Fiscal Year 2010 Operating Budget - Septa

Financial and Budgetary Policies
Debt Service
The Authority has two series of Special Revenue Bonds outstanding. The Bonds are
limited obligations of the Authority and the principal and interest thereon are payable
solely from the revenues received by the Authority from the Treasury Department of the
Commonwealth pursuant to Section 1310 of Title 74 of the Pennsylvania Consolidated
Statutes, including all moneys distributed to the Authority from the Public Transportation
Assistance Fund created under Article XXIII of the Pennsylvania Tax Reform Code of
1971, as amended.
On July 18, 2007, the Governor of the Commonwealth of Pennsylvania signed into law Act
No. 2007-44 (“Act 44”), which, effective July 1, 2007, among other things, (a) repealed 74
Pa C.S. Ch. 13 (which included Section 1310); and (b) provides, in pertinent part that,
notwithstanding such repeal, (i) the PTA Fund shall continue to receive the revenue the
PTA Fund was entitled to receive on June 30, 2007, (ii) despite the repeal of 74 Pa. C.S.
Ch. 13 and, in particular, Section 1310, transit entities that have outstanding obligations
shall continue to receive money from the PTA Fund calculated and paid in the same
manner as was provided on June 30, 2007, and (iii) money remaining in the PTA Fund
after amounts are disbursed as described in (ii) above shall be transferred monthly to the
Public Transportation Trust Fund established under 74 Pa. C.S. Ch. 1506.
The Authority, as a transit entity under Act 44, will continue to receive amounts distributed
from the PTA Fund that are calculated and paid in the same manner as was prescribed prior
to the repeal of Section 1310.
The Authority’s policy is to issue debt periodically to supplement federal grants in support
of the Authority’s capital plan. There are no requirements to establish legal debt limits.
In May 1997, the Authority issued $170.2 million of Special Revenue Bonds, Series of
1997, due in varying amounts through 2022, with annual interest from 4.00% to 5.75%.
The net proceeds of the bonds were used to reimburse the Authority for a portion of the
costs of certain capital projects; refund certain leases entered into by the Authority for a
building and related equipment; pay the costs of certain capital projects and pay the
premium for a debt service reserve fund insurance policy.
In February 1999, the Authority issued $262.0 million of Special Revenue Bonds, Series of
1999A and 1999B due in varying amounts through 2029, with annual interest from 3.25%
to 5.25%. The net proceeds of the 1999A Bonds were used to finance a portion of the
Market-Frankford subway-elevated line vehicle acquisition program; refinance a bridge
loan for payment of a portion of the vehicle acquisition program; reimburse the Authority
for a portion of the costs of certain capital projects and pay a portion of the premium for a
debt service reserve fund insurance policy. The net proceeds of the 1999B Refunding
Bonds were used to refund $73.2 million of the 1995A Bonds, and pay a portion of the
premium for a debt service reserve fund insurance policy.
Southeastern Pennsylvania Transportation Authority Page 14 Fiscal 2010 Operating Budget