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Does SEPTA, after decades of financial shortfalls, now have a hidden surplus of $130 million?
In recent weeks, groups as disparate as transit police seeking higher pay and school students seeking free transit passes have asked SEPTA to dip into that mysterious pot to help them out.
In response, SEPTA officials have said variously that a surplus doesn't exist or that it is off-limits for new spending. SEPTA spokesman Richard Maloney said this week the $130 million was "becoming an urban legend."
In fact, the money does exist and it is not to be found anywhere in SEPTA's budget.
The $130 million, $80 million in fiscal 2008 and $50 million more in fiscal 2009, which begins Tuesday, is part of a growing pool of money that SEPTA has dubbed its "service stabilization fund."
The money, part of the state's contribution to SEPTA under Act 44, the landmark dedicated-funding law that was passed last July, is revenue that is in excess of current expenses. It is being set aside in anticipation of future costs, said chief financial officer Richard Burnfield.
The fund will continue to grow for several more years and then be depleted as costs - primarily wages, health insurance costs and fuel costs - go up, Burnfield said. He said SEPTA hopes to husband the money well enough to get through 10 years - to about 2017.
The fund also allows SEPTA to manage its cash flow, as it waits for payments from the state or local governments, Burnfield said.
But SEPTA's decision not to report the existence of the fund in its budget has made it suspect by SEPTA's critics.
"We should be talking about it - we shouldn't be hiding it," said Lance Haver, the city's consumer advocate. "I can't say that what SEPTA is doing with the money is an unreasonable thing to do - I do think it's an unwise thing to do - but what we do with it should be a topic of conversation."
Matthew Mitchell, of the Delaware Valley Association of Rail Passengers, said during SEPTA's latest round of budget hearings that while his group can "think of several legitimate reasons for SEPTA not to spend all of the new state funding on operations immediately, we are disappointed that SEPTA has not taken the opportunity ... to more clearly address the controversy" over the surplus.
The amount of subsidy that SEPTA receives from the state is based, among other things, on a percentage of state sales tax revenues.
SEPTA general manager Joseph Casey said the transit agency had not included the excess in the budget documents because it was not part of the revenue needed to balance the annual operating budget.
Many government agencies, including most states, have "rainy day funds" that squirrel away money for future economic downturns or budget shortfalls. And the money is typically accounted for in the regular budget documents.
In Pennsylvania, for example, the $800 million rainy day fund, formally known as the Budget Stabilization Reserve Fund," is included in the state's budget document under "other special funds."
Casey said he is considering if, and how, to include SEPTA's fund in revised budget documents for the fiscal year that starts on Tuesday.
He said the agency would not give in to requests to dip into the fund for new spending, such as police pay raises, student transfers, or "unproductive service" additions.
"Harrisburg doesn't want us to waste the money...they don't want us to come back in 2010 or 2011 with our hands out" for more money, he said.
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