MILWAUKEE, Wis. – The past month for the Milwaukee County Transit System has included news of a nearly $11 million budget deficit, a request for an audit of MCTS by the Milwaukee County Comptroller, startling details about ongoing fare evasion across the system, and two high-profile resignations of County transportation leaders.
On Wednesday, the County’s Committee on Transportation and Transit held the transit system’s feet to the fire, demanding answers for how things reached this juncture. New managing director Sandra Kellner addressed several issues, beginning with the communication of the budget deficit that left several County Supervisors and Comptroller Liz Sumner caught off guard.
“In this instance, we did not meet our own standards,” said Kellner. Her appearance before the committee came the day after the sudden resignation of former interim managing director Julie Esch.
In an internal report released June 18th, MCTS said the deficit was linked to the following issues:
- $4.7 million over budget in Salaries and Fringe. This includes $1.4 million in excessive overtime costs compared to budgeted ($500,000 maintenance OT and $880,000 transportation OT).
- $3.4 million over budget in TransDev, the County’s primary method of providing transportation services to those with disabilities.
- $1.4 million lower than budget in revenue.
- $1 million over budget in materials and supplies.
- $5,500 over budget in liability and workers compensation.
In total, MCTS projects receiving $25,462,059 in total revenue for 2025, down 5% from the original $26,888,175 forecasted in the annual budget.
In response, MCTS has announced a 20,000 hour reduction in service planned to begin this fall, and is also planning to eliminate overtime across the agency except for Summerfest service or in case of emergency, in addition to implementing a freeze on of new employee recruitment and filling of existing vacancies, including replacements for departing employees.
One note that caught Supervisors by surprise Wednesday during an analysis by new MCTS Chief Financial Officer Alexander Corona of the deficit the data was the fact that multiple employees regularly accumulate many hours of overtime while working fewer than 40 hours a week.
“This is unhealthy levels of overtime,” said Corona, who noted for every 100 hours of regular work hours, on average an MCTS employee accumulates 25 hours of overtime.
“Is there favoritism? I just need to know how it happens,” said Supervisor Willie Johnson, who also chairs the County’s Committee on Finance.
Several representatives of the Amalgamated Transit Union Local 998 spoke at Wednesday’s meeting, calling into question why the budget deficit first came to light during ongoing contract negotiations, and why an overtime policy that has been built into their contract for over three decades was now cited as the main cause of the issues.
“I’ll be damned if I’m the first to give it up,” said MCTS operator and ATU member Kyle Handel during public comment period.
The union called for a vote to authorize a strike Wednesday. A vote in favor of a strike would not mean a strike would immediately begin.
MCTS says fare evasion led to $4 million in lost revenue in 2024. Union President Bruce Freeman commented during the meeting that fare evasion’s impact was understated in the report, claiming an operator told him that during a five-hour operation window he had pushed the built-in “no fare” button on the bus 96 times.
The committee voted unanimously to adopt a resolution requesting MCTS to develop a data-informed bus fare compliance strategy to strengthen revenue and ensure long-term sustainability.
MCTS fare policy is for operators to only ask for fare once before allowing the passenger to ride. This differs from policies in other area transit zones; in the City of Waukesha, official ordinance dictates that bus operators contact police if riders refuse to pay their fare, according to the city’s transit director Brian Engelking.
Going forward, Corona noted that remaining COVID relief money will be used to cover the budget deficit for 2025 that was planned for use in a future year. But as Officer of Strategy, Budget and Performance Joe Lamers noted, that money is limited in nature.
“”We’re likely going to run out of federal funds in 2026,” said Lamers.
While the issues facing MCTS are many, leadership promised the committee that transparency in the future would be at the core of their plans to address the deficit.
“We want to earn your trust, and we’re here for you,” said Corona.
READ PRIOR COVERAGE OF THE 2025 MCTS DEFICIT:
- MCTS interim managing director resigns ahead of hearing on budget deficit
- Fare evasion costing MCTS millions; Supervisors demand action plan
- Milwaukee County transportation executive director steps down following MCTS audit request
- Milwaukee County Comptroller recommends audit of MCTS over nearly $11 million deficit
- MCTS plans service reduction to address seven-figure budget deficit
