SEPTA approved a $1.13 billion operating budget and a $418 million capital budget yesterday, with none of the drama that often has accompanied budget battles, because the budgets call for no fare increases or service cuts.

And Philadelphia's two newly appointed members of the SEPTA board were finally seated after months of wrangling between Mayor Nutter and City Council.

The new operating budget, which will take effect July 1, provides money for the transit agency's daily operations and is 3.3 percent more than the current budget.

The biggest operating-cost increase is for labor and benefits, which SEPTA projects will go up $40.5 million - 5.4 percent - to $792.5 million. SEPTA is negotiating with bus, subway, and trolley operators and mechanics, whose contracts expired in March and April.

Operating budgets have been a flash point in past years, as SEPTA cut service and raised fares to balance the books. The latest fireworks were in 2007, when Philadelphia's representatives tried to block the budget because of fare hikes; they were overridden by the suburban majority on the board.

The new capital budget, which provides money for vehicles, equipment, and buildings, outlines spending on 23 projects, including plans for more hybrid buses and refurbished Regional Rail stations.

The new capital budget is about $50 million larger than the $368 million capital budget approved for this fiscal year. But the current capital budget got a $191 million injection in February when it was amended to include federal stimulus aid.

The biggest expense in the new capital budget is $54.2 million to continue buying diesel-electric buses from New Flyer Inc. of Winnipeg, Manitoba. The buses are built at a factory in Minnesota. SEPTA will buy 440 of the hybrid buses for a total of $236.4 million over four years.

SEPTA's long-term plans are to buy 100 buses every year.

Lorraine Brill, president of the Delaware Valley Citizens Transportation Committee, and Susan Patrone, representing five South Philadelphia civic groups, repeated their call for SEPTA to honor its 2003 promise to buy 23 trackless trolleys to restore service in South Philadelphia.

SEPTA returned 38 trackless trolleys last year to routes in Northeast Philadelphia, five years after the board voted to suspend all trackless trolley service for one year.

But SEPTA decided in 2006, over Philadelphia's objections, not to buy the 23 trackless trolleys for South Philadelphia. SEPTA managers say buses are cheaper to buy and more flexible to run.

Taking their board seats yesterday were Philadelphia transportation chief Rina Cutler and community activist Beverly Coleman. Nutter nominated them in February, but unrelated disputes between him and Council held up confirmations.

Cutler and Coleman replaced lawyer Jettie Newkirk and Christian DiCicco, son of Councilman Frank DiCicco and a former aide to ex-State Sen. Vincent J. Fumo, as Philadelphia's representatives on the 15-member board.

Contact staff writer Paul Nussbaum at 215-854-4587 or pnussbaum@phillynews.com.