes to the RTA and have to pay again for community-based services.
    For a suburban transit agency without a central business district, Pace at a 36% farebox recovery rate was performing better than most urban cities such as Seattle, Detroit and Tampa. The extreme irony of the situation is that Pace's recovery rate has an insignificant impact on the regional requirement to achieve a 50% recovery rate. Even if Pace had recovered none of its operating costs from revenue in FY 2001, the regional rate would still be over 50%.
    Capital cost of contracting is a federally funded program that supports service contracts to private providers. Pace is a national leader in privatization, with more than 20% of its services provided by private contractors. Pace alleges The RTA's actions to not allow ccc in Pace's budget undermines privatization, and the federal government's encouragement of it. Pace intended to not only meet the RTA's unreasonable budget requirements with the ccc, but also hoped to expand service with the additional operating funding that the program would have provided.
    Not only did the RTA reject Pace's capital cost of contracting solution, but they awarded a $70,000 sole source consulting contract to identify ways Pace could further cut expenses. Although the Pace Board agreed to and cooperated with the study, it believes that any savings identified in the study should go to maintaining and expanding suburban transit service. "This study should not be looked at as a way to further shrink the suburban transit system, but rather as a way to meet the overwhelming and increasing need for suburban mobility," Shepley said.
    "We have been trying to resolve these issues with the RTA for years," said Pace Chairman John Case. "This is a regrettable, but necessary, action. The RTA Board has been grossly misinformed by the RTA administration as to the impact of their budgetary decisions for the past three years, and we feel we have no other option than to seek legal action in order to stop their damage to the suburban system and adequately serve the suburban people."
    Pace officials are optimistic that an independent review of the RTA's actions will support the position that the RTA has exceeded its authority, under the RTA Act, to the detriment of suburban mobility. "It is unfortunate that it has come to this," Case stated, "but we can no longer allow the RTA to prevent Pace from handling its responsibilities to serve this region."