Talking Transportation with Jay Fox - SEPTA Deputy General Counsel

This week’s ATLP Highlights Blog features an interview that I recently conducted with Jay Fox, Deputy General Counsel for the Southeastern Pennsylvania Transportation Authority (“SEPTA”).

SEPTA serves the Philadelphia metropolitan area operating: bus, rapid transit, commuter rail, light rail, and electric trolleybus service.  The transit agency employs over 9,000 people and logs nearly 1.5 trillion passenger miles per year across all modes.

Jay began his career in private practice as a litigator and then as general counsel to an export management firm before joining the Federal Aviation Administration (“FAA”) only a month after the September 11 terrorist attacks.  He then went on to the Federal Transit Administration and Amtrak prior to joining SEPTA. Jay is a graduate of Rutgers Law School.

Jay and I spoke via zoom as both Philadelphia, where Jay lives, and metro Washington D.C., my home, are currently under “stay-at-home” orders in response to the Covid-19 Pandemic.

Justin Marks

Jay, thank you for taking the time to speak with me.

I want to begin by asking how you and your family are doing during this unprecedented time in our history?

Jay Fox

We are doing well.  We are in Philadelphia and as such, under Governor Wolf’s stay-at-home order.  All of the employees in my group at SEPTA are all working from home and we anticipate continuing to do so until well into June. 

Justin Marks

I understand that you began your public service career at FAA a month after the September 11th attacks on the World Trade Center and the Pentagon.  Did FAA’s response to that tragedy impact your work?

Jay Fox

Yes, it did. I started at FAA in October 2001 was immediately assigned to work on the Federal Air Marshal (FAM) hiring initiative.  The FAM program was a relatively small program prior to the attacks.  In the months following, FAA sought to hire several thousand new air marshals.  We received what must have been tens of thousands of applications including many from retired military and police officers.

We experienced some turnover initially because the job required the officers to fly without distracting themselves.  But over time we developed a good crew of marshals.

Justin Marks

Have you been able to apply any of the lessons from your work following the September 11 attacks to SEPTA’s response to the current pandemic?

Jay Fox

Yes, I learned three lessons from that experience. 

First, cool heads will prevail.  I have been impressed by the leadership displayed in the current crisis.  Governor Wolf, here in Pennsylvania, Governor Murphy in New Jersey, and our General Manager here at SEPTA, Leslie Richards have demonstrated steady leadership through this crisis.

Second, the Covid-19 Pandemic has revealed challenges with existing safety protocols, both locally and nationally, that we will now have to confront.

Third, following the September 11th attacks, the Federal Air Marshals, provided two services:  1) they ensured travelers could fly safely; and 2) they made travelers feel safe.  As such, they helped ensure people returned to traveling.

At SEPTA, we need to ensure that our riders are safe when they ride any vehicle in our fleet.  But we also need our community to know that it is safe to ride again.  Our safety measures must be properly communicated so people can return to SEPTA’s buses, trains, and trolleys and we can get Philadelphia’s economy moving again.

Justin Marks

When you left FTA, you held the position of Regional Counsel for Region 3. 

Can you explain the role of FTA’s regional offices and your role as Regional Counsel? 

Jay Fox

Region 3 overseas federally funded transportation investments in Delaware, Maryland, Pennsylvania, Virginia, West Virginia, and the District of Columbia. 

The Regional Counsel position was very interesting because –every day there was something new.  Issues we worked on included grant management, environmental, procurement, oversight, compliance.

It was also interesting because for the small transit agencies that do not have general counsel, the region provides compliance guidance.  But for the big agencies, which usually have in-house counsel, the focus is oversight.  One of the largest oversight challenges for me was regional oversight of the Silver Line that is being constructed now from Washington D.C. to the Dulles Airport. 

With all things, we had to ensure national consistency such that Region 3 was communicating a consistent message along with the other regions and headquarters.

Justin Marks

Can you identify the types of issues that are unique to Region 3 considering the number of legacy transit agencies like SEPTA?  I imagine the issues facing these legacy agencies are different than issues facing newer transit agencies in some of FTA’s other regions.

Jay Fox

Well, Region 3 did have a few New Start projects – SEPTA’s King of Prussia proposed rail project and WMATA’s Silver Line – but yes, the older transits were primarily interested in State of Good Repair Projects. 

This all changed though several years ago when FTA started taking on a larger safety role after WMATA experienced many safety issues.  Now, FTA is intimately involved in safety oversight. 

Justin Marks

After FTA, you joined Amtrak as Director of Host Railroads.  Was that with Amtrak owner-host or with freight railroads as a host to Amtrak?

Jay Fox

I was a “recovering lawyer” managing Amtrak’s relationships with host freight railroads.  Aside from the majority of the Northeast Corridor and small segments of lines in Michigan and a few other places, Amtrak operates over track owned by host freight railroads.

When Amtrak was established and Congress permitted freight railroads to shed their passenger common carrier obligation, Congress required the freight railroads to host Amtrak by granting Amtrak access to tracks and facilities.  And the freight railroads are statutorily required to grant Amtrak “preference” over freight trains.  At Amtrak we call this the Great Compromise.

Justin Marks

Oh, I see, a kind of arranged marriage.  You worked with host freight railroads that are required to host Amtrak.  It seems that the relationship could be a partnership at times, but also adversarial at times. 

In your time at Amtrak, did you develop a philosophy for how you managed these types of relationships?

Jay Fox

Yes, but that begins with an understanding of the problematic nature of the Great Compromise.  Congress created a statutory scheme that creates tension between the host freight railroads and Amtrak.  But Congress failed to establish a national passenger rail plan for efficient rail travel that would move passenger rail beyond the use of the freight network.

When Amtrak was created, freight railroads were going bankrupt.  To alleviate this issue, Congress not only permitted railroads to shed their passenger common carrier obligation, Congress made it easier for railroads to rationalize their systems.  As such, freight railroads removed infrastructure.  Doing so was a prudent business decision which – in part – helped save the freight railroad industry.  But, as the economy adds goods to the freight network and more people attempt to use Amtrak, the infrastructure cannot support competing uses without conflict.

The off-corridor passenger railroad network is owned by an interested party, the host freight railroads.  Contrast this to the airline industry where the government owns the network. 

My philosophy when I was at Amtrak was to recognize - every day - that the freight railroads were our partners.  Even when we had disagreements over on-time performance, we still had to keep the trains moving.

But problems would pop up.  A bad on-time performance report may result in a public dispute between executives.  Our executives argued that hosts should respect Amtrak’s statutorily mandated preference rights, based on the Great Compromise, but some of our partners at the freight railroads had to be reminded constantly of why Congress gave Amtrak preference rights way back in 1973.

Justin Marks

Now, after working outside of Amtrak’s Northeast Corridor, you have returned to the Northeast Corridor at SEPTA as Deputy General Counsel for corporate matters.  What does SEPTA classify as “Corporate Matters”?

Jay Fox

It is easier to say that Corporate Matters includes nearly everything but personal injury claims.  So that covers, procurement, operations, railroad issues, contractual issues, and real estate to name a few.

I joined in July 2019.  We are very busy, and we just added another attorney.  But I like our General Counsel, Gino Benedetti.  He is excellent working with people and believes that relationships come first.

Justin Marks

Earlier you were explaining some of the unique issues to legacy transit agencies you experienced when you were with FTA’s Region 3.  Do you have similar experiences at SEPTA?

Jay Fox

Oh yes. SEPTA’s real property rights were acquired from different transit predecessors or private interests and are located around the Southeastern PA region.  These include Conrail and its predecessors and the Philadelphia Suburban Transportation Co., and its predecessors (“PSTC”).

Some common real state issues with our railroad and PSTC properties include:

  • Limited legal descriptions;
  • No deeded street address for stations;
  • No Assessor’s Parcel Number on right of way;
  • Deeds are by branches, so no individual deeds for stations or right of way;
  • Reversionary language.

Justin Marks

That sounds complex.

Jay Fox

It is.  And of course, SEPTA does not own all of its real estate.  In some locations, it operates across property owned by Amtrak and CSX.  Many of our railroad stations are owned by Amtrak, and FTA holds a federal interest in almost all of SEPTA’s railroad real estate.

Justin Marks

Well, it sounds like SEPTA has the right person considering your experience at Amtrak and FTA.  Aside from real estate issues, prior to March 2020 and the onset of the Covid-19 Pandemic and Pennsylvania’s stay-at-home orders, what were SEPTA’s biggest priorities?

Jay Fox

Our biggest initiatives prior to the onset of the Covid-19 Pandemic include:

1)      The modernization of the trolley system.  It is one of the biggest needs in our system.  We are still running Kawasaki cars from the 1980s.  SEPTA’s Route 15 uses PCC II cars built by the St. Louis Car Company in 1947, which are currently being refurbished for the second time.  Modernization is a lot of work.  We are currently looking to acquire the site of an old GE plant as an all-in-one storage, maintenance, and repair facility for the trolley network.

2)      Reducing SEPTA’s carbon impact by adding to our electric bus fleet;

3)      Resolving our contentious relationship with Amtrak over SEPTA’s use of Amtrak owned stations; and

4)      Centralizing our planning operations.  Prior to Leslie Richards joining as GM, SEPTA’s planning functions were spread out across the agency.  Since she joined, she has consolidated all of the planning functions under one unit.

Justin Marks

And what do you see are the biggest issues facing SEPTA now?

Jay Fox

Well, ridership is down and of course that impacts revenue.  Thankfully, SEPTA is eligible to receive $643 million from FTA as part of the federal response to the pandemic.

We will have to ensure passengers can practice social distancing on our vehicles, so that means operating more vehicles to ensure adequate space for customers, which in turns raises our costs.

Another long-term impact is that the state and local governments may have fiscal challenges which impact their contributions to our system.  For example, Pennsylvania funds SEPTA with turnpike revenue.  That revenue is now reduced because fewer people are driving on the Turnpike.

Justin Marks

How has the pandemic impacted SEPTA’s pre-pandemic issues?

Jay Fox

Well, funding is the big problem.  Our pre-pandemic priorities cost money and now SEPTA will have less revenue to dedicate to those priorities. 

Justin Marks

It is hard to see any silver linings right now, but do you see any opportunities as a result of the pandemic?

Jay Fox

Well, yes.  I see two opportunities.  First, we will find new ways to keep people safe while they utilize our system.  Second, I am hopeful that Amtrak’s similar ridership challenges encourage it to find new ways to cooperate with transit agencies.

Amtrak’s core business is business travel on the Northeast Corridor and now that business will be depressed for the foreseeable future.  I am hopeful that Amtrak will look to its commuter partners to find ways to bolster the system for all riders.

Justin Marks

Well Jay, I can’t thank you enough for agreeing to talk with me, I’ve greatly enjoyed this conversation and I appreciate your time.

 

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