It was a historically busy week for the Metro Transit Authority.
The finishing touches on the new $54 million Music City Central were completed so the downtown bus station can open on Sunday.
MTA’s board passed a resolution asking state legislators to pursue a dedicated funding source for public transportation.
And to top it all off, MTA is now officially in the commuter rail business. As expected, MTA’s board officially voted to approve a contract with the Regional Transit Authority to manage the Music City Star, the commuter rail line connecting Nashville to Wilson County.
In doing so, MTA’s administration effectively agreed to more work for no pay, because the contract does not provide extra financing to the department’s executives who will oversee the line’s operation.
Overseeing Music City Star will be no small task. The line was faced with an operating deficit of about $2.2 million, which required emergency funds from the state and others.
“The answer is absolutely a resounding, yes, we can handle it,” MTA CEO Paul Ballard said of the extra work required to operate Music City Star.
New administration needed
In examining the path leading to MTA’s takeover of Music City Star, the first place to look is the commuter line’s previous manager the Greater Nashville Regional Council (GNRC).
A state comptroller showed that GRNRC had serious accounting deficiencies in its administration of Music City Star. The report on GNRC’s Music City Star operation revealed that RTA needed to “obtain a qualified accounting staff and more thorough accounting information systems, in addition to the express need of RTA to strictly comply with federal funding regulations, for which non-compliance could result in the loss of federal funding.”
Besides the accounting deficiencies, there were problems getting Music City Star up and operating.
According to Tennessee Department of Transportation Commissioner Gerald Nicely, who is an RTA board member, Music City Star had two essential problems in the early going.
First of all, it over-estimated ridership, which totals under 1,000 rides per day.
Secondly, it under-estimated the amount of funds needed on the front end before federal funding kicks in for commuter lines after the third year of operation.
“Everybody wanted to get this thing up and running and it was a low-budget operation,” Nicely said. “It started out as a low-cost operation. There were some concerns going in, but everybody tried. The financial strength needed was under-estimated.”
So, the RTA board has turned its management contract over to MTA, which has proven in its operation of Davidson County’s bus line its ability to run a major transportation system.
Comparatively, the Music City Star line is a relatively small operation. Ballard said that, at a meager $40 million, Music City Star is the country’s least expensive commuter line.
“I don’t think anyone here has the specifics in mind right now [on how to immediately fix the line’s budget shortfall], other than we want to get this started, make sure the train is secure and solve the financial shortfalls for the next fiscal year,” Ballard said.
MTA board member Marian Ott cautioned that the new arrangement with RTA was a short-term solution.
“While we’re very happy to do this on an interim basis, we want to make sure that everyone understands that there needs to be a broader conversation about what the long term arrangement needs to be,” Ott said.
The comptroller report seems to back up Ott’s assessment that a long-term solution for Music City Star’s problems is needed.
“…The MCS rail line will continue to hemorrhage money until alternative revenue sources can be located and/or additional funding from outside sources can be secured given its current level of participation by daily commuters,” the report said.
Dedicated funding key
On identifying additional revenue sources, one will come from the federal government, which kicks in funds after a local rail line’s third year of operation based on its ridership numbers.
The federal funds will kick in the fiscal year beginning July 2009.
Ballard also pointed out the need for dedicated funding to support regional transportation, including Music City Star. To that end, local transportation boards have passed resolutions requesting the state Legislature to pursue dedicated funding sources.
Mayor Karl Dean has been out front on the issue as well, saying dedicated funding is necessary for the future of mass transit in the region.
“We need to work real hard on the dedicated funding issue to support all public transportation in Middle Tennessee,” Ballard said.
Leaders put faith in Ballard
The vote by the MTA board to take control of Music City Star is also a vote of confidence in Ballard.
“I think it is a testing ground, if they can pull this thing out,” Nicely said of MTA and Ballard taking over Music City Star. “It’s a three-year contract and it gives them the opportunity to say they can run a regional system.
“I do think, long-term, we need to look at a comprehensive approach to have a strong management entity particularly if we’re going to expand to other corridors. It’s an opportunity.”
Ballard said he welcomed the extra work, despite the fact it will come without a pay increase for him and his management team.
“All of us who are in this industry, this is what we love to do,” Ballard said. “This is our calling in life to do this, so it’s a welcome challenge.”
The MTA board said the key was to develop a relationship where riders trust and rely on the commuter line.
“I think the Music City Star does a good job,” said Barb Hughes, who works in retail in Nashville and takes the line to work. “I never had any problems with it and I would continue to use it.”