New report challenges MARTA’s management study that’s fueling Legislature’s call for change

By David Pendered

A new report commissioned by a national transit union cites what it contends are deep flaws in MARTA’s own management study, which is fueling the General Assembly’s effort to reorganize MARTA and promote the privatization of some jobs.

MARTA's union and its national parent are stepping up opposition to legislation that would privatize some MARTA jobs while making other changes. File/Credit: Rory Gordon

MARTA’s union and its national parent are stepping up opposition to legislation that would privatize some MARTA jobs while making other changes. File/Credit: Rory Gordon

The new report is part of the groundswell of opposition the national union and its advocates are attempting to mount against looming changes in the management and oversight of metro Atlanta’s largest transit system.

In the past, the presence of the national union appeared to be barely evident in MARTA’s affairs. This moment is different, as evidenced by strong language in the report by a professor at Columbia University who specializes in privatization:

“The report’s omissions are glaring [and] it would be highly irresponsible for any public policy to be crafted based on this slanted, incomplete and predetermined report,” concludes the executive summary of the report written by Elliott Sclar.

Sclar directs the Center for Sustainable Urban Development at Columbia’s Earth Institute. Sclar has written extensively on privatization, including an award-winning book: “You Don’t Always Get What You Pay For: The Economics of Privatization,” (Cornell 2000.)

Sclar’s opinion of MARTA’s management study is clear in the title of his 10-page treatise: “KPMG’s Report on MARTA: Faulty Data, Wrong Conclusions.” His previous works have focused on privatization of Amtrak, air traffic control, and an array of transit topics.

Sclar’s report contends that the KPMG audit reaches a predetermined conclusion.

“By presenting comparisons from the private and public sector instead of other transit agencies, KPMG was able to unfairly manufacture numbers that are not only unfavorable to MARTA, but would also be unflattering to the overwhelming number of transit systems nationwide.”

Sclar writes of the KPMG study: “The analysis provided by the authors does not allow us to draw any substantial conclusions because it compares apples and oranges.”

Elsewhere Sclar writes: “The report fails to specify the scope and details of market data or captive data used as the basis for analysis, preventing the reader from assessing the quality of the work or the validity of the conclusions drawn.”

The management study that draws such strong rebuttal was conducted by KPMG. MARTA hired the consulting company and in October released results of KPMG’s overarching review of the transit system’s operations.

The KPMG report stated at its beginning that its intention was to recommend transformative change:

“MARTA engaged KPMG to provide a combination of operational audits and strategic advisory services to assess and improve MARTA’s overall operational and financial effectiveness. This report focuses on strategic transformation. Key project objectives include: Analyzing current business processes and identifying specific near-term opportunities, identifying longer-term opportunities to improve overall effectiveness and efficiency, identifying new and enhanced methods of revenue generation, and driving sustainable, continuous improvement within MARTA.”

The KMPG report is a factor in the legislation to remake MARTA. House Bill 264 has been approved by the House and now is pending in the Senate.

Tension over the proposal flared Wednesday at the Capitol, during a meeting of the MARTA Oversight Committee, between Rep. Mike Jacobs (R-Brookhaven), who chairs MARTOC, and Curtis Howard, president of Amalgamated Transit Union No. 732.

KPMG focused on labor costs, saying they represent about 77 percent of MARTA’s operating budget. KPMG determined a program of privatization and benefits reduction could provide significant annual savings:

  • Up to $50 million a year in legacy pension plans, healthcare, retirement, absentee and workers compensation;
  • From $60 million to $142 million over five years by outsourcing jobs that are deemed non-core to MARTA’s mission.

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

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