Mayor Kasim Reed, who helped bring the $98 million streetcar to life after years of planning by his predecessor, said he believes some of the operational issues are to be expected when implementing a system of this magnitude. Reed predicts support will only grow in 2016, a year that Fulton County voters could be asked to approve up to an additional penny sales tax to fund transportation projects.
“The scraping of your knee, if you will, I think really comes from doing something that hasn’t been done in Atlanta in 50 years,” he said.
Melissa Mullinax, Reed’s senior adviser, said the city has already made several changes.
They’re working to streamline what she described as a “top heavy” management structure that, for a time, led to confusion over who was in charge. They’ve improved streetcar schedule performance, bringing reliability to the four-car system. They’ve beefed up patrols by Atlanta police to monitor for unruly passengers. They’ve developed the software they need to begin charging to ride next month. And they’ve hired “fare enforcement officers” who will keep tabs on who’s paying and who isn’t.
City officials say they're considering permanently turning day-to-day management over to a private company, a decision which could come in early 2016.
For most of 2015, the streetcar was managed in-house with oversight by MARTA, but the system saw repeated troubles as Atlanta took on the unfamiliar role of provider. Because of the ensuing problems, the city inked a temporary emergency contract this fall with a private transit management firm.
Finding a new path forward would be welcome news to District 7 Councilman Howard Shook, who recently blocked a long-term plan for the streetcar to someday move through Buckhead on Peachtree Road. He likes the downtown streetcar, and the fact that it was supported by private dollars, he said, but has doubts about the city’s ability to manage it.
“If we had hired a professional transit provider, which is what we had been promised all along, then you wouldn’t be listening to people say: ‘The good news is we learned a lot from the mistakes we made,’” he said.
The city initially considered and rejected the idea of hiring a private company to run the streetcar back in 2014. Early estimates indicated it would be far cheaper to keep operations in-house — about $3.2 million compared to $4.5 million. They didn’t anticipate that doing so would incur an extra cost associated with the MARTA oversight required by the federal government.
And recent budget figures show that the price tag for the city to continue to operate the system will average $4.7 million annually over the next four years — slightly more than the cost initially projected for a private vendor’s services.
Stan Feinsold, managing director of RATP Dev McDonald Transit, the company selected in 2014 as the preferred bidder, said Atlanta opted to “self-perform” after engaging his company in months of negotiations.
“Everything that’s happened after that was in part a result of that decision,” he said.
Recovery possible, expert says
Many cities have chosen to outsource management of their streetcar operations to a vendor with experience running complex transit systems, said Jeff Boothe, president of Boothe Transit Consulting. However, there are other examples of cities that chose to go it alone, like Portland and Seattle.
Due to his history of working with MARTA as a former partner with Holland & Knight law firm, Boothe declined to comment specifically about the Atlanta project.
He said that generally, the Federal Transit Administration is concerned about all streetcar projects managed by inexperienced grantees — in particular whether they have the technical capacity to become operators.
“Any agency doing its first transit project … you don’t know what you don’t know,” Boothe said. “It’s a bigger leap than many project sponsors appreciate or understand.”
The city has ambitious plans to install roughly 50 miles of streetcar tracks across the city and the Beltline.
However, Atlanta will have to demonstrate a track record of success if it hopes to persuade the federal government to loosen its purse strings to help pay for the future expansion.
Rick Gustafson, a streetcar consultant who spent 12 years as executive director of the Portland Streetcar, said it’s not too late for Atlanta to regain federal favor.
“It’s really up to them to recover from the first year of a rough start,” said Gustafson, who worked on the Atlanta streetcar project in its early stages.
He thinks they’re already fixing the management issue.
“If they do, they should be fine with the federal officials,” he said.
Another hard lesson could come in January, when the Georgia Department of Transportation releases an in-depth audit of streetcar operations.
GDOT Intermodal Director Carol Comer said she could not discuss the findings before they have been fully vetted by everyone involved, but expressed optimism that Atlanta is fully aware of the stakes.
“We certainly feel that in our dialogue with the city of Atlanta and MARTA that they are aware of the challenges and opportunities that lie ahead with the streetcar,” she said.