MARTA sheds financial deals

By ARIEL HART

The Atlanta Journal-Constitution

Several months ago, MARTA appeared at risk of losing up to $391 million on banking deals that went sour in the financial crisis.

But MARTA has gotten out of about half the deals, the chairwoman of a MARTA legislative committee said Monday, with no losses so far.

It’s an important “so far.” MARTA has only unwound about half of the transactions, said the legislator, Rep. Jill Chambers (R-Atlanta), citing state auditors.

During the banking boom, encouraged by the federal government, transit agencies struck complicated deals to sell and lease back their train lines. The deals were supposed to bring the agencies a profit — assuming the financial institutions they dealt with, like AIG, stayed healthy. The banks cratered instead, and massive losses were a possibility.

Instead, MARTA officials said after the meeting, the deals overall are millions of dollars in the black so far. Auditors finished gathering facts some weeks ago, and MARTA had now gotten out of or canceled its risk in about 67 percent of the deals, officials said.

It was a rare bright spot in a legislative committee meeting where MARTA spread more doleful budget news, and Chambers, a MARTA critic, locked horns with a MARTA supporter on the committee, Sen. Doug Stoner (D-Smyrna).

MARTA officials said that after worsening financial forecasts they were looking at an operating deficit over the next three years totaling $131 million. That would be after spending every penny in its operating reserves. MARTA depends partly on a sales tax levied in Fulton and DeKalb counties, and those revenues have suffered along with the economy.

Chambers also asked sharp questions about consulting contracts, including why MARTA planned to spend up to $492,000 over three years on lobbying consultants to help get new funding from the Legislature.

She criticized MARTA for authorizing some $250,000 for headhunters to find outside talent. MARTA CEO Beverly Scott said part of that was an effort to hire a new safety manager following the escalator failure at stations on New Year’s Eve 2007.

Stoner objected to the meeting’s tone, and said agency officials were being “berated.” That led to an exchange where Stoner said Chambers had given him inaccurate information, prompting Chambers to cut off his microphone. “You’re going to cut me off? You’re going to cut me off?” Stoner asked. Chambers responded, “Mm hmm,” and Stoner replied, “Then I can speak a lot louder than this, Madam Chair,” and continued his complaint without his microphone.