It would have to be 11 percent higher than that just to cover the offset.
I see. Now, let me ask you this question and somebody might ask you this. The thing to getting it to free is some kind of a -- is it a State or a federal law? 54 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142
Both? Can we have Harrisburg and Washington work on that? I mean, we're all trying to do good things here, but if they're going to keep us and you from doing what we need to do, maybe it's time our Congress people and our State Representatives started working on this instead of coming to us with this all the time, when we can only do and you can only do what you can do.
Councilman, I think there may be some opportunity to discuss that in Harrisburg. I've had some experience at the federal level with it, and they are very, very strict about using public dollars to compete with the private sector, and they see public transit properties getting into school bus business as direct competition with the private sector, and --
When you were here before, we asked you some questions about other institutions that you sell tokens to and what 55 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 arrangements you have with them, and the University of Pennsylvania has a relationship in terms of tokens for their students and --
No, sir. They -- we have a relationship with them and many other large institutions around town to buy monthly passes, and that monthly pass is discounted by 5 percent. Now, just keep in mind, the token is discounted by 28 percent. We sell to the University of Pennsylvania a $64 monthly pass. And because they pay in advance and buy 'em in bulk, we discount it by 5 percent. They buy an entire semester's worth at once, so they pay up-front. You know, each time we talk about it, and we'd be more than willing to sell monthly passes, but the bottom line is, the monthly pass is more expensive than the token arrangement, and it's substantially more expensive.
All right, Councilman. I have other information but we'll come 56 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 back to that.
Could we get to the point where now that we're on that, could there be like a whole-term pass? Like Frank DiCicco goes to public school or whatever? We could do all the schools if you want, but we're looking at public schools, and as long as Frank' enrolled at South Philadelphia High School, as long as -- he could have a yearly pass or, you know, from September to June? Isn't there -- do we ever look at anything like that?
Don't clap 'cause then I might want to run for mayor or something.
The idea of a pass is a very efficient idea, it works real well, but it has very limited application. We sell monthly passes; people pay $64 for a monthly pass. And we well weekly passes.
Mr. Leary, let me interrupt you one minute. For instance, you go to Frankford High School, you have an I.D. card 57 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 that's scanned on the back. You take that and the guy scans it. Eventually that -- that technology's here.
All right. Well, can't we scan this Frankford High School I.D. so we can -- I mean -- or we could debit something. There's something out there, you know, and I know you're a nice guy and I know youse are all forthright, but it just seems we do this all the time and -- believe me, I'm not beating on youse, but we need to get to a point where we got to solve it.
We see this down the road. I mean, if not now, where we can come back here and say we've achieved something and 58 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 we're going to do this. And I can't read them stories about that kid that can't take his finals 'cause he didn't have tokens. That's the kind of stuff that makes you not want to be in City Council because you feel like they're the things you want to do, and I'm sure they're the things you want to do and SEPTA wants to do.
Substituting a weekly pass for the token is a very realistic, very legitimate idea. SEPTA tried it several years ago, before my time, tried it for about six weeks.
That's why I'm saying, you lose your I.D., then you don't get in school and then you're in trouble.
Yeah. That -- it became such a problem so quickly. I understand in about six weeks, they had to cancel the program. Kids looking for replacement passes. Now, a token is recyclable, okay? You leave your pass in you jeans and it runs through the washing machine, you know, and there were just 59 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 hundreds and hundreds of issues like that every day, looking for replacement passes, and unfortunately, they had to discontinue the program.
The I.D. Card scan is something that, you know, they can lose, but eventually, they've got to become adults. At least teenagers realize they got to have that to get free. If you gave me a card and said, You can ride the bus for free and you can get in school, I would make sure I didn't lose it, even when I was years old. 14
Well, there's a difference 15 between free and there's a difference --
Replacing a -- (Unintelligible, parties talking over each other.)
Yeah. (Unintelligible, parties talking over 60 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 each other.)
In a crazy way, every time we look at this and you get into the details, and I don't like even saying tis because this is the 21st century and technology should be able to replace --
But the token is such a versatile media, you know, you can't destroy it, you can't -- you know, we're just recycling it.
And I happen to know Councilman DiCicco has a whole bag of old PTC tokens that he slips in every once in a while when he's running, and now that his son's on the board, he can't do it.
But back to my point, I mean, is this something we're looking at? I mean, if I could think of it, someone else --
Oh, no, no. We've been looking at it actively to try to find a way to 61 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 make it work.
That, you know, we've gone back to the point in the mid-'80s when they tried it, to get all the data, and it just scares everybody that look at it.
You know, we sell it -- and, frankly, you'd sell it for the same price as the token.
To give you an easy example, if you price it to be the same as the tokens, you know, $20 a week, what do you do on the school weeks that only have three days?
That's why you could scan that I.D. card and you could -- you can do it when drive over the bridge.
No, you use the I.D. card to buy the weekly card. 62 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142
No, I'm saying you have a debit card, your I.D. card becomes a debit card, and you use that card like you use when you go over the bridge and they send you a bill. It's automatically taken off of something.
I'm not saying you take it off some kid's checking account, 'cause he don't have it, but there's got to be some kind of technology along that lines that we could use.
That's a different technology than we have today. We have the scanner, the magnetic card reader, the introduction of a smart card, and it will come.
I mean, it's only a matter of time. But it's a big capital investment for SEPTA. And I'm going to say, Councilman, we have looked at it, and it's in the range of $60 million to change all of the fare collection equipment from magnetic read to computer-chip smart card. And, Madam Treasurer, am I close? 63 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 SEPTA TREASURER: 132 million.
When new buses come on line, do you put the old system, or do you start making out a system that can be upgradeable.
No. When new buses come on, we take the existing fare boxes that have a 20-year lifetime.
We've really, really -- are exactly where you are internally, trying to figure out how to phase in a technology that will make all of these systems so much easier. I mean, we have so many different fare zones and fare media now that, you know, part of our objective is to simplify it, reduce it, to make it so we can actually get -- so it's understandable.
I want to tell 64 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 you, there's somebody listening to this, that will be reading about this tomorrow that's going to call your office and tell you he has the -- he or she has that technology and their company -- can you give me your home phone number, then they can call you tomorrow, tonight. (Laughter.)
I have a quick follow-up, then Councilman DiCicco, then Councilman Cohen. But I also want Mr. Goldsmith to joining Mr. Leary at the table when he returns; he is here. Mr. Leary, regarding Councilman Mariano's question, we know that if we decrease student transportation costs, we are passing on that cost. If it's free for students, we're passing on that cost -- or reduced for students, we're passing on that cost to either adult fare payers or adult taxpayers. In view of your statement that you have a 50 percent expense recovery ratio that's 65 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 mandated by the State, I would suggest that 50 percent of your money come from fares, the other 50 percent come from government subsidy. If you are seriously looking at reducing or eliminating student transportation costs, are you looking at splitting that cost between taxpayers and fare payers, or have you considered that at all?
No. In our examination of that issue, we were advised by counsel very clearly that we do not have the ability to disadvantage any one customer market group. Let me just -- let me just look to counsel now. (Mr. Leary confers off record with colleagues.)
That's correct, that's the equal rights -- equal protection clause of our enabling act and the Constitution.
I'm referring to a client like the University of Pennsylvania, as Councilman Ortiz referred to before, not young people, not students in general, but a client which is the School District, which is going to 66 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 purchase from you. If we're going to look at discounting or eliminating that cost, it's eventually going to go get passed on to students. If you are seriously considering this, were you looking at splitting that cost between the fare payer and the taxpayer, since you are considering a fare increase, or were you going to pass it on to the taxpayer totally?
Councilman, we would be look to go split the cost at the same ratio that exists today, as costs go up, to keep the balance of a cost recovery ratio at 50 percent. Now, just on your first issue about the Penn pass, because that is discounted at a 5 percent rate, but that is available to everybody, the entire population. Now -- and if the school department would want to engage in that program, we would welcome it. I just have to tell you that it is not in their best financial interest; it's a more expensive program than the one that they have. They have selected the most cost-efficient program that exists.
If you understand 67 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 the question that I was asking you, you referred to a $40 million cost. You said that's split between $16 million for the School District and $24 by SEPTA. Actually, SEPTA doesn't have any money of its own; that money comes from the fare payers and the taxpayers. As we bring the School District and SEPTA to the table to determine what we're going to do in terms of reducing or eliminating costs, is everything on the table? Some of the revenues you're considering are coming from fares. Are you going to -- additional revenue in terms of fare increase, are you going to put it on the table before you decide to make it available for discounting student tokens or student transportation? (Mr. Leary confers off the record with colleagues.)
Councilman, I'm not sure how to answer it. The -- all of the proposals on the table being studied raise all of the media, including the token. So there's no -- we're trying to be very careful to balance it across the 68 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 board in real terms and that if there is a fare increase, they would include all of the media, including the token.
So is it your intention to raise the cost of tokens to the School District through your fare increase.
That is correct. It would have to be a very balanced, across-the-board proposal.
Will Mr. Goldsmith join Mr. Leary at the table. Councilman DiCicco?
I just want to follow up on that line of questioning. Is there any way -- because I understand about this equity and that you can't provide for certain reasons under State and federal regulations free. Now that you're going through the process of looking at a fare increase, without asking for that number here today, is there a way in which that fare increase could be such that it would absorb any potential for an increase to the students? In simpler terms, meaning, is there a way in which you can at the 69 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 very least freeze the student cost to the level they are today -- we're still going to try and figure out if we can ever get that down -- and passing that on for lack of a better way to the consumer by way of a fare increase.
Councilman, I understand the question, and I believe the answer is no. I'd have to consult with counsel on this carefully. My understanding is that to be successful in moving forward with the fare increase, this issue of equity and social justice and balancing is an overriding and very powerful issue. And failure to deal with any one of those principles can in fact -- you end up in court and tied up for a very long period of time. So we're being very careful about that. You know, the idea of keeping the token for the student at the existing price and asking everybody else to increase their proportionate share to pay for it is a principle that's dangerous in our environment of moving forward with something as large and complex as a fare increase throughout the region.
Well, I'm not an 70 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 attorney, but aren't we already doing that in a sense when we provide certain discounts for students? Or is that consistent with discounts in general for people who use public transportation?
It has stood the test of time at this point. Excuse me one moment.
Sure. (Mr. Leary confers with colleagues off record).
I am also reminded, Councilman, that we don't discount for students. We sell it at the regular price, and the school department does.
The other question actually was asked by my colleague who generally looks at my notes while I'm preparing them, but that's okay, we're one big happy family here. (Laughter.)
So, as you know, a couple years ago, when I chaired this committee 71 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 and subsequently was vice chair, I've been looking for other sources of revenue which I would consider to be revenue-neutral, meaning no cost to people who use public transportation and/or to the taxpayers by providing some sort of foundation or money from private industry. Unfortunately, in light of a bill that I introduced a couple of weeks ago and the opposition to that bill, 629, which may have created an opportunity to create a revenue stream by way of certain types of -- permitting certain types of outdoor advertising, along with community support, it appears that that bill is probably dead in the water, and that notion that I was going to be able to create that revenue stream that would provide, if not all of, at least a significant portion of the revenues to pay for the student transportation needs is probably dead in the water. So I know Shelly's in the audience today, and I'm really sorry about that, but it's very unlikely that that legislation will go anywhere as a result of the negative comments and statements that were made to Bill 629. 72 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 I know it's really not for you, Mr. Leary, but I wanted to put that on the record today. Those two years of work seem just about dead at this particular time. Thank you, thank you for being here. Thank you, Mr. Chairman.
Mr. Leary, it's mighty strange to hear you speak in terms of social justice and equity requiring that poor kids have problems getting to school, because you are saying -- you are defending charging kids to go to public school and you're saying that's called for by social justice and equity. And the exact reverse is the fact, not what you said. There are no exquisite balances to maintain in order to keep kids from going to school. The exquisite balance is to find a way to get the kids to school if there's any meaning to the very often-repeated statements that this is "The Year of the Child" or that education is important to Philadelphia or the nation or to whomever. 73 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 If it were possible for us to get a man to the moon or a woman to the moon, you mean it's not possible to get government to act in a way and the private-business sector to act in a way which really assures free education for kids? I don't believe that for a moment, Mr. Leary. And I don't appreciate all of the so-called niceties. I happened to be in City Council when SEPTA law was passed, when it was enacted by the State legislature back in 1968, and I assure you, there were no fine balances that were being sought. What there was plain horse-trading, and the suburbs won over the City. Even though the City provides approximately 80 or 85 percent of the revenue, the benefits went to the suburbs. And it's about time to recognize the facts of life. It's time for you, it's time for the School District, it's time for us in government to get together and make public education free education. And every kid, whether he goes to public school or private school, beginning with kindergarten through high school, ought to be able to get to school without the family figuring out, do we eat this day or do we 74 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 send one of our kids to school this day? (Applause.)
And I think it's an absolute disgrace for representatives of the public -- and SEPTA is a public body -- to stand there and to say social just and equity require that kids have to pay to go to school, because that's just the reverse of the fact. I think it's not for us to decide the technical way in which you do it, but I think it's absolutely part of your duties to find a way, together with the School District and the City of Philadelphia and probably, as Councilman Mariano stated, the State legislators, and if necessary, Congress. But this is a problem that's got to be settled now. We can't wait another year, another two years or five years. This is a problem that can be set, and I think you ought to come clean instead of giving us all of these Massachusetts cliches, because that's all we're hearing from you. You tell us there's nothing more you can do, but you're ready to cooperate with us fully in doing nothing more. That's what your statement 75 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 tells us. And I think you ought to withdraw it and I think you ought to go back to the drawing boards and come up with ways with the School District. And if you feel you need more money from the State, I think it's your role to make the demand to your bosses, to the State government, because the State and the suburbs have most of the seats. Don't they have out of the now? 11 That's my understanding. 12 And I would like to see a genuine 13 approach rather than all of this fancy dancing 14 around the issue, trying to indicate that justice 15 is on your side; it is not. You are the people being unjust, you're being unjust to the kids of Philadelphia. Thank you, Mr. Chairman.
Mr. Chairman, just for the record, I want it to be noted that Councilman was making fun of your Massachusetts heritage, not me this time. 'Cause last time I was in the New England newspapers, and I can't go 76 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 to the Red Sox games anymore.
If Mr. Leary and SEPTA can remain available for questioning, I'd like to have Mr. Goldsmith testify at this time. Goal.
Sandra Dungee Glenn, a member of our board, is here with me, and she'd like to make some comments, and I'd like to have our chief financial officer, Rhonda Chatzkel, join us up here. (Witness comes forward.)
Miss Glenn, please state your name for the record and state your testimony.
Good morning. My name is Sandra Dungee Glenn. Good morning, Chairman Goode and members of the committee and members Council. I'm a member of the Board of Education of the School District of Philadelphia, and it is a pleasure to be here to testify on behalf of the 77 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 Board about our policies and give our perspective on student transportation. Transportation to and from school is as vital a concern to today's Board as it was more than years ago, when the Board adopted its 7 original policies. Then, as now, the Board 8 recognized the simple fact that a student cannot 9 learn if a student cannot get to school, and that 10 helping students get to and from school is one way 11 to promote better attendance, especially in the 12 middle and high school years. 13 Then, as now, Councilmembers 14 acknowledged the importance of students 15 transportation. This kind of collaboration will 16 be critical as we on the Board reexamine all of 17 our policies on transportation in light of the 18 serious financial crisis the District now faces. 19 The board welcomes Council's assistance in 20 crafting strategies to reduce the cost of student 21 transportation. 22 You have each received data summarizing 23 the District's expenditures on transportation and 24 Mr. Goldsmith, the District's Interim Chief 25 Executive Officer, will give you more details in 78 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 his testimony. With that in mind, I want to outline the Board policies now governing all student transportation in order to give you a context in which your help is being sought. First, let me stress that there is no 7 income requirement for any student to receive free transportation. All students receiving special education services, participating in desegregation programs, and assigned to schools for reasons of overcrowding receive free transportation. That transportation can include tokens, transfers, buses or cabs. Homeless students also receive free tokens. Second, students whose route to school is determined to be hazardous by the State of Pennsylvania's Department of Transportation receive free transportation. Third, students who live more than one mile and a half from their assigned schools receive free transportation. Fourth, students whose situations dictate on extraordinary need for free District-provided transportation also receive it upon the recommendation of the District's Chief 79 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 Executive Officer or the Chief Academic Officer or the Board. That is known as the "exception-to- policy" policy. Finally, the District of Philadelphia is required by State law to provide the same free transportation services to parochial and private school students that we provide for public school students. Each day, the District is responsible for the transport of over 60,000 public, private, and parochial school students. The District runs about 1200 yellow bus and cab routes each day and spends $67 million a year on transporting students. This district puts forth much effort and many dollars to minimize student transportation costs across the District, even though the majority of our 214,000 students walk to school. An important component of our transportation system is free and subsidized SEPTA tokens and transfers. Two years ago, at Council's urging, discussions first began on the development of a swipe-card system, with an eye to eliminating the District's costs with buying and distributing 80 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 tokens. More recently -- in fact, just last week -- similar discussions also have taken place. We want to partner with SEPTA in pursuing ways to reduce the impact of this barrier to learning, and we appreciate their willingness to do the same. The Board is directing District staff to assess the impact of transportation costs to public school students and its impact on truancy.
The District and SEPTA should work together with our joint funders, the City and the Commonwealth, to devise strategies on this issue. I also want to thank the Philadelphia Student Union and the Philadelphia Citizens for Children and Youth for their advocacy on behalf of more than 23,000 public school students who ride SEPTA to school. We find intriguing and creative the PCCY proposal that SEPTA or the City look for ways to reduce the cost of either transfers or tokens to the District, which then could provide a larger subsidy to the students. The Board would support such a proposal as long as it would be cost-neutral to the District. Our greatest concern at this time is that students be held harmless in the event of any proposed fare 81 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 increase. Hopefully, this explanation has clarified why what may seem like an easily accomplished task actually will require more innovative solutions devised among SEPTA, Council, and the District. 1 million to the District's overall transportation costs. This board has dedicated itself to working collaboratively with all of our State (indiscernible) in search of solutions to this and a wide range of problems that confront our district. We look forward to having similar creative thinking on this issue from Council. Thank you, and I will be glad to take your questions at the conclusion at our testimony. And it is now my pleasure to introduce Philip R. Goldsmith, the Chief Executive Officer for the District of Philadelphia. 82 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142
Good morning, Chairman Goode and members of Council. My name is Phil Goldsmith, and I'm the Interim Chief Executive Officer of the Philadelphia School District. I'm here to discuss the issues of student transportation. I welcome Council's interest in this subject and appreciate the interest and concern of Philadelphia Citizens for Children and Youth, the Philadelphia student unions, and others who have raised this issue. Currently, over 23,000 public school systems ride SEPTA back and forth to school. Of the students using SEPTA, 10,000 students receive free tokens and transfers. They are eligible for free tokens for a variety of different reasons governed by either State or School District policy or both and include desegregation, special education, overcrowding, hazardous routes, and exception to policy. About 13,000 students purchase tokens at the rate of $9 per week. This discounted rate is subsidized by the School District as a matter of Board policy. 50. In other words, the School 83 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 15 per token and receives 90 cents from the student, a 25-cent subsidy per trip. All students receive free transfers if requested. Each of you should have received the table summarizing expenditures on transportation. 7 million. million. million. 1 million. 5 million. Students' use of tokens is not of recent vintage. It's been going on since the 1950s. It wasn't until almost three decades later, in 1984 and 1985, when the subsidy of tokens began. 15. 84 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 Between 1985 and 1989, the City and School District shared the cost of subsidizing student tokens. Due to the City's financial crisis in the late 1980s, the City stopped sharing the cost. Since then, the School District has borne the entire local burden. 15, which is where the 10 subsidy and the fare now remains. 11 Although we have no definitive 12 empirical evidence at this time to show a 13 correlation between transportation and attendance, 14 common sense and anecdotal evidence suggests that 15 the inaccessibility of transportation can be an 16 impediment to school attendance. As one parent 17 applying for emergency transportation funds for 18 transportation wrote: 19 "The cost of living is too high for 20 the salary I make. The bills make it extremely 21 hard to keep trying to squeeze our money for 22 Maleeka's car fare. Every week, she has to worry 23 about where car fare's coming from. " 85 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 Principals, teachers, and administrators are all too familiar with stories like this. And that's not surprising. Our School District has the second highest poverty rate in the State; it's more than twice the average of the Commonwealth's other 500 school districts. In fact, our most affluent school has a poverty rate that is higher than the State average. The School District's mission is to provide all students with the educational skills and tools needed to be productive and engaged citizens. If students do not attend school on a daily basis or are tardy, it is all the more difficult to achieve our mission. We're committed to working with Council, SEPTA, and the State to develop strategies to reduce transportation costs and reduce any impediments that hinder assistance and foster learning. But having said that, it's essential to emphasize that just as the City had its financial crisis in the late 1980s and stopped its subsidy, the School District now has its own serious financial crisis. As we pointed out in this very chamber only a few weeks ago, the District is 86 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 facing a $191 million deficit for the next fiscal year. And unlike SEPTA, we do not have a fare box to make up any of the difference. As the District's Interim Chief Executive Officer under our new governance model, my mandate is to implement, enhance, and professionalize our management practices and approach.
Until we first resolve our current financial situation, it would not be managerially responsible on my part for me to recommend to the Board any additional subsidy that would increase our costs and increase our deficit. I would recommend to the Board, however, that if SEPTA's proposed fare increase includes students, the District should oppose such an increase. Our students cannot afford to pay more, nor can the District. I trust that it will not come to that. SEPTA and the School District have a good working relationship. We have cooperative initiatives through programs such as the Police Collaboration Project to return truant students to school. General Manager Jack Leary and I have already met, we have arranged for our staffs to meet to explore 87 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 ways to utilize technology, to minimize the administrative task of purchasing and distributing tokens. Several meetings between our staffs have already occurred. It should also be noted that the Commonwealth of Pennsylvania is a major funder of both SEPTA and the School District. As we both talk with Harrisburg about our needs, student transportation should be on both our agendas. It has been on ours. In conclusion, we share a concern as to the raise cost of transportation for our students. It is why the District has subsidized part of their cost uninterrupted for the past 15 years. We know more needs to be done, and nothing would please us more than to be in the financial position to do more. I'd be pleased to answer any questions, and our CFO, Rhonda Chatzkel is here with me, and our Head of Transportation, John Lombardi, is also here. Thank you.
Thank you, Mr. Goldsmith, for your testimony. I don't know 88 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 if you were here and heard Mr. Leary already state that although they have not ruled out their fare increase yet, that because of equity issues, according to them, that they intend to increase the cost of tokens to the School District. You also said that the School District, because of its financial situation, cannot afford to subsidize even under the current conditions, let alone an increase in token prices. But the purpose of this resolution and the purpose of this hearing today is not to ask SEPTA or the School District to foot the cost, knowing that both are funded by tax dollars, and we will discuss actually where the money will come from at some later point. The purpose of this hearing is to actually get down to the actual cost and what we might be able do and what it would actually cost to reduce or eliminate the price of tokens. I'd like to -- or student transportation in general. I'd like to run through a number of different questions with you based upon your testimony and discussions that we've already had. What is the School District's current 89 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 transportation policy; can you briefly describe it. And how is it determined and when was it established?
Okay, I'm going to sort of reiterate what Sandra Dungee Glenn had said, but the policy, as it currently states is to provide -- first of all to be a resident of the City of Philadelphia. Secondly, there's transportation, free transportation, for special education needs where -- in their IEP so designated. Next, there is transportation for a student who lives more than a mile from his or her home and is participating in a voluntary desegregation program of the School District of Philadelphia. There is also a free transportation in Grades 1 through 6, if you live a mile and a half from your school. Also, if a school route is designated as hazardous by the Pennsylvania Department of Transportation, free transportation is provided. And then, also, if your school is overcrowded and you need to be transported 90 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 elsewhere, we provide free transportation. And then there's the exception-to- policy designation, which would include either individual requests or requests that come from our staff concerning special situations, such as homeless people and other matters like that. As I understand it, I think John Lombardi has said he's been with the District since 1974 and said that these policies have basically been in place since 1972, or at least since he's been here. So they've been long-standing and they get approved and reapproved from time to time, but they are long-standing policies of the School District.
Are there any legal restrictions from establishing an income-based a student transportation cost policy?
But there are none 91 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 that you know of.
There is none that I know of. Obviously, our free food program is income-based, and that's obviously a federal program and a different program, so it may be well that we may be able to do that, but I don't know the definitive legal answer to that.
Okay, based upon the current student transportation policy, what's the current overall cost of student transportation for the District?
The current cost is $14.8 million -- I'm sorry, the current cost for our total transportation program is $67 million. The net cost for the District is $44 million.
On March 15th of this year, a few weeks ago, City Council unanimously passed a resolution calling on the School Board to establish a students transportation cost policy based on financial need, the current financial needs of the student population. Could you please update this committee on where you are in this process, when it will be 92 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 resolved, and will the Board examine -- how it will examine truancy-related transportation costs? If either you or Ms. Glenn could answer question.
Mr. Chairman, if I can. Just to restate it, the Board has asked staff to begin to look at data that might make any correlation or kind of identify the correlation between transportation costs, public transportation costs, and student attendance. And so we don't have anything definitive on that as of yet, but we are trying to get that answer. The second part of your question in terms of the Board's review of our policy, we have just begun, or are just beginning, to actually -- the policies really have not been reviewed in any depth for the past, I believe, years, since 19 they went into effect. And I think it is the 20 Board's intent during the course of this coming year to review them and look at how we may need to update our policies particularly as it relates to issues like the impact of income since over 80 percent of students are eligible for free or reduced-price lunch, and what does that mean in 93 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 terms of the need for transportation or the role of subsidized or free transportation. But, again, that review is -- has not begun in full. We need to really do that during the course of this year, so that is nothing that we have not revised as of yet.
So within the course of this year, is there any time frame set to something you definitely will have done by June, before June, or is there any time frame set in terms of a deadline?
No, we have not. Just to give you a straightforward answer on that, no, we have not set a time frame.
Okay. I would ask that you do so because, particularly for the purposes of this conversation, I think that traditionally, members of the public and sometimes members of Council have pointed the finger at SEPTA, without acknowledging that there is no 22 income-based policy with the School District, and we require that policy before we can take any action and even look at finding funds. I want to ask a lot of other questions 94 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 related to actual student transportation costs to get down to what that number might be, even before you establish a policy. What would be the cost to the District of fully covering all student transportations costs?
If we were just to do, in an ideal world, all students have to have free transportation to school, meaning not just public but non-public.
My name is Rhonda Chatzkel, and I'm the Chief Financial Officer for the School District. Without doing a full analysis of which students might avail themselves of transportation who currently don't, we came up with an aggressive cost scenario. We assumed that about 70 percent of all elementary school students who do not now 95 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 receive transportation -- and I should say that any elementary school student in the categories that Mr. Goldsmith and Miss Dungee Glenn mentioned do receive transportation. But by and large, elementary school students live very close to their home school. But if 70 percent of those were to receive transportation, and because they're young, it would be yellow bus transportation, the cost to us could be $100 million for that pool, that population alone. The assumption is, and it's a grounded assumption, that anything that we provide to public school students, we need to provide to non-public school students as well, which is what brings the cost up. We also could not assume that there would be reimbursement for that expense, because to a child lives less than a mile and a half between home and school, that's not a reimbursable expense. If we were to provide for secondary school students, who are not now receiving free transportation, if any child buying a subsidized token were to receive a free token -- and, again, not knowing whether public transportation or 96 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 yellow school bus is the appropriate vehicle, we assume the most expensive mode of transportation for the rest of those secondary school students, which is a yellow bus, which runs about $1,000 per student per year, and for which the reimbursement is fairly low, at about 30 percent -- sometimes 8 to 30 percent, depending on the year and the type 9 of transportation, type of bus. 10 The additional cost for that expensive 11 mode of transportation might be another 12 $60 million -- again, assuming that we have to 13 deliver the same transportation to non-public 14 school students. 15 So on the high side, without doing 16 further analysis, we would come up with a cost of 17 about $160 million, maybe even more. 18
And that's in 19 addition to the current 67 million. 20
That's in addition, 21 that's correct. 22 Again, very aggressive costing because 23 we don't know what type of transportation would be 24 appropriate. 25
So when people 97 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 discuss broadly the issue of free transportation for students, we're talking a $200 million figure, not a 2 to $3 million figure.
Okay. What would be the cost to the District of lowering the student cost to 50 cents per token?
The first answer -- and there need to be two parts to this answer. If we assume that the 18,400 students -- and that's not just public school students but non-public school students -- that currently receive subsidized tokens are the only recipients of that increased subsidy, the cost to us would be $2.7 million approximately before reimbursement; and assuming that reimbursement rates stay the same, the net cost would be just under $900,000. We need to preface this with a reference to the public school code, which gives the State an ability to review and to approve whatever reimbursement they're paying for, you know, for public transportation. And so if they opted not to approve the increase, we couldn't assume a 67 percent 98 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 reimbursement rate, and that would make a big difference.
I'm sorry. The $2.7 million figure covers public and non-public?
Yes. The other piece to this -- and, again, from an educational standpoint, this is plus, and from the financial standpoint, it has an impact -- is that if more students availed themselves of this subsidy because it became more affordable to them, for every 10 percent increase in subsidized ridership, there would be a net cost to the District of about $200,000; again, assuming that the reimbursement rates from the State stay about the same.
Okay. And so you assume this would increase student ridership?
And how would that further increase the cost? By how much do you 99 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 estimate?
For every 1,840 students 6 that decided to take advantage of the subsidy, it 7 would be a net cost of 200,000. If we were to 8 assume that -- and, again, not really knowing what 9 the response rate would be, if we were to assume 10 that the participation rate in the subsidized program were to double, just to double, that there would be 18,400 new children that would opt to take advantage of this, the cost to us before reimbursement would be an additional $8.7 million. The cost to us were we to receive the same level of reimbursement -- which, again, is a question -- is $2.9 million. If it were to triple, which may or may not be unrealistic, it depends on where all these students live and what their situations were, but if it were to triple so that were 55,000 students, about, that were to take advantage of the subsidized program, that would represent about 50 percent of the whole pool of secondary students, so it may not be unreasonable as a 100 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 high. And the cost to us in that scenario would be about $15 million in additional cost before reimbursement. And if we were to get the same level of reimbursement, it would be just under $5 million.
Okay. Under the current ridership, it would be 2.7 without reimbursement and 90,000 after reimbursement.
Let me just say, if I may, Chairman Goode, it's always difficult to determine the law of supply and demand; obviously, if you lower the price, normally the demand goes up. We did have a pilot project several years ago, I believe, at William Penn High School, where it was not an issue of cost, it was an issue of distribution, and took it out of the schools and used some distribution points of SEPTA and also some stores around the area, and I believe our costs tripled because the usage went up. And that had nothing to do with the price, as I understand; it was just a question of greater accessibility. And, again, you could argue 101 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 educationally that's sound, but from a financial point of view, there's no question that it has impact.
Can you tell me how many tokens purchased by the School District remain unsold or not distributed at the end of the school year?
The unsold amount last year -- I think the at the close of last year was $243,000. I'm not sure how many tokens if you divided $1.15 into that would --
That's for public school students. I think for parochial school, it was about $8300.
Okay, what about in terms of not distributed, in terms of free tokens?
Same number. 102 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142
Okay. How does the School District count for transfer uses by students, and what is the transfer price based upon?
John, do you want to answer that? (Witness comes forward.)
Good morning. I'm John Lombardi, Administrator of Transportation Services. Currently, the process that we're billed under, SEPTA informed us that whenever a student places a token in a fare box and asks for a transfer, the driver pushes a button and makes note of it, and that information is relayed back to the central office. And the estimate is that approximately 59 percent of the students who ride SEPTA and use student tokens ask for a transfer, and they charge us 40 cents per transfer.
Thank you. Last question for members of the committee, is the current student transportation cost policy adequately addressed to its extracurricular activities? I've heard many 103 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 complaints over several years, even dating back to when I was at school, that past a certain time, SEPTA does not accept school tokens.
I checked into that the other day with our athletic department and others. There was no indication that, in fact, was the indicate. That's not to say that from time to time it doesn't happen, but as far as I know, there's no systemic issue along those lines. Obviously, if there was, it would be something we'd be interested in addressing.
Sure. Thank you. You know, it really befuddles me in terms of how complicated it seems to us to provide a very basic service. I remember when I went to public school in the lower east side of New York. All I showed was my student government card to the subway attendant or the bus driver, and I would get in and get on the bus and be able to go to school. And it seems that we have gotten 104 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 wealthier as a nation, we have gotten richer as a nation, but in terms of the services that we use to provide students, especially students who live in urban areas such as Philadelphia, Detroit, we really have taken away rights and things that those students used to have. And I know that the school system cannot afford to keep on subsidizing, and obviously, Mr. Leary told us that they have gone as far as they can go by offering the school system the same discount that they offer everybody. They're not offering anything new, they're not offering anything special to the students. They are saying to the school system, You come in as the biggest institutional customer we have, probably providing a great percentage of the daily ridership that SEPTA enjoys, at the same level that every other individual comes in, and you get the same type of discount. It is not rocket science. We have kids who are not going to school. We have a gas rate hike that may put families really in dire economic straits. We have a water rate hike coming down the pike. We have a bus fare hike coming down, as 105 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 Mr. Leary stated. We need to be able -- and we keep talking about that in order to become a first-class city, we need a first-class system of education -- and, of course, two new stadiums. You know? But we get the money for the two new stadiums, but in order to become a first-class city, we cannot come up with $3 million to be able to reduce the amount that students pay for their tokens to 50 cents. But we're able to come up with a billion dollars and we issue bonds and we issue all sorts of things and we put our kids in debt into the next 50, 40 years. And isn't it a fact, Mr. Goldsmith, that today, there are kids that are not attending school because their family, their mother, their grandmother cannot afford a token? Is that a fact?
Well, I think that there are instances of that, yes, and we hear stories about that.
And even if it were one, you know, that would be criminal. And since SEPTA can't do anything about it, and I know that 106 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 we are trying to find money for the school system as it is in order to be able to keep on providing basic books and be able to give our kids an opportunity to have a music teacher every once in a while and not once every two weeks at least. It really falls to this Council to be able to find at least $3 million. We are not going to solve the problem, we understand that. But then it behooves us to begin because SEPTA's not going to do it. The suburban board that controls it will not allow it. Their kids go to public schools and their public schools are functioning very well. Their public schools in the suburbs don't suffer the deficit that we're suffering here. So it behooves us, then, to find the $3 million. It's whether we have the will to be able to, as a Council, as a city government, to be able to say, We are going to try to do something. And we've been talking about this now for ten years or more. So, it isn't -- it isn't the new board and the new chief executive. It's about time that we did something about it. It's about time we did something about 107 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 it. It's about time that we are able to say that all of those developers and all of those other individuals that keep on getting from us in one way or the other, we have to be able to get from them to give to the kids, or somehow or other, all of these economic stimulus that we have -- I think the biggest economic stimulus that we can have is graduating classes from Edison and Olney and Kensington and so on that are able to do and provide the people power to function and create an economy in this city. And we cannot keep on accepting the fact that kids are not attending school because they are poor. We cannot keep on accepting the situation that a mother or a grandmother has to make a decision about what to do every day and where to put her limited amount of money that they have. It falls on this Council, Mr. Chairman. It comes down to whether we want to do something at this point because, SEPTA, Harrisburg, Mr. Goldsmith keeps going to Harrisburg, asking them to be able give us money for schools and books and to bring us up to a level of per-student 108 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 spending that is not luxurious but even is just adequate, and we can't even get that. So it can't fall on the School District to keep on subsidizing. And if we have a surplus we have to be able to find $30 million in order to be able to at least begin the process. I think that's the least this Council and this government can do. Thank you, Mr. Chairman.
Thank you, Mr. Chairman. Is there any long-term plans? You might have spoke about this, but is there a long-term plan? Are we considering using like a five-year plan to eliminate the cost of transportation, allowing this reduction to take place, like, slowly?
I know our costs are up. But, you know, like Councilman Ortiz says, they've been talking for ten years. I mean, we'd be willing to wait a little if we see, again, the same thing I told Mr. Leary, the light at the 109 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 end of the tunnel. I mean, is this any plans on the School District's part to eliminate -- I mean, they say they're prohibited --
-- from offering something. You can do what you can do; you just have to pick up the cost basically.
Right. I think, as you know, we have come up with a three-year plan which we have distributed to Council, and Miss Chatzkel may talk about where we saw things going in transportation. I will say as we engage Harrisburg in conversations, as we have, one of the issues we do talk about is transportation. And, you know, there's some responsiveness to the needs that we have on this issue and we are in a different situation than a lot of other school districts in not being able to provide free transportation. I think that's been noted in Harrisburg. And hopefully, as we continue to work with Harrisburg and others, we will get some relief from that situation. 110 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 But it's nothing that I can write a check on right now as we go through that process, but it has been noted and it's been noted in interesting places.
And would that be like the District's several transportation costs? I mean, have you guys sat down -- just for instance, there might be different fuel to use.
I'm just trying these things out. There are things like --
We're continually looking at that, yes, and we have to continue to look at that.
All right, thank you very much. No further questions.
Could Mr. Leary come back to the witness table. (Mr. Leary and staff members return to witness table.)
I feel like we're going to have a ceremony of some sort. 111 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 (Laughter.)
I do have a follow-up question to Councilman Mariano's inquiries regarding SEPTA simply not being able to provide these kind of free tokens, and I want to make sure I heard you correctly before I proceed with follow-up questions. Did I hear you say by federal law or federal statute, you're not able to provide the discount or free or discount token to students?
Yes, that is correct. It's -- now, I'm not sure, let me ask for guidance from counsel. (Mr. Leary confers off record with colleagues.)
Not federal statute, but I believe it's a Constitutional issue regarding equal protection clauses that require -- in the Pennsylvania Constitution that prohibits us from disadvantaging any one group, or conversely, or advantaging [sic] one group.
Could you provide 112 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 that piece of the document that speaks to that specifically to the Chair. Who would that be administered by, the Federal Highway Transit Administration? And if not today --
Okay. So if you could provide that to the Chair, that would be helpful.
Who approves discount rates for senior citizens? Is that a Board policy or a State policy, and why is that not included under the same umbrella as has been --
There is a special program, and it's the lottery program, at the State level that provides the funds to support the -- and pay 113 4/2/01 PUBLIC TRANSPORTATION, UTILITIES - RES. 142 for the extra subsidy for seniors to ride free essentially.