CHICAGO Regional Transportation Authority of Illinois head Joseph Costello will retire at the end of February from the agency where he has worked for the last two decades first as fiscal chief and then as executive director.
“I want to thank Joe for his years of service. Joe’s commitment to improving the region’s transit system has helped ensure the financial stability of our system,” RTA board chairman John Gates said in a statement Tuesday announcing Costello’s departure.
Costello said he was leaving to pursue the next chapter in his life.
“I would like to thank Chairman Gates and the RTA Board of Directors for their leadership during my tenure here,” Costello said. “I’m proud of what we’ve accomplished together during my 19 years at the RTA and I feel the timing is right to explore new opportunities.”
A successor has not been named.
Costello is well-known to the local public finance community primarily because of his long tenure as the RTA’s chief financial officer. Costello took the job of CFO in 1995 and went on to manage more than $3 billion of borrowing to support capital spending at the three service boards it fiscally oversees -- the Chicago Transit Authority, Metra commuter rail, and Pace suburban bus service.
Costello has held leadership positions at governmental and transit committees and boards and the agency was recognized for its budgeting presentation and financial reporting.
The board tapped Costello to serve as executive director in December 2010. The agency’s financial prospects brightened due to a sales tax increase and improving economy but over the last year has been stung by several controversies.
The RTA butted heads with the CTA over CTA borrowing plans and attempts to push its autonomy as the RTA sought greater management influence over regional transit.
A state-appointed task force is examining regional transit oversight and may recommend changes to Gov. Pat Quinn and lawmakers on management and oversight issues.
Metra was the subject of a patronage scandal and a series of board members have been ousted after the former head of the agency accused the board of forcing him out over patronage allegations and attempting to keep him quiet with a lucrative severance package.
Costello was required to go through training after he was accused of sexual harassment by an employee.
The RTA recently laid out its case for the state to centralize and expand its borrowing powers for Chicago area transit needs at the expense of the CTA, calling the CTA’s own bond issuance “costly” and “wasteful.”
The CTA fired back, calling its parent authority “an unaccountable, bureaucratic agency.”
The proposal outlined by Gates in a memorandum is the latest in a series put forth by the RTA as the task force weighs recommendations on the governance structure of local transit. The aim is to improve regional management. The RTA could lose or gain powers as part of the process.
The RTA has exhausted most of its statutory long-term issuance capacity, although the state’s own ongoing $31 billion capital program earmarks $2.7 billion for transit.
The RTA wants the state to both centralize bonding authority for the region under its auspices and expand its capacity to $5 billion. The RTA currently has $2 billion of outstanding debt primarily repaid with sales taxes that is rated in the low-double-A to mid-double-A category.
The Quinn task force’s preliminary report found the existing system is “not guided by a strong, clear vision,” is managed by four transit boards with 47 members creating competition among agencies, and lacks accountability with too much duplication and a lack of accountability.
