Atlanta’s transit system under pressure amid leadership search
5 min read
MARTA
After its chief executive resigned amid hangups to his immigration status and some high-visibility operational fiascos, the Metropolitan Atlanta Rapid Transit Authority’s board is searching for a new leader.
“MARTA is at a pivotal moment in its history,” said Fulton County Commissioner Bob Ellis. “With multiple operational failures in recent months, continued struggles to increase ridership and a multitude of capital projects in flight, the new CEO of MARTA has their work cut out for them.”
MARTA runs a 47.6-mile heavy rail transit system serving metropolitan Atlanta, more than 500 buses and a short streetcar line.
The departure of General Manager and CEO Collie Greenwood in July is the “kind of change [that] presents an opportunity to rearrange some of the agency’s priorities,” said Joseph Krist, Muni Credit News publisher.
MARTA experienced major service disruptions during Atlanta’s gay pride weekend in October and a Shakira concert in June. About 70 minutes before the first wave of runners were to start the AJC Peachtree Road Race in early July, a train stalled at a crossover, backing up many other trains and leading some runners to miss the start of the race.
After a Beyoncé concert in mid-July a MARTA escalator malfunctioned leading to
MARTA isn’t clean, safe or reliable, has been plagued by labor issues and has failed to deliver major projects on time, Atlanta Journal-Constitution President and publisher Andrew Morse said
The board was under increasing pressure to replace Greenwood from May to Greenwood’s announced departure on July 17, Morse said.
Greenwood, a Canadian citizen, said he was retiring early due to a delay in receipt of a permanent resident green card and because he wanted to spend more time with his family and friends.
Greenwood, a veteran of the Toronto Transit Commission, joined MARTA in 2019 and was promoted to the top spot in 2022.
Greenwood had stopped working June 18 due to his work permit expiring.
Fulton County Commissioner Bridget Thorne said she is “waiting patiently” to see what direction the new leadership takes.
“In recent years, MARTA has spent an inordinate amount of time planning for the future — so much so that they’ve become more competent at developing plans than they are with execution and operations,” Ellis said.
“There needs to be a real emphasis on service,” Krist said, “That is what drives support for transit projects.”
Ellis said MARTA was now pursuing 161
“Now is the time for execution and for projects to get delivered and the new CEO will need to bring a focus on execution and relentlessly focus in on the most critical capital projects that are core to the future success of MARTA and getting them completed as quickly as possible,” he said. “That may mean that other projects that do not have any clear funding sources and carry a host of question marks just need to be tabled.”
Atlanta voters approved an extra half-penny sales tax to support public transit improvements in 2016. MARTA’s capital plan includes light rail transit,
MARTA’s board of directors appointed previous Chief Customer Experience Officer Rhonda Allen as acting general manager and CEO. The board is currently seeking an “interim” general manager and CEO who will serve until a permanent one is found,
MARTA Board Chairwoman Jennifer Ide told Fox 5 that MARTA knows it needs to do better. The board is looking for “somebody who’s trusted and respected by the community that has good relationships with all of the jurisdictions, that understands the concerns of the business community and that understands the importance of the large events that we’re having – not just the FIFA World Cup [soccer tournament] but we have many other big events that are coming.”
MARTA’s sales tax revenue bonds are rated Aa2 by Moody’s Ratings, AAA by S&P Global Ratings,
MARTA expects to execute
Among them are new railcars to replace the two- and three-decade old cars in service now, and a $500 million
“I would suspect that the emphasis would be on getting those [capital] projects underway completed,” Krist said. “If the track record of project delivery is poor, customers are not going to get excited about projects they may never see.”
Just as important as projects, “the new CEO needs to focus on customer experience and getting riders on buses and trains to address its poor ridership trends,” Ellis said. “Everyone at MARTA needs to be incentivized and motivated to make this occur.”
The interim general manager/CEO “is a position that should focus on day to day operations,” Krist said. “It’s up to the board to determine policy and project priority. The interim is not in a position to do so.”
Ridership in fiscal 2024 was 64.2 million, down more than 46% from fiscal 2018, the last full year before COVID-19, according to data published in MARTA’s official statements.
That “will not get it done in the long run,” Krist said.
“Given the perceived level of service disenchantment, getting people back on the system is a key. So it’s all about service,” he said.
MARTA’s bond credit relies on sales tax collections rather than ridership.
“S&P Global Ratings does not believe MARTA’s change in leadership is material from a credit standpoint currently,” said S&P Senior Analyst Andrew Safford. “Our analysis of MARTA’s AAA/stable priority lien sales tax rating, affirmed earlier this year, is primarily based on the fundamentals of the Atlanta service area, the stability of a 1% sales tax on most retail sales in Fulton, DeKalb, and a couple other counties in the broader Atlanta Metropolitan Statistical Area.”
In its January rating of MARTA’s sales tax revenue bonds Moody’s said the bonds have solid debt service coverage, though it would likely decline to 3X to 4X from 5.2X by 2030. The bonds benefit from a strong sales tax pledge and a large and growing Atlanta metropolitan region and an expectation that employment growth will continue to be strong.
Moody’s said it expects MARTA to issue $4.1 billion or less of new debt from fiscal 2025 to 2034.
“Ridership per capita for MARTA tends to be lower than for other transit systems that serve large metropolitan areas,” Moody’s said. “These ridership factors may weigh on MARTA’s ability to raise future revenues as they may indicate local political support for mass transit that is vital for system maintenance and expansion.”
KBRA pointed to some of the same positives as Moody’s. As a concern, it noted pledged receipts have moderate sensitivity to economic cycles.
When Fitch upgraded its MARTA bond rating to AA-plus from AA a year ago, it said the area’s personal income base and MARTA’s revenues had been growing faster than its debt.
