SB2572 97TH GENERAL ASSEMBLY

LRB097 13862 KMW 58429 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB2572

Introduced 1/11/2012, by Sen. Susan Garrett

SYNOPSIS AS INTRODUCED:

See Index

Amends the Metropolitan Transit Authority Act. Provides that if the Board of the Regional Transportation Authority determines that the budget, financial plan, and five-year capital program do not match the Regional Transportation Authority's five-year capital program prioritization list, then the Board of the Metropolitan Transit Authority shall make the changes necessary to meet those requirements. Makes other changes. Amends the Regional Transportation Authority Act. Requires that the Service Boards submit certain reports quarterly (now, annually). Sets forth guidelines concerning a Service Board's strategic plan. Provides that the Regional Transportation Authority may withhold capital project funding or any discretionary funding if a Service Board's strategic plan is excessively inconsistent with the Authority's strategic plan. Provides that the Regional Transportation Authority shall prioritize capital projects based on certain criteria, and that projects listed on the aggregated and prioritized list are the only projects eligible for capital funding, except in the case of an emergency declared by the Governor or the Board. Provides that if the Commuter Rail Board's and the Suburban Bus Board's budget and financial plan do not match the Regional Transportation Authority's five-year capital program prioritization list, then the Commuter Rail Board or Suburban Bus Board, as applicable, shall make the changes necessary to meet those requirements. Sets forth requirements concerning Service Boards' financial reports and budget proposals. Provides that if the Regional Transportation Authority finds that a Service Board violated certain requirements, then the Authority shall withhold specified funding. Sets forth procedures that a Service Board must take to reestablish the funding. Makes other changes.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning local government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Metropolitan Transit Authority Act is amended by changing Section 34 as follows:

(70 ILCS 3605/34) (from Ch. 111 2/3, par. 334)

Sec. 34. Budget and Program. The Authority, subject to the powers of the Regional Transportation Authority in Section 4.11 of the Regional Transportation Authority Act, shall control the finances of the Authority. It shall by ordinance appropriate money to perform the Authority's purposes and provide for payment of debts and expenses of the Authority. Each year the Authority shall prepare and publish a comprehensive annual budget and five-year capital program document, and a financial plan for the 2 years thereafter describing the state of the Authority and presenting for the forthcoming fiscal year and the two following years the Authority's plans for such operations and capital expenditures as it intends to undertake and the means by which it intends to finance them. The proposed budget, financial plan, and five-year capital program shall be based on the Regional Transportation Authority's estimate of funds to be made available to the Authority by or through the Regional Transportation Authority and shall conform in all respects to the requirements established by the Regional Transportation Authority. The proposed budget, financial plan, and five-year capital program shall contain a statement of the funds estimated to be on hand at the beginning of the fiscal year, the funds estimated to be received from all sources for such year and the funds estimated to be on hand at the end of such year. The proposed budget, financial plan, and five-year capital program shall be available at no cost for public inspection at the Authority's main office and at the Regional Transportation Authority's main office at least 3 weeks prior to any public hearing. Before the proposed budget, financial plan, and five-year capital program are submitted to the Regional Transportation Authority, the Authority shall hold at least one public hearing thereon in each of the counties in which the Authority provides service. All Board members of the Authority shall attend a majority of the public hearings unless reasonable cause is given for their absence. After the public hearings, the Board of the Authority shall hold at least one meeting for consideration of the proposed program and budget with the Cook County Board. After conducting such hearings and holding such meetings and after making such changes in the proposed budget, financial plan, and five-year capital program as the Board deems appropriate, it shall adopt an annual budget ordinance at least by November 15th preceding the beginning of each fiscal year. The budget, financial plan, and five-year capital program shall then be submitted to the Regional Transportation Authority as provided in Section 4.11 of the Regional Transportation Authority Act. In the event that the Board of the Regional Transportation Authority determines that the budget, financial plan, and five-year capital program do not meet the standards of said Section 4.11 or match the Regional Transportation Authority's five-year capital program prioritization list set forth in Section 2.01b of the Regional Transportation Authority Act, the Board of the Authority shall make such changes as are necessary to meet such requirements and adopt an amended budget ordinance. The amended budget ordinance shall be resubmitted to the Regional Transportation Authority pursuant to said Section 4.11. The ordinance shall appropriate such sums of money as are deemed necessary to defray all necessary expenses and obligations of the Authority, specifying purposes and the objects or programs for which appropriations are made and the amount appropriated for each object or program. Additional appropriations, transfers between items and other changes in such ordinance which do not alter the basis upon which the balanced budget determination was made by the Regional Transportation Authority may be made from time to time by the Board.

The budget shall:

(i) show a balance between (A) anticipated revenues from all sources including operating subsidies and (B) the costs of providing the services specified and of funding any operating deficits or encumbrances incurred in prior periods, including provision for payment when due of principal and interest on outstanding indebtedness;

(ii) show cash balances including the proceeds of any anticipated cash flow borrowing sufficient to pay with reasonable promptness all costs and expenses as incurred;

(iii) provide for a level of fares or charges and operating or administrative costs for the public transportation provided by or subject to the jurisdiction of the Board sufficient to allow the Board to meet its required system generated revenue recovery ratio as determined in accordance with subsection (a) of Section 4.11 of the Regional Transportation Authority Act;

(iv) be based upon and employ assumptions and projections which are reasonable and prudent;

(v) have been prepared in accordance with sound financial practices as determined by the Board of the Regional Transportation Authority;

(vi) meet such other financial, budgetary, or fiscal requirements that the Board of the Regional Transportation Authority may by rule or regulation establish; and

(vii) be consistent with the goals and objectives adopted by the Regional Transportation Authority in the Strategic Plan set forth in Section 2.01a of the Regional Transportation Authority Act.

The Board shall establish a fiscal operating year. At least thirty days prior to the beginning of the first full fiscal year after the creation of the Authority, and annually thereafter, the Board shall cause to be prepared a tentative budget which shall include all operation and maintenance expense for the ensuing fiscal year. The tentative budget shall be considered by the Board and, subject to any revision and amendments as may be determined, shall be adopted prior to the first day of the ensuing fiscal year as the budget for that year. No expenditures for operations and maintenance in excess of the budget shall be made during any fiscal year except by the affirmative vote of at least five members of the Board. It shall not be necessary to include in the annual budget any statement of necessary expenditures for pensions or retirement annuities, or for interest or principal payments on bonds or certificates, or for capital outlays, but it shall be the duty of the Board to make provision for payment of same from appropriate funds. The Board may not alter its fiscal year without the prior approval of the Board of the Regional Transportation Authority.

(Source: P.A. 95-708, eff. 1-18-08.)

Section 10. The Regional Transportation Authority Act is amended by changing Sections 2.01a, 2.01b, 3A.10, 3B.10, 4.01, and 4.11 as follows:

(70 ILCS 3615/2.01a)

Sec. 2.01a. Strategic Plan.

(a) By the affirmative vote of at least 12 of its then Directors, the Authority shall adopt a Strategic Plan, no less than every 5 years, after consultation with the Service Boards and after holding a minimum of 3 public hearings in Cook County and one public hearing in each of the other counties in the region. The Executive Director of the Authority shall review the Strategic Plan on an ongoing basis and make recommendations to the Board of the Authority with respect to any update or amendment of the Strategic Plan. The Strategic Plan shall describe the specific actions to be taken by the Authority and the Service Boards to provide adequate, efficient, and coordinated public transportation.

(b) The Strategic Plan shall identify goals and objectives with respect to:

(i) increasing ridership and passenger miles on public transportation funded by the Authority;

(ii) coordination of public transportation services and the investment in public transportation facilities to enhance the integration of public transportation throughout the metropolitan region;

(iii) coordination of fare and transfer policies to promote transfers by riders among Service Boards, transportation agencies, and public transportation modes, which may include goals and objectives for development of a universal fare instrument that riders may use interchangeably on all public transportation funded by the Authority, and methods to be used to allocate revenues from transfers;

(iv) improvements in public transportation facilities to bring those facilities into a state of good repair, enhancements that attract ridership and improve customer service, and expansions needed to serve areas with sufficient demand for public transportation;

(v) access for transit-dependent populations, including access by low-income communities to places of employment, utilizing analyses provided by the Chicago Metropolitan Agency for Planning regarding employment and transportation availability, and giving consideration to the location of employment centers in each county and the availability of public transportation at off-peak hours and on weekends;

(vi) the financial viability of the public transportation system, including both operating and capital programs;

(vii) limiting road congestion within the metropolitan region and enhancing transit options to improve mobility; and

(viii) such other goals and objectives that advance the policy of the State to provide adequate, efficient, and coordinated public transportation in the metropolitan region.

(c) The Strategic Plan shall establish the process and criteria by which proposals for capital improvements by a Service Board or a transportation agency will be evaluated and prioritized pursuant to Section 2.01b of this Act by the Authority for inclusion in the Five-Year Capital Program, which may include criteria for:

(i) allocating funds among maintenance, enhancement, and expansion improvements;

(ii) projects to be funded from the Innovation, Coordination, and Enhancement Fund;

(iii) projects intended to improve or enhance ridership or customer service;

(iv) design and location of station or transit improvements intended to promote transfers, increase ridership, and support transit-oriented land development;

(v) assessing the impact of projects on the ability to operate and maintain the existing transit system; and

(vi) other criteria that advance the goals and objectives of the Strategic Plan.

(d) The Strategic Plan shall establish performance standards and measurements regarding the adequacy, efficiency, and coordination of public transportation services in the region and the implementation of the goals and objectives in the Strategic Plan. At a minimum, such standards and measures shall include customer-related performance data measured by line, route, or sub-region, as determined by the Authority, on the following:

(i) travel times and on-time performance;

(ii) ridership data;

(iii) equipment failure rates;

(iv) employee and customer safety; and

(v) customer satisfaction.

The Service Boards and transportation agencies that receive funding from the Authority or Service Boards shall prepare, publish, and submit to the Authority such reports with regard to these standards and measurements in the frequency and form required by the Authority; however, the frequency of such reporting shall be quarterly and due on March 1st, June 1st, September 1st, and December 1st no less than annual. The Service Boards shall publish such reports on their respective websites. The Authority shall compile and publish such reports on its website. Such performance standards and measures shall not be used as the basis for disciplinary action against any employee of the Authority or Service Boards, except to the extent the employment and disciplinary practices of the Authority or Service Board provide for such action.

(d-5) It is the responsibility of the Service Boards to work in good faith with the Authority to submit strategic plans that conform to and are consistent with the Authority's strategic plan. The Authority may withhold capital project funding pursuant to Section 4.11 of this Act or any discretionary funding if a Service Board's strategic plan is excessively inconsistent with the Authority's strategic plan.

(e) The Strategic Plan shall identify innovations to improve the delivery of public transportation and the construction of public transportation facilities.

(f) The Strategic Plan shall describe the expected financial condition of public transportation in the metropolitan region prospectively over a 10-year period, which may include information about the cash position and all known obligations of the Authority and the Service Boards including operating expenditures, debt service, contributions for payment of pension and other post-employment benefits, the expected revenues from fares, tax receipts, grants from the federal, State, and local governments for operating and capital purposes and issuance of debt, the availability of working capital, and the resources needed to achieve the goals and objectives described in the Strategic Plan.

(g) In developing the Strategic Plan, the Authority shall rely on such demographic and other data, forecasts, and assumptions developed by the Chicago Metropolitan Agency for Planning with respect to the patterns of population density and growth, projected commercial and residential development, and environmental factors, within the metropolitan region and in areas outside the metropolitan region that may impact public transportation utilization in the metropolitan region. Before adopting or amending any Strategic Plan, the Authority shall consult with the Chicago Metropolitan Agency for Planning regarding the consistency of the Strategic Plan with the Regional Comprehensive Plan adopted pursuant to the Regional Planning Act.

(h) The Authority may adopt, by the affirmative vote of at least 12 of its then Directors, sub-regional or corridor plans for specific geographic areas of the metropolitan region in order to improve the adequacy, efficiency, and coordination of existing, or the delivery of new, public transportation. Such plans may also address areas outside the metropolitan region that may impact public transportation utilization in the metropolitan region. In preparing a sub-regional or corridor plan, the Authority may identify changes in operating practices or capital investment in the sub-region or corridor that could increase ridership, reduce costs, improve coordination, or enhance transit-oriented development. The Authority shall consult with any affected Service Boards in the preparation of any sub-regional or corridor plans.

(i) If the Authority determines, by the affirmative vote of at least 12 of its then Directors, that, with respect to any proposed new public transportation service or facility, (i) multiple Service Boards or transportation agencies are potential service providers and (ii) the public transportation facilities to be constructed or purchased to provide that service have an expected construction cost of more than $25,000,000, the Authority shall have sole responsibility for conducting any alternatives analysis and preliminary environmental assessment required by federal or State law. Nothing in this subparagraph (i) shall prohibit a Service Board from undertaking alternatives analysis and preliminary environmental assessment for any public transportation service or facility identified in items (i) and (ii) above that is included in the Five-Year Capital Program as of the effective date of this amendatory Act of the 95th General Assembly; however, any expenditure related to any such public transportation service or facility must be included in a Five-Year Capital Program under the requirements of Sections 2.01b and 4.02 of this Act.

(Source: P.A. 95-708, eff. 1-18-08.)

(70 ILCS 3615/2.01b)

Sec. 2.01b. The Five-Year Capital Program. By the affirmative vote of at least 12 of its then Directors, the Authority, after consultation with the Service Boards and after holding a minimum of 3 public hearings in Cook County and one public hearing in each of the other counties in the metropolitan region, shall each year adopt a Five-Year Capital Program that shall include each capital improvement to be undertaken by or on behalf of a Service Board provided that the Authority finds that the improvement meets any criteria for capital improvements contained in the Strategic Plan, is not inconsistent with any sub-regional or corridor plan adopted by the Authority, and can be funded within amounts available with respect to the capital and operating costs of such improvement. In reviewing proposals for improvements to be included in a Five-Year Capital Program, the Authority may give priority to improvements that are intended to bring public transportation facilities into a state of good repair. The Five-Year Capital Program shall also identify capital improvements to be undertaken by a Service Board, a transportation agency, or a unit of local government and funded by the Authority from amounts in the Innovation, Coordination, and Enhancement Fund, provided that no improvement that is included in the Five-Year Capital Program as of the effective date of this amendatory Act of the 95th General Assembly may receive funding from the Innovation, Coordination, and Enhancement Fund. Before adopting a Five-Year Capital Program, the Authority shall:

(1) consult with the Chicago Metropolitan Agency for Planning regarding the consistency of the Five-Year Capital Program with the Regional Comprehensive Plan adopted pursuant to the Regional Planning Act; and .

(2) produce a list of capital projects submitted by the Service Boards aggregated and prioritized by the Authority based on criteria listed in this Section.

Each Service Board shall provide the Authority with a quarterly report submitted on March 1st, June 1st, September 1st, and December 1st detailing progress on the projects. Projects listed on the aggregated and prioritized list shall be the only projects eligible for capital improvement funding and exceptions shall only be granted in cases of emergency, as declared by the Governor or an affirmative vote by the Board.

(Source: P.A. 95-708, eff. 1-18-08.)

(70 ILCS 3615/3A.10) (from Ch. 111 2/3, par. 703A.10)

Sec. 3A.10. Budget and Program. The Suburban Bus Board, subject to the powers of the Authority in Section 4.11, shall control the finances of the Division. It shall by ordinance appropriate money to perform the Division's purposes and provide for payment of debts and expenses of the Division. Each year the Suburban Bus Board shall prepare and publish a comprehensive annual budget and proposed five-year capital program document, and a financial plan for the 2 years thereafter describing the state of the Division and presenting for the forthcoming fiscal year and the 2 following years the Suburban Bus Board's plans for such operations and capital expenditures as it intends to undertake and the means by which it intends to finance them. The proposed budget, financial plan, and five-year capital program shall be based on the Authority's estimate of funds to be made available to the Suburban Bus Board by or through the Authority and shall conform in all respects to the requirements established by the Authority. The proposed budget, financial plan, and five-year capital program shall contain a statement of the funds estimated to be on hand at the beginning of the fiscal year, the funds estimated to be received from all sources for such year and the funds estimated to be on hand at the end of such year. The fiscal year of the Division shall be the same as the fiscal year of the Authority. Before the proposed budget, financial plan, and five-year capital program are submitted to the Authority, the Suburban Bus Board shall hold at least one public hearing thereon in each of the counties in the metropolitan region in which the Division provides service. The Suburban Bus Board shall hold at least one meeting for consideration of the proposed budget, financial plan, and five-year capital program with the county board of each of the several counties in the metropolitan region in which the Division provides service. After conducting such hearings and holding such meetings and after making such changes in the proposed budget, financial plan, and five-year capital program as the Suburban Bus Board deems appropriate, it shall adopt an annual budget ordinance at least by November 15 next preceding the beginning of each fiscal year. The budget, financial plan, and five-year capital program shall then be submitted to the Authority as provided in Section 4.11. In the event that the Board of the Authority determines that the budget and financial plan do not meet the standards of Section 4.11 or match the Authority's five-year capital program prioritization list of Section 2.01b of this Act, the Suburban Bus Board shall make such changes as are necessary to meet such requirements and adopt an amended budget ordinance. The amended budget ordinance shall be resubmitted to the Authority pursuant to Section 4.11. The ordinance shall appropriate such sums of money as are deemed necessary to defray all necessary expenses and obligations of the Division, specifying purposes and the objects or programs for which appropriations are made and the amount appropriated for each object or program. Additional appropriations, transfers between items and other changes in such ordinance which do not alter the basis upon which the balanced budget determination was made by the Board of the Authority may be made from time to time by the Suburban Bus Board.

The budget shall:

(i) show a balance between (A) anticipated revenues from all sources including operating subsidies and (B) the costs of providing the services specified and of funding any operating deficits or encumbrances incurred in prior periods, including provision for payment when due of principal and interest on outstanding indebtedness;

(ii) show cash balances including the proceeds of any anticipated cash flow borrowing sufficient to pay with reasonable promptness all costs and expenses as incurred;

(iii) provide for a level of fares or charges and operating or administrative costs for the public transportation provided by or subject to the jurisdiction of the Suburban Bus Board sufficient to allow the Suburban Bus Board to meet its required system generated revenues recovery ratio and, beginning with the 2007 fiscal year, its system generated ADA paratransit services revenue recovery ratio;

(iv) be based upon and employ assumptions and projections which are reasonable and prudent;

(v) have been prepared in accordance with sound financial practices as determined by the Board of the Authority;

(vi) meet such other uniform financial, budgetary, or fiscal requirements that the Board of the Authority may by rule or regulation establish; and

(vii) be consistent with the goals and objectives adopted by the Regional Transportation Authority in the Strategic Plan of Section 2.01a of this Act.

(Source: P.A. 94-370, eff. 7-29-05; 95-708, eff. 1-18-08.)

(70 ILCS 3615/3B.10) (from Ch. 111 2/3, par. 703B.10)

Sec. 3B.10. Budget and Program. The Commuter Rail Board, subject to the powers of the Authority in Section 4.11, shall control the finances of the Division. It shall by ordinance appropriate money to perform the Division's purposes and provide for payment of debts and expenses of the Division. Each year the Commuter Rail Board shall prepare and publish a comprehensive annual budget and proposed five-year capital program document, and a financial plan for the two years thereafter describing the state of the Division and presenting for the forthcoming fiscal year and the two following years the Commuter Rail Board's plans for such operations and capital expenditures as the Commuter Rail Board intends to undertake and the means by which it intends to finance them. The proposed budget, financial plan, and five-year capital program shall be based on the Authority's estimate of funds to be made available to the Commuter Rail Board by or through the Authority and shall conform in all respects to the requirements established by the Authority. The proposed budget, financial plan, and five-year capital program shall contain a statement of the funds estimated to be on hand at the beginning of the fiscal year, the funds estimated to be received from all sources for such year and the funds estimated to be on hand at the end of such year. The fiscal year of the Division shall be the same as the fiscal year of the Authority. Before the proposed budget, financial plan, and five-year capital program are submitted to the Authority, the Commuter Rail Board shall hold at least one public hearing thereon in each of the counties in the metropolitan region in which the Division provides service. The Commuter Rail Board shall hold at least one meeting for consideration of the proposed budget, financial plan, and five-year capital plan with the county board of each of the several counties in the metropolitan region in which the Division provides service. After conducting such hearings and holding such meetings and after making such changes in the proposed budget, financial plan, and five-year capital plan as the Commuter Rail Board deems appropriate, the board shall adopt its annual budget ordinance at least by November 15 next preceding the beginning of each fiscal year. The budget, financial plan, and five-year capital program shall then be submitted to the Authority as provided in Section 4.11. In the event that the Board of the Authority determines that the budget and program, and financial plan do not meet the standards of Section 4.11 or match the Authority's five-year capital program prioritization list of Section 2.01b of this Act, the Commuter Rail Board shall make such changes as are necessary to meet such requirements and adopt an amended budget ordinance. The amended budget ordinance shall be resubmitted to the Authority pursuant to Section 4.11. The ordinance shall appropriate such sums of money as are deemed necessary to defray all necessary expenses and obligations of the Division, specifying purposes and the objects or programs for which appropriations are made and the amount appropriated for each object or program. Additional appropriations, transfers between items and other changes in such ordinance which do not alter the basis upon which the balanced budget determination was made by the Board of the Authority may be made from time to time by the Commuter Rail Board.

The budget shall:

(i) show a balance between (A) anticipated revenues from all sources including operating subsidies and (B) the costs of providing the services specified and of funding any operating deficits or encumbrances incurred in prior periods, including provision for payment when due of principal and interest on outstanding indebtedness;

(ii) show cash balances including the proceeds of any anticipated cash flow borrowing sufficient to pay with reasonable promptness all costs and expenses as incurred;

(iii) provide for a level of fares or charges for the public transportation provided by or subject to the jurisdiction of such Commuter Rail Board sufficient to allow the Commuter Rail Board to meet its required system generated revenue recovery ratio;

(iv) be based upon and employ assumptions and projections which the Board of the Authority finds to be reasonable and prudent;

(v) have been prepared in accordance with sound financial practices as determined by the Board of the Authority;

(vi) meet such other uniform financial, budgetary, or fiscal requirements that the Board of the Authority may by rule or regulation establish; and

(vii) be consistent with the goals and objectives adopted by the Regional Transportation Authority in the Strategic Plan of Section 2.01a of this Act.

(Source: P.A. 95-708, eff. 1-18-08.)

(70 ILCS 3615/4.01) (from Ch. 111 2/3, par. 704.01)

Sec. 4.01. Budget and Program.

(a) The Board shall control the finances of the Authority. It shall by ordinance adopted by the affirmative vote of at least 12 of its then Directors (i) appropriate money to perform the Authority's purposes and provide for payment of debts and expenses of the Authority, (ii) take action with respect to the budget and two-year financial plan of each Service Board, as provided in Section 4.11, and (iii) adopt an Annual Budget and Two-Year Financial Plan for the Authority that includes the annual budget and two-year financial plan of each Service Board that has been approved by the Authority. The Annual Budget and Two-Year Financial Plan shall contain a statement of the funds estimated to be on hand for the Authority and each Service Board at the beginning of the fiscal year, the funds estimated to be received from all sources for such year, the estimated expenses and obligations of the Authority and each Service Board for all purposes, including expenses for contributions to be made with respect to pension and other employee benefits, and the funds estimated to be on hand at the end of such year. The fiscal year of the Authority and each Service Board shall begin on January 1st and end on the succeeding December 31st. By July 1st of each year the Director of the Illinois Governor's Office of Management and Budget (formerly Bureau of the Budget) shall submit to the Authority an estimate of revenues for the next fiscal year of the Authority to be collected from the taxes imposed by the Authority and the amounts to be available in the Public Transportation Fund and the Regional Transportation Authority Occupation and Use Tax Replacement Fund and the amounts otherwise to be appropriated by the State to the Authority for its purposes. The Authority shall file a copy of its Annual Budget and Two-Year Financial Plan with the General Assembly and the Governor after its adoption. Before the proposed Annual Budget and Two-Year Financial Plan is adopted, the Authority shall hold at least one public hearing thereon in the metropolitan region, and shall meet with the county board or its designee of each of the several counties in the metropolitan region. After conducting such hearings and holding such meetings and after making such changes in the proposed Annual Budget and Two-Year Financial Plan as the Board deems appropriate, the Board shall adopt its annual appropriation and Annual Budget and Two-Year Financial Plan ordinance. The ordinance may be adopted only upon the affirmative votes of 12 of its then Directors. The ordinance shall appropriate such sums of money as are deemed necessary to defray all necessary expenses and obligations of the Authority, specifying purposes and the objects or programs for which appropriations are made and the amount appropriated for each object or program. Additional appropriations, transfers between items and other changes in such ordinance may be made from time to time by the Board upon the affirmative votes of 12 of its then Directors.

(b) The Annual Budget and Two-Year Financial Plan shall show a balance between anticipated revenues from all sources and anticipated expenses including funding of operating deficits or the discharge of encumbrances incurred in prior periods and payment of principal and interest when due, and shall show cash balances sufficient to pay with reasonable promptness all obligations and expenses as incurred.

The Annual Budget and Two-Year Financial Plan must show:

(i) that the level of fares and charges for mass transportation provided by, or under grant or purchase of service contracts of, the Service Boards is sufficient to cause the aggregate of all projected fare revenues from such fares and charges received in each fiscal year to equal at least 50% of the aggregate costs of providing such public transportation in such fiscal year. "Fare revenues" include the proceeds of all fares and charges for services provided, contributions received in connection with public transportation from units of local government other than the Authority, except for contributions received by the Chicago Transit Authority from a real estate transfer tax imposed under subsection (i) of Section 8-3-19 of the Illinois Municipal Code, and from the State pursuant to subsection (i) of Section 2705-305 of the Department of Transportation Law (20 ILCS 2705/2705-305), and all other operating revenues properly included consistent with generally accepted accounting principles but do not include: the proceeds of any borrowings, and, beginning with the 2007 fiscal year, all revenues and receipts, including but not limited to fares and grants received from the federal, State or any unit of local government or other entity, derived from providing ADA paratransit service pursuant to Section 2.30 of the Regional Transportation Authority Act. "Costs" include all items properly included as operating costs consistent with generally accepted accounting principles, including administrative costs, but do not include: depreciation; payment of principal and interest on bonds, notes or other evidences of obligation for borrowed money issued by the Authority; payments with respect to public transportation facilities made pursuant to subsection (b) of Section 2.20 of this Act; any payments with respect to rate protection contracts, credit enhancements or liquidity agreements made under Section 4.14; any other cost to which it is reasonably expected that a cash expenditure will not be made; costs for passenger security including grants, contracts, personnel, equipment and administrative expenses, except in the case of the Chicago Transit Authority, in which case the term does not include costs spent annually by that entity for protection against crime as required by Section 27a of the Metropolitan Transit Authority Act; the payment by the Chicago Transit Authority of Debt Service, as defined in Section 12c of the Metropolitan Transit Authority Act, on bonds or notes issued pursuant to that Section; the payment by the Commuter Rail Division of debt service on bonds issued pursuant to Section 3B.09; expenses incurred by the Suburban Bus Division for the cost of new public transportation services funded from grants pursuant to Section 2.01e of this amendatory Act of the 95th General Assembly for a period of 2 years from the date of initiation of each such service; costs as exempted by the Board for projects pursuant to Section 2.09 of this Act; or, beginning with the 2007 fiscal year, expenses related to providing ADA paratransit service pursuant to Section 2.30 of the Regional Transportation Authority Act; and in fiscal years 2008 through 2012 inclusive, costs in the amount of $200,000,000 in fiscal year 2008, reducing by $40,000,000 in each fiscal year thereafter until this exemption is eliminated; and

(ii) that the level of fares charged for ADA paratransit services is sufficient to cause the aggregate of all projected revenues from such fares charged and received in each fiscal year to equal at least 10% of the aggregate costs of providing such ADA paratransit services. For purposes of this Act, the percentages in this subsection (b)(ii) shall be referred to as the "system generated ADA paratransit services revenue recovery ratio". For purposes of the system generated ADA paratransit services revenue recovery ratio, "costs" shall include all items properly included as operating costs consistent with generally accepted accounting principles. However, the Board may exclude from costs an amount that does not exceed the allowable "capital costs of contracting" for ADA paratransit services pursuant to the Federal Transit Administration guidelines for the Urbanized Area Formula Program.

(c) The actual administrative expenses of the Authority for the fiscal year commencing January 1, 1985 may not exceed $5,000,000. The actual administrative expenses of the Authority for the fiscal year commencing January 1, 1986, and for each fiscal year thereafter shall not exceed the maximum administrative expenses for the previous fiscal year plus 5%. "Administrative expenses" are defined for purposes of this Section as all expenses except: (1) capital expenses and purchases of the Authority on behalf of the Service Boards; (2) payments to Service Boards; and (3) payment of principal and interest on bonds, notes or other evidence of obligation for borrowed money issued by the Authority; (4) costs for passenger security including grants, contracts, personnel, equipment and administrative expenses; (5) payments with respect to public transportation facilities made pursuant to subsection (b) of Section 2.20 of this Act; and (6) any payments with respect to rate protection contracts, credit enhancements or liquidity agreements made pursuant to Section 4.14.

(d) This subsection applies only until the Department begins administering and enforcing an increased tax under Section 4.03(m) as authorized by this amendatory Act of the 95th General Assembly. After withholding 15% of the proceeds of any tax imposed by the Authority and 15% of money received by the Authority from the Regional Transportation Authority Occupation and Use Tax Replacement Fund, the Board shall allocate the proceeds and money remaining to the Service Boards as follows: (1) an amount equal to 85% of the proceeds of those taxes collected within the City of Chicago and 85% of the money received by the Authority on account of transfers to the Regional Transportation Authority Occupation and Use Tax Replacement Fund from the County and Mass Transit District Fund attributable to retail sales within the City of Chicago shall be allocated to the Chicago Transit Authority; (2) an amount equal to 85% of the proceeds of those taxes collected within Cook County outside the City of Chicago and 85% of the money received by the Authority on account of transfers to the Regional Transportation Authority Occupation and Use Tax Replacement Fund from the County and Mass Transit District Fund attributable to retail sales within Cook County outside of the city of Chicago shall be allocated 30% to the Chicago Transit Authority, 55% to the Commuter Rail Board and 15% to the Suburban Bus Board; and (3) an amount equal to 85% of the proceeds of the taxes collected within the Counties of DuPage, Kane, Lake, McHenry and Will shall be allocated 70% to the Commuter Rail Board and 30% to the Suburban Bus Board.

(e) This subsection applies only until the Department begins administering and enforcing an increased tax under Section 4.03(m) as authorized by this amendatory Act of the 95th General Assembly. Moneys received by the Authority on account of transfers to the Regional Transportation Authority Occupation and Use Tax Replacement Fund from the State and Local Sales Tax Reform Fund shall be allocated among the Authority and the Service Boards as follows: 15% of such moneys shall be retained by the Authority and the remaining 85% shall be transferred to the Service Boards as soon as may be practicable after the Authority receives payment. Moneys which are distributable to the Service Boards pursuant to the preceding sentence shall be allocated among the Service Boards on the basis of each Service Board's distribution ratio. The term "distribution ratio" means, for purposes of this subsection (e) of this Section 4.01, the ratio of the total amount distributed to a Service Board pursuant to subsection (d) of Section 4.01 for the immediately preceding calendar year to the total amount distributed to all of the Service Boards pursuant to subsection (d) of Section 4.01 for the immediately preceding calendar year.

(f) To carry out its duties and responsibilities under this Act, the Board shall employ staff which shall: (1) propose for adoption by the Board of the Authority rules for the Service Boards that establish (i) forms and schedules to be used and information required to be provided with respect to a five-year capital program, annual budgets, and two-year financial plans and regular reporting of actual results against adopted budgets and financial plans, (ii) financial practices to be followed in the budgeting and expenditure of public funds, (iii) assumptions and projections that must be followed in preparing and submitting its annual budget and two-year financial plan or a five-year capital program; (2) evaluate for the Board public transportation programs operated or proposed by the Service Boards and transportation agencies in terms of the goals and objectives set out in the Strategic Plan; (3) keep the Board and the public informed of the extent to which the Service Boards and transportation agencies are meeting the goals and objectives adopted by the Authority in the Strategic Plan; and (4) assess the efficiency or adequacy of public transportation services provided by a Service Board and make recommendations for change in that service to the end that the moneys available to the Authority may be expended in the most economical manner possible with the least possible duplication.

(g) All Service Boards, transportation agencies, comprehensive planning agencies, including the Chicago Metropolitan Agency for Planning, or transportation planning agencies in the metropolitan region shall furnish to the Authority such information pertaining to public transportation or relevant for plans therefor as it may from time to time require. The Executive Director, or his or her designee, shall, for the purpose of securing any such information necessary or appropriate to carry out any of the powers and responsibilities of the Authority under this Act, have access to, and the right to examine, all books, documents, papers or records of a Service Board or any transportation agency receiving funds from the Authority or Service Board, and such Service Board or transportation agency shall comply with any request by the Executive Director, or his or her designee, within 30 days or an extended time provided by the Executive Director.

(h) No Service Board shall undertake any capital improvement which is not identified in the Five-Year Capital Program or as otherwise prescribed in Section 2.01b of this Act.

(i) No later than January 1, 2013, the Service Boards shall implement software that allows the Authority to access and review all real-time information related to financial reporting.

(j) The Authority shall prepare and present reports to the Service Boards on a quarterly basis. These reports shall include the Authority's assessment of the overall financial issues of the Authority, as well as those unique to the Service Board. The reports shall also include the results of any audits, evaluations, reviews, or studies performed by the Authority for the Authority or another individual agency.

(k) Service Boards shall each provide to the Authority an annual budget at least 45 business days before the budget is presented to the Service Board for a vote of adoption. After reviewing a Service Board's proposed budget, the Authority shall present and make recommendations to the respective Service Board concerning the proposed budget no later than 15 days before that Service Board votes for budget adoption.

(Source: P.A. 94-370, eff. 7-29-05; 95-708, eff. 1-18-08; 95-906, eff. 8-26-08.)

(70 ILCS 3615/4.11) (from Ch. 111 2/3, par. 704.11)

Sec. 4.11. Budget Review Powers.

(a) Based upon estimates which shall be given to the Authority by the Director of the Governor's Office of Management and Budget (formerly Bureau of the Budget) of the receipts to be received by the Authority from the taxes imposed by the Authority and the authorized estimates of amounts to be available from State and other sources to the Service Boards, and the times at which such receipts and amounts will be available, the Board shall, not later than the next preceding September 15th prior to the beginning of the Authority's next fiscal year, advise each Service Board of the amounts estimated by the Board to be available for such Service Board during such fiscal year and the two following fiscal years and the times at which such amounts will be available. The Board shall, at the same time, also advise each Service Board of its required system generated revenues recovery ratio for the next fiscal year which shall be the percentage of the aggregate costs of providing public transportation by or under jurisdiction of that Service Board which must be recovered from system generated revenues. The Board shall, at the same time, consider the written determination of the Executive Director, made pursuant to Section 2.01d, of the costs of ADA paratransit services that are required to be provided under the federal Americans with Disabilities Act of 1990 and its implementing regulations, and shall amend the current year budgets of the Authority and the Service Boards to provide for additional funding for the provision of ADA paratransit services, if needed. The Board shall, at the same time, beginning with the 2007 fiscal year, also advise each Service Board that provides ADA paratransit services of its required system generated ADA paratransit services revenue recovery ratio for the next fiscal year which shall be the percentage of the aggregate costs of providing ADA paratransit services by or under jurisdiction of that Service Board which must be recovered from fares charged for such services, except that such required system generated ADA paratransit services revenue recovery ratio shall not exceed the minimum percentage established pursuant to Section 4.01(b)(ii) of this Act. In determining a Service Board's system generated revenue recovery ratio, the Board shall consider the historical system generated revenues recovery ratio for the services subject to the jurisdiction of that Service Board. The Board shall not increase a Service Board's system generated revenues recovery ratio for the next fiscal year over such ratio for the current fiscal year disproportionately or prejudicially to increases in such ratios for other Service Boards. The Board may, by ordinance, provide that (i) the cost of research and development projects in the fiscal year beginning January 1, 1986 and ending December 31, 1986 conducted pursuant to Section 2.09 of this Act, (ii) the costs for passenger security, and (iii) expenditures of amounts granted to a Service Board from the Innovation, Coordination, and Enhancement Fund for operating purposes may be exempted from the farebox recovery ratio or the system generated revenues recovery ratio of the Chicago Transit Authority, the Suburban Bus Board, and the Commuter Rail Board, or any of them. During fiscal years 2008 through 2012, the Board may also allocate the exemption of $200,000,000 and the reducing amounts of costs provided by this amendatory Act of the 95th General Assembly from the farebox recovery ratio or system generated revenues recovery ratio of each Service Board.

(b)(1) Not later than the next preceding November 15 prior to the commencement of such fiscal year, each Service Board shall submit to the Authority its proposed budget for such fiscal year and its proposed financial plan for the two following fiscal years. Such budget and financial plan shall (i) be prepared in the format, follow the financial and budgetary practices, and be based on any assumptions and projections required by the Authority and (ii) not project or assume a receipt of revenues from the Authority in amounts greater than those set forth in the estimates provided by the Authority pursuant to subsection (a) of this Section.

(2) The Board shall review the proposed budget and two-year financial plan submitted by each Service Board. The Board shall approve the budget and two-year financial plan of a Service Board if:

(i) such budget and plan show a balance between (A) anticipated revenues from all sources including operating subsidies and (B) the costs of providing the services specified and of funding any operating deficits or encumbrances incurred in prior periods, including provision for payment when due of principal and interest on outstanding indebtedness;

(ii) such budget and plan show cash balances including the proceeds of any anticipated cash flow borrowing sufficient to pay with reasonable promptness all costs and expenses as incurred;

(iii) such budget and plan provide for a level of fares or charges and operating or administrative costs for the public transportation provided by or subject to the jurisdiction of such Service Board sufficient to allow the Service Board to meet its required system generated revenue recovery ratio and, beginning with the 2007 fiscal year, system generated ADA paratransit services revenue recovery ratio;

(iv) such budget and plan are based upon and employ assumptions and projections which are reasonable and prudent;

(v) such budget and plan have been prepared in accordance with sound financial practices as determined by the Board;

(vi) such budget and plan meet such other financial, budgetary, or fiscal requirements that the Board may by rule or regulation establish; and

(vii) such budget and plan are consistent with the goals and objectives adopted by the Authority in the Strategic Plan.

(3) (Blank).

(4) Unless the Board by an affirmative vote of 12 of the then Directors determines that the budget and financial plan of a Service Board meets the criteria specified in clauses (i) through (vii) of subparagraph (2) of this paragraph (b), the Board shall withhold from that Service Board 25% of the cash proceeds of taxes imposed by the Authority under Section 4.03 and Section 4.03.1 and received after February 1 and 25% of the amounts transferred to the Authority from the Public Transportation Fund under Section 4.09(a) (but not including Section 4.09(a)(3)(iv)) after February 1 that the Board has estimated to be available to that Service Board under Section 4.11(a). Such funding shall be released to the Service Board only upon approval of a budget and financial plan under this Section or adoption of a budget and financial plan on behalf of the Service Board by the Authority.

(5) If the Board has not found that the budget and financial plan of a Service Board meets the criteria specified in clauses (i) through (vii) of subparagraph (2) of this paragraph (b), the Board, by the affirmative vote of at least 12 of its then Directors, shall adopt a budget and financial plan meeting such criteria for that Service Board.

(c)(1) If the Board shall at any time have received a revised estimate, or revises any estimate the Board has made, pursuant to this Section of the receipts to be collected by the Authority which, in the judgment of the Board, requires a change in the estimates on which the budget of any Service Board is based, the Board shall advise the affected Service Board of such revised estimates, and such Service Board shall within 30 days after receipt of such advice submit a revised budget incorporating such revised estimates. If the revised estimates require, in the judgment of the Board, that the system generated revenues recovery ratio of one or more Service Boards be revised in order to allow the Authority to meet its required ratio, the Board shall advise any such Service Board of its revised ratio and such Service Board shall within 30 days after receipt of such advice submit a revised budget incorporating such revised estimates or ratio.

(2) Each Service Board shall, within such period after the end of each fiscal quarter as shall be specified by the Board, report to the Authority its financial condition and results of operations and the financial condition and results of operations of the public transportation services subject to its jurisdiction, as at the end of and for such quarter. If in the judgment of the Board such condition and results are not substantially in accordance with such Service Board's budget for such period, the Board shall so advise such Service Board and such Service Board shall within the period specified by the Board submit a revised budget incorporating such results.

(3) If the Board shall determine that a revised budget submitted by a Service Board pursuant to subparagraph (1) or (2) of this paragraph (c) does not meet the criteria specified in clauses (i) through (vii) of subparagraph (2) of paragraph (b) of this Section, the Board shall withhold from that Service Board 25% of the cash proceeds of taxes imposed by the Authority under Section 4.03 or 4.03.1 and received by the Authority after February 1 and 25% of the amounts transferred to the Authority from the Public Transportation Fund under Section 4.09(a) (but not including Section 4.09(a)(3)(iv)) after February 1 that the Board has estimated to be available to that Service Board under Section 4.11(a). If the Service Board submits a revised financial plan and budget which plan and budget shows that the criteria will be met within a four quarter period, the Board shall release any such withheld funds to the Service Board. The Board by the affirmative vote of at least 12 of its then Directors may require a Service Board to submit a revised financial plan and budget which shows that the criteria will be met in a time period less than four quarters.

(d) All budgets and financial plans, financial statements, audits and other information presented to the Authority pursuant to this Section or which may be required by the Board to permit it to monitor compliance with the provisions of this Section shall be prepared and presented in such manner and frequency and in such detail as shall have been prescribed by the Board, shall be prepared on both an accrual and cash flow basis as specified by the Board, shall present such information as the Authority shall prescribe that fairly presents the condition of any pension plan or trust for health care benefits with respect to retirees established by the Service Board and describes the plans of the Service Board to meet the requirements of Sections 4.02a and 4.02b, and shall identify and describe the assumptions and projections employed in the preparation thereof to the extent required by the Board. If the Executive Director certifies that a Service Board has not presented its budget and two-year financial plan in conformity with the rules adopted by the Authority under the provisions of Section 4.01(f) and this subsection (d), and such certification is accepted by the affirmative vote of at least 12 of the then Directors of the Authority, the Authority shall not distribute to that Service Board any funds for operating purposes in excess of the amounts distributed for such purposes to the Service Board in the previous fiscal year. Except when the Board adopts a budget and a financial plan for a Service Board under paragraph (b)(5), a Service Board shall provide for such levels of transportation services and fares or charges therefor as it deems appropriate and necessary in the preparation of a budget and financial plan meeting the criteria set forth in clauses (i) through (vii) of subparagraph (2) of paragraph (b) of this Section. The Authority shall have access to and the right to examine and copy all books, documents, papers, records, or other source data of a Service Board relevant to any information submitted pursuant to this Section.

(e) Whenever this Section requires the Board to make determinations with respect to estimates, budgets or financial plans, or rules or regulations with respect thereto such determinations shall be made upon the affirmative vote of at least 12 of the then Directors and shall be incorporated in a written report of the Board and such report shall be submitted within 10 days after such determinations are made to the Governor, the Mayor of Chicago (if such determinations relate to the Chicago Transit Authority), and the Auditor General of Illinois.

(f) If the Authority discovers a violation of items (1) and (2) in Section 2.01b of this Act, then the Board shall withhold from that Service Board 25% of the cash proceeds of taxes imposed by the Authority under Sections 4.03 or 4.03.1 and received by the Authority and 25% of the amounts transferred to the Authority from the Public Transportation Fund under subsection (a) of Section 4.09, but not including the amounts described in paragraph (iv) of item (3) of subsection (a) of Section 4.09, that the Board has estimated to be available to that Service Board under subsection (a) of Section 4.11. To resume this funding, at least 3 current members of the violating Service Board shall testify in front of the Authority's finance committee or successor thereof. This hearing shall be held no later than 10 days after the claim of the offense. The hearing shall allow the Service Board a chance to discuss the violation. No more than 10 business days after the hearing, the Authority's finance committee or successor thereof shall take this matter before the Board to determine whether to continue sanctioning the Service Board as outlined in this subsection.

(Source: P.A. 97-399, eff. 8-16-11.)