Friday, December 10, 2004

SEPTA: An expiring lease leads to an opportunity

This is a little out of date (is in, it happened on Tuesday), but Councilman Goode wrote an excellent Op-ed in the Daily news this week discussing the expiring lease of SEPTA. Basically, the city and SEPTA signed a lease 34 years ago that gave SEPTA exclusive rights to the city's transit facilities. (Such as subway and train stations, and probably even the tracks themselves, though I will look into it.) This effectively has made SEPTA the only viable provider of mass transit in the city. Unfortunately for the city, we signed one hell of a bad lease.

As Councilman Goode says, we have a public transit agency that gets most of its local funding from Philadelphia, and most of its farebox income from Philadelphia, yet the city has just two of the 15 members of SEPTA's board. So what you have is a suburban, Republican-dominated board controlling the transit agency of Philly. Not a good idea, as the board's general deaf ear to city concerns has proved.

So now, 34 years after signing a mistake, the city has an opportunity, which I genuinely believe they will seize. According to Goode, if the city so chooses, it can force SEPTA to spend federal capital dollars (different source of income then the failing operating budget) to actually buy the facilities. I do not know how much of a cash infusion this would give the city, but I suspect it would be immense. (For example, in Minnesota, creating just one line of a light-rail system cost hundreds of millions of dollars to build.) I think the state, and effectively SEPTA would have to pay 20 percent of the cost, and the federal government would pay the remaining 80. So, you may be able to force the federal government to fork over a ton of money to the City. That said, if there really is some value in it, there probably is a good reason to keep it in our pockets.

Goode states that we can possibly open up the system to competition, which I think sounds nice, but is unrealistic. Lets remember that regional mass transit is not an overall money maker, in terms of fare income vs operating expenses. (The overall economic impact is far different, but don't tell that to state legislators.) If you bring in a competitor with no mandate to provide mass transit to all, they will simply compete on the profitable lines only. So for example, a bus route with a high amount of seniors (who do not have to pay), would be ignored. The end result could be that SEPTA is beaten out on the profitable routes, and is left with only those that lose the most money, meaning its bottom line is even further damaged, they cut service to these routes, and we essentially have a strictly profit-driven, severly shrunken public-transit system- a total disater for the City.

So, what is the answer? Leverage. Leverage SEPTA to fundamentally alter the structure of the board. If Philly contributes the most money, the city of Philadelphia needs more of a voice; a loud, leading voice and votes that can give the transit agency a new direction. If Philadelphia riders pay the most fares, then they deserve a real voice, as well. If they dont agree, we dont sign the lease, and although we owuld have a huge crisis on our hands, SEPTA would be dead for all intents and purposes. They will avoid this at all costs.

I am getting a hold of the lease itself over the weekend, and will post an analysis of it shortly thereafter. I would very interested to hear what you lawyers/law students think of the lease, as well.

The bottom line though, is that the city has a real opportunity here... We must seize it.

UPDATE: Just to be accurate, SEPTA actually gets a fare for each senior citizen- it comes from the lottery proceeds. So in theory, they would be just as profitable for SEPTA. Anyway, the point remains that if you allow just any competitor, the end result may be route poaching, with an weakened shell of mass transit left over.

5 Comments:

At 10:26 AM, Blogger Alex Urevick-Ackelsberg said...

Some of the regional rail lines are owned by Amtrak, but the rest belong to SEPTA.

This is from a Daily News article from last year dealing with SEPTA's constant inability to arrive on time.Officials said six of the seven regional rails share some common track with Amtrak throughout the 260-plus miles of the system, though at least 60 percent of that system is owned and controlled by SEPTA.I'm with you that we should seize this moment to gain more control over our transit beast- who should we be contacting- city council?

 
At 1:29 PM, Blogger DanielUA said...

Well, no, none of the infrastructure belongs to them, it al belongs to the City, itself. So, we hold a lot of cards.

In terms of what to do, I am not sure. I do not think making calls to City Council will make a big difference, because i think they know this is a significant opening for the City...I think it is worthwhile to first read the lease, then try an figure the biggest things we want changed in it, and in the general structure of SEPTA.

 
At 1:30 PM, Blogger DanielUA said...

And by them, I mean SEPTA. Amtrak does own the rail lines.

 
At 12:09 AM, Blogger Daniel S. said...

I'm here through a diary entry on Mydd.com. Any talk of a strong candidate against Santorum? Thoughts on Chris Heinz running?

 
At 12:07 PM, Blogger DanielUA said...

Chris Heinz? Zero chance.

Hafer, Casey or Hoeffel are the favorites.

 

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