At SEPTA’s July Board meeting, it disclosed that it has $396 million in cash in a “stabilization fund.” SEPTA’s staff also announced that the projected elimination of 3,000 bus stops will save SEPTA $5 million a month, less than 2% of the surplus SEPTA currently has.
SEPTA’s General Manager informed the Board that SEPTA remains optimistic about receiving the necessary funding from the State. Despite the optimism, the Authority decided not to wait for Pennsylvania to pass a budget. Instead, in three weeks, in the words of its general manager, SEPTA will “make devastating cuts that will be extremely disruptive to our customers… with these cuts 10’s of thousands of riders will be left with no viable Public Transit option.”
There were no elected officials other than board members at the meeting. No one other than Hall Monitor asked if you have $396 million in the bank waiting to be used, why can’t it be used to eliminate the need for the cuts?
The Board Chair would only allow Hall Monitor to ask two questions. Once the questions made it clear that there was more than enough money to make the cuts unnecessary, one of the two Philadelphia appointments to the SEPTA board, Mike Carroll, PE tried to explain why the City was allowing the cuts to “devastate” the City Transit division while the suburban regional rail lines will not suffer similar reductions for at least six months.
Mr. Carroll explained, “We [SEPTA] use the Stabilization Fund like a checking account; we don’t know what costs will be coming up; that cash needs to be on hand. So SEPTA doesn’t borrow money or end up with no money to pay for things.”
No one revealed the existence of SEPTA’s line of credit with PNC bank. The line of credit was established to cover unexpected costs.
Board Member Carroll acknowledged SEPTA could use part of the $396 million to make the service cuts unnecessary, but chooses not to.
“We have to maintain some level of rate stabilization fund; we can’t go to zero. There is no scenario where we can spend it down to zero. We get information from experts in the field that tell us where it should be [the amount of money in the stabilization fund], and we are right at that line. So we don’t have a lot of slack to spend it down below where it is now,” he said.
The little slack that Mr. Carroll admitted SEPTA does have and can use is enough to make all the cuts unnecessary while legislators finalize the state budget.
No member of the Board or the General Manager admitted that SEPTA projects using the stabilization fund over the next three years, drawing it down to zero.
Nor did any member of the Board or the General Manager explain why paying bills on time was more important than getting riders to their stops on time.
In any other business, the managers would negotiate with their suppliers to accept a longer wait or lower payment. Bondholders in different businesses facing dismantling would be asked to renegotiate payments and interest rates.
SEPTA decided to prioritize bondholders and the corporations it does business with over the riders. Instead of making the bondholders and businesses wait for payments, SEPTA has chosen to make the riders wait.
General Manager Scott A. Sauer said the agency is doing all it can to secure funding. While at the same time, threatening SEPTA riders with a 45% service cut and the highest fares in the nation.
The tactics SEPTA is using amount to telling the Republican leadership in Harrisburg that if they don’t fund public transit, SEPTA will hurt low-income people of color. Perhaps someone believes the Republican leadership that supported cutting Medicare and SNAP, worries about harming the working poor in Philadelphia.
It may be more revealing to listen to an unbroadcast interview with SEPTA’s general manager, who said: “We have made efforts to prioritize services that make the most sense to us.”
The real shame is that our elected officials don’t show up for us, and the cuts projected for this year are unnecessary. There is no law preventing SEPTA from using the $394 million in the stabilization fund to keep the system operating. All the Board needs is the courage to follow the late John Lewis and get in the way and cause good trouble.
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