Memphis, August 14, 2025
News Summary
Business owners in downtown Memphis are considering legal action against the Memphis Area Transit Authority (MATA) due to alleged mismanagement of trolley repairs, which has severely impacted local businesses. Recent audit findings revealed a significant budget shortfall and misuse of funds, prompting the Downtown Neighborhood Association to advocate for legal recourse. MATA has promised trolley service restoration soon but faces ongoing scrutiny over financial discrepancies and unauthorized expenditures. Meanwhile, an additional lawsuit from nMomentum Corporation adds to MATA’s legal troubles.
Memphis Downtown Business Owners Consider Legal Action Against MATA Over Trolley Mismanagement
The president of the Downtown Neighborhood Association of Memphis, Jerred Price, has announced that several downtown business owners are contemplating legal action against the Memphis Area Transit Authority (MATA). They are alleging โgross negligence and misuse of fundsโ that were intended for trolley repairs, as revealed by a recent audit.
Local businesses are feeling the impact of the trolleys being out of service, prompting them to seek assistance from the Downtown Neighborhood Association. Price has criticized MATA for inconsistencies relating to repair costs, noting a dramatic shift from initial estimates in the millions to a reduced quote of just $30,000.
The city of Memphis disclosed a financial audit last month which uncovered MATA’s $60 million budget shortfall. The audit highlighted that taxpayer funds were diverted towards unnecessary expenses, including luxuries like a suite at FedExForum, new executive offices, and extravagant office furniture. Additionally, WREG Investigators reported questionable charges on executive credit cards with expenses ranging from jewelry to spa treatments.
During a recent city council transportation committee meeting, Interim MATA CEO John Lewis announced that trolley repairs would be significantly less expensive than previously estimated. In July, MATA board members suggested repair costs for the trolley cars could be less than $30,000 instead of the $2 million projected by prior management. Despite this, initial assessments revealed while the trolley tracks were in good condition, issues with poles and infrastructure needed to be addressed. MATA has stated that they expect to restore trolley service by the start of the new year.
Jerred Price expressed his commitment to advocating for local businesses but expressed hope that legal action could be avoided if trolley service could be reinstated soon. At a recent MATA board meeting, complaints about management misdirection were raised, particularly regarding misleading information about bus routes, with 20% of published routes unavailable since April.
Accusations of misleading the public were made by board member Cynthia Bailey during the meeting. MATAโs consulting firm, TransPro, cited non-transit expenses like luxury spa visits in their report, expressing surprise at the findings regarding the misinformation about bus services. An employee linked to unauthorized expenses has been suspended and a formal investigation is currently underway. Furthermore, the former MATA Deputy CEO Bacarra Mauldin is on administrative leave amid these revelations.
Community advocates have criticized MATA, stating that leadership has prioritized administrative tasks over service to riders. In terms of updates, repairs on the trolley services indicate that while repairs to turn buckles have been completed, brake issues remain pending due to required paperwork.
Adding to MATAโs legal troubles, nMomentum Corporation is suing them for $555,430.40 over unpaid contractual services related to public transit improvements. The lawsuit alleges that MATA halted payments to nMomentum in January 2024 without justification, despite the firm continuing to deliver services while owed over $480,000. The lawsuit claims that MATA’s breach of contract has led to severe financial distress for nMomentum. At the same time, MATA is engaged in a separate $1.2 million contract with TransPro for crisis management and restructuring in light of these ongoing challenges.
Key Information on MATA’s Trolley Mismanagement
- Potential legal action by downtown business owners against MATA for mismanagement
- Audit findings reveal a $60 million budget shortfall and misuse of funds
- Discrepancies in trolley repair costs from millions to $30,000
- Misleading information regarding bus routes since April
- Ongoing investigation into unauthorized expenses and suspended employee
Frequently Asked Questions
What is prompting business owners to consider legal action against MATA?
Business owners are considering legal action against MATA due to allegations of gross negligence and misuse of funds designated for trolley repairs, which have led to financial hardships for many downtown businesses.
What did the audit reveal about MATAโs financial management?
The audit revealed a $60 million budget shortfall and pointed to the use of taxpayer funds for unnecessary expenses, including luxury office items and unapproved executive spending.
When is MATA expected to restore trolley service?
MATA has stated that they expect trolley service to be restored by the beginning of the new year, pending completion of essential repairs.
Deeper Dive: News & Info About This Topic
HERE Resources
Memphis Transit Authority Faces Financial Crisis Amid Changes
Allegations of Document Destruction in Memphis Schools
Memphis Schools Undergo $6 Million Audit Proposal
Memphis MATA Undergoes Major Reforms Amid Accountability Issues
Forensic Audit Approved for Memphis-Shelby County Schools
Memphis Schools Under State Control Amid Leadership Changes
MATA Faces Scrutiny Over $848,000 in Mismanaged Funds
Memphis Schools to Undergo Forensic Audit Amid Misuse Concerns
Controversy Surrounds Memphis Schools as Former Superintendent Sues Board
Memphis Schools Experience Leadership Changes Amid Accountability
Additional Resources
- WREG: Businesses Considering Legal Action Over Trolley Absence
- Google Search: MATA legal action
- Action News 5: MATA Staff Member Suspended
- Wikipedia: Memphis Area Transit Authority
- Memphis Flyer: City Council Replaces Entire MATA Board
- Encyclopedia Britannica: Public Transportation
- Action News 5: Consultant Sues MATA Over Nonpayment
- Google News: MATA lawsuit
- Fox 13 Memphis: Return of Downtown Trolleys
Author: STAFF HERE MEMPHIS WRITER
The MEMPHIS STAFF WRITER represents the experienced team at HEREMemphis.com, your go-to source for actionable local news and information in Memphis, Shelby County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the areaโwith deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Beale Street Music Festival, Elvis Week, and Memphis in May International Festival. Our coverage extends to key organizations like the Greater Memphis Chamber and the Memphis Convention & Visitors Bureau, plus leading businesses in logistics, healthcare, and music that power the local economy such as FedEx, St. Jude Children's Research Hospital, and AutoZone. As part of the broader HERE network, including HEREBristol.com, HEREChattanooga.com, HEREKnoxville.com, and HERENashville.com, we provide comprehensive, credible insights into Tennessee's dynamic landscape.
