Second time’s the charm for $26.1 million transfer to CTA; Council members still angry about being dissed

Despite last week’s tongue-lashing, CTA President Dorval Carter Jr. did not appear when the Budget Committee reconvened Tuesday.Instead, Carter’s chief financial officer made the case that the money is needed to shore up CTA pensions.

SHARE Second time’s the charm for $26.1 million transfer to CTA; Council members still angry about being dissed
A Brown Line train travels over the new CTA Red-Purple Bypass near the Belmont Station on the North Side, Monday morning, Jan. 24, 2022.

A Brown Line train approaches the Belmont Station earlier this week.

Ashlee Rezin/Sun-Times

The second time was the charm for a pass-through of funds from the city to the CTA — but only after City Council members were told the $26.1 million real estate transfer tax windfall would be used to help retire pension obligation bonds.

Six days ago, the seemingly routine and non-discretionary request triggered a buzz saw of opposition from Budget Committee members livid that CTA President Dorval Carter Jr. didn’t see fit to testify about how the money would be spent.

Sensing almost certain defeat, Ald. Pat Dowell (3rd), the committee chairwoman, moved for a brief recess to give Carter time to join the virtual meeting. She later announced Carter was not available and recessed her committee meeting.

In spite of the tongue-lashing he got last week, Carter did not appear when the committee reconvened Tuesday to take another crack at the fund transfer.

Instead, Carter sent Chief Financial Officer Jeremy Fine to make the virtual case that the money is needed to help retire pension obligation bonds issued in 2008 to shore up a pension fund that supports 18,750 active employees and retirees.

The annual debt service payment is $150 million on bonds that won’t be retired until 2040.

Fine’s rather bureaucratic testimony was preceded by a more impassioned plea from Deborah Lane, secretary-treasurer of the Amalgamated Transit Workers Union Local 241.

Lane urged the committee to fulfill its statutory obligation to pass the transfer tax windfall through to the CTA or risk piling additional pension payments onto hard-working CTA bus drivers, who already pay 13.24% of their salaries toward their pensions.

“We don’t want our members to keep taking hits on a pension plan that needs to be really, really fixed,” Lane told the Budget Committee.

Committee members were not about to leave CTA employees in the lurch. But before signing off on the fund transfer, they were determined to extract their pound of flesh from the CTA.

“My question is really simple: Where is Mr. Carter?” Black Caucus Chairman Jason Ervin (28th) asked aloud about a CTA president who was recently rewarded with a 33% pay raise — to $350,000 a year.

“I’ve heard from multiple people at CTA above and below him. But, I haven’t heard from him.”

Sam Smith, the CTA’s vice president of legislative affairs, sheepishly responded, “He is not here. We were asked ... to appear to answer questions. ... I did talk to President Carter earlier. He wants to reach back out. There’s a lot of follow-up that we need to do speaking not only to your concerns but other aldermen.”

Ervin stood his ground.

“I don’t think we’ve ever heard from him. ... If the gentleman feels it’s beneath him to come talk with us, then that’s the message that’s being conveyed,” he said.

Ald. George Cardenas (12th), Mayor Lori Lightfoot’s deputy floor leader, said he appreciated the call he got from CTA Board Chair Lester Barclay after last week’s gripe session. But it’s not a replacement for Carter’s testimony.

“I acknowledge the fact that money has to go to the CTA based on statutory requirements. But it’s by no means a thumbs-up on CTA and their management. It’s lacking. There’s a tension. This is not gonna go away,” Cardenas said.

“The next time something comes up on the CTA, I better not get a call from anybody except the CEO of CTA talking about how management is structured and the accountability that must be had from that body.”

Downtown Ald. Brendan Reilly (42nd) said he is “all for” using the embarrassment of transfer tax riches generated by a booming housing market to “stabilize” CTA pensions.

But there is a “fundamental lack of communication” between the CTA and City Council that needs to be fixed.

“This would have been a great opportunity for President Carter to get up here and explain to us what the plan is to improve safety on our transit system — especially our trains,” Reilly said.

“We need to have a broader conversation about the future of the system itself and what we can do short-term to make it safer for its ridership — especially as we’re trying to coax people to come back to work in the Central Business District.”

Before calling for a voice vote on the fund transfer, Dowell told Carter’s minions, “You’ve heard an earful from my colleagues. ... I would recommend that you figure out a way to bring aldermen together to address issues related to the capital budget, your priorities, ridership, safety, how you’re coming out of this recovery.”

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