Transit agency budgets are going to be under scrutiny. They need to be analyzed with a fine tooth comb:
Taking a close look at SEPTA
By: PATRICK WALTERS , The Associated Press
PHILADELPHIA - Critics of this region's transit agency have been calling for years for someone to shine a bright light on its finances in search of wasteful spending, inefficiency and fat.
Legislators leery of doling out more money to support the Southeastern Pennsylvania Transportation Authority. Watchdog groups decrying that cash-strapped SEPTA is inefficient and should contract out some service. Passengers sick of being threatened with higher fares year after year.
But SEPTA and other transit agencies, whose $68 million bailout last week will mean less money for highway and bridge work around the state, have countered that they have nothing left to do but cut service if the state doesn't find a more reliable funding source to support them.
Now, both sides could be on their way to getting some answers - like them or not.
While announcing the bailout plan Monday, Rendell signed an executive order forming a commission to look at ways to cut costs and increase efficiency at the state's transit agencies, the largest of which are SEPTA and Pittsburgh's transit agency, the Port Authority of Allegheny County.
That effort, which will involve a comprehensive desk audit of how those agencies are run, is sure to be watched closely by both sides.
"Every problem is defined in terms of being a funding problem. Nobody ever looks at costs," said Wendell Cox, an Illinois-based transportation consultant who was involved in a 1997 audit of SEPTA. "SEPTA's survival depends upon their extorting more money out of Harrisburg."
The 1997 audit by Phoenix Management Services suggested that SEPTA reduce its work force from 10,000 to about 8,500, reduce base fares from $1.60 to $1.25 and eliminate transfers. It also recommended that SEPTA sell off some computer operations and some bus routes to private companies.
Since that time, SEPTA has reduced its work force to about 9,000 employees and raised fares to $2, one of the highest rates in the country. Some say the agency can do better.
Donald Nigro, of the Delaware Valley Association of Rail Passengers, said his group believes SEPTA does need a better funding system, but also needs to better use its resources. He said SEPTA has fewer passengers per car-mile than comparable regional rail systems across the country.
"They're running all this equipment around, but they're not being as well used as other operators," Nigro said. He said SEPTA has a lot of redundant service as well, including the multitude of bus lines that run parallel to the agency's north-south Broad Street Subway.
Citing federal transit data from 2002, Nigro said SEPTA averages 24.8 passengers per car, compared with 30 to 39 passengers for peer systems. He said that pushes SEPTA's cost for each passenger-mile to 41 cents, above the 25- to 30-cent average.
State officials hope that the commission's research will help resolve questions about whether there is waste at SEPTA, which has a $920 million operating budget for fiscal year 2005, whether there are more places to cut and whether competitive contracting could help.
SEPTA, however, says it knows of no fat in its budget.
"What else is there to cut to maintain the service? The answer is zero. We are eating hand-to-mouth," SEPTA spokesman Richard Maloney said before the funding was announced. "So when the money runs out, the service has to stop."
Other reviews have been conducted, but Rendell said they weren't as extensive as the one planned now. Earlier in his term, for example, Rendell asked that a study be done to assess the needs of public transit. That study, by former Amtrak chief financial officer Arlene Friner, has been submitted to the government, but the final version hasn't been released.
Topics that critics want addressed include how much money is spent on health care, management salaries and overtime. The commission will also look at how the state can best raise transit funds, an issue transit agencies say is the root of the problem.
The governor said he was forming the commission partly in response to critics in the Legislature and others who think the agency should be more efficient.
If the Legislature does not approve new transit dollars before June 30, by which time the $68 million bailout would run out, Rendell said his administration would ask to divert an additional $344 million in highway funds to keep the agencies afloat through 2006.
Grant Gulibon, senior policy analyst with the conservative Commonwealth Foundation in Harrisburg, said there has to be a way for the agency to be run better and not just keep getting more money.
Experts consulted by the foundation believe that SEPTA, the Port Authority and other transit agencies have a spending problem, not a funding problem, Gulibon said.
But the president of the American Public Transportation Association, a national transit group, said there's only so much that labor-intensive transit groups can do to cut back.
"If the choice is between paying more and cutting service, the public usually says I'd rather pay more," said William Millar, a former head of the Port Authority of Allegheny County. "I don't want to imply that there's nothing you can do, but you're very limited in what you can do."