MARTA directors learned Monday that they would be saving $4.5 million because the transit authority had refinanced a small batch of bonds.
For MARTA, the savings may seem small in comparison with its $400 million operating budget, and the savings are stretched out to 2020. But every dollar saved is a victory for the authority, which has been struggling with an annual operating deficit of about $30 million. It was even sweeter because MARTA officials had only expected to save $3.7 million on the deal.
“That is great news,” Board Chairman Fred Daniels said.
The authority is currently remaking its business model and considering privatizing some nontransportation functions to put it on a more sound financial footing. It is also taking other steps. General Manager Keith Parker recently reorganized his top staff, cutting out a handful of expensive executive and administrative positions, which he said should save the authority about $1 million annually.
At Monday’s board meeting, directors also authorized the authority to request proposals from developers for a “transit-oriented development” at the King Memorial station. MARTA took a similar step a decade ago at the Lindbergh station with the hope of increasing ridership and supplementing its main funding of fares and sales tax with real estate leases.
Kevin Hurley, the senior director of treasury and the capital program, has been grabbing opportunities to refinance bonds as the opportunities arrive — last year he did three bond deals to save about $1 million a year.
Of the most recent bond refinancing, he said, the authority moved away from the Moody’s rating agency because it has become more skeptical of MARTA bonds — the authority has about $1.8 billion in bond debt — and has dropped its rating to Aa3. Standard and Poor’s rates MARTA as AA+, and Fitch rates it as AA-.
“We typically price pretty good,” he said.
