Thank you, Member O'Rourke. Member Thomas and then we're wrapping up with O'Neill. We have to be brief because we had stop at 12:30. We've been here since 10:00.
First of all, good morning. This is my first line of questioning. So, Commissioner, thank you for last night, Councilmember Bass's district along with other elected officials. I Understand it's a late night, going into an early morning. I'm wondering from both of you, how much of a priority is it to use your facilities to help promote, push, and encourage the creative economy? We spoke before about gaming and libraries as well as in rec centers. I'm thinking about the film industry. I'm thinking about music. What are we doing to be creative and innovative to make sure that our spaces are not only welcoming to the creative economy, but we are encouraging the next generation to maximize their God-given talent while simultaneously creating space for adults who want to be professionals to use our facility to maximize their ability.
So for our youth, we have a performing arts program that is phenomenal. And, yeah, they just gave me notes. I'm going off the top of my head. But -- and I would love to invite you -- and I'm going to be quick. But as far as other people that are adults that want to engage, we have facilities where we would love for them to come in and use those spaces.
We provide a lot of those activities now. And what I could do is put something in writing to let you know what we do and what -- and what some of the numbers are.
Council President, I just want to go on the record and continue to push us as a city to do better as it relates to promoting the creative economy. I've been advocating a lot around gaming, thinking about the film industry, thinking about the arts industry. 2026 is on the horizon. We want to make sure that people could perform and maximize their talent in safe spaces. We want to attract people here to our city and we want to partner with our rec centers and our libraries to make sure that young people and tourists can take advantage of this. Thank you, Council President.
Council President, can I -- can I throw something in. It'll take me 60 seconds maybe.
So we have a program called Making Spaces, which I think you'd really be interested in. PPRs Entrepreneur and Residents Initiative. It's focused on youth training, mentorship and business development. With the support of the Knight Foundation Partnership --
Because we are going to put this down for the record, but this is his mission that he's passionate about as well. So how about you all get together after this --
-- and then really put that strategy together.
So it could become a reality as opposed to us just having a hearing about it. He's going to stay on the case. All right?
Thank you. O'Neill, very briefly. I'm going to bang the gavel, sir.
Very brief. I don't know any other way. Thank you, Mr. President. First, I'd like to just thank you on behalf of the Philadelphia Activities Fund, Commissioner, both during the Kenney administration as a mayoral appointment and now as our ex-officio appointment to the -- to the board. You've been not only supportive but integral to the changes that have been made that needed to be made and were very difficult to happen. But following up on Councilman Harrity and the Rebuild project, I could speak all afternoon on my contempt for it, but the -- it's only as much contempt as I have for the soda tax, which we could have funded everything else but Rebuild with operating dollars. Regressive, you name it, unfair, but can you -- or revenue through your request get each district a summary of how much their constituents have paid and so to tax. We're now approaching years. And how the Rebuild money has been spread among the districts. Because every year we get the same amount of money for our districts. And that's been -- that's long before I got to Council, that practice. And I think it's a very good one. But no one ever asked us to criticize the program and they've spent years working with capital, some of the best people in this city and there's so many good people you'll hate to single them out. But whether it's your operating people, your capital people, they are just first class. And just wanted to say, if you can get me that I'd appreciate it. Thank you.
Sure. Thank you very much. I want to thank the both of you for your testimony and keep up the good work. Thank you, members. We will be back at 1:30. (Council at recess.)
Good afternoon, everyone. We will continue our Committee of the Whole budget hearing. This afternoon, we will have a presentation by the Southeastern Pennsylvania Transportation Authority. With that being said, Ms. Loughead, will you please call the first panel? The only panel.
You can state your name and title officially, for the record, and begin your testimony. SEPTA GM
My name is Scott Sauer and I am the interim general manager of SEPTA. Good afternoon, Council President Johnson, Transportation and Public Utilities Committee Chair Driscoll, members of Philadelphia City Council and guests. I'm pleased to be joined by Chief Charles Lawson of the Transit Police, I'm also joined by members of the SEPTA team representing various departments. Thank you for the opportunity to testify on behalf of SEPTA's budget request as part of the city of Philadelphia's Fiscal Year 2026 budget. The city of Philadelphia's $135 million contribution under Mayor Parker's budget proposal will help SEPTA meet its state legislatively mandated requirement to secure local matching funds to maximize the state's operating subsidy of $896 million. Critically, while SEPTA is proposing an auster budget based on current state funding, the city of Philadelphia's proposed contribution reflects a commitment that will match the additional state assistance that would be generated through Governor Shapiro's statewide transit funding plan. Thank you for this strong commitment to SEPTA's future. We are grateful to have the support of City Council on so many SEPTA initiatives over the past year. SEPTA Key Advantage, the Zero Fare pilot, automated bus lane enforcement, the Smoke-Free SEPTA campaign, and the major role that SEPTA played in the success of the Eagle's Super Bowl parade in early February, carrying 400,000 fans to NRG Station, the Parkway, and all points in between. This is my first time testifying before the full Council in my new role. I am the proud son of a trolley operator and have followed my father, Robert, to SEPTA in 1990. I've had a great opportunity to build a career at SEPTA that has included leading the system safety and operations divisions. And now the full organization as its interim general manager. Through both my personal and professional experience, I know how critical SEPTA is to our city and I am committed to seeing us through a crisis that threatens our public transportation system as we know it. Last Thursday, SEPTA released its Fiscal Year 2026 budget that would require 45% service cuts coupled with major fare increases and workforce reductions, to balance a $213 million budget deficit without a permanent state funding solution for transit. 5% fare increase. A 20% service cut would take effect in August, followed in September by the fare increase giving SEPTA the highest single trip fare in North America, alongside MTA of New York, and a complete hiring freeze that would leave critical operations and safety positions unfilled. By next January, cuts then would total 50 bus routes, in the 7 city of Philadelphia alone and 8 service on the five Regional Rail 9 lines that operate over AMTRAK 10 territory, including the Chestnut 11 Hill West would also be eliminated. m each day. 16 Approximately 800,000 17 passenger trips are recorded on 18 SEPTA on an average weekday with 19 this diminished system that we could 20 be forced to operate by January, 21 approximately 350,000 of those trips 22 would be lost. And we expect that 23 more would follow as services 24 degraded. SEPTA will not be able to provide additional service for special events or support the transportation needs of our world class city when we host the World Cup, the Semiquentennial, and other major events planned for next year. SEPTA's budget proposal was extremely difficult for me to present personally and I know is even more difficult for our customers and the public to hear. If implemented, it would effectively dismantle SEPTA, leaving the city and region without the frequent reliable transit service that has been an engine of economic growth, mobility and opportunity for the millions who call Greater Philadelphia home. For more than two years we have been warning that this moment was coming.
Now with our new fiscal year starting on July 1, and a state funding solution still not in place, we cannot budget on hope and have no 3 choice, but to budget based on the resources available. But this does not have to happen. Governor Shapiro has proposed a statewide transit funding plan that would prevent these drastic measures from occurring. Legislative action on Governor Shapiro's proposal now would provide stability and certainty for SEPTA and transit agencies across the Commonwealth, to maintain operations and deliver critical service. And I want to take a moment to thank the members of Council for your strong support of SEPTA's efforts to secure funding in Harrisburg. Particularly for participating in Friday's rally and for your strong statements highlighting how critical SEPTA is to the people and communities you represent. I can't tell you how meaningful it is for all our employees to know you have their backs. You are putting your name and actions behind SEPTA, and I want you to know that we are doing all we can to operate efficiently and fulfill our promise to provide the safest, cleanest and most reliable service. This is not a position SEPTA ever wanted to be in and we have worked hard to narrow our budget deficit. 5% fare increase and the resumption of paid parking at regional rail lots, have helped reduce SEPTA's budget deficit from $240 million in the current fiscal year down to a forecast of $213 million in Fiscal Year 2026. At the same time, we are making important progress on the priorities that matter most to our customers and our funding partners, including a 33% drop in serious crime on the system, the largest one-year decrease in SEPTA's history. The highest number of uniformed transit police officers in more than a decade. Forty-seven consecutive months of year-over-year ridership growth with 11 of 12 months in 2024 increasing by 10% or more over 2023. Advancing the top-to-bottom restructuring of cleaning operations, adding 76 front line surface -- surface bus operators. And the completion of contactless payment implementation across all modes. And our customers are noticing, too. SEPTA's first quarter customer satisfaction survey shows statistically significant improvements in every category from safety and cleaning to reliability and convenience. SEPTA's funding crisis is coming at the worst possible time and would undo the steady progress we've been making. We need to keep this positive momentum going for the customers and communities we serve. And I look forward to continuing to work with you on funding and other priorities in the coming year. Thank you for the opportunity to appear before you today in support of SEPTA's Fiscal Year 2026 operating budget request. I'm grateful for your support of SEPTA and I welcome your questions.
Well, thank you very much. Just have a couple brief questions before turning over to members of City Council. I want to start off by acknowledging Wendy Harvey-Green. Just for her hard work and her dedication and representing SEPTA here in City Council through a variety of different transitions of leadership and a variety of different peaks and valleys as it relates to SEPTA moving forward in the city of Philadelphia. I have to remind people, maybe about five or six years ago when I served as Chair of Transportation and Public Utilities, we received the award for having the most outstanding transportation authority. Not in the city of Philadelphia, but in the nation. And so we need to make sure that we're doing everything we can do possibly to support SEPTA during this crisis. We know that in the city of Philadelphia, we have our investment, but we need for our partners on the state level to really, really make sure that we are prepared, not only for 2026. I know that everybody, you know, sounds the alarm and said: Well, we have a crisis with SEPTA and we're not going to be prepared for 2026. And I believe we have to address this issue to be prepared for 2026. But I want to talk about the day-to-day people that use accepted every single day whether that's our children going to and from school, from our seniors going to and from the doctor's office, to our everyday working class families going to and from work. And so we have to always make sure that we're focusing on those most vulnerable and those most in need that rely on SEPTA every single day, even as we prepare for 2026. I also want to acknowledge Pam McCormick, give her a round of applause as well. Because she's in the thick of it in Harrisburg advocating and -- advocating, demanding and getting folks that do not live in the Philadelphia and five county region, who live across this state to look at SEPTA in a favorable light. So we want to support bridges and roads throughout Pennsylvania, and I think that's something we should do. But also making sure that because SEPTA is the economic engine for the region and the city of Philadelphia pretty much provides a significant amount of revenue that makes all parts of Pennsylvania able to thrive, then we should be treated as such. But I'm a former legislator in Harrisburg so such is not the case. And so we want to continue to advocate and be supportive of your efforts. Talk to me about -- and I asked you this earlier when I saw you at a meeting, but I just want to go on the record. I know part of our financial management, we pay $65 million to AMTRAK to utilize their rails. And I know this isn't something that's uncommon. But just go on the record on how we can advocate to restructure that deal with AMTRAK, hopefully in the future. And then obviously you have proposed a significant amount of cuts and I think these are cuts across the board. But how are we still taking consideration those neighborhoods that are already severely not receiving the level of service that we should be giving them just based upon our budgets and our equity. And so can you talk about those two, please? SEPTA GM
Sure. On the AMTRAK topic. So SEPTA runs three entire lines on AMTRAK territory. The Trenton line, the Wilmington-Newark line and the Paoli-Thorndale line. We also run two other lines on -- partially on AMTRAK territory, those are the Kingwood and the Chestnut Hill West lines. We have an obligation through a legislative action from Congress to pay AMTRAK for the lease, essentially, to run our service on this territory. That covers for -- that covers our operating needs, which would include things like propulsion power and maintenance of the infrastructure. It would also cover -- there's also a portion of it that covers capital needs. So if AMTRAK were to replace track or overhead catenary systems, they would dip into this fund. You're correct in that SEPTA is not the only entity that pays into this. Every state entity, every transit agency that runs on SEPTA -- on AMTRAK territory pays similarly to AMTRAK for that right to run on that territory. The difference in SEPTA, however, than some of our neighbors is because we are not directly controlled by the state government. The state governments in New York and Massachusetts, for example, Maryland, pay directly to AMTRAK from their budgets, whereas SEPTA essentially pays out of our operating funds that we receive from Harrisburg. We pay into that fund. So we -- the 65 million that we've cited as savings is our net savings. So that is short of the other dollars that we would pay them for a variety of issues, and then 65 million is dollar for dollar back into SEPTA's budget just by not operating on that territory. So the actions that we have taken thus far and we continue to take, and this is not a new conversation. We've -- we've had discussions with our congressional delegation on these payments, what they mean to SEPTA. We've also had conversations with PennDOT on ways that they may be able to do something differently for SEPTA. As you know, as I'm sure you're well aware, PENNDOT, the Commonwealth has their own budget deficit that they are dealing with. But they -- as of today, we have to make that payment if we run on that territory, but activity continues to try to advocate for a change in that. It is legislation however, so it would be a heavy lift for Congress to change.
Have you and your team invited Senator Pittman to the city of Philadelphia to take a tour of all the great things SEPTA has to offer here in the city of Philadelphia, since obviously he lives in another part of the state and may have a certain perspective about the city of Philadelphia and the importance or his unimportance of SEPTA to our region? SEPTA GM
We have and we still hope to meet with Senator Pittman at some point, and I'm sure we will. So whether -- whether we can have the Senator here to entertain him with SEPTA and show him all the things -- the really good things that are happening with SEPTA and the city, or if we go to Harrisburg to meet with Senator Pittman. We're open to any way we can have dialogue.
I would recommend you definitely, you and your team, needs to go to Harrisburg like ASAP, yourself. Not a consultant, not, you know, the chamber. You should lead that charge to show how critically important SEPTA is to the region. And, again, I know we keep talking about 2026, which is great and we want SEPTA to be up and running, but I'm also very, very concerned about people who live in our most vulnerable neighborhoods. The people who are the most vulnerable population of individuals who utilize SEPTA day in and day out. Hence why you have an advocate here Councilmember Nicholas O'Rourke, fighting for Zero Fare and making sure that the most vulnerable population is taken care of because they rely on SEPTA everyday. And so whatever we can do to be supportive of those efforts, I worked with Senator Pittman on the state level, but this is also most importantly about advocating to take care the most vulnerable population of individuals who need support. I want you to just briefly, before I turn over it to my members. Because it's easy to come and we give you feedback when SEPTA comes in front of us. A lot of that feedback is very critical because we want to see things being done. You titled some numbers earlier today around the issue of crime and public safety that your team has been working on. That's been something that we in this body has been taking SEPTA to task on day in and day out. So, Scott, give us an update on the progress you have been making regarding public safety. SEPTA GM
Yes, certainly. And we appreciate the feedback from Council. We -- we take that to heart. And crime reduction safety is no different. So we have heard loud and clear, we need to be safer, we need to be more secure. So the efforts that Chief Lawson particularly has undertaken over the last year plus, has been remarkable, to say the least. We have been able to reduce crime by the highest numbers that we've ever seen in the Transit Police Department's 43-year history down 33%. These are remarkable figures. We've been able to raise the ranks, the number of sworn police officers in the -- in the department to 248. We are actually bucking a trend in our neighboring law enforcement agencies where we are seeing positive numbers consistently coming into the police department. We have a class currently in the police academy, which is scheduled to graduate in June. And we are already filling our next class to begin in July. The chief and his staff have done -- have made tremendous efforts to recruit and to even return police officers who had left the Transit Police department during the pandemic for other positions in other departments, they are returning. And we have lured in other police officers from other law enforcement agencies as well. Law enforcement officers now see SEPTA as an attractive place to come and contribute to the safety of our system. We have really done -- we've introduced a virtual patrol unit which uses the 30,000 cameras we have in the system to monitor. It's a force multiplier for our officers on the ground to be able to direct resources and to combat things before they become an issue. We've also introduced now a Surface Transportation Unit. This is a unit of dedicated officers and leadership that are dedicated full- time to buses and trolleys. So that now we're not only patrolling the subway systems and our rail network, but we're out on the buses and trolleys, also preventing incidents from occurring there. And when it comes to employees. Employee assaults and issues impacting our employees have been a big problem, we've been able to reduce those incidents in almost half, 42%. So we have really made tremendous strides to keep the system safe.
And that was my follow-up question because I know the hardworking workers that work for SEPTA, specifically under TWU, who are on the front line day in and day out. I know one of the sticking points was public safety during the negotiations. Have we made progress with putting, I guess, it's the glass -- the glass, bulletproof glass that protects the actual SEPTA driver? Give me an update on that. I did see it in another country, so I want to get an update on that in terms of how we're doing. And then also last, but not least, and I'll wrap up before I turn it over to my members. We talk about the law enforcement component, right, but as we address public safety comprehensively, also talk about -- well, give us an update -- I remember y'all rolled out an initiative that deals with behavioral health. Individuals dealing with drug addiction, right? Who are basically utilizing our SEPTA transit system, right, day in and day out. But it's having a impact on the quality of life for different neighborhoods. But also, the actual -- the person that's driving -- I mean, the person that takes SEPTA every single day. So give us an update on that as well. SEPTA GM
Certainly. So on the bus enclosures. So we've had for many years a bus enclosure that -- it was really designed -- in the be -- in the beginning we were trying to curb some of this negative activity customers on our employees, so we put in a bus barrier that exists today, but it's only a partial enclosure. So it was it was it was good at reducing the severity of most instances, but what it did not do is it did not fully encapsulate the operator and it certainly was not bullet resistant. So what we have done we've done a number of things what we call our safer operator compartment program. And it's the full cabin enclosure, which is -- which is new in this country, but we are going to have an enclosure and we already have a pilot bus running on the system today that the operators are testing for us. Where the operator is now fully enclosed, ceiling to floor, from the rear to the window. This should prevent almost every physical encounter that they -- that they unfortunately have to endure. Everything from the hitting to the spitting, things being thrown at them, that -- this should take care of that. What it doesn't do is address shootings. As you know back in 2023, we had a horrible horrific shooting on our bus that result in the death of --
We just had a shooting about two, three weeks ago horrible on the bus of a 15-year-old man young man so go ahead. SEPTA GM
Certainly. But speaking to the operators safety, the TWU approached us about -- about just under a year ago with an idea to do bullet resistant glass. They had a vendor in mind that they could do it. We've went through a variety of testing. Most recently, we did the ballistics test. It passed with flying colors. So we are now moving ahead with an enclosure that includes this ballistics glass. The biggest hurdle for us to overcome was the weight. It adds significant weight onto the front axle of the bus, our engineering staff has had to come up with some solutions for that, but we think we have it. So we'll have the first bus done by the end of June. And then we'll put seven more into service soon after so that each bus to garage has at least one bus to be tested by the operators to ensure that it fits their needs. Chief Lawson, we've -- we've moved our behavioral health initiatives into the police department, so I'd like to ask Chief Lawson to comment on some of that. CHIEF LAWSON: Good afternoon, Council President. So you mentioned the SCOPE program. The SCOPE program is an acronym for safety, cleaning, outreach, engagement and planning. And that -- that program for us has netted tremendous gains for us on the system. That program remains almost completely intact as it was when it started. That program is doing tremendous work and the director is doing tremendous work on bringing in --
Can you go in the numbers? Can you go in the numbers? How many -- how many people have been serviced under the SCOPE program? And what type of services did they receive treatment? CHIEF LAWSON: Yep. So I have some numbers for last year -- last year there were more than 142,000 engagements, there were -- the SCOPE team removed more than 120,000 people off the system that were not interested in treatment or violating our services in some manner. More than almost 19,000 people were given resources of some kind or another to help them out. More than 12,000 referrals to other agencies occurred in that program. More than 280 Narcan deployments. And they do tremendous work just with our everyday problems, trying to reduce smoking on the system and things like that. They been a tremendous help. I do want to update Council on just, and some of you have heard this, in late 2024 our Office of Inspector General conducted an audit on the SCOPE program. And part of that audit revealed some alarming issues centered around the outreach portion of that program. And so essentially, they discovered some waste and some fraud in those contracts. And -- and we felt obligated upon that discovery to kind of suspend those contracts and figure out a path forward to make the most for our -- get the most for our money. I can tell you that -- that we have revamped that SCOPE program, we've embedded them now in the police department. We have -- some of the restructuring that we've done has enabled us to hire now steady supervision to monitor the engagement activity of our outreach workers in the field. We're strengthening the onboarding training of that group. So we're putting a plan in place to have better oversight and accountability of our outreach contracts and we're planning to reissue those contracts, have those folks on SEPTA by July 1.
Okay. Well, thank you very much. Chair recognizes Councilman Jim Harrity.
I'm sorry. Just for informational purposes, can you tell me who -- you cancelled the contract for the SCOPE program. Who was the provider? CHIEF LAWSON: There were two providers. One was NET, Northeast Treatment Center, and the other was Merakey. And Councilman Harry, only one contract was cancelled. Merakey is still under contract.
Wait, time out. Pause. Time out. So two contracts were cancelled for fraud. Did I -- I heard that wrong? SEPTA GM
Correct. The waste that was discovered by the inspector general caused us to pause -- pause services while we re-engaged with Merakey. Merakey is still under contract. Northeast Treatment was terminated for convenience so we parted ways. And that was long before the Inspector General's report was surfaced.
Because the reason why I said pause is because I know that as a city, we have other contracts with these agencies. So if they're engaging in waste with one agency, then why would we allow them to work with other agencies? That's -- so I wanted to do a -- I will follow-up and do a deeper dive particularly as it relates to Merakey and Northeast Treatment -- Northeast Treatment. Because if they're engaging in waste and this is the Inspector General's finding, then they shouldn't be doing any business with city of Philadelphia and engaging any other contracts, at least from my perspective. It's like being under actual investigation in one department, but you're still getting to make money off the city in other departments. And so, okay. I want to start off with the Chair of Transportation, then the Majority Leader. Member Mike Driscoll.
Well, thank you, Mr. President. And welcome, Chief, and welcome, Scott. Good luck in your new responsibilities. It's certainly a unique time for you and for this Commonwealth and for this city. I think Council President was spot on when he said that the southeast is the economic engine for the Commonwealth. So when you go up there and you make your case to the Republicans and the Democrats, you let them know that this isn't a Democratic issue, this isn't a Republican issue. This is a workforce development issue for us to be continued as the economic engine for the Commonwealth, which we indeed are. And they need to hear that because the rest of the state combined does not put in what the Southeast puts in to the state budget, as former State Representative Kenyatta Johnson can attest, and I certainly had my eight years up there. And, you know, it's not easy what you're about to do, but it needs to be said. So I just want to lead with that. Not long ago SEPTA announced that you authorized services of a new vendor for the key card fare product. And what I wanted to know is the status of that and how does that stand as it relates to, you know, last week's budget proposal? SEPTA GM
Sure. So just a few months ago the board authorized us to move ahead with our second version of SEPTA Key. We awarded that contract to Cubic for the -- the total amount was $211 million, and that includes the back office and infrastructure. And what this is an upgrade of the current system, which is about 15 or 16 years old now and it has experienced failures. Our customers will tell you that there are days when the fare readers do not work. There are days when they can't load value onto their cards. And we have discovered through a variety of methods that we had to recover revenue from our current vendor in order to be made whole due to system failures. That's just a product of a of a software system that has aged out. By comparison, if your -- your iPhone that you use, if you use an iPhone, this would be the equivalent of using your iPhone 4 in 2025. So we are -- we are beyond that now at this point and so it's time for an upgrade. So the $211 million and it's certainly a large figure and we appreciate the people that scrutinized it and it deserve that scrutiny, but it will be spread out over the life of the contract, so it equates to somewhere around to $16 million per year. And the operating costs once we transition from SEPTA -- from Key 1 to Key 2, the operating costs will eventually return to the same levels that they are today. There will be a brief period in the middle where we're running both systems concurrently and the operating cost will elevate, but soon it will return and we will be fully in Key 2.0, and the operating cost will be exactly the same. So where is it today? So it is at its infancy right now. They are still going through the initial engineering and design, but we -- customers will start to see Key 2.0 where they can kind of see it and touch it in about two years. And that's about how long it will take before we start to see kind of how kind of things start to roll out on the front end, all the back end work is happening now.
Contract will take -- is projected to take about six to seven years total.
Okay. And Mr. President, just another question. What has SEPTA done to generate additional funding on your own and, you know, are you maximizing your advertising income or looking for other ways to make up these funds? SEPTA GM
Yeah. So thank you for that. Definitely we -- we have increased on our own as much revenue generation as we can. So just -- just in the last six -- six to eight months, we've reinstituted parking fees at all of our lots and garages, that's generated an additional $4 million in new revenues that we did not have. The fare increase which I mentioned back in December was 7 million. 8 We are also trying to 9 maximize to our -- to the greatest 10 extent every resource we have 11 available for advertising. So we 12 have five of the -- we have five of 13 the six largest naming rights, 14 packages for station naming rights with Jefferson, Wawa, I'm going to -- I'm going to miss them all. NRG. You know what I -- what I mean, but our station naming rights packages have been very advantageous to us. We have electronic messaging now on our Silver Liner Fives, electronic messaging on our newest buses where we can place advertising. And we are in the process of developing smart advertising where as the bus traverses through the city it can change depending on where it is, as to what gets advertised. So we can advertise local businesses, for example.
And I'll let you continue. And elaborate on some time ago, I remember reading an article that SEPTA sold certain properties at a nominal cost to a particular developer. And it begs the question, if we need money, then why would we sell the property rights at a nominal cost if we're trying to generate as much revenue we need? If we know this doomsday scenario is coming -- and this is along the line of questioning of generating revenue. SEPTA GM
Sure. So it's as much revenue generation as it is cost savings to SEPTA. So this -- so it's a very common practice when in our case and it certainly has happened in other cases, the stations that -- for example, the stations that I believe you're referencing are in the Germantown section of the city. There were five stations. They were in various states of disrepair, the station buildings. And those station buildings were costing SEPTA about $150,000 a year to maintain. And that's just to keep them --
How much did we sell the land for? The Chair recognizes Councilmember Bass.
Come on now. You know these properties are in Chestnut Hill and Germantown. SEPTA GM
And so, yes. So it's not just Germantown. This is -- this is some of the most valuable real estate in the city of Philadelphia and you gave it away for a dollar. And you all gave it away under a program called a FASO. A FASO is finding a special opportunity, F-A-S-O. And so you found a special opportunity which is essentially a hookup. So call it what it is, it's a hookup. You gave somebody a hookup, that's what it is. And so, you know, here we are trying to figure out money to keep this system running and at the same time, you know, there's these side deals which are making wealthy people even wealthier. I ain't got no problem with anybody making money, that's okay with me. But at the same time you can't come before us asking for these very valuable, very limited resources and at the same time hooking up people that, you know, that you want to hook up, I'll just say. And the fact that there was no community participation, no 21 involvement from the neighborhood, no say so in terms of what they wanted to see. We gave away five -- you gave away five properties in some of the most valuable neighborhoods in the city of Philadelphia for $1 for 99 years. Who doesn't want that deal? I'll take that deal. Who doesn't want that deal? Anybody? Like this is a hookup so let's call it what it was. Like I just, you know, I just I couldn't sit and hear that it was just something that was saving SEPTA money. Because it's really not a matter of saving SEPTA $150,000 a year when these properties are valued at much more than that. If you had put them on the market and sold them, you would have sold them for more than $150,000. A whole lot more. They would have sold for -- I don't know, a whole lot.
So for the record, Scott, I know you have a response, could you just, for the record, for the edifice of my members, where are the five locations located at regarding these particular properties? SEPTA GM
So the locations are Gravers, Mt. Airy, Carpenter, Tulpehocken and Upsal stations.
Okay. And in terms of the arrangement, did we just sell it or is it like an agreement where we get some -- some revenue or profit from, I guess it's a partnership or just -- SEPTA GM
So it is -- it is a 99-year lease and the developer agrees to lease -- agrees to lease the stations it's a dollar. And they agree to maintain the stations and they're also going to improve the station building for some development, typically commercial development.
So if they're doing, let's say, high-end condos, do we get any revenue off of it? SEPTA GM
So the -- so -- so -- so these stations are likely not that. They would be -- they would be the -- the revenue we're generating is the recovery of costs that we would expend to maintain the stations, it's the $150,000 a year.
And that $150,000 a year savings started the day they signed the lease. And there's also a capital improvement that the developer will have to -- that has agreed to invest in the stations totaling nearly $4 million.
The Chair recognizes gentleman -- councilmember Bass.
So I just -- I just want to be clear on what you're saying, which is not that SEPTA is getting $150,000 a year. What is happening is that SEPTA is just not putting out $150,000 a year and is basically just giving away the property. So you just gave it away so you don't have to do the maintenance on the property anymore. That's what's happening here. I just want to be absolutely clear so it doesn't seem as if there's, you know, resources coming back to SEPTA from this transaction because there's not.
Well, we still want the stations. They still belong to SEPTA, we want to use the stations. They're our property.
So I understand that you were leveraging what you had without selling it, the 91. But there's always a very robust revenue sharing model that could have been used. Do you know why it wasn't or when this happened and under whose age this happened? Because there's more -- is there a clause for claw back? There's different ways to handle this.
I would like to do this. I would like to do this just to continue managing. We're still on -- the floor is still open to Councilmember Mike Driscoll, Chair of Transportation. And besides just points of information, these lines of questioning could be directed when individuals are called. Just want to maintain just some order on the floor. Member Driscoll, please continue your line of questioning.
Thank you, Mr. President. I'll save mine for round two.
Okay. All right. The chair recognizes Majority Leader Gilmore- Richardson, then Councilman Jamie Gauthier, who took the train today, and then also Councilman Nicholas O'Rourke, who took the train today as well.
Thank you. Thank you so much, Council President. And thank you to SEPTA. I wanted to start with the thank yous that we've done for every hearing, then I have five questions that I must get on the record. One, I want to thank you, Council President, for the suggestion regarding SEPTA's senior leadership engagement around Harrisburg. As our Chair of Transportation, Member Driscoll stated, and our Council President, who are both, you know, veterans of the state house. It'll be important that we have that level of engagement directly from the leadership team at SEPTA up in Harrisburg. So I wanted to underscore that matter. In addition to that, we want to thank Wendy Green-Harvey, always responsive and collaborative with members of City Council. Our Philly own Fran Kelly and Pamela McCormick. Also, the entire Planning Department for their work and collaboration on the bus revolution. I know it was painful, but I appreciate each and every one of you. To your board chair, Ken Lawrence, I appreciate his work on the bus revolution and just everything SEPTA. And then also I must give a shout out to Leslie Richard, she was wonderful to work with. And then TWU 234, and all of our bus operators and those who work on the system. Scott, we're very happy for you as well. Because you rose through the ranks, very similarly started as an operator and we appreciate your institutional knowledge that you bring in a moment wherein it'll be important for SEPTA in this moment. So I have very quickly just five questions. I'm going to give you all my questions so I can get them on the record. One, SEPTA's Planning Department, As I just notated, led the way on a project titled Bus Revolution. It was supposed to be this comprehensive new bus network that would yield more efficient bus service. I really appreciated all the work that you all did and you know slowing down the project and working with us, so we could have additional community engagement. But considering the recent budget crisis announcement, where does that project stand? And then next, I wanted to talk about the impact for young people because I think that was lost. And at the most recent press conference that was held by Senator Saval and others, the students spoke. And I was just struck thinking about all the years that I rode SEPTA to and from West Philly to Philadelphia High School for Girls. So what would be the impact on the student fare card program? And then additionally, for youth impact, I want to talk about current. How are you all working with the Philadelphia Police Department and our Department of Human Services regarding curfew enforcement on the line from a safety perspective as well? There have been a ton of incidents as it relates to young people. And we have Community Evening Resource Centers where young people can be taken to receive resources if they're out past curfew. So what are you all doing around curfew enforcement on the line? Because a lot of times when things are happening like these flash mobs and other things, young folks run to the line. And I don't know that there's any curfew enforcement happening. And then finally, because I want to respect and honor the clock. How are you all working with the Office of Homeless Services? I asked this question last year regarding in particular the dedicated beds, if any, for SEPTA. But how you all interface directly with the city's Office of Homeless Services? SEPTA GM
Okay. Okay. I think I have them all. So let me -- let me start with bus revolution. So we appreciate the input that you gave to Bus Revolution and everyone from Council. So that's that project is not done. It's paused pending the outcome of funding.
If funding comes that -- we can take that right off the shelf and begin an implementation process that will start with a broad communications plan to educate our customers on the changes prior to them taking effect. But we should funding come, we could begin implementation as early as February of 2026.
As for -- as for our student fare programs, that is a program that that is funded -- is currently funded by the state legislature or state -- the state commonwealth. So there's -- while the service may cut -- may be cut, there's no -- there's no plan at this point to do anything different with student fares than what we currently do today.
Well, so that's different than -- that's different than fares. So when it comes to service, student -- so service availability for students would be impacted as harshly as it would be for any other customer. So the extra service, what we refer to as our 400 series buses, is what you might refer to as a student charter, that would be affected by cuts. The extra service that we use to enhance the line -- the lines themselves to serve different schools, they would see cuts and reductions as well. We've tried very hard very, very, very, very much to reduce the impact of the cuts in the first round of cuts, the 20% reduction. But once we start to cut deep like we -- like we're proposing, it's very difficult to maintain any real semblance of frequent service for anyone, including students. But certainly that is not what we want to do. We want to provide the same levels of service, if not better, than what we're -- what we're currently providing today. Chief, you want to take -- CHIEF LAWSON: Sure. So I can tell you, I'm a huge fan and proponent of the Community Evening Resource Centers. I mean, it's a tremendous tool for law enforcement in this city. I typically will bring that group in to discuss that program with my entire supervisory and leadership team at least once every year since I've been in charge of the program in the police department over here. That's a tool that we can use to keep kids safe. Kids get caught up in these flash mobs, like you said. We have folks getting in trouble and it doesn't have to happen. We have a tremendous working relationship with our partners in this city. I do I want to take the opportunity at this point to really thank Commissioner Bethel and his team, particularly on their priority to bring back, you know, the SEPTA checks and helping direct Philadelphia Police Officers check our SEPTA transit operators and things. I can tell you that through the first quarter of the year, they have performed more than 8,500 of those checks on SEPTA properties. So that is a tremendous, tremendous help to us and our -- our employees certainly really appreciate that that level of service. But we coordinate on those flash mobs frequently with sharing of intel and collaborate a lot with getting groups over to the CERC centers. I love that program. Office of Homeless Services, the director of our SCOPE program, Teresa White, has a tremendous collaboration coordination with them. They're in communication virtually every single week. As we bring back and remold our SCOPE program, we're going to have even more close coordination with them. But right now, we're relying on the Office of Homeless Services and their homeless outreach Contracts right now to kind of take over the slack that we lost in the suspensions of our contracts.
Thank you, Madam Chair. MADAM CHAIR BASS: Thank you, Council Lady. Next up is Councilwoman Gauthier.
Thank you, Madam Chair. Good afternoon to the both of you and thank you for everything that you do to keep Philadelphia moving, literally. This morning Minority Whip Nicholas O'Rourke and I, rode the L from 52nd Street to City Hall, so that we could ask riders about their concerns and questions. I represent the only Council District where a majority of residents do not drive to work. So for my communities in West and Southwest Philadelphia, riding SEPTA is not an option, it's a necessity. Something we often hear from Senate Republicans is that their taxpayers should not pay for SEPTA because they incorrectly claim their constituents do not benefit from it. These lawmakers are conveniently ignoring the fact that our region is only 5% of the state's land, but generates almost 40% of the Commonwealth's tax revenue. We know that Philly is the economic engine for the entire Commonwealth, so these Republican transit cuts would sink Philly's economy. But can you talk about how having reliable mass transit here in Southeastern Pennsylvania supports economic activity in other regions of the state? Can you also talk about how much funding SEPTA receives from the Commonwealth versus other large transit systems in other states? So for instance, do you receive more or less than your peers? And lastly, given SEPTA's ongoing fiscal challenges, including significant budget shortfalls and limited state funding, how will trolley modernization be impacted in FY26? SEPTA GM
So thank you for that. So let me -- let me discuss a little bit about the impacts on the state. So SEPTA -- while SEPTA certainly operates in the five counties, parts of Delaware, parts of New Jersey, our reach across the Commonwealth is far and wide. The number of procurements, the things that we buy everyday, whether it's wheels or it's just windshield wipers or cleaning products, we stretch into every -- into many of the counties in the Commonwealth. So while we may not -- that person that lives in Butler County who's never taken a ride on a SEPTA bus, there may be a company in Butler County that we do business with that they're benefiting from the people that ride SEPTA everyday. And I've made -- I've made the same argument when I -- in some interviews that I've done where I say like, look, I've been -- I've been to a lot of places, but I've never been to some of the counties in Pennsylvania, never ridden on their roads or ridden on their bridges, but I probably have contributed to their maintenance. So and -- and I don't begrudge anyone, their road or their bridge that they need to have, but our people in the -- in this part of the Commonwealth, they need mass transit. We can't get around. And I grew up in Southwest Philadelphia and I rode the 13 Trolley to school and to work, my first job. So I did those things and I wouldn't have been able to become the person I am without SEPTA. So -- and I realize that our customers by and large are in the same situation that I was in many, many years ago. So -- so the impacts that stretch across the Commonwealth, while they may not realize it to the point where they don't see value in SEPTA. They will see the value if we don't exist, and then they will see the value.
I think we should outline that for the Republicans. SEPTA GM
I agree with you. And to allay any concern that Council may have about my involvement in this process, I have been front and center to anyone who will listen to me in Harrisburg and elsewhere. You know, myself, lead -- trying to lead the way as the leader of this organization, as a leader in this community, I want people to see my face when they think about whether or not SEPTA needs to be funded and hear my voice. So I assure Council that I am front and center on this issue everywhere I go. I'll bounce -- as it compares to our peers, our funding for peers, we are actually amongst the lowest in the country when it comes to funding as compared to the largest transit agencies in the country. We have a chart that I can certainly share with Council, but there's a chart that we use to kind of talk about this, that we didn't even create. It was actually created by Chicago Transit Authority to make their case for being under funded. And we were worse than they were.
So they did us a favor by creating a chart where they ranked third from the bottom, but we were at the bottom.
That was a list of about to large 4 transit agencies in the country. 5 The highest being Seattle. They -- 6 they had the highest. 7 And it's really, like 8 Seattle, for example, is building a 9 transit agency that to look like 10 what we are today. We have it. They're spending billions of dollars to create what we have. We don't need billions of dollars to create this system. We exist. We exist on infrastructure that's exists today and we need help. We need the legislature to own SEPTA because we are a product of the legislature. As for trolley modernization, the trolley modernization project is still progressing. The cars are in design with Alstom, and so we are hoping to have a mock up of the car that we can display as part of 2026, when the time comes, that we can show our customers what this car will look like in real life. They'll be able to kind of touch and sit in it. But the car is progressing -- we are fully -- our critical path items that we need to bring the cars onto the property is fully funded. So that includes our Route 36, what we will now refer to as T5. That line is fully funded so that we can get that line in operation. We can get the cars out on the road to begin testing once they arrive, which is still a couple years away. But trolley modernization is still -- is still moving forward. I'm sorry, was there another question?
That was it. Thank you so much. Thank you, Madam Chair. MADAM CHAIR BASS: Thank you, Council Lady. Next is Councilman O'Rourke.
Thank you, Madam Chair. Good afternoon, everybody. SEPTA GM
Thank you for the hard work that you all put in everyday to maintain our city's lifeline. I want to start by talking about the Zero Fare program. The Zero Fare program, the Mayor's office has announced that the plan to continue the SEPTA Key Advantage for city employees, which is great news and is "in discussion" with SEPTA to extend the Zero Fare program through FY26. Many of us are happy to hear that Zero Fare is safe for another year. We have heard it across the city, we have heard it certainly here, and so that is exciting news. I do have a few questions about this, though. Could you share more about where those discussions stand currently? Will Zero Fare actually be funded at current levels through the end of FY26? SEPTA GM
So that is the commitment that we continue Zero Fare as it is today. So the same program with no -- with no additional limitations. We are still working out what that looks like with the administration, but SEPTA is supportive of the program. We have no objection to moving the program forward. In fact, we saw the value in it immediately. So that it was -- it had a goal of about 25,000 users, it met that goal. So we're -- we're excited that the administration wants to continue it and we're you know we're eager to kind of nail down what it -- what it's going to look like.
So the discussions continue as it relates to what that looks like. SEPTA GM
What we've been told is that the funding plan for Zero Fare in FY26 is to take funds already committed to SEPTA and restructure them to pay for the program. If I'm understanding this correctly, the city actually increased the subsidy to SEPTA by about 15 million in FY24. And that we're essentially restructuring that that extra 15 million to fund Zero Fare. Can you confirm that this is correct? SEPTA GM
So what the administration did is they overmatched their commitment to SEPTA. And what they did is they based their matching funds on what the governor's proposal was for SEPTA, not what we actually received. So in essence, they have paid us more than they were obligated to pay because they committed to the proposal that the governor made. And so they're -- they're ahead of the game as it stands today and they're considering using those funds to fund the Zero Fare program.
Okay. And still and I heard the bell, so I'm going to get off the clock. But to make sure I have this straight, we are going to be using funding that we were already planning to give to SEPTA and restructuring that, so to also pay for the administrative overhead for the Zero Fare program. Wouldn't that mean -- if that's the case, wouldn't that mean that SEPTA is actually receiving less money now as a result? SEPTA GM
I'll come back in the second round. Thank you. MADAM CHAIR BASS: Thank you, Councilman. Councilman Harrity.
Thank you, Deputy Whip. Hello. How is everybody doing today? I'd like to get a little bit more into the SCOPE so I can understand. Because I actually am a fan of the program. I have examples here where people have gotten into Merakey and have been successful, one for eight months already and one for five. So but what I would like to get into is you said that they were -- the contracts were paused, right, because of the Inspector General's report. Can you elaborate on that a little bit more and kind of tell us some of what the report showed? Because from what I understand it was that there may have been a little bit of padding going on with the numbers and how many people they actually services compared to what the number really was. So could you please just get into that a little bit for us? SEPTA GM
Sure. And just let me just -- let me also be clear, we're a fan of the program as well. It has been -- it has been an enormous success for us in being able to reach people in a non-law enforcement way to get them the help that they -- that they so need. So what -- what I want to kind of try to clarify a little bit is the Inspector General's report, so there's -- there's -- there's still discussions going on. So the way the Inspector General measured contacts with folks who need help may not have been crystal clear and what that -- and you probably know this better even than I do. So making contact with someone who is in need is a process that these outreach specialists have to -- have to earn the trust of the people that they're trying to offer help to. So contact with someone in this regard may look like a lot of different things. It's not just direct physical or verbal contact with that person. It could just simply be being near them to give them the sense that this person is a friendly. So I think that there are some things that we still have to hash out as to what an engagement looks like. But by and large, what we've done on per SEPTA is we're going to own this. And the Chief alluded to this, that we're going to add supervisory personnel of our own from our roles that will take some ownership of supervising the outreach specialists. Making sure that whatever is being reported is 100% accurate, something we can verify. So that -- so that should we do should we look into this again at a later date, we all agree on what the a contact is and how to measure it. I don't want to in any way mislead anyone that we weren't concerned about it. We were, which is why we paused operations. We want to make sure that we have this set up in such a way that people can't question it as something that's not productive. So Merakey is still on board. Northeast Treatment, we separated ways before the report was issued. But the pause was just out of an abundance of caution to make sure that we have our act together before we re-engage.
Are there still investigations going on related to this? SEPTA GM
Just at this point I wouldn't determine it as an investigation. It's conversations around the report on the investigation.
So what you're saying is what they were trying to get at is trying to make it clear of what a contact actually is like. So they couldn't just say if they gave them water -- SEPTA GM
If we report 50 contacts, we want to make sure we made 50 contacts.
So do we. So and I appreciate it. And like I said, I'm a fan of the program. I have talked to numerous, you know, I'm in recovery, I'm open about it. I've talked to people in the program that have gotten in, actually, I couldn't believe it, through your program and Merakey. So I was a little concerned when I heard the report about the Inspector General and some other things going on, and wanted to try to get some clarification. So I thank you on that, but we'll definitely be keeping an eye on not just you guys for the program continuing, but also the people providing the service. So that we know that the service is being provided. That's important. SEPTA GM
Thank you. MADAM CHAIR BASS: Thank you, Councilman. Council -- Chair recognizes Councilwoman Lozada. But before you go, I do have a couple of questions that I want to put before SEPTA before we leave today. And that is I would like a list in the last two years how many FASOs, the Finding A Special Opportunity, that SEPTA has done? How many of these deals? How much were the contracts? To whom did they go to? And were there minorities/women who were a part of these transactions? And the length of the leases? SEPTA GM
We'll get that for you. MADAM CHAIR BASS: Today? Can we have it today before we wrap this up? SEPTA GM
Yes, we will try our best to get that. MADAM CHAIR BASS: Super. thank you so much. Thank you. Councilwoman Lozada.
Thank you, Madam Chair. Thank you for being with us this afternoon. Let me start off by saying that I appreciate everything that you all have done to try to figure out how to make the system cleaner and safer. I'm baffled, though, because we still have a long way to go. And so my question is -- I don't have to tell you what the issues are in the transit stops along the 7th Council District, you know what they are, you're familiar with them. My question is now that Mr. Divers has retired, how do you all plan to manage the safety and the cleanliness and the removal of some of our unsheltered population on our systems? He was the point of contact, right? And it didn't matter if we called them on a Sunday morning or a Friday late evening, he was responsive. It can't be Wendy. It can't be Wendy. Wendy is one person, right? And so who is your outreach person? How do we respond to this? I have staffers who use the transit system everyday and every morning is a different story about someone lighting up a crack pipe next to their children, right? With no response from SEPTA Police even after multiple reports. And so I need to figure out, we're preparing for 2026 and we're saying that we're going to be ready. We can't -- we're not ready now for our own residents. So what are you going to do? How do we respond? Who's the point of contact person? CHIEF LAWSON: So you're right, Ken Divers has now retired. His second in command is now the interim director of our SCOPE program. If you don't have her information, we'll make sure that you get it so she's available anytime that you need her. You can always reach out to me. I'll address anything that needs to occur. I do want to share, I mean we've made significant progress through the Kensington corridor. And so I mean across every measuring statistic that we're measuring crime is down, cleanliness is up, engagements are up, enforcement is up more than 200%, you know, through that corridor. We're doing more collaboration with the city than we ever have. And I absolutely agree that a lot more needs to be done, right? Like this is an issue, it's one of those issues that SEPTA and that our Police department cannot solve alone. I can't create more housing opportunity, I can't get people clean myself, so I need to work we need to work through other individuals in that. Theresa is a tremendous support for me. She now -- I talked about embedding the SCOPE program within the Police Department. She's a member of my command staff now. She has not only the resources that she has in the SCOPE program, she has availability of the entire resources of the Police Department at her disposal.
So to some people in this legislative body those numbers matter, but to me what matters most is the people that are using the system. Right? And my community is telling me that it is not reliable, that it is not safe and that it is not clean. And so I need -- I can connect with you, I can call you, but what do my residents who, you know, some people depend on the system to work, like my colleague has mentioned. My residents depend on it to survive, right? Because they don't have the luxury of vehicles. And so I need -- I need to know, you know, that when they're using that app that somebody's going to respond. We see officers up on the -- on that platform and people are evading pain and they're just standing there. Right? People are using, openly injecting themselves at the steps of our SEPTA stations and there's officers at the foot of the steps, and they're just watching. And so I need -- I need some real solutions. I need you to help me believe that No. 1, visitors coming into our city in 2026 are not going to walk away seeing this in my community. And No. 2, that you are going to not have one Mr. Divers, but three, four, five of them because that's what we know we need. Right? And the problems are not just in my district, while my district is ground zero for these problems, I'm sure on 52nd Street, 54th Street, all of these other, you know, stations have the same problem and so we need more Mr. Divers And more serious concrete solutions to how are we going to do this? What do we do -- how do you better partner with the Police Department? How do you better partner with offices like mine? How do we put real solutions in the hands of residents that depend on the system? Because I'm not hearing that, I didn't read it in your testimony and we talk a lot. And, yeah, it all sounds amazing, but I have -- I don't see us making progress in my district. SEPTA GM
So what I -- what I can -- what I can commit to at this point is we have Teresa, who took Ken Diver's place. We are adding supervisors, as we mentioned to this program, so we are -- we are multiplying the force that could be available. But I certainly would like to, you know, I'd like to figure out what -- what else is needed. We've thrown a lot of resources at our cleaning operation. I realize that that may not be completely visible to you in your district. So I'd like to figure out what is -- what else is necessary that I can really make an impact. I heard you on Monday, you talked about this very same issue for 2026. That you don't want to be a viral video. I don't want that for you either, I don't want that for this city. So if I can -- if there's a way that we can collaborate in a more meaningful way than we have been, then I'm open to it. I'm open to figuring out precisely what it is that that your -- your constituents need to feel safe riding SEPTA because that's what we want. We have a number of initiatives underway to combat fare evasion we can certainly talk through that when the time is right. But -- but specifically to your concerns, there's got to be a way now that we can -- we can battle this together and I'm willing to do that.
How many of your -- I'm sorry, Madam Chair. How many of your -- I don't know your board, right? How many of your board members are professional transit folks? Understand transit, can speak to transit, can come up with policy around transit, can create recommendations around -- how many of your board members are prepared for that? SEPTA GM
I mean, our board is a very engaged and professional board. I would say there's a mix of professions on the board.
I want to know transit specific. And this is why I'm asking this. There is no way that the decisions that have been made up to now are being made by people who understand transit oriented policies, legislation, conversation, fundraising. Like I can't understand -- I'm not a transit person and so I'm just trying to figure out, who do you have guiding you in this process? SEPTA GM
I would say my board has been instrumental in guiding me up to this point. I've been in the job just a few months and they have been a big help to me. Like I said, there's a variety of professions that I can lean on from professional engineers to lawyers, it's a mix. I wouldn't say -- I am -- I like -- I liken myself and my team, the team that works around me, we are the professional -- transit professionals. The board gives me guidance and helps me make good decisions. And I feel like --
I don't doubt that. I don't doubt that. And I'm not -- I'm not -- I'm not putting your board down. I'm not saying that they're not good people, I'm just saying that that have a foundation in transportation, that has a foundation in transit oriented policy. SEPTA GM
Yeah, I can't speak -- speak specifically to their complete backgrounds. I know what their professions are.
But I I would have to defer that question to someone on the board.
And I think that that's where we need to look at. That's what we need to look at, right? It's good that they can that -- that they are professional and that they're good people and that they're committed and they believe in transit systems. I get it. But if they don't have the knowledge, it's almost like me walking in being on your board and telling you what you need to do in a transit system when I have no clue -- SEPTA GM
-- what it even takes, right? And so I just -- I'm just going to recommend that we -- that we just look at that because I think it's common sense, right? Thank you, Madam Chair. I'm not trying to start no trouble. I'm not trying to start no trouble. I'm just saying, right? Y'all asking me -- it's like me telling you what to do and I have no idea because I -- my major was in HR and in management, right? MANAGING DIRECTOR CARROLL: So good afternoon, Councilmember Lozada. Mike Carroll, deputy managing director for the Office of Transportation and Infrastructure here in the city and I'm also a SEPTA board member. So I can't answer your question much more specifically than Scott has. There's a couple of us who have transportation backgrounds. There's a few who work in law related issues that are directly connected to SEPTA's work. So labor, for example. Risk and liability, for example. So there's a breath of professional expertise the board provides. I think, you know, the best way for us to kind of get you the comfort that I think you need is for the board to reach out to Councilmembers, such as yourself and Councilmembers, in general. You know, there's a decent amount of engagement with Council President, but we can expand that and you can get to meet these folks and have some facetime with them and share some of your concerns and get them of their feedback. I will say that coming out of the pandemic, the board has tried to articulate a message where I think Scott, I'm sorry, the interim general manager has really picked up on that there's a need for constantly elevating the sense of customers and workers safety and security. And I have been asked to lead a subcommittee that focuses on safety in particular, specifically the operation is, you know, one that has a lot of hazards associated with it, a little bit less on the customer side. But there's also an emphasis on accountability and I think the general manager has put a ton of focus on accountability. And that is about building a culture in the organization given that, you know, the people who worked for SEPTA, like everybody else in the region, has been through a lot in the last few years. And these are our residents. They're not people who appear from Mars and run trains and buses and, you know, they're just kind of showing up out of thin air. They live in our neighborhoods, you know, they -- they -- they work here, they shop here, their kids go to school here. So they have an investment, but trying to raise that culture is something that the board is focused on. And I think it would be very healthy for the board to share insights and ideas with Councilmembers in order to get that perspective and I think you're getting that.
I think that would be great and I would appreciate that. However, again, right, I want us -- I want -- we are -- we're saying that we're in a critical -- and Madam Chair, I know that I'm over time, but we're in a critical situation right now where we're talking about I think I read 50 lines going to be cut by 2026. And we're talking about in the same year where we're having a ton of people coming into our city and we're talking about relying on public transportation, right? And so I -- you know, we have to at some point become a common sense government, right? And we need people leading conversations that are prepared to lead those conversations in a very effective, responsible way. The transit system needs to be clean, it needs to be safe, it needs to be reliable. And if that means I'm gonna focus just on the Market-Frankford line right now, and I'm going to give it a 100% and make it reliable and make it clean and make it safe. You have to do that before I decide that I'm going to use your system. It can't be the other way around, right? You can't continue to cut, cut, cut, be less reliable, and then expect me to want to use you. We have to do this the other way. And so I'm just saying we need to figure it out. MANAGING DIRECTOR CARROLL: I appreciate that.
Thank you, Madam Chair. MADAM CHAIR BASS: Thank you very much, Council lady. And I agree with you a thousand percent. Because if we're having this, you know, very difficult conversation about cuts to SEPTA and about, you know, who's going to lose service and, you know, what's going to be drawn back. And, you know, it's going to dramatically affect the entire city of Philadelphia. And so when we make decisions, you know, going -- going back to, you know, my concern earlier about giving away, you know, five very valuable properties for a dollar for a hundred years. When we make a decision like that it really, kind of, like makes you scratch your head and say, you know, who is making these kinds of decisions that are affecting all of us. It's not just, you know, a group of people. It's affecting the entire city of Philadelphia. And when we don't have the right professionals on the boards, you know, or connected and making decisions at SEPTA, again, it affects us all, and it's very much of concern. Any information available yet on those demographics? SEPTA GM
We are getting it, Councilmember. MADAM CHAIR BASS: Okay. And one other question on the bus revolution. I think you mentioned to Councilwoman Majority Leader Kathy Gilmore-Richardson, I think it was her that asked about it. And you said part of it was paused. SEPTA GM
So the entire new bus network is paused pending the outcome of our funding situation. MADAM CHAIR BASS: So what does that mean? SEPTA GM
So the reason why that is -- so we can't move forward with implementation when we're talking simultaneously about stripping service away. So new bus network was not a reduction in service, it was to take our existing resources and make them more efficient and more useful to our customers. To create, in fact, more frequency and more reliability for customers. We would have to do a -- we are going to have to do a communications campaign to educate our customers on what this new bus network is going to look like. MADAM CHAIR BASS: Right. SEPTA GM
We could have that conversation at the same time we're talking about stripping away up to 50 bus routes. MADAM CHAIR BASS: How much have we spent on the bus revolution so far? SEPTA GM
Well, it would -- so what we've spent so far and I don't have the precise figure, but it would have been really consultant and staff time up to this point because it is generally resource neutral, so I will have to get you that figure. MADAM CHAIR BASS: And the other question I have on the bus revolution is that when we change bus routes and bus numbers and names, and all that, we were told it was because it was confusing. And so I'm trying to find out what the confusion was? SEPTA GM
So I think more so than it's confusing -- so it certainly wouldn't be confusing to locals. Because people like you and I, who've been here for our entire life -- MADAM CHAIR BASS: Right. SEPTA GM
But what we were trying what the what we were trying to do with the new nomenclature is to create a system that is good and understandable for locals and visitors alike, for both the frequent and the infrequent user. So -- so when we -- as we shifted and we adopted a letter -- a letter naming system naming convention for our rail lines, we are shift making sure that all the bus routes take a numerical naming convention. So of the six or seven bus routes that were remaining that still had letters, we shifted almost all of them to numbers to coincide with the other 115 or so bus routes that are also numbers. That was to give it more consistency across mode. MADAM CHAIR BASS: So if we made a decision to make that sort of a change, to change letters to numbers, so that it would be more understandable for people who are not from Philadelphia, for visitors. So we essentially made these changes to make it easier for visitors to understand, rather than the people who ride and pay for SEPTA every single day and who take this transit. Because for the life of me I just don't understand what was confusing about our system. Especially when, you know, like the XH, the H, the R, the -- you know, like all of these bus routes. You know, even from back in the day the C bus, right? SEPTA changed the C bus. You know what people still call it? The C bus. And so who are we making these changes for? SEPTA GM
And again, it -- so -- so just to give it give some historical perspective, the C bus changed and, yes, there are still some leftovers who still call it the C bus. People like us. MADAM CHAIR BASS: Everybody calls it the -- SEPTA GM
People -- there are still people who refer to our regional rail lines as the R -- R5, R4, R3, rather. So there traditions die hard sometimes, but at the same time I can also remember bus routes -- I remember bus routes because I've been here so long that other people don't recall because it has changed and now everybody knows the new. So it's not just new just for the sake of being new and it wasn't just intended for the -- for the visitor. It was just meant to make sure it was consistent that this mode was treated this way. The bus mode was treated this way, the rail mode is treated this way. The same way we now refer to our transit rail lines as our metro. It just it feels new and the newness makes it feel confusing, but in time people will grow accustomed to the new nomenclature. Some won't, but many will. And the new -- the new folks who come in who enter the system, whether they're now children or infants growing into the system or they're visitors or people relocating into the city, they won't know it any other way. MADAM CHAIR BASS: I hear you. I think that -- and I'm not going to belabor the point. But I think that whatever time and resources we spent on this could have better been used to try to figure out the financial situation of SEPTA rather than changing the R to the you know Route 49 or, you know, like whatever it is. SEPTA GM
Understood. MADAM CHAIR BASS: I just don't think that that was probably the best use of our time and talent and treasury, you know, for SEPTA or for trying in public. Because if we're making all these changes and the idea is to make someone who visits Philadelphia once a year, you know, at the expense and the, you know, confusion of those who have been riding SEPTA for a lifetime, it just doesn't make sense. But like I said I don't want to belabor that. Chair recognizes Councilmember Anthony Phillips.
Thank you, Chairwoman Bass. SEPTA -- just a couple questions. SEPTA is has capital projects that they're responsible for. In our district two capital projects SEPTA is responsible for include the Fern Rock district, there was supposed to be an underpass or overpass. Lawndale, there's supposed to be a new overpass or underpass. And there has been community conversations about this for about way before I even started. When I first started on Council, I had meetings about this in 2022 and now it's 2025. And then to learn that former Councilwoman Cherelle Parker had projects with the, you know, that were slated to be working in her office and so forth. We're now going close to it's about six years now it looks like and the capital project still has not started. To me it's disappointing because I look up and I'm like, oh, are we moving on it and nothing's moving. But it's more disappointing to a community that SEPTA continues to engage about this and there's no construction happening. So even before the death spiral there was funding that was earmarked for capital projects in our district. And I'm trying to figure out what is the status of those type of those capital projects and is SEPTA becoming more like Rebuild Philadelphia in our Parks & Rec where they're constantly not finishing parts -- you know, capital projects. Thankfully, Rebuild is getting stuff done now, but before they weren't. It looks like SEPTA's, you know, doing the same model. SEPTA GM
Sure. And let me speak to those two projects in particular, and then I'll talk a little bit about the capital program generally. So both Fern Rock and Lawndale are both in consideration for executing the project. Fern Rock has been particularly challenging because the solution is not apparent. There -- there were -- there was discussions about a crossover, there were discussions about an underpass. The engineering associated with both options and the underpass does not seem like a viable option. But certainly the overpass, the engineering associated with that doesn't present an easy remedy for that location to be able to do this project. That's not to say that it wouldn't ever happen, but there's still a lot more that has to be done before we get to a real viable solution for Fern Rock. Lawndale is a little bit different. While we had an engineered project, the funding was not there. So we -- we -- when we had we had applied for a grant from the Federal Railroad Administration, it didn't come. It's still on the books as a project that we want to execute, it's just the funding just has not presented itself for that project. We -- we -- it had never been funded at least during the time that I've been paying attention to the project. But -- but more broadly, our capital program is sorely under funded. We still have a $5 billion backlog of state of good repair. We have a $17 billion 12-year program that we can only fund about billion of, which 6 includes trolley modernization, 7 station accessibility. Rail car 8 replacements. 9 We have the old -- we still 10 have the oldest rail car fleet in 11 the country and our 50-year-old 12 Silverliners are unfunded to be 13 replaced. 14 So we would love to build anything that -- that will make our customers experience better. We want to make our stations fully accessible. That's -- that's a priority for the organization. We've had to -- we've had to delay a couple station accessibility projects because we just don't have the funding to move forward. Now there's a variety of reasons for that. Number 1, we don't get the funding levels -- as Councilmember Gauthier pointed out, we don't get the funding levels that our peers do. But just as important, we don't -- inflation has taken a bite out of our capital budget as well. So there's a number of reasons why these projects don't always get over -- get started, those are just a couple.
But Scott, I understand that, but it's the process, right? SEPTA GM
The community is not understanding, neighbors aren't understanding if you're going to take our time, bring us out to meetings on multiple occasions, and then we do know that there's a grant that's pending. It's like why even put us through that until you have all your marbles in the book? Right now, that entire community engagement team in my mind has literally had meetings in our district over and over again with nothing to show for at this point. And it's disappointing to -- it's disappointing not only to myself, but to our neighbors. So I just think our process just has to get better with the capital project side. And not only that, the follow-up is not really good either. Because even after a meeting there's not like, hey, we're going to be getting here. We're still in design, still in design. So it's just the process that I'm concerned about. SEPTA GM
Yeah, and I appreciate that. And as -- as your -- your colleagues have -- have pointed out in other -- in other aspects of the way we do business, we do have to do better at communicating with you, with your constituents, with the people of the region, and our processes internally for evaluating these projects as they're presented to us has to improve as well. We have to -- and all those things are in motion. I want to assure the Council that those things are happening. We've -- just in the few months that I've -- that I've been general manager, we've put already put in a number of processes to try to, No. 1, right size our capital program. And then secondly, make sure that we have a process for selecting projects before we come to the community --
Yes, yes. Have the funding ready to go and have a process of when we're going to finally say we got to make time, especially with the Fern Rock one. Just, last question. The bus operators are -- the bus operators and the railroad operators, the operator, they are your No. 1 staff people. I'm thinking about their safety as operators. And one of the things I'm thinking about is that the ongoing number of young people who they're young, things happen, they get on the bus after school and they also get on the bus during the regional rail -- they get on regional rails, the train, excuse me, the subway. Is there a way in which this budget could potentially reflect people that could be -- could be supportive of the bus operators during this time helping to communicate with schools. You know, there's traditional bus stops that all the -- all of the young people congregate at. We could have people out there as a safety precaution helping to funnel in kids into those buses only of certain limits and so forth. And I'm just thinking about like also having a police department for school, SEPTA police, always around during those let out times. I feel like they're just there, and then that just -- and they could be over -- there could be people that could be hired just to help deescalate the congregation that is at these traditional spaces. Are we thinking more innovatively about how to help to make sure that we're not having too many kids on buses, too many kids on trains, but also helping to deescalate situations having staff members work on that from as part of a safety project. CHIEF LAWSON: So I think -- I think COVID, kind of, really put us behind the eight-ball in this in that the number of operators that we had on the street were fewer and far between, which -- which meant service was impacted which meant more people getting on buses. I think a couple of the programs that we implement now is like, you think I think about school trip programs where we're communicating directly with the schools and providing trip or service directly from a school to a particular transportation center. I think that helps. Our collaboration with the city is fantastic with, sort of, problem hotspot locations. We kind of know where they are. We do supply police officers off of the line and out at these hotspot locations, particularly where we know there's been historical problems. We're tracking that as new hotspots come online. I think all of this is going to be alleviated as our as our staffing gets better and our service count gets better and the number of fleet vehicles get better.
Are you in constant communication with school principals and leaders about needs at bus stops because that could be really helpful. CHIEF LAWSON: We do. So I have my commanders essentially is similar to district level commanders all have school safety meetings that they attend. We have a tremendous working relationship with school police. So we're communicating every week when school's in service with school police as well.
Thank you, Mr. Chair. Just one question. Could you talk to us about, you know, if the level of funding you're seeking from the state doesn't come through, how will you utilize the Stabilization Fund in order to keep SEPTA afloat? Can you talk to us about what that fund is? SEPTA GM
Sure. Thank you. Yes. So the Service Stabilization Fund has had many names over the years, none of which are completely accurate. The Service Stabilization Fund is its proper name. And what it is in reality is a working capital fund. So we use that fund every single day to do business. We pay -- we pay our contractors for capital projects, we pay salaries, we -- we pay for variety of procurements and other needs out of this fund. So the value of the fund fluctuates from -- throughout the year. It reaches its highest point typically on the last day of the fiscal year which is June 30th. As it stands today the fund sits at just over 200 million. We will dip into that fund for about $13 million to close the remainder of the fiscal budget after all 21 the cuts are made. So even though 22 it's a $213 million deficit, we will 23 we will cut the 45%, we will raise 24 the fares, and then we will still dip into the fund for $113 million to close out the remaining gap. What that does is it leaves us with less than a month's operating expenses left to conduct daily business. And what that could eventually lead to if we exhaust that fund is we would then start using debt to pay for things. Much like anyone else might use debt when they run out of money, which will incur higher fees, higher charges for us to do business in addition to the rising costs that we already deal with. So the Stabilization Fund has been mischaracterized as a rainy day fund or an emergency fund, something that just kind of sits off in the bank somewhere and waits for us to use it. That's not -- that's not at all what it is. We use it everyday.
Thank you. And you rely on -- you do business in a lot of counties in the state. Have you -- or what type of effort have you made with those contractors you have to help you leverage their legislators in that part -- in that part of the state? SEPTA GM
Yeah. So we have engaged with all of our vendors and contractors and consultants to let them know that should SEPTA have to enact this budget, that they would in turn see reductions in us being able to execute contracts with them. We've encouraged them to reach out to their legislators, we've even shared this information directly with legislators who represent these districts or these -- these counties. So that they are aware that while we may spend $5 million in your county today, we cut half the budget and we cut half the workforce, that $5 million could be zero. it could be a little bit more, but likely would be zero. So we have encouraged all of our vendors to engage. We've put them on notice as to what could happen as the same is true of their of their representatives as well.
Thank you, Council President. Thank you all for being here. Congratulations on your appointment. I wanted to ask about your board composition. So we -- Philadelphia is expected to contribute about 135 million while our surrounding counties are asked for about 30 million combined. While there might be some discrepancy around who actually utilizes SEPTA, the most city residents or suburbanites, the rationale for the city's disproportionate investment into the authority is that the city stands to benefit from a fully funded operational SEPTA service. However, the ten county appointed SEPTA boards, only two are from the city and our suburban neighbors have overwhelmingly more collective representation than the city has. Has SEPTA ever seriously considered a reconstruction of its board so it is reflective of the central role the city plays in its operations and strategic planning?
We contribute the most to the authority because we ostensibly have most to gain, however, we have totally unequal representation at the highest levels of decision within the authority. MANAGING DIRECTOR CARROLL: So I'll take this one on and I just wanted to jump in because it's not -- those questions are not questions that the general manager or the staff or leadership of SEPTA really are involved in at all. The fundamental reason why the board is structured the way it is because of the authorizing legislation which is state legislation. And since the state of Pennsylvania setup SEPTA, that's how they define the board structure. There are conversations individual board members have about what the appropriate structure would be. But the board itself doesn't even have the power to reconstitute its -- its representation. That would have to be done by the state legislature. So in that vein, I would really appreciate when the lobbying is done with the -- with our state legislature to actually highlight the disproportional, you know, participation that is, you know, that we do from Philadelphia. And the fact that, you know, we are helping keep this afloat at a great cost to us when we are one of the poorest big cities in the -- in the country. The second thing I wanted to ask about the board was about my -- my colleague Quetcy Lozada asked about people with experience on about transportation planning. My question is about development because we just heard about the 99-year leases without any sharing of revenue, potentially, which we'll get more information. But that's a real -- a solid pathway for us to be able to amplify. And I wanted to know who on the board has and is maybe giving you support on that issue? And how these deals were structured? And then finally, the final lead up question is that when we have this type of authority, you know, doing this kind of work we need to make that value proposition to the state about what is the actual investment from Philadelphia, not just direct, but indirect and what is it doing for the entire state. That would -- we need a like a graphic to show that. So I'll take your answers. Thank you, Council President. I'll just listen to the answers. SEPTA GM
So it was mentioned earlier that we have a board -- we have a board subcommittee that advises us on safety and security. We also have a similar board subcommittee that advises us on real estate transactions. So that -- the makeup of that subcommittee is there's a variety of board members that are either assigned to or attend. The chairperson of that committee is Commissioner Marian Moskowitz of Chester County, and then there are other board members. And we can certainly supply that list to you, but they advise us on real estate transactions.
And they were the people who authorized the 99-year leases that you did in Northwest Philadelphia? SEPTA GM
The subcommittee doesn't authorize, they advise. The entirety of the board authorizes. They vote collectively, the members. 2
Okay. And my -- I forgot what my other question -- SEPTA GM
Long 9 question. Oh, about a real graphic 10 showing the state what is our 11 investment in SEPTA. 12 SEPTA GM
Oh, 13 we -- we do. We share that. 100% 14 we share Philadelphia's investment 15 in SEPTA versus the state investment versus the county investment. And I will say in fairness to the counties, like Philadelphia, they have all committed their share. Even like Philadelphia has, they have committed their share based on the governor's proposal. And so -- so I didn't want to -- I didn't want to insinuate anything negative about the county commitment, they are committed to SEPTA as well. But certainly Philadelphia because of its size commits much more.
And so just to make the point to the governor and the legislature that what -- the revenue we generate for the rest of the state, that's a graphic we would like to have because we can be advocates for all of you here. And then all the -- all the voters who live in Philadelphia, the largest county, who will, you know -- you know, determine the fate of statewide officers is very important for us. So we would like that piece of information. SEPTA GM
We have an economic impact analysis that we conducted based on the cuts that reveals that information. We'll make sure that you have that.
Thank you, Mr. President. And thank you and congratulations on your appointment. SEPTA GM
Thank you. I remember with the competent Wendy going through the bus revolution -- did I say competent? Highly competent Wendy going through the bus revolution, and I warned at some of the hearings certain things that I'm going to repeat today. That every time we shorten a route, there's a senior that has to walk further. Every time we eliminate a route, there's a kid that has to navigate through neighborhoods that he may or may not know that cause him danger. Every time we change the names of a route, we tend to confuse people who know to catch this bus, to get that bus to get to my doctors. So what I said in the bus revolution was: Have we talked to institutions that deal with the University of Penns of the world, the other large institutions that service those populations, school district, how this is going to impact them. And I understand it's a doomsday and God knows that I know that there are people working at the state as we speak trying to figure out where the quarters in the couch are to pay for this deficit. And you got a governor working for you, you got a state house working for you and we need to work on the rest. You have a Council that wants to work with you. But when you punish the people who are trying to help you, it just gives us a very bad taste in the mouth. If it's a kick in our butt to motivate us, we are motivated. Trust us. But we cannot have people who work the night shift eliminated from work because they no longer have a means back and forth. Now having said that, no good crisis -- in Chinese, they say the same word for crisis is the same word for opportunity. We should not waste this crisis because we should be revamping, tweaking where we can to make it more efficient. Example is when we went through the whole piece with the Sixers Arena. We should take that as an opportunity to see how we can help make successful trips from suburbanites, who want to take public transportation down to the stadium, how to get express party L's, buses from Fern Rock from 69th Street to be able to go there and have a Sixers mascot on there, so that they can feel safe. We should be working with our state counterparts to say where would they park at 69th Street? Where can they use the mall that -- we need to logistically put those things in place now so that we increase our ridership today. God help us if we actually get some help from the state, you are in a better position to more effectively plan for a better future for this system. In 2026, we're going to need you like at full strength, not at half strength. We need to have these systems in place so that visitors can park at Fern Rock and ride in. Park at 69th Street and be on a party safe transit system. And feel welcomed like a -- I'm not going to go with New York or DC, but some of those other cities kind of have the perception that they have right. What I will agree with you wholeheartedly on, we do have the best veins and infrastructure of most transportation cities. Better than Denver, better than some of these other places that are trying to get to where you already are. We just need to build on that. Thank you, Mr. President.
Thank you. And I'd like to tell a story how when I was in -- I was in Ohio, Cleveland, I was part of an organization called City Year and we had our synergy in Cleveland, Ohio. And their Delaware waterfront is similar to what we -- their Delaware riverfront would be called The Flats, right? And that's where we had our conference at. And we were all leaving in the evening and we missed our bus, right? Curt, we were in the middle of nowhere right. And it dawned on me how important SEPTA was because that was the last -- that was the last bus. Like there was no bus after that, right? Like that was it, right? And it made me appreciate SEPTA cause I'm from South Philly. And we got -- I got the Broad Street line and we used to have the C, which it changed to another bus, but it's still the same bus on Broad Street. So I have the option to catch the bus or the sub. And then the 2 bus going north and south. And then on 19th Street and 20th Street, the 17, which is the best bus route in the city, right, that's going from north and south. Right? And then I think we just eliminated, but we also had a bus on 23rd Street which was the 7, right? And that's just going north and south. But that's just getting started. But also, the 29, east and west. The 64, east and west. And so once I learned that I got left that night in Cleveland, it was dark, too.