November 25, 2002 4:00 p.m.
 Conference Room 241, 243 South Allen Street

 John Spychalski, Chairman
 Donald Sherman, Vice-Chairman
 Richard Kipp, Treasurer
 Joseph Davidson
 Gary Powers

 Hugh Mose, General Manager
 Joseph Gilbert, Director of Transportation
 Judith Minor, Director of Administration
 L. Eric Bernier, Director of Service Development
 Jacqueline Sheader, Marketing Coordinator
 Diane Heichel, Executive Assistant
 Richard McCarl, State College Borough Liaison


Vice-Chairman Sherman called the meeting to order at 4:12 p.m. Mr. Gilbert introduced Mr. Charles "Chuck" Hook, CATA's newest Operations Supervisor. Mr. Hook was formerly a member of the U.S. Army before joining CATA as a bus driver.

Mr. Mose introduced Steve Suder, the new Executive Director of the Centre Region Planning Agency.



Chairman Spychalski called for comments or input from the general public. No public comments were presented.



A. Approval of Minutes of October 28, 2002 Board Meeting
Mr. Davidson moved that the Board approve the minutes of the October 28, 2002 Board meeting as presented. Mr. Kipp seconded the motion. There being no further discussion, Vice-Chairman Sherman called for a vote and the motion passed unanimously.

B. Receipt of the October 2002 Finance Reports
Mr. Mose noted that passenger revenue is up about 10.3% over last year and all other revenue is up about 12% over last year. He then reported that expenses are down 20% overall from last year. Mr. Mose gave credit to the staff for cutting extra spending in many areas.

Ms. Minor reported that the increase in health insurance costs for the year will be about 20%, rather than the anticipated 15%. She also reviewed other expenses which may impact the budget negatively. Mr. Gilbert outlined the problem with burnt valves and having to rebuild some of the bus engines. The cost to re-line the cylinders before the valves are actually burnt is about $2,000 per bus. The cost to rebuild the engines after they are damaged is approximately $4,000. The newer series engines have been modified to prevent this problem in the future.

In response to Mr. Kipp, Mr. Gilbert stated that maintenance is replacing the oil filters more frequently, but this does not alleviate the problem with the burned valves.

In response to Mr. Sherman, Ms. Minor stated that she always likes to have a little bit of a buffer in the budget just for such unexpected expenditures.

Mr. Mose noted that in reviewing monthly pass sales, although the number of the regular OnePasses sold has decreased, the Penn State pass program continues to bring in new pass holders. Overall, pass sales have doubled over last year.

In response to Chairman Spychalski, Ms. Minor noted that there have been quite a few phone calls from PSU employees who stated that they had never ridden the bus before, but were interested in the "Ride for Five" program, which seems to suggest that many are new bus riders. Other than that, there is no way of tracking how many of the PSU employees were former pass holders and how many are new riders.

Chairman Spychalski stated that if there would be some way to track the "Ride for Five" new pass holders compared to old pass holders, he would be interested in those figures.

Mr. Mose noted that the October ridership on Centre Ride is higher for this month than it has been in the past 2 years. Mr. Mose also noted that the Ridership Summaries for August and September are not yet completed. One of the elements which is difficult to calculate is the free-fare zone on the H, M, P, and U Routes. He stated that his rough estimate is 50,000 riders a month using these Centre Line buses in the free-fare zone. Mr. Mose also reviewed the increase in ridership on the Centre Line routes in the neighborhoods.

In response to Mr. Davidson, Mr. Mose noted that staff recognizes that the LOOP and LINK are as crowded as they have ever been during class changes, and the H, M, P and U Routes in the fare free zone are crowded as well. Because of this, the service will be monitored closely to see if the free-fare zone program needs to be reviewed for the sake of the regular Centre Line riders.

In response to Mr. Powers, Mr. Mose noted that all of July and most of August are in reduced service, which uses less fuel.

Mr. Powers moved that the Board receive the October 2002 Finance Reports. Mr. Sherman seconded the motion. There being no further discussion, Chairman Spychalski called for a vote and the motion passed unanimously.

C. "Smart Commute" Program
Mr. Mose stated that at the October Board meeting he made a presentation on the Smart Commute program. At that time the Board authorized him to continue working with the Fannie Mae Corporation and come back to the Board with a more complete proposal.

Mr. Mose stated that Smart Commute is a pilot program that has been established by Fannie Mae, the home mortgage underwriting entity, to encourage prospective home buyers to purchase within a transit corridor by giving them a "leg up" in qualifying for a mortgage. Although it is considered a pilot program, its successful implementation in a number of larger cities seems to indicate that Smart Commute will be continued indefinitely.

Mr. Mose then outlined the program and how it works, adding that Fannie Mae has successfully implemented the Smart Commute program in several large cities, and they have been looking to try it out in a smaller market.

Fannie Mae has made a solicitation, contacting Northwest, Omega, M&T, Nittany and Citizens Banks. Northwest and Omega reaffirmed their interest in participating, while several of the others indicated the willingness to consider it. Mr. Mose also stated that CATA will be expected to market the program. Fannie Mae will underwrite the cost of all materials the Authority produces (up to $10,000), although CATA would have to pay for the placement costs of any advertising. That being the case, staff proposes to produce brochures and posters, but rely on public service announcements in lieu of paid advertising. The total investment by CATA will be no more than $2000.

In addition, CATA will be encouraged to offer some type of discount to entice new home buyers to try transit. Transit systems in larger communities that have implemented the Smart Commute program have typically provided either free or deeply discounted bus passes for an introductory period. Given our financial situation, as well as the bookkeeping complexities associated with discounts, the staff recommendation is to give program participants enough complimentary ride coupons to allow them to give the service a "test drive" at no cost, then offer them the ability to purchase a two-month OnePass at the regular one-month price.

With the Board's concurrence, Mr. Mose stated that he would contact Fannie Mae and let them know of CATA's willingness to participate. He'd then write them a confirming letter outlining the program elements that CATA is prepared to undertake. The next steps will be for Fannie Mae staff to come to State College for lender training, and for CATA to prepare promotional materials. Program implementation would occur sometime after the first of the year.

Mr. Powers moved that the Board authorize the General Manager to work with Fannie Mae to establish a Smart Commute pilot program for the CATA service area to include a special introductory One-Pass rate and certain other marketing activities. Mr. Sherman seconded the motion.

In response to Mr. Davidson, Mr. Mose confirmed that the cost to CATA would be approximately $2,000, which would be reimbursed by Fannie Mae. The only other cost incurred by CATA would be the discounted passes. Ms. Sheader confirmed that the $2,000 she plans on spending for marketing this program is part of her already approved marketing budget, even though this money will be reimbursed by Fannie Mae. She also added that she feels $2,000 will be sufficient to market this program and get a good return on the investment.

In response to Mr. McCarl, Mr. Mose stated that the program would increase a family's borrowing power by $2,000 - $3,000 which could result in the ability to purchase a home priced at $10,000 more than they would normally be approved for.

Mr. Kipp stated that he feels this program may give more credibility to the Authority. Chairman Spychalski added that this is one way to give the community a better perception of public transit.

Mr. Davidson came up with a slogan of "Take the Bus and Get more Bucks."

Mr. Powers stated that this is one way to target people looking to purchase a home and let them know that they may actually be able to purchase a home in areas they felt they could afford.

There being no further discussion, Chairman Spychalski called for a vote and the motion passed unanimously.



A. 2003 Board Meeting Schedule
Mr. Mose reviewed the proposed Board meeting schedule for calendar year 2003 as follows:

January 27 February 24 March 24 April 28 June 2 June 23 July 28 August 25 September 22 October 27 November 24 December 15

Mr. Mose noted that all meetings will begin at 4:00 p.m. on the 4th Monday of the month with the exceptions of May and December. To avoid conflicts with Memorial Day and the Christmas Holidays, these meetings have been scheduled for June 2 and December 15 respectively. All meetings will be held in the State College Borough Conference Room 241, 243 South Allen Street, State College. Changes may occur and will be published during the year as necessary. Once adopted, this schedule will be published in the CDT, as required by law.

Mr. Sherman moved that the Board adopt the proposed 2003 Board Meeting Schedule as presented. Mr. Davidson seconded the motion. There being no further discussion, Chairman Spychalski called for a vote and the motion passed unanimously.

B. Resolution Authorizing the Filing of a State Capital Grant for Bus Purchases
Ms. Minor reviewed the resolution and noted that this state capital bond money was applied for two years ago and has only recently been approved. This is a formal process to now apply for the funding.

Mr. Davidson moved that the Board adopt the enclosed resolution authorizing the filing and execution of the State Capital Grant for Bus Purchases. Mr. Kipp seconded the motion. There being no further discussion, Chairman Spychalski called for a vote and the motion passed unanimously.

C. December Board Meeting
Mr. Mose noted that since the regular December Board meeting would have fallen on Christmas Eve this year, it was necessary to change the meeting date to December 16. However, since there are no specific agenda items mandating a December Board meeting, staff recommends canceling the regular December meeting.

Mr. Kipp moved that the Board approve canceling the December meeting due to a lack of agenda items. Mr. Powers seconded the motion. There being no further discussion, Chairman Spychalski called for a vote and the motion passed unanimously.



A. General Manager's Report
Mr. Mose noted that his every-other-week report captured most of the recent activities.

Mr. Mose also reported that he, Mr. Bernier, Ms. Heichel, along with Mr. McCarl and others, attended the Opening Ceremonies for the I-99 Ribbon Cutting.

B. Service Development Report
Mr. Bernier asked the Board to review the written report included in their Board packets.

In response to Mr. Sherman, Mr. Bernier noted that there will be a minor routing change on the P Route in Innovation Park. The P Route timetable will also be changed slightly throughout the route to redistribute the necessary time.

C. Other
Chairman Spychalski presented Mr. Gilbert with a Resolution of Appreciation for the excellent job he did as Project Manager for the building expansion of the Cato Park Facility. Mr. Mose noted that the entire project was very demanding of the entire staff, but especially to Mr. Gilbert.

Mr. Sherman presented Chairman Spychalski with a Pennsylvania Railroad Company coffee mug.



There being no further discussion, Chairman Spychalski adjourned the meeting at 5:09 p.m.