[PRCo] Re: Protesting Washington & Charleroi Conversions

[Schneider Fred]

Barry and the rest of you:

The fallacy in this story (the link that Barry provided) is that the  
PUC would have allowed the conversion no matter how many people  
protested the Washington and Charleroi conversions if it could be  
proven it was in the corporation's  best economic interest to make  
the change.   The man in the news article suggests that it might be  
possible to prevent the conversion of the interurbans in 1953 and I'm  
saying that it was truly impossible.   All Pittsburgh Railways had to  
do was hold up the record of continuously declining riders since 1945  
and the PUC was going to override any and all opposition.

Unlike regulatory bodies in some states, the Pennsylvania PUC and the  
PSC before 1930, served to protect the interests of the utilities in  
the commonwealth from extremists who believed they should give  
services away for nothing.

There were cases in the past where protesters came to PUC abandonment  
hearings demanding that rail service be retained.   Two examples I am  
thinking of were West Penn's McKeesport city service, where the  
complainants said that it would be an undue burden on the community  
when it snowed because the warm and comfortable trolleys were much  
safer in such weather.  [As a sidebar, you might need to be told that  
heaters were a option in automobiles in the 1930s.]   Of course the  
PUC was not going to force West Penn to run its vehicles 362 days out  
of the year so those people could have streetcars the other 3 days.    
The other example involved parents complaining that West Penn cars  
would be safer between Larimer and Irwin than school buses.   If my  
recall is valid, the judge then asked how many of those attending the  
hearing came on the trolley and of course none of them did.

The difference between Pittsburgh Railways and any other private  
transit corporations and today's public agencies is that those  
private companies had to obtain enough money from the fare box to (1)  
pay all operating costs, (2) pay all capital costs, (3) pay all debt  
service, and (3) pay all taxes and franchise costs that the federal,  
state and local governments threw at them.

The public agencies of today only need to recover, according to the  
Federal Transportation Administration (FTA), 30% of their operating  
costs from the farebox and they (the local agencies) keep changing  
the definition of what operating costs are.   Day to day maintenance  
items keep getting pushed out of operating costs into capital so we  
can turn around and then ask the feds for money for a midlife  
overhaul of your bus or trolley or subway car when it collapses like  
a one horse shay ... so simple repairs suddenly got kicked out of the  
30% bracket into the 70% bracket.   In other words, 30% shrinks to  
20%.      Your fare of about $2.00 covers a miniscule portion of the  
total.   The typical transit ride probably costs somewhere between $8  
and $12 today.   I don't think we can really tell how much because  
none of the federal bonds that were issued in the 1960s for buses or  
MARTA's subway cars or Washington's subway or PAT's first LRVs are  
ever going be paid off, there will simply be new bonds issued to  
cover the cost plus accumulated interest over the years.

We cannot state for certain what the true fare today really is  
because don't depreciate anything.   We live in a dream world.   The  
federal government gives us a subway.   We do not write of a portion  
of it every year.   We wait until it totally collapses and then we  
point fingers.   Suddenly we need to add another $115 million to the  
infrastructure cost which should have been proportionally added a  
little each year.

In a real world we would buy a bus and depreciate it until we scrap  
it and then we would write off any remaining depreciation from the  
books.   In this dream world, we get a grant from the federal  
government.   The feds issue bonds ... series EE or whatever.   When  
they run out, the feds issue new bonds.   The bus they financed may  
have been scrapped 20 years ago but the debt service is still paying  
it off.   (I guess it is sort of like the woman that makes the  
headlines tonight who is pregnant with 12 babies.   Or like the  
consumer who uses Visa to pay off MasterCard to pay off Discover to  
pay off American Express to pay off Visa to pay off MasterCard to pay  
off Discover to pay off American Expr....)

The cost of the ride in the private sector gradually became less  
because of efficiencies and because periodically the companies went  
bankrupt and wrote off some of the capital costs.   The public sector  
doesn't write off anything ... it just keeps rolling over old costs  
into new ones and increasing the basis for tomorrow's fares.

However, as unfortunate as this sounds, the oil is running out so we  
need mass transit.  The idiots are in command.   I haven't a clue  
what our grandchildren will do about it.

I should add that I have the e-mail list for all the kids in my high  
school class (we're 70 years old now).   The big topic on this list  
now is health care.   I'm amused by the number of them who like  
Medicare but will tell you they don't like socialized medicine.   I  
guess it's socialized if you have it ... but not if I have it?   I  
guess transit is the same way.   It social goodness if it helps me.    
It's terrible if it helps you?      :<)

I would love to read Ed Lybarger's rebuttal to this....   And Derrick  
too.

And Barry ... how do you print these news items?   They appear to be  
blocked so you cannot do anything but read them.

Fred Schneider


On Aug 18, 2009, at 3:20 PM, Barry, Matthew R wrote:

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