February 19, 2016 — A MATA employee walks in “The Barn” where buses in need of repair are parked behind the operations building at 1370 Levee Road Friday. (Yalonda M. James/The Commercial Appeal)

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By Tom Charlier of The Commercial Appeal

The Memphis Area Transit Authority's No. 9 bus, running about eight minutes late, rumbles north along Highland Street on a sunny afternoon carrying a half-dozen riders, including Wilmetta Crawford, who's well aware that, for all the troubles of public transportation in Memphis, she would be hard-pressed to do without it.

A teacher's assistant at Getwell Elementary, Crawford each day rides 30 minutes to and from a bus stop near Macon and National, which is a short walk from her home. Without the No. 9 bus, "I'd have to go all the way Downtown and transfer two or three times," she said.

But the chronic and deepening financial strains that have put MATA "on the verge of collapse," as president and general manager Ron Garrison told the City Council last week, could threaten lightly used routes such as No. 9. Without an infusion of another $7 million in operating funds from City Hall — as well as $5 million in capital money to buy new buses — severe cuts in service might be required when the next fiscal year begins on July 1, Garrison said.

A look a MATA's finances makes clear that the financial problems have been long in coming, and intensifying. The agency endured eight straight years of budget deficits totaling $22 million through fiscal 2015. And without further help from the city, the accumulated deficits could reach $66 million by 2018.

So bleak are the finances that MATA last year had to take out two bridge loans from the city totaling $4.5 million just to meet payroll and other expenses.

MATA gets about 95 percent of its revenue from four main sources — the city, the federal government, passenger fares and state grants. Between fiscal 2012 and 2015, total operating revenues declined from $55.8 million to $53.3 million as federal support fell by more than $1 million to $12.4 million, state grants dropped more than $700,000, to $7.5 million, and passenger fares plummeted $2 million to $8.3 million. Support from the city, which provides more than 40 percent of the agency's funds, remained constant at around $23 million.

The decline in funding, which began in 2009, triggered a devastating, self-perpetuating cycle, agency officials say.

Faced with drooping revenues, MATA began diverting nearly all of its federal capital-maintenance grants — money that should be used to purchase vehicles — to operations. The result was an aging fleet, with nearly half the agency's 162 fixed-route buses eligible for retirement, that became increasingly costly and trouble-prone to keep operating.

The fleet troubles, in turn, forced service cuts, which translated into a drop in passenger totals, which further cut revenues from fares and from formula-based federal and state grants.

"We took from staff and capital funds to keep operations on the street ...," Garrison said in an interview Friday. "We have zero reserves. We operate in a deficit."

MATA buses now average a total of about 25,000 riders a day.

The ongoing shutdown of the trolley system following two fires in 2014 has hurt MATA in several ways. The loss of the system's 1.1 million annual riders meant no farebox revenues from trolleys and no federal rail funds. Additionally, the agency needs to spend close to $2 million this year rehabilitating the trolley system.

Amid the drop in revenues, MATA's expenses also have been falling, but not enough to pull the agency out of the red. Total expenditures in fiscal 2015 were $56.9 million, down from $60.3 million a year earlier.

Salary expenses declined as MATA shed 135 employees — nearly a quarter of its workforce — between 2008 and 2015. The agency also benefited from a steep drop in fuel costs. Total fuel expenditures fell to a projected $3.95 million for fiscal 2016 — down 57 percent from $9.15 million in 2009 — because of cheaper oil prices and the reduced consumption associated with service cutbacks.

Despite those and other cost reductions, MATA finished last fiscal year $3.6 million in the hole, down from a deficit of $5.9 million for 2014.

For fiscal 2017, the agency is requesting $30 million in operating funds from the city along with extra capital funds to replace 40 fixed-route buses.

In its 2016 budget proposal issued last August, the agency said funding was needed to upgrade the fleet, stabilize operating finances, build a capital reserve and deal with a "huge" OPEB (other post-employment benefits) liability that had left the agency with no money on hand for large payouts. Having lost so many employees, MATA also needs to start filling some key staff positions to "cease the gradual unraveling of organization infrastructure," the proposal said.

To meet the agency's 2017 needs, officials have confirmed they're weighing a possible transportation fee that city residents and businesses would pay monthly.

To bolster their point that the agency is woefully underfunded, MATA officials showed council members estimates that cities such as Nashville and Louisville, Kentucky, spend $41 and $50 per capita on public transportation, respectively, compared to $29 for Memphis.

In its presentation last week, MATA also said it hopes to "raise the bar" for service by having routes within a half-mile of 50 percent of residences and businesses, by simplifying fares and improving its availability to low-income residents.

Census figures show that public transportation remains a critical need in Memphis. About 6,200 people in the city commute daily by bus, according to the figures, and more than 35,000 households in Memphis have no access to a car or truck.