MARTA General Manager Keith Parker proposed a budget Thursday that promised a revitalized transit authority within five years, with $111 million in reserves rather than falling off the fiscal cliff, as had been projected.
Especially relevant for riders: A 25-cent fare increase planned for the next fiscal year starting in July has been eliminated, to be replaced by a 15-cent increase in 2015 and subsequent 10-cent increases that aren’t as likely to spark patron backlash.
The proposal — which will go out for public comment and eventually to the board of directors for approval — would restore by 2018 about half of the level of service that was cut three years ago, through a combination of increased routes and increased rail and bus service. The plan also would reopen public restrooms in stations in 2015.
Getting there still may be a rough road. Parker’s budget is based on privatizing seven departments, including payroll and para-transit service — something the transit union has vowed to fight in court. Parker noted public employees currently running the affected departments could offer their own proposals in competition with proposals submitted by private enterprise.
The plan also cuts union benefits, especially in the areas of pensions and health care, both of which are prized by employees and will be the subject of a negotiated labor contract with the union this spring. It also deletes 150 unfilled positions. The unfilled posts gave the agency’s finances a boost this fiscal year by helping turn a projected $36 million deficit in the operating budget to one that is now just under $1 million.
“We are looking at a balanced budget … where we will be increasing our reserves by year five and moving forward,” Parker said of the new projections. The agency previously was projected to lose $25 million to more than $30 million, with reserves “down to zero within a four- to five-year period,” he said.
State Rep. Mike Jacobs, R-Brookhaven, who chairs the committee overseeing MARTA, applauded the proposed outsourcing and cost controls, but said the plan’s success will be dependent on the labor contract with the Amalgamated Transit Union Local 732.
“I’m encouraged by the current trajectory, but it is all contingent upon continued smart management decisions,” said Jacobs, who failed to secure legislation this year that would have mandated MARTA privatize some departments and cut employee benefits. “I certainly hope that the union recognizes that a strong, vibrant, solvent MARTA is beneficial to them as well.”
Attempts to reach Curtis Howard, leader of the MARTA union, were unsuccessful Thursday, but he has made clear in the past that workers passed up fighting for raises — Parker said many haven’t had a raise in a decade — in return for good benefits.
The proposal includes a one-time payment to workers in December equal to 3 percent of their pay and an average raise of 3 percent 18 months later, but that would be based on merit and not on the increased cost of living.
“It is an all-in approach,” Parker said. “It brings customer relief, employee relief and fiscal relief without raising taxes. It doesn’t call for any new money from the state or any other group at this point. “
The five-year proposal closely follows the financial road map outlined by a management audit by the consulting firm KPMG last year. Auditors found MARTA spent $50 million annually over the national average in employee benefits and could save between $60 million and $142 million over five years by privatizing some functions.
Parker said the proposed budget incorporated 60 percent of the savings that KPMG projected. “We’ve taken a very conservative approach,” he said. “We have not put ourselves in jeopardy where we would have to increase fares more or cut service to stay on our path.”
He said the authority needed to “stabilize” rising pension costs — the KPMG report suggested moving new employees to a 401(k) plan — but declined to say how, adding that it would have to be negotiated with the union.
He also said that the health-care plan would have to be downgraded compared with what union negotiators had won in past years.
“MARTA’s health-care program has things it it that nobody else does,” said Parker, who became general manager in December. “We want to have health care that provides an incentive for people to come to work here and stay working here, but we don’t want it to be overkill where we are spending money on it that we could be investing back in employees and customers.”
The transit authority, the ninth-largest nationally and the only comparable one that doesn’t receive any direct state funding, will focus on making itself financially solvent before it again approaches the Legislature to seek another source of funding. Currently a one percent sales tax in Fulton and DeKalb counties and patron fares provide the bulk of the funding for operations and capital improvements.
Current funding is not enough to expand the system, which many experts say is critical to increasing ridership. But Jacobs, often a MARTA critic, said the transit authority may finally have gotten on a fiscally sound path.
“Perhaps we have turned a corner with Keith Parker,” he said. “I don’t think we would have been looking at the level of transformation that I hope to see if we were operating under the previous administration.”
MARTA in five years
— No fare increase in fiscal year starting July 1. Smaller incremental increases in subsequent years.
— Restored service in terms of routes and frequency
— Reopened public restrooms
— Security cameras on all trains and buses
— Some outsourced functions such as payroll and para-transit services
— Employee benefit cuts, such as rising pension and health-care costs.
— Employee merit raises
— Balanced budget
— Sustainable transit
Steve Visser has reported on MARTA for a year, focusing on finances, ridership and security. He also has reported on public safety, courts, the homeless and mental health issues.