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May 2013

Rail News: Passenger Rail

Philly's public transit funding woes cause capital pains for SEPTA


— by Angela Cotey, Associate Editor

In 2009, the Southeastern Pennsylvania Transportation Authority (SEPTA) completed a massive renovation of the Market-Frankford Subway-Elevated Line. The 100-year-old corridor was completely rebuilt and now features new stations, track and support beams. New rail cars are operating on the corridor, too. The agency invested about $1 billion over 15 years in the 13-mile line, which now has improved reliability and better on-time performance.

The rest of SEPTA's rail infrastructure could use a similar overhaul. The agency inherited its regional rail network from the Reading Co. and Penn Central railroads in the mid- to late 1970s. The railroads were going bankrupt and couldn't invest in the infrastructure, which was built at the turn of the 19th century. About 350 of SEPTA's bridges are more than 100 years old and the power system dates back to the 1930s. In addition, the majority of the rail fleet is more than 30 years old.

For SEPTA officials, determining the work that needs to be done is not the problem. The agency has a mile-long list of repair needs and a pool of maintenance-of-way workers experienced with rehabbing the agency's old infrastructure. The problem is funding.

Agency officials have identified $4.7 billion worth of backlogged projects that are needed to bring the system to a state of good repair. Those projects range from repairing water damage in stations to upgrading bridges to replacing substations that — if compromised — could make entire rail lines inoperable.

The Philadelphia system's state-of-good-repair needs aren't unusual; systems in New York City, Washington, D.C., New Jersey and Boston, to name a few, are facing similar dilemmas. The difference is that, in Pennsylvania, state funding for public transportation has declined so much over the years that SEPTA is working with a bare-bones capital budget, even by public transit standards. Agencies in similar-sized cities have capital budgets about three times that of SEPTA's current $300 million, says General Manager Joseph Casey.

And no one is more familiar with the agency's budget woes. A 31-year SEPTA veteran, Casey's background is in finance; prior to being appointed general manager in 2008, he held positions as chief financial officer and treasurer, as well as assistant general manager of finance. Perhaps that's why, when it comes to budget matters, Casey is matter of fact; with SEPTA's reliance on the state for capital dollars, the agency's funding situation "is what it is," he says.

But what SEPTA can control, it controls well, Casey says. Agency officials have taken steps to generate new revenue, cut costs and spend wisely in order to maintain a balanced budget. New customer service initiatives have helped improve rider satisfaction and a new sustainability program has helped reduce SEPTA's environmental footprint. And agency maintenance-of-way crews are fine-tuning repair strategies so they can address as many critical needs as possible despite limited funds. As a result, SEPTA is operating efficiently, even with infrastructure that's in desperate need of upgrades, and ridership is at a 23-year high despite capital funding being at a 15-year low.

Long List Of Needs

Casey hopes the latter will be addressed soon. But like many other states, Pennsylvania is facing unprecedented budget challenges and deep spending cuts. And when it comes to transportation issues, Pennsylvania's troubles aren't limited to public transit. Roads, highways and bridges are in dire need of repair, as well. Engineers have rated the commonwealth's infrastructure as a D- and a transportation advisory commission created by Gov. Tom Corbett has identified more than $4.5 billion in infrastructure repair needs in 2013-14 alone. Those costs will continue to rise until significant funds are invested in the transportation system.

"The entire transportation network in Pennsylvania needs to be addressed and I think everyone recognizes it," says Casey. "But no one wants to raise taxes and fees, so how do you do it?"

As part of his proposed 2013-14 budget, Corbett in February unveiled a transportation bill that calls for gradually lifting a cap on the wholesale oil company franchise tax over the course of five years. The plan is expected to generate $1.8 billion annually by the end of the five-year period. Transit funding is estimated to increase by $40 million in the first year and $250 million by the fifth year.

The proposal is a good starting point, but not nearly enough to address the commonwealth's — and SEPTA's — infrastructure needs, says Rep. Cherelle Parker, the Democratic chair of the commonwealth's House Subcommittee on Public Transportation.

"The funding is, from my perspective, woefully inadequate," she says.

But Corbett's proposal does give legislators a starting point for discussing how transportation infrastructure should be funded. On April 16, state Sen. John Rafferty, a Republican who chairs the Senate Transportation Committee, unveiled his own transportation funding proposal that would generate about $2.8 billion in additional transportation revenue annually by lifting the oil franchise cap, as well as raising license and driver registration fees.

About $1.5 billion would be allocated to public transit agencies over a five-year period. Because SEPTA is the commonwealth's largest transit system — it operates more than 400 track miles and carries 340 million passengers annually — it would receive the lion's share of the funds, according to an April 16 article posted on the Philadelphia Inquirer's website.

Editor's note: On May 7, the Senate Transportation Committee passed Rafferty's bill. For more information, click here.

A Will To Pass A Bill

Rafferty is calling on legislators to pass a transportation funding bill by June. Parker believes there's a good chance it will happen; legislators on both sides of the aisle representing districts throughout the state agree it needs to be addressed this session, she says. There was no telling as of late April what a final bill would include, but it will be important that mass transit needs don't get lost in the bigger-picture discussion about infrastructure investment, Parker adds.

"We have so many infrastructure upgrades that are needed, and we can no longer take a Band-Aid approach," Parker says.

SEPTA can't afford to continue taking a patchwork approach to maintenance, either. Over the years, agency crews have performed as-needed repairs at dozens of stations, as well as on platforms, track and bridges. But the recurring maintenance costs take a toll on SEPTA's already-strained budget; in the long run, investing in larger capital projects to bring the infrastructure to a state of good repair would significantly reduce the agency's maintenance costs.

A few of the necessary projects include: addressing water infiltration, corrosion, concrete spalling and accessibility issues at the Broad Street Subway's City Hall and 15th Street stations; bringing the 69th Street Transportation Center in Upper Darby to a state of good repair; and rehabilitating the Media/Elwyn commuter-rail line by replacing power substations and the catenary system, stabilizing the track bed, and renovating or replacing several bridges.

Some of SEPTA's most dire repair needs are invisible to passengers. The agency's substations date back to the 1930s.

On the Reading portion of SEPTA's system, the substation transformers are one-of-a-kind components that no longer can be purchased. If a transformer blows, it would take SEPTA a year to replace it, says Bob Lund, SEPTA's assistant general manager of engineering, maintenance and construction.

"We talk a lot about the condition of our bridges and that's something the public can easily see, but there's a lot of other infrastructure that needs to be addressed that isn't quite as visible," he says.

Last summer, the agency received a Transportation Investment Generating Economic Recovery grant to rebuild the Wayne Junction substation, which, if it were to fail, could cut power to half of SEPTA's regional rail lines. But other substations need a similar overhaul, particularly on the Reading side of SEPTA's system. Penn Central also used to operate what is now the Northeast Corridor, so if components on the former Penn Central portion of SEPTA's system failed, the agency could borrow a part from Amtrak.

"There are things on the Reading side that, if they go, we're simply out of luck," says Casey.

With limited resources, SEPTA crews have been working to replace the critical components of some substations until the agency has funds to replace the entire substation. As crews complete work, they collect as many still-usable transformers or components so the agency has an inventory of spare parts.

"It's like the spokes of a wheel — we're concentrating on the inside spokes because if that fails, it affects more lines," says Casey. "We're doing core work and then working our way out to the individual lines."

That's the strategy SEPTA maintenance workers are taking when it comes to overhead catenary system (OCS) replacement, too. The agency is working to replace 255 miles of OCS. During the past several years, crews have replaced 114 miles, starting in the rail system's core and working outward.

At The Ready

At the moment, SEPTA has very few "major" projects under way, Casey says, and likely won't be able to launch any until additional state funding is available. If the legislature were to approve a transportation bill that includes dedicated revenue for transit, SEPTA has at least $500 million worth of projects ready to go.

The agency has had some experience with quickly implementing and completing shovel-ready projects. In 2009, SEPTA was awarded $191 million in American Recovery and Reinvestment Act dollars to complete 32 infrastructure improvement projects. Work included upgrading much of the Media-Sharon Hill trolley line with new track and ties, new or upgraded signal systems, new grade crossings, and new overhead power and fiber-optic cables. The agency also installed a new, prefabricated station building at the Primos Station site, along with high-level platforms and Americans with Disabilities Act-compliant ramps. Other stimulus money went toward repairing bridges and overhauling some stations. Although SEPTA's state-of-good-repair needs have taken center stage while the Legislature seeks to better understand where capital funding is needed and why, it's not all doom-and-gloom for the agency. Ridership of 340 million is at a 23-year high. On-time performance on the regional rail system hit 99 percent in March. And agency execs still are riding high after SEPTA was recognized as the American Public Transportation Association's (APTA) 2012 Outstanding Public Transportation System.

Industry Recognition

The award recognizes an agency's overall effectiveness in key areas such as budget, operational efficiency and customer service.

Even in times of economic challenges and funding cuts, the agency has had a balanced budget for 13 consecutive years. SEPTA officials have worked hard to control costs, most notably by negotiating "responsible" labor contracts that reduce legacy costs to the agency, Casey says.

SEPTA also is finding ways to increase revenue, particularly by pushing advertising deals.

For example, in 2010, the agency inked a station naming rights deal with AT&T at Pattinson Avenue Station that will yield more than $5 million over a five-year period.

A sustainability program SEPTA implemented in 2011 factored into APTA's recognition of the agency, as well.

The program takes an all-encompassing approach by promoting environmental sustainability through efforts to use less energy and water, and better manage waste; social sustainability, by adding new transit-oriented developments, better integrating bikes and transit, and supporting disadvantaged business enterprises; and economic sustainability, by increasing market share to help address the Philadelphia region's congestion problems.

SEPTA's customer service initiatives are helping the agency achieve the latter. When Casey was promoted to general manager, he made customer service a top priority.

"It was clear to me the organization wasn't paying close enough attention to customers," says Casey. "We had poor communication, and a lack of cleanliness, convenience and courtesy. We now have a program dealing with all four of those issues."

And everyone is involved. For example, customer service training is provided to all SEPTA employees — not just front-line workers — including the maintenance and building staff, says Lund.

"They, too, are the eyes for SEPTA and the vision of the agency," he says.

Lund, who oversees SEPTA's maintenance and construction division, also sees every infrastructure-related complaint or suggestion that is registered in the customer service system. He then passes them on to maintenance workers and engineers.

"That way, they can get a feel for what our passengers and the public see and what they are concerned with," he says. "Then, when we design or build something, we can make sure it works for our customers."

For more on how SEPTA is working to create a customer service culture, read this web-exclusive article.

SEPTA officials hope the agency will be doing a lot more on the design-and-build front in the years to come.

So does Rep. Parker, who believes more funding for Philadelphia's transit system will benefit not only the agency and its riders, but the entire Pennsylvania economy.

Between 2009 and 2012, SEPTA invested more than $1 billion in the commonwealth — which is home to a large number of rail supply firms — via procurements for rail cars and components. Through its efforts to spend money within the commonwealth, as well as efforts to cut and control costs amid declining state funding, SEPTA has proven itself as an agency worthy of more investment, Parker believes.

"SEPTA has done an outstanding job functioning as an entity, and we have a responsibility to provide them with a dedicated funding stream," says Parker.

Casey & Co. hope they get it before SEPTA's infrastructure is past the point of repair.


Browse articles on Southeastern Pennsylvania Transportation Authority SEPTA Joe Casey Bob Lund Pennsylvania transit funding Gov. Corbett Cherelle Parker state of good repair

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