Rail Outlook 2015: Metra's Don Orseno

Don Orseno, Executive Director/Chief Executive Officer, Metra

Aside from the federal funding question, what will be an important issue for your transit agency in 2015 and how do you plan to address it? What's your biggest concern in meeting passengers' expectations in 2015?

Identifying steady and reliable funding sources to maintain our aging equipment and other capital needs is a critical issue for our agency. The lack of consistent local and federal funding forces us to be creative, think outside the box and look for innovative ways to meet immediate and critical capital needs; maintain our rolling stock; ensure our tracks are in good condition; and, on the human capital side, retain and recruit good talent to run the business. Our challenge is finding viable funding options to maintain and replenish our rolling stock and maintain a state of good repair throughout our system. This fall, we proposed a $2.4 billion modernization 10-year plan that will allow us to replace and rehab aging rail cars and locomotives, dating back to the Eisenhower era.

Second, meeting the federal deadline to install and implement positive train control (PTC) is a major issue for Metra and all commuter railroads. It is an important safety system that will save lives. However, it is complicated and costly to install. In Metra's case, we estimate that we will spend $400 million on the installation of PTC and millions of dollars annually to maintain it.

This federally mandated capital expense places an additional burden on transit systems that are already facing inadequate capital funding streams. Metra and its Board of Directors are addressing the capital costs of PTC and inadequate funding for the replacement of its aging fleet by issuing bonds or similar financing for the first time in its history.

Our priority is to maintain a safe and reliable service for the 300,000 passenger trips we provide daily in one of America's busiest urban markets. While our customers have come to expect us to operate on time 95 percent of the time, that goal will continue to be a major challenge until we are able to update our rolling stock to where it needs to be.

How will congressional action/inaction on the funding front impact your agency in 2015?

It costs to run a business. A commuter-rail service is a business and the costs to maintain our rail cars and locomotives are great. Metra's capital needs far exceed its capital resources. Our federal funding falls way short of the actual need. Metra needs $9.9 billion over the next decade to achieve and maintain a state of good repair on its system, and it can roughly expect about a fourth of that amount from traditional state and federal sources. Roughly 50 percent of Metra's assets are estimated to be in marginal or worn condition.

The inability of Congress to move forward with a new transportation authorization bill has put all of us in a holding pattern that can't be sustained. The result is that Metra is increasing fares in 2015, and part of that increase will be to support the first financing program in our agency's history. Our plan is to use the financing as the foundation of a $2.4 billion modernization program to install PTC, and begin a program to replace rail cars and locomotives. However, Metra's borrowing authority can't completely cover our needs to renew our capital assets. It's imperative that Congress move forward with a transportation funding plan that helps not just my agency, but all transit properties moving forward.