[PRCo] Dream on...

[Fred Schneider]

Again, the word file for Matt and Ed is at the end of the document.   This is a fabulous piece showing such blatant political optimism ... PAT's promoters were saying we can money running transit and we won't have to even increase the fares.   We know more than those profession boobs that were in the industry all their lives.   Duh.   
Read it an weep.   

http://news.google.com/newspapers?id=nUIqAAAAIBAJ&sjid=EE8EAAAAIBAJ&pg=6396%2C1820855

 

Pittsburgh Press,  Wed.  Aug. 7, 1963, page 1

 

Negotiations Resume

 

Port Authority, Trolley Firm Talking Price

 

County Prepared to Guarantee Bonds Despite Extended Deficitit

 

By Ralph Brem

 

   Allegheny County’s Port Authority began again today to try to buy its biggest liability – the Pittsburgh Railways Co.

 

   According to latest reports, the sooner the authority has all of the County’s mass transit facilities under one wing, the better the chances are for a low-deficit operation.

 

   The only holdout is Pittsburgh Railways Co. (PRC).   New purchase talks started today.

 

   The predictions of possible higher deficits under a consolidated mass transit system resulted from the increasingly rapid loss of passengers by PRC.   Last year alone the loss was 6,793,985 passengers.

 

   The authority hopes to start next January to operate the unified system, made up of 31 separate lines.

 

   It could cost the taxpayers between $535,905 and $1,811,535 next year and more in subsequent years if the County Commissioners agree to guarantee the authority’s revenue bonds.

 

   This means any tab the fare box cannot handle, the commissioners will.

 

   The commissioners voted to do it, but it’s not in writing yet.

 

   However, late yesterday, Chairman William D. McClelland and John E. McGrady, the majority commissioners, said they probably would go along with the idea despite the higher deficit figure.

 

   The lower of the two estimates comes from the authority; the higher from a New York consulting firm, Coverdale and Colpitts.

 

   At that, the authority’s figure is about $175,000 higher than they originally estimated for the first year of deficit operation.

 

   The consultant’s opinion was needed to give financial institutions which might be selling authority bonds an up-to-date look at the local situation.

 

   There has been no change in the basic purchase cost of the entire system—39 million dollars.   It’s operating it that hurts.

 

   According to the authority’s chairman, Judge Loran L. Lewis, the New York firm’s report paints a gloomy picture, mainly because of PRC’s rapid loss of fare paying passengers.

 

   But, he adds, it is better than the consultant’s earlier study which was far darker.

 

   “The Port Authority’s revised report is not as pessimistic,” Judge Lewis said in a letter yesterday to the County Commissioners which he attached to a comparison of figures involved.

 

   Judge Lewis said he though improved service and good management would halt the downward trend.

 

Some Firms Gained

 

Actually, he said latest reports show that 15 of the transit firms involved in the proposed County takeover gained 981,900 passengers last year.

 

   These, he said, were “better equipped and better managed.”

    Fifteen others lost 1,438,975 passengers, Judge Lewis said, and that does include PRC’s loss of nearly seven million.

 

    The authority fears that every passenger lost now will be tough to win back.

 

   According to the report, Judge Lewis said, Coverdale and Colpitts predicted a profit for the County’s proposed system.

 

   It seems the operation running in the black for $350,000 despite the passenger drop, but the costs of paying the bond debts of $2,161,535 will take [all of] that and leave a deficit of $535,905 for the taxpayers.  

 

Figure in Between

 

   “Perhaps the real answer lies somewhere in between those figures, Judge Lewis said.

 

   Both the authority and the consultant’s reports agree that the deficit will not be limited to the first year of authority operation.

 

   Both agree the downward trend will continue, but they differ in rate and subsequent deficit.

 

   The authority figures its operating loss in 1965 will be $574,920 and in 1966 $613,000; the New Yorkers figure $3,261,535 and $791,535 respectively, provided there is a fare increase in 1966 to 35 cents.

 

   However, the authority appears firm in its promise to keep the fare at 30 cents while Coverdale and Colpitts points out advantages in increasing the fares.

 

Fare Raise Would Help

 

   For instance, the deficit in 1965 would be more than one million dollars if the fare was increased two cents, the New York firm’s report said.

 

   Or it added, more than two million dollars less if the fare went up 3 ½ cents.

 

   The authority, however, feels it can tap other sources of revenue such as charter coach service, advertising, and hauling newspaper, mail and packages to help ease the deficit.

 

   Harley Swift, executive director of the authority said the whole difference between the consultant’s report and the authority’s estimates is the opinion of how many passengers will ride.

 

Mr. Swift thinks a well run County-wide system will attract more riders; the consultants figure it won’t.

 

   In any event, the County Commissioners appear ready to go along with the takeover no matter what the deficit cost.