Tag: MATA Budget

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City Council Questions MATA’s Transparency During Presentation

Photo: Justin Fox Burks

Memphis City Councilwoman Yolanda Cooper-Sutton said that the Memphis Area Transit Authority’s (MATA) interim CEO Bacarra Mauldin had been “gifted an issue” and criticized the agency for not asking for help in their budget crisis. 

These comments came after officials noted that the agency had been operating in an unrestricted budget deficit for the last 10 years.

“To hear that this is a 10-year-long thing that you all have known about — that you didn’t have enough money and never said anything to anyone is very disturbing,” Cooper-Sutton said. “I don’t think you would run your household for 10 years and no one would say anything.”

Cooper-Sutton went on to call out the organization’s Board of Commissioners for not speaking up as well, and that they should share in accountability for the agency’s financial burdens.

“No one knew there was a deficiency coming down the pipeline? No one?” Cooper-Sutton said. “I’m going to tell you what my spirit is discerning — someone is lying and not telling the truth. You’re not going to tell me that the educated board with all those alphabets behind their name that no one knew and saw this coming for 10 years? It’s unbelievable.”

Mauldin responded saying she remembers being two doors down from her predecessor and had no idea that the agency was facing financial hardship.

“The board didn’t know,” Mauldin said. “From the moment that we gave full visibility over what was happening with the finances, I shared that information with the board and we have as governance partners to try to right this ship. I know that it’s unbelievable, I know that it’s unacceptable but we have done everything in our power to bring this in-line so that we could provide the service this city needs and deserves.”

Today’s meeting follows the passage of the transit authority’s budget for Fiscal Year 2025 which resulted in more than 200 layoffs and the suspension of routes. Riders and community members have openly called on the council to intervene in the agency’s problems. The council had also requested that MATA appear before them every two weeks to provide updates in hopes of increasing transparency. 

Mauldin said that her team was “beaten down” and that all they want is to make things right.

“Our goal is to develop a robust transit system that positions Memphis to compete nationally,” Mauldin said. “The city deserves that and we want to give it to the city. We’re committed to providing insights and context necessary to be a part of the solution and help drive the city towards a successful future.”

MATA’s presentation covered their financials, staff optimization, and the steps they plan to take moving forward. Mauldin was joined by external chief financial officer Hamish Davidson, chief of strategic partnerships and programs Erik Stevenson, and chief development officer John Lancaster.

Davidson highlighted that MATAs debt has grown over time due to increased costs and a decrease in ridership and flat funding. He added that the budget affects on-time performance and they are currently operating at a $85 million budget, with a proposed balanced budget of $67.8 million.

“This is not something that occurred in one year,” Davidson said. “This is something that has been continuing for many years.”

According to Davidson, this is something that the media and others had been “lambasting” the agency about, and wanted to note that their deficit wasn’t an annual loss.

The approved budget shows that a majority of MATA’s funding comes through grant revenue ($64 million) with the City of Memphis being its primary funding source at $30 million. The rest of their budget is supplemented by their operating revenue of $3.7 million from passenger fares, advertising, and charters.

Councilwoman Pearl Eva Walker noted that the council’s assessment of MATA’s  troubles stemmed from lack of on-going information and updates, as opposed to understanding of finances.

In hopes of adding context to the operational side, Lancaster explained that their problems also stem from their density and size of their service area. MATA covers nearly 300 square miles with a fleet of less than 100 buses. For comparison, Lancaster said they operated more than 300 buses in a little over 100 square miles in the 1970s.

Stevenson said they had to reduce their workforce in order to stay in line with their budget. As a result 18 trolley workers, 29 administrative personnel, and 52 unionized personnel were laid off with 75 eliminated positions.

While the agency presented a PowerPoint in hopes of providing answers, the council was still not pleased with their presentation, prompting several questions and comments from council members. Walker noted that the presentation was very “general.”

Councilwoman Rhonda Logan questioned if employee perks such as employee vehicles had been reduced as the company works to cut down on spending. Mauldin said she would provide the council with a detailed list of these things, including the context in which they exist.  

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Citizens Call On City Officials To Act In MATA’s Budget Crisis

Photo: Justin Fox Burks

Riders and citizens are calling on city leaders to intervene regarding the effects of the Memphis Area Transit Authority’s(MATA) newest budget.

These comments come days after the $67 million budget was approved unanimously by the agency’s Board of Commissioners. Prior to the approval, interim CEO Bacarra Mauldin and her team had been open about how the budget would affect both riders and personnel with routes being suspended and more than 200 employees being laid off.

While MATA had been vocal about these proposed changes, this didn’t make it easier for the public to accept, and are calling on the city to intervene.  In a statement released by the Moral Budget Coalition, Bennett Foster, executive director for Memphis For All said these changes will affect “tens of thousands of Memphians,” and the city “has the power to prevent that.”

“Chronic underfunding has already led to reduced transit services, hitting hardest in majority Black neighborhoods that depend on public transportation the most,” Foster said in a statement. “This situation jeopardizes public safety, economic mobility, and racial justice. Enhancing MATA is not only vital for connecting residents to jobs, healthcare, and education–it is also crucial for the economic growth and overall quality of life in Memphis.”

The Moral Budget Coalition has asked for Mayor Paul Young and the Memphis City Council to allocate at least $20 million to MATA. They have several recommendations such as increasing property taxes, re-allocating portions of rainy day funds, and increasing vehicle registration.

MATA officials have noted that the city has historically been their primary funding source. During this year’s budget season, Memphis City Council allocated $30 million for Fiscal Year 2025.It was also during this budget season that officials said they would be more involved in MATA’s budget moving forward.

Members of the coalition spoke about how citizens are dependent on public transit for their transportation needs. Foster said the city is primarily responsible for maintaining transit service, and that he felt MATA had not been a priority in current and previous administrations.

“We are here to make sure that cycle of chronic disinvestment in public transit and public services –it begins and ends here,” Foster said. “If we don’t take action now – it’ll be too late. If MATA is cutting their employees in half, cutting their service by 30 percent we’re gonna lose access to federal funds, we could lose formula funds that match our budget and we’re gonna get into a debt spiral.”

The public also made comments during this month’s meeting. One attendee said they didn’t agree that the agency was out of options for revenue and suggested that the city tax airplane passengers, real estate transactions, football and basketball tickets, as well as offering Beale Street transportation.

“If you don’t think this is a desperate situation, I’m telling you it is,” the attendee said. 

Funding has long been an issue for MATA since the pandemic. During Tuesday’s board meeting, Mauldin stressed this saying that the agency struggled to receive consistent funding as CARES funds ran out.

“MATA has operated for a number of years without any increases in the amount operating funds made available to it,”  Hamish Davidson, external CFO of J.S. Held LLC  said during Tuesday’s meeting. “It has managed to survive and indeed grow beyond its means through the provision of the CARES Act funds made available post Covid.”

Davidson said MATA cannot sustain itself without the increase of funds, and they receive 95 percent of their funding from federal,state, and local funds. The other 5 percent comes from advertising and farebox revenue. Davidson said that historically funding had not stayed static, but it has reduced with no regard to inflation, and that the last two budgets were deficit budgets.

In addition to rising operating costs a majority of MATA’s costs stem from employee compensation and benefit packages. Davidson also said they have reached a new collective bargaining agreement for union members.

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MATA CEO Discusses State of Transit, Budget, and Proposed Changes

Baccarra Mauldin (Photo: Memphis Area Transit Authority)

The Memphis Area Transit Authority (MATA) has gone through significant change over the past few months, prompting questions from concerned citizens and bus riders alike.

Bacarra Mauldin was named interim CEO following the retirement of former CEO Gary Rosenfeld in February. Mauldin’s appointment followed the aftermath of the agency opting to nix their controversial proposed winter service changes.

Since those proposed changes that were presented as a way to enhance the agency’s on-time performance and efficiency, other problems have arisen, such as a $60 million deficit that was announced in May.

Mauldin said the agency is going through a “transformation” dedicated to serving Memphis and their entire service area in the best way possible.

Having worked in transit prior to arriving at MATA, Mauldin said she would call the current state of affairs “business unusual.”

“I say that as a play on ‘business as usual’ because so many transit agencies across the country are going through the same thing — at various levels and proportions,” Mauldin said. “They’re all going through their ‘isms’ when it comes to budget, and funding, and finance.”

Ridership has plummeted as a result of Covid-19, playing a major factor in the state of transit, Mauldin said. Agencies are also in the aftermath of Covid-19 relief funds running out.

“That really propelled the state of financial instability for transit agencies across the country, large and small,” Mauldin said.

Mauldin said the agency’s debt has been growing due to the increased cost of doing business, decreased ridership, and flat funding. She added that their budget holds have resulted in slower on-time performance.

One of the first things Mauldin did in her official capacity was to retain the services of external CFO Hamish Davidson of J.S. Held LLC. Mauldin said up until this point, there had not been a CFO at the agency, and they needed someone to get in immediately to recreate those financials so they could “move forward with certainty.”

“Knowing good business, and what good business structure and practices look like, I made the decision early on that I needed a reputable, credible CFO to come in and rebuild the finances because the finances hadn’t been reported in quite some time,” Mauldin said. “In fact the financial reports didn’t even exist.”

In addition to this, Mauldin said the agency immediately put “cost-saving measures” into effect. MATA hopes to bring the CFO position in-house “in time.”

“The cost-saving measures will probably be a permanent thing,” Mauldin said. “We are stewards of taxpayer’s money, and we want to make sure we are always using those in the best way, and operating in transparency and good faith.”

As a result of acting in transparency, the agency has made both employees and riders aware of some of the potential changes that could take place in order to improve efficiency, performance, and the budget.

“If we were to keep operating the way we’re operating today, our budget would be $85 million,” Mauldin said. “We have committed to our board that we were going to present a balanced budget. We presented a draft budget of $67 million for FY25.”

These cuts have impacted routes, staffing, and other factors, Mauldin said. While she said these changes “hurt,” the agency has to have a “solid, sustainable foundation” to thrive.

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Bus Riders Fearful of Potential MATA Budget Solutions

Photo: Justin Fox Burks

As the Memphis Area Transit Authority (MATA) works to fix problems in their budget, bus riders are afraid that potential solutions for the agency will negatively impact service for citizens.

Johnnie Mosley, founding chairman of Citizens for Better Service, stated on Friday, July 12th, that his organization along with the Memphis Bus Riders Union received word that MATA administration met with bus drivers about the possibility of layoffs and service cuts.

MATA pledged to be more open and transparent with their ridership about changes affecting service, which Mosley said has not changed. However, he believes that both riders and drivers are concerned for the future.

“We’ve been reaching out to various drivers. We reached out to the union to see if we could get any verification or answers,” Mosley said. “In the meantime, we’ve been in close communication with Representative Justin J. Pearson, and we’re trying to figure out whether there are resources or money that the state could have to get MATA out of this situation.”

Following this comment, Erik Stevenson, chief of strategic partnerships and programs for MATA, released this statement:

“With staff and riders, we must consistently share that MATA faces a significant budget deficit resulting from years of increasing costs, decreasing ridership, and flat funding. In August, we’ll begin a thorough engagement process to assist us with the tough decisions that must be made to optimize our transportation system. To maintain our pledge to provide a balanced budget, all options have to be on the table.”

MATA’s interim CEO Bacarra Mauldin reported in her June 2024 CEO report that there is currently a hiring freeze despite their recruitment focuses on a number of open positions such as mechanics and trolley and fixed route operators. She said they are trying their best to “manage with the staff they have.”

In May, the transit authority revealed they had a $60 million deficit, and was “committed to increasing revenue and refining [its] process of spending.”

During their June budget proposal hearing in front of Memphis City Council, Mauldin said their biggest expenses are wages and fringe benefits as they have to offer competitive compensation packages. She also said MATA needed more mechanics, operators, and buses for their fixed routes and MATAPlus services for citizens with disabilities.

They also said a large amount of their budget would go towards installation of the Memphis Innovation Corridor, the first bus rapid transit service in Memphis.

While MATA has presented ways to refine their budget and spending, many riders are unhappy with some of their proposed solutions. Citizens like Mosley fear that the agency may resort to changes that would negatively affect their ridership.

Mosley alluded to the agency’s controversial proposed winter service changes that were presented in 2023. These changes included suspending service after 9 p.m. and suspending a number of routes. MATA’s board ultimately decided to nix these proposals after poor reception from the public. 

After advocating on behalf of citizens while these proposals were on the table, Mosley said he hopes that the agency doesn’t resort back to these solutions in hopes of fixing their financial issues.

“The question is: Where are they going to cut?” Mosley said. “We don’t want those cuts to [affect] underserved areas. We don’t want the same plan the board rejected in December. We need MATA to come up with plans on how to increase ridership.”

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Public Still Unhappy With MATA’s Transparency After Public Meeting

Photo: Justin Fox Burks

While the city of Memphis has allocated $30 million to Memphis Area Transit Authority (MATA) for fiscal year 2025 (FY25), questions remain regarding the organization’s $60 million deficit.

During the June 2024 MATA Board of Commissioner meeting on Wednesday, several members of the public expressed their concern for the deficit. Prior to the meeting, organizations such as Citizens for Better Service and Memphis Bus Riders Union said they were unhappy with the organization’s previous ways of addressing the issue.

“MATA owes the city of Memphis, especially bus riders, an explanation of how it is going to solve the deficit without hurting bus riders,” Johnnie Mosley, founding chairman of Citizens for Better Service, said.

These comments came after MATA administration presented their budget proposal earlier this month to the Memphis City Council for consideration.

During the meeting, the transportation agency did not directly address the deficit. Instead, MATA said they were committed to increasing revenue and “refining [their] process of spending.” At the board meeting, MATA interim CEO Bacarra Mauldin said the council would be “more involved” with all organizations and agencies receiving money from the city. 

Mauldin also said, with the city being their primary funding source, they want to make sure they are being as “transparent” as possible.

Shelby County government has allocated $1.2 million towards MATA for FY25, which Mauldin said is “consistent with where they’ve been for the past few years.” She noted that while it may seem like a small amount, their consideration in the budget means there is still the “opportunity to move forward.”

As the city has wrapped up its budget season, Mauldin said she is focused on building relationships with county commissioners and administration to procure a “higher level of funding” in the future.

“We know that the money that we have from the city of Memphis as well as Shelby County will not plug the entire hole,” Mauldin said. “We’re going to continue to work with those funding partners, but in addition we’re going to look into some other ways to get funding to close that gap. Most importantly, we’re going to look in the mirror and we’re going to tighten our own belts, and we’re going to spend smarter on the right things at the right time.”

She added that they are putting safeguards in place in order to ensure they’re being “good stewards of all the taxpayer’s money.”

Hamish Davidson of J.S. Held LLC has been retained by the organization as an external CFO and presented on “financial controls” during the board meeting. Davidson remarked that finance is “an area where if you don’t have the proper controls then your finance department can leak like a sieve.” To prevent this, Davidson said they are working to “spend smarter” and make sure they know where every dollar is spent.

Davidson said they currently have an understanding of MATA’s “historical processes and procedures” as well as their accounting systems. They also have gained the trust of employees.

However, he said they still need to identify their risk profiles and “current and future state of their budget and headcount,” and “determine the appropriate controls, reporting, and policies necessary.”

“A lot of these processes need to be updated,” Davidson said. “They’re totally out of date and more importantly they also need to be followed to the letter.”

Davidson said when he was retained in February, he thought they would be “long finished” by now in addressing these things, but he said it’s been put on the back burner due to more “pressing issues” related to MATA’s financials such as preparing the budget for FY25.

He said over the next few weeks they could create a timetable to present to MATA’s Board of Commissioners.

Close to the end of the meeting, the board opened the floor for public comment. They noted that this portion was for receiving comments and that they would not engage in a “spirited debate.”

Some participants made comments about bad service from both the agency and bus drivers; however, most complaints were about the agency’s finances.

Joe Kent of the Taxpayer Justice Institute criticized the agency for saying they lead with transparency when he said they are “anything but transparent.”

“If you want to collaborate with the public you need to answer questions,” Kent said. “How are you operating with a negative $10.1 million in cash? I just don’t understand that.”

Another participant suggested that the organization was “being investigated and some indictments were coming down.”

The board said that while they were not going to go back and forth with participants, they would follow up with them individually.