COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON TRANSPORTATION AND PUBLIC UTILITIES - - - Room 400, City Hall Philadelphia, Pennsylvania Monday, November 15, 2004, 2:20 p.m. - - - Resolution 040821 - Resolution authorizing the Council Committee on Transportation and Public Utilities to hold hearings on the importance of public transportation to the Philadelphia and the Southeastern Pennsylvania region, to evaluate the need for increased dedicated state funding for public transit, and to review strategies to enhance coordinated and comprehensive transportation policy and planning. PRESENT: COUNCILMAN MICHAEL A. NUTTER, Chair COUNCILMAN DARRELL L. CLARKE COUNCILMAN JACK KELLY COUNCILWOMAN DONNA REED-MILLER - - - V A R A L L O Incorporated Litigation Support Services 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2 040821 - Transportation/Pub.Utilities - 11/15/04 - - - P R O C E E D I N G S - - -
Good afternoon, ladies and gentlemen. We're about to start the Committee on Transportation and Public Utilities public hearing on Resolution Number 040821. We have a number of witnesses for today, and we'll to try to work through this process. Ladies and gentlemen, we're trying to conduct a hearing. Could we please have a little quiet in the room. Thank you. We have a couple witnesses with us this afternoon, one of whom is the Chairman of the Board of SEPTA, along with two other board members. They have a time constraint, and I committed to try and get them out as quickly as possible, not because they don't want to spend time with us, but they'd like to spend time with some friends of ours in Harrisburg to further work on funding issues. So with that, please identify 3 040821 - Transportation/Pub.Utilities - 11/15/04 yourselves for the record, and introduce... There are two other board members with us.
Certainly, Chairman. My name is Pat Deon, Chairman of SEPTA. And also with me is board member Jettie Newkirk and Christian DiCicco, along with our general Manager Fay Moore.
I just came today. I'm heading to Harrisburg now. I didn't have time to prepare any formal testimony.
But the only testimony that I'd like to get out is very simple. The authority has a $62 million shortfall this year. Over the last seven years we have managed to close up our shortfalls by various means, including becoming more efficient. We have -- We are probably 1800 workers less now than we were when I got on the board seven years ago. We have close to $420 million in savings over that time period. 4 040821 - Transportation/Pub.Utilities - 11/15/04 We're at the point now where we've made all fixes that we think we can get in efficiencies. And now we're going to start cutting into the bone, for lack of a better word. And we're going to have to go through layoffs and drastic draconian service cuts. About a year ago we went up to Harrisburg, and we went through this process of which the... If you go back a little time when we had a tax called the Perta tax, we enjoyed about $35 million in revenue, roughly, which has disappeared. So, a lot of these issues where people are saying that we're inefficient and we're not managing, we've had money actually pulled from our budget in various shapes and forms over the last, you know, five, six years. So when we went to Harrisburg last year, we asked the Governor and the legislature to come up with a permanent fix. We got from the Governor's office, we have to look into the efficiencies of your system and how we look at it. 5 040821 - Transportation/Pub.Utilities - 11/15/04 And transit all over. The whole state's in trouble with transit. It's not just Philadelphia. They sent in a woman I think you guys are very familiar with, who's Arlene Freiner who used to be -- work for City Council and did the budget, and then also went off to work for Amtrack as a CFO. She spent about three or four months in our building, went through all of our budgets, all of our stuff, came back with a glowing recommendation that we deserved to have dedicated funding, we deserved the funding we need to have the system run. So I think that the issues of putting aside anybody's ill feelings towards SEPTA, I think we've done a great job of at least getting this authority into a financially dedicated mode. We do the right things. We try to be responsive every day. And I think we deserve to get this done. It's really been a fight.
Mr. Deon, I'm also aware, if you want to put on the record, haven't there been others or at least one 6 040821 - Transportation/Pub.Utilities - 11/15/04 other study or analysis from a financial standpoint of SEPTA's operations? And what did that show?
There was a mandated study that we go through for our financing for Act which was completed about a year 8 ago, which basically came back with executive 9 summary of we're probably the third or fourth 10 most efficient authority in the country, that 11 we really deserve to have this kind of 12 funding set forth with us. 13 And the other study was done about 14 three months ago. Representative Perzel, 15 Speaker Perzel, put together a committee 16 study, airports, and included transit 17 authorities in it. 18 They came out studies again, and 19 came back with the same recommendations that 20 we should be adequately funded on the -- from 21 Harrisburg. 22
So the focus at 23 this point, again, putting aside any of the 24 day-to-day engagements that riders may have 25 with the system -- And everyone will have 7 040821 - Transportation/Pub.Utilities - 11/15/04 their story. But I think what's critically important -- and I won't hold you up from your mission this afternoon. What's critically important is a unified message, I think, out of Philadelphia, Bucks, Chester, Delaware and Montgomery Counties, which is what SEPTA is. It's not just the transit system for Philadelphia. It's Southeastern Pennsylvania Transportation Authority. That we need a dedicated funding source in order to maintain the current system; if not, make improvements, continue efficiencies, and work together to have a unified transit system. And is that what you're seeking to do?
Exactly. What I have today with me are two of the city board members, that come from the city, who are very good at making sure the city is represented well on this board and that we do the right things. But the flip side of that is that we are a five-county regional board. The 8 040821 - Transportation/Pub.Utilities - 11/15/04 reverse commuting, the schools, the hospitals all depend on this system every day. And to lose service on weekends, to lose the service after 8:00 p.m. will cut into the hospital work, the nursing homes. To lose 1,400 jobs of our great people -- we have great people that work for SEPTA. We got great unions. They do a good job every day. We move a million people. So really, the issue today is, we've all got to work together: Unions, management, the region, to get some dedicated funding for SEPTA, and to make transit in the state of Pennsylvania a priority.
Thank you. I'm going to head up to see our Governor and ex-mayor.
And don't exceed the speed limit. Don't exceed the speed limit. 9 040821 - Transportation/Pub.Utilities - 11/15/04
Thank you. Miss Newkirk or Mr. DiCicco, would you like to make any comments as well?
-- for the opportunity. As you know, Councilman, I was appointed back in '92. See how things move along when you're having fun.
And so, I have seen and heard all the complaints against SEPTA, and been there and made some of those complaints myself. I have seen three general managers, three board chair, and been back and forth in terms of Harrisburg, trying to get that dedicated funding. In 1991, if you recall, we thought we had succeeded.
Right. 10 040821 - Transportation/Pub.Utilities - 11/15/04
Then Harrisburg said, well, you know, if you stop begging and make yourselves streamlined and efficient, we will give you the money. And SEPTA did that. It laid off hundreds of employees, and got rid of others through attrition, streamlined its work force, and went through all of those things in terms of becoming financially sound and well managed. A part of becoming that was its present general manager, who at that time was brought abroad as the treasurer, and who helped to bring SEPTA into sound financial footing. So I think that I can say, from the viewpoint of the city, and as a board member, that SEPTA has listened to all of the detractors -- (Councilman Clarke entered the Council hearing room.)
Hello, Councilman. In terms of making itself a well-managed system, it has cut out the fat. 11 040821 - Transportation/Pub.Utilities - 11/15/04 There is no more fat. It has gotten rid of, I think, too many employees. Of course, I get blamed for saying that by some of my suburban colleagues who think that there's no such thing. But in order to run a transportation authority, you need bodies. And I think we need bodies. So, I think we have done all the management things that can be done. If you recall the episode with the Phoenix audit, which talked about performance issues, and equipment, and all of that. So, it's been through every kind of management audit we can think of. It has done the employee breaks, and now it's time for brunch. I'd like to respond just briefly to some of the things I have been hearing, one of which is that SEPTA is threatening once again. SEPTA is mandated or management is mandated by law to present a balanced budget as you know, as is City Council, as is the Mayor, all of us. 12 040821 - Transportation/Pub.Utilities - 11/15/04 And in doing that, it has to have public hearings. And the basis for those public hearings have to be the testimony and presentation of the plan that it will use to balance its budgets. So what has been rolled out is not a threat. It is a proposal and a plan, a proposal to the board, and a plan of what would have to happen in order to balance the budget if the money is not forthcoming. It is not something that management wants to do. And it certainly is not something that board members want to do. Nobody in this city or on the board wants to see a cessation of weekend service. I think it would be disastrous not only for SEPTA, but for the entire region, its riders. So that is not something that non-compassionate suburban board members have presented that they want to do in order to threaten the riders. It is a proposal by management to tell the board members that this is what would have to happen in order to come up with 13 040821 - Transportation/Pub.Utilities - 11/15/04 the balanced budget if the money does not come for dedicated funding, or as they are now talking about, a quick fix from Harrisburg. And so, SEPTA is not threatening. And I would hope that the riders, the constituents, your constituents, SEPTA's constituents, would understand that on this issue, SEPTA, its union, are on their side; that all of us are in this boat together, and if it sinks, we'll all go down together. And so that the animosity against SEPTA can be temporarily put aside. I know I would dare not hope for permanency in this, but temporarily put aside, so that we can all pull forward and work on this funding issue together. And then we can go back to fighting about bus drivers or whatever. Thank you so much, Councilman.
Thank you very much, Ms. Newkirk. Mr. DiCicco, do you have a comment? MR. DiCICCO: Just briefly. Good afternoon, Councilman. 14 040821 - Transportation/Pub.Utilities - 11/15/04 I probably couldn't add much to what Mr. Deon and Ms. Newkirk has said, but I would take this last opportunity to make one last passionate plea to our riders, and to the Governor, and the majority in control in the legislature. These problems are real at SEPTA. The Governor's report by Miss Reiner show the problems at SEPTA, and SEPTA has addressed those problems. The Governor's report -- or Miss Reiner's report about SEPTA concludes that SEPTA has cut the fat, as Miss Newkirk has explained. But it is now up to the Governor to come through with his promise to find a long-term fixed funding source for SEPTA, so that we -- this city, as well as the five counties, finally puts this animal to rest, and we don't have to go back to our riders to bear the cost of public transportation. Thank you.
Thank you. Let me note for the record that 15 040821 - Transportation/Pub.Utilities - 11/15/04 Councilman Clarke is in attendance. And Councilman, any questions? Miss Moore has not testified yet. To Commissioner Deon, who is not here, and Miss Newkirk, and Mr. DiCicco, and then we'll have the General Manager, Fay Moore, I would only say that the presentation that you've made and will make, I think, bring a great clarity to what the issues are and what they are not. My hope is that out of some of this crisis and hysteria, we would be in a position -- and working along, again, with our unions -- to lay out a better case to the general public, and certainly to the riding public, that mass transit is critically important to this region. We will all have, again, our day-to-day issues and contact. It's not just a Philadelphia problem. It's not just a five-county problem. But it is a statewide problem, an issue that is affecting many other transit agencies across the Commonwealth. 16 040821 - Transportation/Pub.Utilities - 11/15/04 Now, we only read about, generally in our papers, about SEPTA, and in many instances we may only care about SEPTA in our region. But I think the issue of mass transit and its importance as an issue, we could all probably stand a lot more education and information around that issue and figure out how we rally around our own transit agencies, and the many others across this Commonwealth that are facing the same kind of problem. So, with that, General Manager Faye Moore, please identify yourself for the record and proceed.
Good afternoon, Councilman Nutter, Councilman Clarke. I am Faye Moore, General Manager of the Southeastern Pennsylvania Transportation Authority, lovingly referred to as SEPTA. Thank you for the opportunity to speak today on the issue of transit funding policy. Utilities - 11/15/04 supporting the economic growth and strength of the region, and the need for dedicated funding, there are a few SEPTA facts that I'd like to share. SEPTA is a public not-for-profit transit operation created in 1964 by the General Assembly in Harrisburg. We were formed from the assets of bankrupt private transit companies. Today our operation includes some 200 routes served by 3,000 vehicles, and we employ approximately 9,000 people. 3 billion. 70 percent of the individuals employed by businesses in Philadelphia central business district use SEPTA to get to their jobs. The Philadelphia International Airport, center city hospitality industry can attract and retain employees in part because SEPTA gets people to their jobs. We get them there for early morning, late night and weekend work schedules. Utilities - 11/15/04 People ride SEPTA to shop, dine, attend events at the sports complex. And all of these activities add and help support our local economy. I would venture to say the customers I just described believe the money they put in the fare box more than pays for all the costs associated with delivering that ride. So they might be a little surprised to learn that their fares, our customers fares, only cover about 50 percent of the cost. The remaining 50 percent comes from state and local subsidy support. Of that, Harrisburg provides the majority of the funding, at 72 percent versus 15 percent for all five counties combined. Although the state is the single largest funding source, the amount of subsidy SEPTA receives from dedicated funding is low, especially compared with other major transit operations across the country. 75 percent of its subsidy from dedicated sources. Unfortunately, the lack of a viable dedicated funding program is not the only issue impacting transit. We have also been affected by the pattern of flat appropriations from the state's annual operating budget. While the subsidy we receive from Harrisburg has many components, only one, the base operating grant, has the potential for annual increases. And the grim reality is, this grant has not increased in six of the last eight years. Had the state operating subsidy grown an average of 3 percent over the last 12 years, a rate lower than inflation, I wouldn't be speaking to you today because there would be $500 million in funding available for transit. Utilities - 11/15/04 so some of you might be wondering what happened. When the current program was passed, it was projected to provide $200 million in funding for public transit by 1992. Unfortunately, it has never reached that expectation some years later. 9 Had dedicated funding achieved 10 anticipated levels and grown 3 percent each 11 year, I wouldn't be appearing before you 12 today, because there would have been an additional $912 million available for transit statewide. Without a stable predictable source of funding, every fiscal year SEPTA faces the daunting task of balancing our operating budget. This process has become highly publicized and frequently criticized, but an increasing sad story nevertheless. Utilities - 11/15/04 for diesel fuel, health care and pensions, and an annual cycle of escalating budget shortfalls. Without a stable, predictable source of funding every year, the authority must hope that Harrisburg provides sufficient general operating budget funding, and that we can identify enough one-time measures to balance our budget, as we have done over my short but long lifetime at SEPTA of nine years. Unfortunately, we do not have any more one-time fixes, and SEPTA is now faced with implementing a contingency plan to close our $62 million deficit.
The contingency plan, which was a subject of public hearings in October, calls for eliminating all weekend service, raising fares by percent, reducing Monday through 21 Friday services by 20 percent, and reducing 22 the associated SEPTA staff. Utilities - 11/15/04 who don't use transit. These reductions will create significant economic consequences for this region. Less transit service will mean more cars on area roadways, especially during rush hour. It will mean more air pollution and greater use of energy resources. Reduced or no service will impact local businesses, especially those with weekend and second and third shift work operations. Employees will not be able to get to work. Shoppers will not be able to get to area retailers or malls. Finally, SEPTA is not just a transit provider. We are a business that spends in excess of half a billion dollars each year buying goods and services. Many of our purchases are with local and Pennsylvania businesses. But with drastically reduced levels of service, SEPTA will be buying fewer supplies, and products, and services. Utilities - 11/15/04 be laid off from SEPTA and forced into a challenging job market. Many might not be readily employed, and could end up requiring social service support, after having gainful employment. If you will recall, I mentioned the authority's assets came from bankrupt private companies. Transit is not a money-making venture and it never has been. Ironically, we are now doing the very things that cause the private companies to falter: Raising fares, and reducing services, until ridership levels could no 15 longer support the service demands. As we are told every day, SEPTA is not perfect. We cannot satisfy every demand or expectation the public may express about public transit in the city or the region. But wouldn't it be wonderful if over the next several years SEPTA was able to devote its full efforts towards running the system and trying to satisfy the public's demands and expectations, and spend less time begging for transit funding? Utilities - 11/15/04 Thank you, Councilman Nutter, for your individual efforts to help our transit. And thanks to you and members of the committee for the opportunity to present this information. Your support of public transit is greatly appreciated, and I do thank my board members for rearranging some very critical times to appear with us today.
Well, thank you very much, Miss Moore. And I think, again, your board members are demonstrating their... not only their regular commitment to SEPTA, but also to mass transit and public funding, but also giving this Council certainly a direct sense of their commitment and support by being here with us. We have been joined by two other members, Councilwoman Donna Reed-Miller, as well as Councilman Jack Kelly, who has committed to staying in the chamber all day long. And if anyone wants to have another hearing, Councilman Kelly will be glad to be 25 040821 - Transportation/Pub.Utilities - 11/15/04 here for that into the evening. Any questions for Miss Moore? Councilman Clarke.
Thank you, Mr. Chairman. Good afternoon. This may not be necessarily a question for you, but you have the mike. With respects to contributions, do we get any federal contributions for SEPTA or to the state beyond capital improvements? Do we get any operational federal contributions?
At one point in time our transit agencies did get federal operating -- direct federal operating assistance. Part of the reason for the 1992 and the 1997 efforts to get additional money to transit is the federal government stopped making direct contributions or subsidy allocations to transit. There is the opportunity for us to get some type of preventive maintenance, but that is definitely part of our capital program. But there is no direct operating subsidy provided to mass transit. 040821 - Transportation/Pub.Utilities - 11/15/04
I'm not really sure why the federal government stopped it. It stopped. I think it was also an effort to push transit and transit concerns back into the states. But it was definitely stopped.
So, has the contributions been redirected or did it simply cut off the line item, no more federal contributions to the states for mass transit, or was it done in a different way?
There was absolutely no 15 direct operating subsidy, and I think we stopped it in about 1997?
I think there was a Democrat in office then, wasn't it? I'm going to follow up, actually, on some questions that I had maybe a year ago. 27 040821 - Transportation/Pub.Utilities - 11/15/04 And I'm not sure I got any information relating to that. The revenue generated on a county-by-county basis by the various transit divisions -- You have the Philly Transit Division, and you have the transit divisions for individual counties. Do you have information on the revenue generated by those counties? Like Philadelphia, although I know we do have some inner mobile transportation and intercounty transportation. But by and large, a substantial amount of Philly's operations are internal, i.e., the buses and the subways. Do other counties have similar types of operations internally, bus lines that are essentially in that particular county?
We don't necessarily do things... It just so happens that City Transit Division does include mostly City Transit vehicles or vehicles within City Transit. We do most of our accounting by 28 040821 - Transportation/Pub.Utilities - 11/15/04 division. So, the City Transit Division. There's a Frontier Division. Then there's a Victory Division. There is some parallel to where they reside. So, Frontier and Victory would be more in the suburban areas. City Transit is more city focused. Then there's regional rail. But it's not necessarily each by five counties.
All right. When I asked that question last year, I had asked for a county-by-county basis. And I never got that information. Is it because...
Because there is no 19 county by county. We do it by division.
In the period of a year is there a reason why anybody couldn't have done an analysis on that?
I'm not so sure -- I'd have to go back, but I'm not so sure we understood it to be county by county, as 29 040821 - Transportation/Pub.Utilities - 11/15/04 opposed to division. But even then, I'm not so sure we'd ever be able to give you county by county, the revenue that was generated by county. If you're asking by subsidy, I thought we had provided that information to you.
Because I'm trying to get a sense of the revenue generated on a county-by-county basis. And actually, if you don't have that, I guess you could look at Philadelphia versus the other divisions which are all suburban short term, but I really would like to get the county-by-county information.
Well, again, we don't do anything in terms of revenues generated by county. We do it by division. And, again, you can draw some parallels with those divisions in the counties that represent -- But we don't do 30 040821 - Transportation/Pub.Utilities - 11/15/04 anything county by county, in terms of revenue.
I understand. I'll ask the question again, and probably won't get an answer again. But I'm going to keep asking the question every time you come here. With respects to the subsidy contributed to the counties... And I'm assuming you don't have that on a county-by-county basis, since you don't know. Or do you?
So, we have -- we understand the subsidies that go to each county, but we don't understand the revenue generated by each county.
Because in some areas we have the ability to cross bill between divisions. It's still not driven by county, but it's driven by the divisions. So we, can give you that. We can tell you which county --
How do you 31 040821 - Transportation/Pub.Utilities - 11/15/04 determine how much subsidy each county gets?
It's by the division. So we look at each division that would have -- We look at the projected deficits of each one of those divisions, and then --
But you just said -- I asked you did you have it on a county-by-county basis, the subsidy contributed to each county.
-- do you have on a county-by-county basis the subsidy that's contributed by the state. And you said yes. But if you're saying that you didn't misunderstood [sic] me, then fine.
Let me just make sure I'm understanding what you're asking. We can tell you how much subsidy is given to us by each one of the five county areas. We can 32 040821 - Transportation/Pub.Utilities - 11/15/04 tell you how much subsidy is provided to us by the state of Pennsylvania. Is that what you're looking for?
But you can give me the revenue generated by Philadelphia versus the other divisions.
I can give it to you by division. I just can't give it to you by county.
City Transit versus Frontier versus Victory versus regional rail; yes, sir, I can give you that.
As soon as we get back and can fax it to you. 33 040821 - Transportation/Pub.Utilities - 11/15/04
You've already answered my next question. With respects to the counties, you say that some of the other counties do have internal operations similar to Philadelphia?
There are some divisions that can be more closely aligned to some of the counties, but we don't have -- with the particular exception of Philadelphia.
What would it take for us to do a county-by-county analysis?
So, I'm trying to understand how you can determine the subsidy on a county-by-county basis, but yet you have no sense of the revenue generated on 34 040821 - Transportation/Pub.Utilities - 11/15/04 a county-by-county basis. And I would think that the revenue generated would have some correlation to the subsidy that you provide. If this particular county was providing more revenue, maybe they should get back more subsidy.
It is definitely... Revenue by revenue we cannot. But again, we do all our accounting by division. The subsidy is based on a predetermined formula. And activity in each one of those divisions is sort of -- certain level of activity is assumed by each one of the counties.
It kind of makes me get a sense that you don't really want to know how much revenue is generated on a county-by-county basis.
But yet you can -- I'm just getting a sense that if I 35 040821 - Transportation/Pub.Utilities - 11/15/04 have a particular county, and I'm providing the majority of the revenue, then I probably should be getting back, you know, substantial share of some of the subsidies, right?
If you can't ever determine how much revenue is generated on a county-by-county, then you can't really determine, you know, how much subsidy I should get, in a real sense.
When we get back we will also send you the formula. But the formula is predetermined, and it goes hand in hand with the degree of service or expected deficit expected from each one of the divisions and spelled out by county. So we'll fax you that, too.
You just said... Wait a minute. 36 040821 - Transportation/Pub.Utilities - 11/15/04
The county is only by the subsidy level. It is not by the revenue generated by each county.
I understand that. You made that clear. I just can't understand how you can determine what the subsidy should be on a county basis but you don't have a sense of what the revenue is on a county basis.
So that determination is not a decision that SEPTA can make in order to do that figuring. It's the state formula which tells how much the state is going to give. And then based on all these factors, that Ms. Moore has put in, then what the 37 040821 - Transportation/Pub.Utilities - 11/15/04 counties will also put in in terms of subsidy.
So, that is not under the control of SEPTA, in terms of making that determination.
I understand. I mean, there are a lot of things that are not under my control, but I can access the information.
Let me tell you where I'm going with this. And I think you probably know. I just have a concern that, you know, the City of Philadelphia's Transit Division is probably creating -- generating more revenue on a per capita basis than the other counties. That's just my belief. But as it relates...
Okay. I wouldn't necessarily agree. I mean... 38 040821 - Transportation/Pub.Utilities - 11/15/04
Miss Moore... But Miss Moore, you're telling me that you don't know what you're generating on a county-by-county basis. I tell you what my feelings are. And you say, no, that's wrong. You said you don't know. So how are you going to refute what I'm saying, if you don't know?
Could you tell us in what counties the different divisions operate within?
I think I have somebody here that can give us that detail. And actually, we can mark the places and we can leave copies before we leave of the information that you requested.
You can draw that line around the counties. You can do an overlay.
I didn't say that one, 39 040821 - Transportation/Pub.Utilities - 11/15/04 now.
My name is Joe Casey. I'm Chief Financial Officer for SEPTA. City Transit Division primarily is in the City of Philadelphia. However, there are some routes that enter Bucks County and also Montgomery County.
Victory Division is primarily in Delaware County. Some of that service also operates in Montgomery County, and some in Chester County. Frontier Division operates in Bucks County, Chester County and Montgomery County. And the regional rail operates throughout the system, throughout the five-county area. I will tell you there was some questions on where the revenue comes from, what county. We do not ask our customers what counties they reside in. City Transit Division includes the 40 040821 - Transportation/Pub.Utilities - 11/15/04 Market-Frankford. A large part of that revenue is generated through Delaware County residents entering through 69th Street. All that revenue is associated with the City Transit Division, even though we know a great deal of those customers, if you will, are residents of Delaware County.
Okay. So, we don't we don't know -- In all those revenues are attributable --
I didn't ask you where the people that ride the system live. I just asked you...
But that's what you're asking, as far as the revenue, what county generates the revenue. We don't ask our customers what county they're from. All we know is the City Transit Division. And we know what revenue is generated through the City Transit Division.
That's correct. 41 040821 - Transportation/Pub.Utilities - 11/15/04
If I live in Delaware County, I could very easily board at 69th Street. And that's on the -- It's across the county line, so it's in Delaware County. However, that revenue is recorded in City Transit Division. So, when you were saying that, you know, City Transit might generate a lot of the revenues, that's one of the things that Mr. Casey was pointing out, that while it's attributed to City Transit, if you really looked at it --
And I'm assuming that there are things the exact opposite of that, where a person is boarding somewhere else.
It's attributable to another county. So, at the 42 040821 - Transportation/Pub.Utilities - 11/15/04 end of the day, it may balance out which is why I'm only dealing with the specifics of the county. In this case also happens to be a division, and that revenue generated within that division, all right, and the other divisions. And what I'm simply saying, I'm concerned when I hear that you understand, you know, how much subsidy on a county-by-county basis the county should get, but you don't have a sense of, you know, how much revenue the counties are generating. And you also made reference to the fact that the SEPTA doesn't generate this program, that it's done on a state requirement.
Well, that's where I want to make -- Because there are two formulas. The one that Miss Newkirk was referring to is the matching required for our base operating grant. But then there is another formula, and we'll leave you copies or we're actually -- before we leave, where the 43 040821 - Transportation/Pub.Utilities - 11/15/04 formula is percentages established. And that's how we recognize the subsidy needs for each one of the counties within the divisions.
So, at the end of the day, as an elected official who represents Philadelphians, how could I feel comfortable that Philadelphia is getting its share, Philadelphia County is getting it's share of subsidy, as it relates to the amount of revenue that it generates, on a fair and equitable basis? Because I think that as a lay person and, you know, guy living in North Philadelphia, talking to people, most people believe that the Philadelphia Division generates the majority of the revenue. And a lot of this has to do with, you know, simple visuals. You know, they see a train going to the suburbs, riding the suburbs, four or five people on it. And they see the 48 going down 29th Street, people standing up like sardines, you know. They have to start another bus at 29th and Girard 44 040821 - Transportation/Pub.Utilities - 11/15/04 because by the time the bus gets to 29th and Girard from 29th and Allegheny, it's filled. So the people that live south of 29th and Girard can't get a seat, let alone any place to stand. They see this. But they see in a lot of the suburban counties the level of density is much less that the level of density on the vehicles that are in Philadelphia. So from a layman's perspective, we get the sense that we're spending the bulk of the money, but yet we're not getting, you know, an equitable share of the subsidy coming back into the city. And I don't have -- I don't have an answer. I've been trying to get that answer: It's a fact or it's not a fact. And I don't -- It doesn't seem like I'm going to get it again this year.
I will tell you what we will give you. We'll leave you the formula. When you look at the formula, if you can still make that statement, give us a call and 45 040821 - Transportation/Pub.Utilities - 11/15/04 we'll come back. Because the formula clearly indicates that a significant percentage of the subsidy does, indeed, come into City Transit Division. While it generates a lot of the revenue, it also generates a significant portion of the expenses.
And it's by formula. And again, you need to look at the formula. The formula has been in place --
The formula has been in place for a long time. The formula requires the consensus of the five counties to change the formula.
But if, in fact, the formula is weighted towards the other 46 040821 - Transportation/Pub.Utilities - 11/15/04 counties --
We'll leave you a copy of the formula. The formula has a significant percentage coming into the City Transit Division.
Will you also leave me a copy of the map, indicating where the divisions are, the City Transit Division, and Frontier, and the Victory?
Well, why don't we leave you this formula? And if you need additional information... Because this might answer the question --
Why can't you leave me a map showing me where the counties are -- where the divisions are?
Because we don't -- Sir, I'm sorry, but we don't walk around with the maps.
Yeah. We'd have to give 47 040821 - Transportation/Pub.Utilities - 11/15/04 you a system-wide transit map.
I'm sure you'll give the Councilman all the information he needs. Right?
Thank you, Mr. Chair. Good afternoon. I have a couple questions. What was the gas tax for a few years back for SEPTA? Was that some form of dedicated funding?
First of all, SEPTA cannot benefit from the gas tax. We are prohibited from the State Constitution from benefiting from the gas tax. We received dedicated funding in 1991. It was a series of how we describe it as nuisance tax; in addition to the electric, I guess the real estate taxes on public utilities. That was the biggest piece. That 48 040821 - Transportation/Pub.Utilities - 11/15/04 was -- That was dedicating a nice percentage of dedicated money. But in 1997-'98, we went through deregulations. And the utility portion -- related utility portion dropped from maybe $30 to $40 million. We're getting less than $1 million from it this year.
Can you tell me what Senator Greenleaf's bill and Representative John Taylor's bill is all about, what it actually will do or won't do?
The essence, because I don't have it in front of me, but the essence of it would be to take about three percent of the sales tax and move it as a dedicated source for mass transit.
Okay. Because, I mean, you've said it in your testimony, I mean. The cutbacks and the elimination of weekend service would be a 49 040821 - Transportation/Pub.Utilities - 11/15/04 drastic negative impact on the economy here in this city and the surrounding suburban counties. So... What is SEPTA doing? When are these bills going to be introduced? I mean, what's the status? What's going on? I guess that's what I need to know.
I think they have, indeed, been introduced. At this stage in the game we don't know much more than we did before. This is the lame duck session. We are hoping that sometime during this session we will get some type of dedicated funding. From all reports we're hearing, maybe not dedicated funding. This time maybe another one-time fix. So, unfortunately, we'll be back having these types of conversations more than likely next year. I look so forward to them. But we do have people. Taylor -- Senator Greenleaf, who is also a SEPTA board member, that have introduced it. I'm just not sure at this stage of the game whether there's enough time for dedicated funding 50 040821 - Transportation/Pub.Utilities - 11/15/04 bills to be passed.
Just to follow up, Miss Moore, what is your drop-dead date, as far as the anticipated cuts that you want to make in services? When is it -- In other words, you're saying that the legislature right now may not even get to this until next year.
But what are you planning to do before this? Or do you still anticipate making those cuts? And if so, how do they affect the senior citizen population and also the disabled population in the city? You mention in your testimony, but I'd just like to know basically what they're anticipating here.
Okay. I can tell you first and next steps. We presented a financial briefing to the board last 51 040821 - Transportation/Pub.Utilities - 11/15/04 Thursday. They have asked us to come back this coming Thursday at a board meeting to give them some idea of other options available. The options will include, if we put weekend service -- If we take it off the table and, you know, keep weekend service, what type of additional fare increases or service reductions might that mean from Monday through Friday. So that's the next thing that we have to do Thursday. If we don't get dedicated funding or some type of fix between now and November 29th, then there is a special board meeting being scheduled for December 2nd, where we will ask the board to consider our recommendations to close the $62.2 million of deficit. The recommendation as it now stands would be the contingency plan.
The effective date for the fare increase would be the 1st of 52 040821 - Transportation/Pub.Utilities - 11/15/04 January, and the -- Right now the expected time line for the service reductions would be January 23rd.
Any questions? Miss Moore and members of the board, thank you very much.
I don't know what your schedule, Miss Moore, is like. Maybe if you could possibly spend a few more moments with us -- I don't know if any other questions will come up. But I know you have a transit system to run. So, you'll let me know. You'll let me know what your time situation is.
But I will also let you know that in the event I do have to leave, there are staff people that I feel very comfortable can answer questions.
Thank you, again. 53 040821 - Transportation/Pub.Utilities - 11/15/04 UNIDENTIFIED VOICE: I have a question. I'm a SEPTA union local 234 bus operator who got hurt driving a SEPTA bus because the brakes and the steering failed. The accident happened in 1984.
Ma'am. UNIDENTIFIED VOICE: They took away my work disability, and...
Ma'am, you'll have a full opportunity -- UNIDENTIFIED VOICE: I want to know where the money went. Similarly, my workers' comp -- And those things that you're talking about, Mrs. Moore, are those divisions that we're talking about.
Ma'am, you'll have a full opportunity to come up to the table and express yourself. We don't have question and answer back and forth between the two witnesses. If you have a statement that you want to put on the record, you'll do it at the table, like all the other witnesses. Thank you very much. 54 040821 - Transportation/Pub.Utilities - 11/15/04 UNIDENTIFIED VOICE: When will I be able to do that, sir?
When we get through our witness list, ma'am. Mr. Jeff Brooks, President of Transport Workers' Union, Local 234. Congratulations to you and welcome to City Council. Please identify yourself for the record.
My name is Jeffrey Brooks, Senior President of Transport Workers' Union, Local 234 of Philadelphia. I represent City Transit Division and suburban divisions such as Frontier and Red Arrow Division, newly elected and vehemently [sic] involved in the dedicated funding base for SEPTA, as well as the community, as well as our members. Thank you for having me here. And one of the things that wasn't mentioned, and the question wasn't asked, was the fact of the people who will be displaced which are my members, which are obviously your 55 040821 - Transportation/Pub.Utilities - 11/15/04 constituents.
We have an interest from day one, from October 3rd, when my staff was sworn in, as well as myself, to make sure that there will be a dedicated funding base. I've been with SEPTA years. 19 9 of them I've been actively involved in this 10 union. So, I also am aware of 1991 when the 11 dedicated fund was provided for SEPTA. I 12 rode SEPTA's buses up to Harrisburg, as well 13 as my staff and members did so also last 14 week. 15 We have been making every effort to 16 secure our actual legislators in the State of 17 Pennsylvania, secure their commitments for 18 the purpose of a dedicated funding base. 19 One of the things that becomes clear 20 to me is, just tomorrow they're scheduled for 21 all labor leaders in SEPTA to meet with Faye 22 Moore and her staff in reference to possible 23 budget crisis. Although they are anticipating 1400 members to be displaced, furloughed, laid 56 040821 - Transportation/Pub.Utilities - 11/15/04 off, we in fact could very well bear the brunt of this, being the largest union within SEPTA. As myself being representative of close to 5100 members, we understand how vital this is, and not only to ourselves, but because not only are we union members, but also we wear many hats in the community, I myself being a Democratic committeeperson in Olney. But our members also are spread apart in the five counties, not just Philadelphia. Although I was born and raised in Philadelphia, I understand that our members have decided to move elsewhere. But our employment has been a sound employer for quite some time. Our biggest problem in this has been that we viewed that the riding public and some legislators has not taken this seriously. As I said, I've been involved in this union and been employed in this company 57 040821 - Transportation/Pub.Utilities - 11/15/04 for some years. So as a result, I have seen every facet of SEPTA's rise and fall, when it comes to budgetary issues. More so that we also have seen as our operators of vehicles, mechanics and other trades, we have also seen how we, the front line, in essence the front line managers, in the sense of the individuals who service the riding public are the first ones who will be accosted by those same individuals if there's a fare increase. We will be the same ones who will be held accountable, especially in the sense that we have a contract that expires in March of next year. We will not bear the brunt of that with this crisis. But in going to Harrisburg, I've heard certain individuals make statements that were derogatory against our employer. Although we have a history -- And you will recall back in 1998 we filled these halls.
I do remember 58 040821 - Transportation/Pub.Utilities - 11/15/04 that.
Under a 40-day strike. I was the recording secretary at that time.
And although we have a history with SEPTA, I understand that we are bound to them, no different than a marriage. Marriages... There are ups and downs. We are seeking counseling at this time. So as a result, to keep a little levity in this, I believe there's nothing else that we have an interest, but our interest, I have made clear to every legislator that I have met with -- And there's been numerous ones.
-- as well as individuals who have proposed bills. We will without question continue to fight, even though there's only a Band-Aid put on this problem. It's a small amount of money, in the sense of how SEPTA does business and the crisis that they face, if there's only a 59 040821 - Transportation/Pub.Utilities - 11/15/04 small amount to fix this problem for the -- for the short term. We are looking or we will proceed on and go forward to make sure that a dedicated funding base occurs, so in fact we are not here year in and year out again wed with our partner with hat in hand. So, at this point, I have members who are calling me every day, in reference to the possibility of a layoff, and that's real. And we're trying to impress upon each and every person who will listen that with our 5100 members, there are votes. And we will, although I stated I'm a Democratic committeeperson, I've made this perfectly clear to every legislator who will listen, I'm bipartisan as president of this local. I will do for those who do for us, period. So, if nothing else, what we ask behind you is to use your influence to make sure that we do secure funds. And my partners in other parts of the state I have been talking to numerous times. And the transit system in the state 60 040821 - Transportation/Pub.Utilities - 11/15/04 of Pennsylvania is not a SEPTA problem. It's a state of Pennsylvania problem. It's a transit problem for all the riders of Pennsylvania. And we are... Without question, we are not going to leave the community and the riding public behind. So, we thank you for this time, and we ask your help in any way possible. Unfortunately, I cannot stay. I have other engagements. I am going on the radio, for one, to beat the drum.