Rare DRPA feat: Budget smaller than previous year’s

The Delaware River Port Authority broke with tradition Wednesday as its board adopted an annual budget significantly smaller than the previous year's spending plan.

DRPA, which operates four toll bridges and the PATCO commuter rail line between Philadelphia and South Jersey, will have an operating budget of $258 million for 2013, down more than 6 percent from its $275 million 2012 budget.

The new budget contains no increase in bridge tolls or train fares, and preserves the 50 percent toll discount for senior citizens.

For DRPA, whose spending on economic development cost tollpayers about $500 million over the last 13 years for stadiums, concert halls, museums, and pet projects of board members, the 2013 budget marks a turning point.

"This is a new day at the Port Authority, founded on fiscal responsibility and reforms," said Jeffrey Nash, the Camden County freeholder who is the longtime vice chairman of the DRPA board and chair of its finance committee. "We have heard the voices of the community."

Chief financial officer John Hanson said no DRPA budget in recent memory had been smaller than its predecessor, except in 2005, when the budget was down by less than 1 percent.

New board chairman David Simon, executive vice president and chief legal officer of the Jefferson Health System, said it took five tries to pare the 2013 budget to its final level, and he noted the spending plan maintained $3.5 million worth of discounts for senior citizens.

Simon said DRPA will not increase tolls or fares, despite a provision approved in 2008 that called for automatic toll increases every two years, starting in 2013, to match inflation.

Simon said the new budget "should help preserve the current bridge toll and rail fare structures for the foreseeable future."

Tolls are expected to bring in $291 million in 2013, and PATCO fares will produce an additional $27 million. That represents 96 percent of DRPA's revenue.

The biggest saving in the 2013 budget is in lower costs to service the agency's $1.2 billion debt. Payment on that debt and related costs represent nearly half of DRPA's annual expenses.

By refinancing debt, paying off some debt early, and cutting the costs of letters of credit, DRPA expects to save about $19 million next year.

And the agency will save nearly $3 million because it won't have to pay for bridge inspections, which are done every other year. The next inspections are due in 2014.

The costs of running the bridges and PATCO will go up about 3.5 percent, to $131 million, largely because of higher costs for employee pensions ($3 million more), E-ZPass transaction costs ($900,000 more), and health insurance costs ($700,000 more).

The budget envisions 17 fewer employees (to 936 from the current 953) and no raises for nonunion workers, most of whom have gone three years without an increase.

The 2013 capital budget, which pays for major construction and repair work, was set at $119 million, down from $125 million in 2012.

The biggest capital expenses slated for the new year are $43 million for the ongoing rehabilitation of PATCO train cars and $34 million for the continuing redecking of the Walt Whitman Bridge.

The board also continued its recent efforts to implement changes approved more than two years ago.

The latest steps, including a consolidated ethics policy, a ban on political activity at work, and a requirement that all companies working for DRPA disclose their political contributions, are part of a continuing effort to make changes requested in 2010 by the governors of Pennsylvania and New Jersey.

The board approved other changes last month and in October.

The new DRPA inspector general, Thomas W. Raftery 3d, prodded the agency into action with a report in May that criticized it for failing to put many of the changes into practice.