Staring at the possibility of reduced service, Memphis City Council members reacted coolly to a proposed $67.4 million MATA budget for FY2025 during the Tuesday, August 20 Transportation Committee Meeting.
“You all want us to give you the money and then you go on and do what you do. Guess what? We’re not doing that anymore,” said council member Eva Pearl Walker. “We’re going to have some integrity and accountability.”
The scaled down proposal would result in a 30 percent service cut. It acknowledges annual increased operating costs and dwindling ridership the transit system experiences.
“We can’t have a system that costs more than what we’re taking in,” said MATA Interim CEO Bacarra Mauldin. “That is what we’re trying to do in proposing this lower budget number.”
With operating revenue of $3.4 million, the transit system relies heavily on grants. The largest donor is the City of Memphis, at $30 million. The federal and state governments cover most of the remainder. Shelby County would pay $1.3 million in the proposal.
To maintain current service levels, a “right-sized budget” would run $85 million.
“Radical change for radical results…I think radical change should just yield normal expectations and results. Integrity should be a normal expectation, not a radical expectation. Accountability should be a normal expectation, not a radical expectation,” said Walker
Several sign-wielding citizens opposed to the cuts applauded after the first-term council member tore up her copy of the proposal.
“I wish you the best with this mess. My final comment is on behalf of the people,” said Walker.
MATA’s board of directors are expected to consider the proposal on Tuesday, Aug. 27.
In addition to criticizing the proposed cuts in service, council members chided MATA leadership for announcing the proposal through media spots. Several members also learned the trimmed budget would result in scaled-back MATA routes through reporting.
They also gained insight into the suspension of MATA’s trolley system, following a brake failure on a trolley in July. It was the second incident this year. A new brake systems cost $200,000 per trolley. Maintenance crews are maintaining the tracks, in hopes of a return to service.
In the meantime, 18 MATA employees have also been laid off due to the service’s suspension.
“Everyday, you’re sharing something else. From the trolley lines to everything else. That is not a good thing,” commented committee chair Edmund Ford, Sr.
However, it will only the be first round of layoffs. An additional 200 employees are expected to be laid off in the coming weeks.
During the update, members also learned of a service audit planned for MATA by Transpro. The Tampa-based transportation consulting firm’s inspection is expected to last six to eight weeks.
It follows the decision to hire global accounting firm PricewaterhouseCoopers (PwC) to conduct a forensic audit earlier this month. A forensic audit is a detailed examination of financial records to find evidence of fraud, misconduct, or other irregularities. The evidence can be used in legal proceedings, or to prevent future fraud.
On May 21, Mauldin informed MATA board members the transit system was facing a budget deficit of $60 million. In 2022, MATA ran a $43 million deficit.
“The situation I inherited as a leader is not ideal,” said Mauldin. “However, we have remained resolute in our efforts to turn things around. We have remained resolute to manage fiscally responsibly. And we are resolute in our efforts to make sure we are communicating in a way that you all probably have not experienced in recent history.”
To avoid budget entanglements in the future, Mauldin also proposed including MATA’s budget with the city’s budget season, which ended on July 1. Currently, the transit system takes up its budget after the larger plan is completed.
“I want to start out budget process earlier in the year, so the numbers we’re putting before this council during the budget season are more in line with the numbers we show in our own budget as an organization,” said Mauldin.
Nevertheless, the provisional leader will have plenty of opportunities for discussion in the future, as routine updates are anticipated to be scheduled.
“I want to see you all every two weeks,” said Ford. “We’re going to fix it.”
