‘Difficult measures’: SEPTA cuts executive pay, takes other steps to stem revenue losses

As the coronavirus pandemic drains SEPTA of riders and revenue, the agency is implementing a range of emergency cost-cutting measures.

A rider waits for a SEPTA train.

A rider waits for a SEPTA train. (Kimberly Paynter/WHYY)

As the coronavirus pandemic drains SEPTA of riders and revenue, the regional transit agency is hoping for a federal bailout and implementing a range of emergency cost-cutting measures.

The perennially cash-strapped transit provider projects a loss of $150 million in revenue by the end of the fiscal year that ends June 30.

The financial cliff comes after the agency maintained a $7.3 million surplus through the first eight months of the fiscal year, SEPTA General Manager Leslie Richards wrote in a letter to SEPTA employees. That has now been decimated by the COVID-19 pandemic. Ridership fell by 64% on city transit and plummeted by 88% on Regional Rail.

“You should know that SEPTA is in close communication with the Pennsylvania Congressional Delegation, as well as state and local officials, regarding the fiscal impact of the COVID-19 outbreak,” Richards wrote in her letter.  “We are hopeful there will be a federal relief package for SEPTA and other public transportation agencies that are still providing critical services during this crisis. However, more immediate action is necessary to stem SEPTA’s mounting operating losses.”

  • WHYY thanks our sponsors — become a WHYY sponsor

Richards described a number of emergency cost-saving measures.

“Our team is closely examining all facets of our operations to identify areas where cost-savings and efficiencies can be achieved,” Richards wrote. “Given the evolving situation we must take difficult short-term measures. All options are being considered.”

Such measures include a 10% pay cut for herself and the executive team, effective immediately. Other measures implemented, or to be implemented soon, include “elimination of overtime, a freeze on new hires, eliminating marketing efforts where possible, eliminating non-essential employee travel, and we are considering further service reductions on Regional Rail and Transit.”

The GM, who took the role less than three months ago, says they’re assessing “options for additional reducing costs moving forward.”

And that may include layoffs.

“That’s obviously something we would try to avoid,” said Busch. The authority is starting off with executive pay cuts, but “we have to consider all options.”

Michael Bente, a cashier on the Broad Street Line, said the announcement in the letter worries him.

“One of the main things that I signed up for coming to this job was job security,” said Bente, who has worked for SEPTA for about eight years. “I feel like now everything is just pretty much on the edge.”

Bente also criticized the timing of the letter, saying Richards added “more panic to already panicky employees” still dealing with changes and uncertainty due to the pandemic.

“It only makes sense to wait a little bit before you start talking about losses,” he said. “A lot of us are over 50-years-old, who have underlying issues. Let’s make sure we’re taking care of them first and foremost.”

WHYY is your source for fact-based, in-depth journalism and information. As a nonprofit organization, we rely on financial support from readers like you. Please give today.

Want a digest of WHYY’s programs, events & stories? Sign up for our weekly newsletter.

Together we can reach 100% of WHYY’s fiscal year goal