MEMPHIS, Tenn. — A box suite for Memphis Grizzlies games, millions on furniture and equipment for a new office in a downtown skyscraper, and more — WREG Investigators spent hours poring through Memphis Area Transit Authority’s board meeting minutes to try figure out how they got in a $60 million deficit.
MATA announced recently it can no longer cover current staffing and services under its current budget. Twenty-three bus routes will be cut down to 16, and trolley service is suspended indefinitely.
“Please be patient with us as we work to get through this time, but we will get to the other side,” MATA’s Interim CEO Bacarra Mauldin said at a recent board meeting.
She said increased costs, decreased ridership and flat funding resulted in the shortfall.
WREG Investigators wanted to find out more. We dug through years of MATA’s board minutes.
According to those minutes, the budget remained steady at the end of 2020 through 2021 as the executive team touted that COVID relief money took them “from a very low cash position to a manageable position.” They stated it took care of “immediate cash flow needs.”
MATA has stated 95% its funding comes from local, state and federal government. MATA determines how it’s spent, like upgrading vehicles “assigned to field supervision activities” from vans to SUVs that cost around $27,000 dollars each.
They bought six of these SUVs in December 2021 and three more in 2022. Last year, they approved “two Chevy Traverse AWD LS off the Tennessee State contract at a cost of $36,130 per vehicle” and “four Chevy Silverado 1500 Crew-Cab pick-up trucks at a cost of $45,400.”
In 2021, a water pipe break damaged MATA’s office. The executive team claimed the temporary office wasn’t big enough, because they were adding “several safety positions and administrative positions for various technology projects.”
The board approved a $267,210 lease at One Commerce Square, $123,300.88 more for additional storage and a build-out on the 12th floor that ended up costing $800,000.
They also signed off on $600,000 dollars for furniture, fixtures and equipment.
Last year, MATA’s CEO at the time said they “expect future awards of federal capital grants” and that would “require additional office space.”
They added more space to the lease, spent another nearly $800,000 in construction and design fees plus another half million in furniture, fixtures and equipment for that new area.
In May 2023’s meeting, they discussed expanding their contract with the Memphis Grizzlies, at a cost of up to $510,898 over two years.
“We entered into an agreement with the Grizzlies where they will work with us on some marketing efforts,” the CEO Gary Rosenfeld said. “We have looked at the opportunity to be able to provide tickets to games.”
Tickets to games, meaning a “branded suite.” That brought its contract with the Grizzlies to a half-million dollars.
“This includes concerts, Disney on Ice, whatever might come into it. Anything but the playoffs,” Rosenfeld told the board.
MATA said it would enhance their ability “to hire and retain employees” and “enhance opportunities with internal and external stakeholders.”
It passed unanimously.
Mayor Paul Young announced an international firm is conducting a forensic audit on MATA. It’s not clear when it will be complete and if those results will be released.
“MATA is not in this alone. We are all in this together,” Young told the city council at a meeting earlier this month.
When COVID relief money ran out, the next budget for FY2023 showed operating expenses had reached $84 million and the operating profit was in the red.
MATA said by halting the trolleys, cutting staffing and routes, their budget is now balanced.
It’s unclear what the future holds. We reached out to MATA’s Interim CEO and her team for a comment on the spending.
MATA said in an email that the agency no longer has the Grizzlies suite this season. As for the office space and furniture, MATA said that spending went through a competitive bidding process, or competitive quotes were obtained, and they defended the cost and procurement process as “not abnormal.”
In contracts passed by the board in the past 3.5 years, more than $5 million has been spent on trolleys, repairs and pavement.
Asked whether that money could have been spent better in light of the fact that trolley service is now suspended indefinitely, the agency said it is “committed to maintaining all assets in excellent condition and we are required to maintain all assets in a state of good repairs.”
In addition to the cuts to service and staff, MATA says the agency will
- Conduct a thorough review of expenses to identify non-essential expenses and prioritize critical ones that directly impact operations
- Suspend non-essential travel
- Postpone non-essential purchases of supplies and equipment
- Halting nonmandatory training programs
- Freeze hirin /recruitment efforts
- Limit overtime for operation staff
- Freeze overtime for administrate staff
- Scale back vendor contracts.
“We are deeply committed to the responsible and efficient use of our resources. Every dollar is thoughtfully allocated to maximize impact, ensuring that our initiatives not only meet their goals but do so in a way that reflects our dedication to fiscal responsibility and the communities we serve,” the agency said in an email.
They also invited the public to attend its regular community meetings to provide feedback.
