MARTA 2009 Budget Summary Review 1 Transit Budgeting

MARTA 2009 Budget Summary Review 1

Transit Budgeting Strategies Internal Productivity & Cost Containment Fare Changes New Revenue Sources Transit Service Levels 2

The Budget Context… Ø Eliminate Legacy MARTA Legislative Financial Constraints ü “ 50/50” Capital and Operating Split ü Interest Income Limitations Ø Aggressively Do Our Part – (“Self Help”) ü Complete Comprehensive Internal Financial Review by Year-End (“Zero-Based Budget Approach”) ü ID Additional Internal Productivity/Cost Containment Measures 3

The Budget Context… ü Prepare Fare Recommendations (Planned FY 2010 Implementation – Phase I) ü January 2009 Mid-Year Budget Revision Ø Plan for Long-Term Financial Sustainability (Operations, “State of Good Repair”, Expansion Program) ü ID Needs and Funding Requirements ü Anticipate “Rainy Days” (avoid “volatility” to transit service levels and fares) 4

The Budget Context… Ø Resolve the Regional Transit “BIG PICTURE” ü What is Our Transit Plan? ü What is MARTA’s Future Role? Ø Implement a Proactive Public Information, Education and Communications Plan re: MARTA/Transit Funding Needs 5

Proposed Operating Budget FY 2009 6

Original Budget Projection (as of June 2007 – FY 07 Un-audited) 7

FY 08 Operating Budget Overview 8

FY 08 Budget Highlights Annual Revenue Projections – Budget vs. Current Forecast Ø Sales Tax Receipts down (-$7. 6 M operating impact) Ø Passenger Revenue below Projections (-$2. 4 M) Ø Other Income favorable (+$6. 8 M) Ø Future loss of SB 114 and 115 Funds (-$11. 5 M in FY 09; -$24 M in FY 10) Ø No New Local/Regional/State Transit Funding – $50 M “needed” annually (MARTA estimate) 9

FY 08 Budget Highlights Expenses Ø Mid-Year Budget Adjustment (-$10. 2 M) – No Impact to FY 08 Service Levels or Fares – 130 Frozen Positions – $2. 9 M in Other Cost Containment Actions – FY 2007 Mid-Year Adjustment Impacts Ø GASB 45 Adjustment ($6. 5 M) – Other Post Employment Benefits (OPEB) Obligations 10

Updated Total Sales Tax Yield Projections Thousands October 2006 vs. January 2008 * *March YTD Actual Total Sales Tax Yield is 2. 56% ($6. 9 M) below the revised estimate from January 2008. 11

Priority Recommendations Today…… Ø An Emphasis on the “BASICS” - Safety & Security, Reliability, Customer Environment “State of Good Repair” “Expense Neutral Restructuring” “Live Within Our Means” Ø Complete In depth Organizational & Financial Assessment - Submit Mid-Year 2009 Budget Revision Ø Strengthen Performance Management, Analysis and Reporting - Revenue & Ridership Data Ø Complete Comprehensive Fare Study Ø Finalize MOVE System Optimization Review Recommendations 12

Priority Recommendations Aggressively Advance…… Ø FY 09 Legislative Proposals to eliminate the “ 50/50” capital/operating split and “capital reserves” limitation Ø Expanded regional transit plan and new dedicated funding Ø State transportation/transit funding Ø Internal productivity/cost containment measures – Zero Based Budget (Mid Year Budget Adjustment) – “Rightsizing” (R. I. F. ) – Station Services – Employee Availability – Fleet Size & Reliability – Material/Inventory Control – Project Management and Internal Controls – ID Capital Project Operating Impacts – Collective Bargaining Strategy 13

FY 09 Budget Proposal 14

FY 09 Operating Budget Proposal Key Assumptions Ø Steady State Rail and Bus Service Plan Ø Significant MARTA Mobility Service Increase (+50 assigned vehicles) Ø Average Growth in Revenue Hours……………………. 28% Ø Average Growth in Revenue Miles……………………. . . 29% Ø Average Annual Expense Growth……………………. 30% Ø No Fare Increase Planned in FY 09 Ø Fare Restructuring to Begin in 2010 (Phase I) Ø No New Dedicated Transit Funding in FY 09 15

Operating Revenue 16

Annual Operating Expenses $M 17

FY 2009 Proposed Staffing Levels 18

Operating Reserve Balance $M (FY 2002 – FY 2009) 126. 2 127. 3 92. 8 19

Proposed FY 09 Operating Budget 20

Comparison of Revenues & Expenses (Baseline w/ Escalation) $M The “Additional Revenues” Line Assumes Continuation of 55/45 Revenue Split, Use of Interest on Capital Reserves and the Estimated Impact of a 0. 20 cent Fare Increase 21

Operating Budget Projections (FY 09 – FY 11) 22

Next Steps 23

BUDGET TIMELINE Ø April 23 --- Present Budget Proposal to Board at Budget Retreat Ø May 3 to 6 --- Notice of Public Hearings in AJC Ø May 1 --- Notice of Public Hearings – Publish in Atlanta Daily World , Atlanta Inquirer, Champion, Go. De. Kalb. com, Mundo Hispanico and Crossroads Ø May 12 --- Hold Public Hearing, 7 pm, in Maloof Auditorium and North Fulton Service Center Ø May 13 --- Hold Public Hearings, 7 pm, in Atlanta City Hall and College Park Public Safety Complex Ø May 28 --- Present Proposed Budget to Business Management Committee Ø June 9 --- Present Budget to Full Board Ø June 16 --- At the Customer Development and/or O&D Committees call for Special Board Meeting if not adopted at June 9 meeting 24