Former ATLDOT official to press MARTA on claim it has spent over $50M on bus services with little result

A former City of Atlanta transportation official plans to press MARTA to explain what he says is an unexplained spending of over $50 million on “enhanced” bus routes that created little or no increases in bus service.

Douglas Nagy, a former Atlanta Department of Transportation (ATLDOT) deputy commissioner, said he will press the MARTA Board of Directors about the issue in public comments at its Nov. 9 meeting. “If the money didn’t go to expanded bus service, where did it go?” he asked.

MARTA said it believes Nagy’s overall calculation is based on a category of costs the agency is “working to true up” against actual expenditures, with the remaining money going back into “More MARTA” reserves. Nagy said that’s a “partial response” that leaves “mystery” about many details, including what the final numbers are.

Atlanta City Council President Doug Shipman said that Nagy’s observations are in line with the council’s own concerns about the sales-tax-funded “More MARTA” expansion and improvement program in general and bus spending in particular. Earlier this year, MARTA agreed to a program audit that is still underway.

“One of the fundamental questions of the audit is around understanding how all the ‘More MARTA’ dollars have been raised and spent, including specifically around the enhanced bus service, which consistently has been higher than initially expected,” said Shipman. He said he hopes the audit will show “how that money was spent.”

More MARTA projects – all entirely within the City of Atlanta – are funded by a 0.5 percent sales tax approved by voters in 2016. Amid renewed public controversy in recent months over the lack of delivery, MARTA has rearranged 17 projects into two “tiers,” or phases. The agency estimates it can deliver the first-tier projects by 2028.

However, skepticism has bubbled in such institutions as the City Council, the Mayor’s Office, and sometimes MARTA’s own Board of Directors. More recently, City Hall buzzed with news this month of the departure of MARTA Chief Financial Officer Raj Srinath, which the transit agency said is not related to the “More MARTA” audit.

“Enhanced” bus service is part of the upgrades. It can mean a wide variety of improvements, ranging from entire new routes to express service, increased trips, extended routes, and more.

Nagy, who was an ATLDOT deputy commissioner for transportation strategy, is not the first former agency official to question MARTA’s financial numbers. Josh Rowan, ATLDOT’s first commissioner who later served briefly as the transit agency’s own deputy general manager, earlier this year claimed internal numbers predicted a $1 billion revenue shortfall for “More MARTA.” MARTA later said its financial model shows “no shortfall” in the roughly $1.956 billion first phase of “More MARTA.” But Rowan read the numbers as including an $852 million deficit reliant on yet-to-be-secured federal funding and with low contingencies.

Nagy said he got involved in “More MARTA” finances in January 2022 when Rowan, then still the ATLDOT chief, asked him to review the program. MARTA was unable to promptly provide financial data, he said, and it was not available online. “It soon became apparent to me that MARTA itself did not have [reports on] finances for the ‘More MARTA’ program,” he said, adding that it took until May 2022 to receive reports and December to get bus service information.

Nagy claims that his discussions with City Hall officials about the difficulty in getting “More MARTA” information and his observation about bus spending were key to spurring City Council investigations and, ultimately, the audit, which MARTA initially resisted.

“The bus level of service data from MARTA shows they have effectively stopped providing enhanced service or much-enhanced service” since September 2020, he said, citing various MARTA presentations. Yet the “More MARTA” financial tables show the agency “keeps charging tens of millions of dollars for it,” he said.

He tallies the spending at $57.3 million, based on adding up figures from July 2020 through December 2022 on a table of “bus service enhancements” in a December 2022 “Quarterly Progress Report” for “More MARTA” that the transit agency included in a letter to Mayor Andre Dickens and the City Council earlier this year.

Meanwhile, Nagy said, MARTA reports enhanced bus service going down since the COVID-19 pandemic crunch, when ridership plummeted and many routes closed down. One example is an enhanced bus service report written this summer that said, “More MARTA Atlanta bus service enhancement levels in operation remain low, roughly 1% higher than before enhancements began in 2017.”

In pointing out the big spending and small service change, Nagy refers to more than $50 million as having “gone missing.” But he acknowledges that there are other possible explanations, such as errors or confusion about pandemic-related spending. MARTA faced unexpected pandemic expenses, though it also received federal relief funding.

Nagy said no clear explanation has come since he contacted MARTA and several of its board members earlier this year with his observation about spending versus service. He said he wondered if he would “make a fool of myself” because of a “magical answer” related to category confusions or other explanations. But, he said, “There has been no magical answer that came out of anybody I have spoken with.”

MARTA spokesperson Stephany Fisher was provided with Nagy’s basic claims and some of the transit agency reports he cites, particularly regarding the $57.3 million in spending. “We believe he’s referencing the sustaining capital costs and as our GM/CEO has told the City of Atlanta, we are working to true-up the sustaining capital costs based on actual expenditures and the remaining money will be placed in the More MARTA Atlanta reserves,” said Fisher. The general manager and CEO is Collie Greenwood.

Informed of MARTA’s response, Nagy said it lacks detail and the fundamental issue of spending versus service is “still a mystery to me” that he will raise at the board meeting. 

“It’s unfortunate MARTA executives didn’t tell the truth the first time and now have to ‘true up’ their story,” he said in a text message, adding in a phone interview, “They’ve given a partial response and I think it’s alarming they are walking back their numbers now.”

Shipman has voiced broadly similar questions about “More MARTA” bus spending. He said he believes MARTA “should consider putting some dollars back into ‘More MARTA’ specifically for future projects” to make up for some of that bus spending.

Nagy left ATLDOT earlier this year for the private sector, a decision he said was solely motivated by the need to earn a higher salary to continue living in Atlanta’s Midtown neighborhood. He said he is going public with his concerns because he can do so as a private citizen again.

“This is not an ideological thing,” he said. “I love MARTA. I ride it to work every day. I am a super-user and I rely on it every day for my transportation. I just want to see MARTA have credible finances and expand transit in Atlanta.”

The MARTA Board of Directors meeting is scheduled to begin with a noon working session. It can be viewed online via the MARTA website.