FY 2012 Operating Budget and FY 2013-2017 Financial ... - Septa

Financial and Budgetary Policies
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.
In March 2007, the Authority issued $131.6 million of Variable Rate Revenue Refunding
Bonds, Series of 2007. The net proceeds from the sale of the 2007 Bonds were used to
currently refund the Authority’s outstanding Special Revenue Bonds, Series of 1997 and to pay
the premium for a debt service reserve fund insurance policy. The Bonds were initially issued
in the Auction Mode. In July 2008, the Bonds were converted from the Auction Mode to the
Weekly Mode.
In October 2010, the Authority issued $222.5 million Revenue Refunding Bonds, Series of
2010 due in varying amounts through 2028, with annual interest rates from 2% to 5%. The net
proceeds from the sale of the 2010 Bonds, together with other funds of the Authority, were
used to (a) currently refund the outstanding principal amount of the 1999 Special Revenue
Bonds, Series A and Series B, (b) fund the termination payments and accrued amounts
payable in connection with the termination of certain swap agreements and, (c) fund certain
costs and expenses incurred in connection with the issuance and sale of the 2010 Bonds.
Concurrently with the issuance of the 2010 Bonds, the interest rate mode on the 2007 Bonds
was converted from a Weekly to a Daily Rate and the existing indenture was amended to
eliminate any requirement that the Authority fund a debt service reserve fund.
Interest on the Bonds is payable semi-annually on March 1 and September 1. The debt
service requirements related to the Series 2007 and 2010 Bonds are listed on the following
page, on a calendar year basis.
SEPTA Fiscal Year 2012 Operating Budget 14