SEPTA Board approves funding for major initiatives

  The Southeastern Pennsylvania Transportation Authority Board approved proposals to a fund fare modernization initiative; the purchase of new Regional Rail cars; and a major, long-needed station renovation project.

The first proposal authorized a loan commitment agreement with the
Philadelphia Industrial Development Corp. Regional Center that will
provide up to $175 million in funding for the New Payment Technology
initiative. This includes the main "Smart Card" project, as well as
related improvements to infrastructure, communications and customer
service.

A modernized fare payment and collection system is
critical to SEPTA’s near- and long-term financial health, as illustrated
by its inclusion as a key component of the Authority’s Strategic
Business Plan. The system will make fare collections more efficient, and
its "open" nature is expected to attract new riders. Customers will be
able to pay for travel on SEPTA trains, buses and trolleys using common
retail methods such as bank cards, mobile devices, and other emerging
"smart" technologies. It also means a move away from outdated fare
instruments such as tokens and paper transfers.

New Payment
Technology initiatives will be financed through the "The Welcome Fund," a
low-cost loan program developed by the PIDC Regional Center in
conjunction with CanAm Enterprises, LLC. The PIDC Regional Center, which
was established under the U.S. Immigrant Investor Program to administer
the loan program for southeastern Pennsylvania, has provided funding
for the Pennsylvania Convention Center, the Temple University Health
System, the Comcast Center and several other major local projects.

SEPTA
pursued innovative financing after the main fare modernization project
was cut from the Fiscal Year 2011 Capital Budget due to a 25 percent
reduction in funding. With the loan commitment agreement in place, SEPTA
can begin to advance its New Payment Technology plans. The projects are
expected to be complete in about three years.

In an unrelated
action at the January 2011 meeting, the SEPTA Board approved proposal to
issue up to $250 million in Grant and Fare Revenue Bonds to fund the
purchase of new Silverliner V Regional Rail cars and the Wayne Junction
Station renovation project.

SEPTA is purchasing 120 new Regional
Rail cars under a contract with Hyundai-Rotem and a significant portion
are expected to be delivered this year. The bonds, which SEPTA has long
expected to issue for the Silverliner V project, will provide up to $208
million in funding for the purchase of the railcars and related costs.

The
Silverliner Vs will significantly upgrade customer service throughout
the Regional Rail system. The new trains feature state-of the-art
technologies and amenities. Their addition to SEPTA’s fleet will also
add passenger capacity and help alleviate overcrowding.

Customers
will also see service improvements through the Wayne Junction Station
renovation project. The station, which sits at the heart of the Regional
Rail system, is among SEPTA’s busiest. The facility was originally
built in 1901, and has fallen into a serious state of disrepair.

SEPTA
planned to move ahead with the Wayne Junction Station renovations this
year, however, as was the case with New Payment Technology, the project
was cut from the Fiscal Year 2011 Capital Budget due to the 25 percent
funding reduction.

SEPTA has continued to try to find ways to
advance projects cut from the budget. Financial support for the Wayne
Junction Station recently came in the form of a $4 million competitive
grant award from the Federal Transit Administration. The funding secured
through issuing the Grant and Fare Revenue Bonds will provide up to $23
million to pay for the remaining project costs.