Audit: MARTA spends $50M too much, should privatize some functions (Atlanta: compensation, costs)

[tonygeorgia]

Audit: MARTA spends $50M too much, should privatize some functions

Audit: MARTA spends $50M too much, should privatize some... | www.ajc.com

MARTA is spending $50 million above the national average for employee benefits, but if it revamped its health care, retirement and worker compensation plans, it could erase a projected $33 million operating deficit, an audit released Monday reveals. The transit authority will have to cut services even more in a few years if it doesn’t control runaway costs, according to the KPMG audit, commissioned by the authority’s board of directors to give it a blueprint for stabilizing the troubled finances and to expand its services.
The audit said that, in addition to the labor and retirement savings, the authority could save between $60 million and $142 million over five years by outsourcing many functions. According to the audit, the five-years savings if cleaning services were privatized would be $29 million to $49.5 million.

[jsvh]

The audit report is also being discussed here: https://www.city-data.com/forum/atlan...mg-report.html

[branh0913]

I'm all for privatization, but I'm not sure what and how. But I'm sure it will work out in the long run.

[AcidSnake]

It's a pretty interesting report to say the least.

But it feels a lot like this report is comparing apples and oranges. It's quite easy these days to create reports that will lead to the conclusions that a party or parties would want it to lead to, and that is a situation that's quite common in this current anti-government atmosphere.

I would like to see how the other similar transit agencies in the nation compare to MARTA in terms of cost. Not trying be a conspiracy theorist mind you, but why compare MARTA's costs to to the costs associated with non-transit agencies?

Originally Posted by tonygeorgia

Audit: MARTA spends $50M too much, should privatize some functions

Audit: MARTA spends $50M too much, should privatize some... | www.ajc.com

MARTA is spending $50 million above the national average for employee benefits, but if it revamped its health care, retirement and worker compensation plans, it could erase a projected $33 million operating deficit, an audit released Monday reveals. The transit authority will have to cut services even more in a few years if it doesn’t control runaway costs, according to the KPMG audit, commissioned by the authority’s board of directors to give it a blueprint for stabilizing the troubled finances and to expand its services.
The audit said that, in addition to the labor and retirement savings, the authority could save between $60 million and $142 million over five years by outsourcing many functions. According to the audit, the five-years savings if cleaning services were privatized would be $29 million to $49.5 million.

[tikigod311]

Originally Posted by AcidSnake

It's a pretty interesting report to say the least.

But it feels a lot like this report is comparing apples and oranges. It's quite easy these days to create reports that will lead to the conclusions that a party or parties would want it to lead to, and that is a situation that's quite common in this current anti-government atmosphere.

I would like to see how the other similar transit agencies in the nation compare to MARTA in terms of cost. Not trying be a conspiracy theorist mind you, but why compare MARTA's costs to to the costs associated with non-transit agencies?

I thought I saw in the actual report that many of the comparisons were made between BART, SEPTA, and Denver RTA.

[AcidSnake]

Yeah but those are just a few agencies out of the many transit agencies in the whole United States.

I'm not trying to imposed some impossibly huge standard on KPMG, but far too many times audits like these who are critical of public-governed agencies operating within the ITP tend to be far too politically-charged & agenda-based. Give me a report that comprehensively looks at how MARTA operates compared to its peers, to include side details like state funding, whether or not the density of commercial & residential developments influencing the pricing of services, and if these peers have autonomy over their decision making(Is MARTA the only place governed by a politically-oriented committee like MARTOC?) and I would drop my suspicions on this issue.

Otherwise?

I will always have the suspicion that this report was done just to get in the good favor with the state legislature, who is just as inept in handling the affairs of state-governed institutions. But I guess since Atlanta doesn't exactly have a truly mature & independent press corp to get to the bottom of these issues, questions like mines will likely never be raised or answered by the powers-that-be in this state.

Oh well...

Originally Posted by tikigod311

I thought I saw in the actual report that many of the comparisons were made between BART, SEPTA, and Denver RTA.

[arjay57]

Originally Posted by AcidSnake

I would like to see how the other similar transit agencies in the nation compare to MARTA in terms of cost. Not trying be a conspiracy theorist mind you, but why compare MARTA's costs to to the costs associated with non-transit agencies?

KPMG gives MARTA positive marks for some of the cost saving steps it has taken.

However, the areas where they criticize MARTA are just plain common sense, not some subtle, subjective difference. For instance, MARTA pays $27.55 an hour for cleaning when an outside vendor can do the same job for half that price. That alone would save $29 million to $49.5 million over the next five years.

To put that in context, MARTA's fair hike to $2.50 a ride only generated $4 million a year. Good management could have easily eliminated the need for a fare increase.

Bear in mind that MARTA has never scrimped on executive compensation either. Beverly Scott was paid $371,000 last year. In her new job at MBTA, a much larger and more complex system, she'll have to scrimp by on a mere $220,000.

[researchnerd]

Originally Posted by arjay57

KPMG gives MARTA positive marks for some of the cost saving steps it has taken.

However, the areas where they criticize MARTA are just plain common sense, not some subtle, subjective difference. For instance, MARTA pays $27.55 an hour for cleaning when an outside vendor can do the same job for half that price. That alone would save $29 million to $49.5 million over the next five years.

To put that in context, MARTA's fair hike to $2.50 a ride only generated $4 million a year. Good management could have easily eliminated the need for a fare increase.

Bear in mind that MARTA has never scrimped on executive compensation either. Beverly Scott was paid $371,000 last year. In her new job at MBTA, a much larger and more complex system, she'll have to scrimp by on a mere $220,000.

Damn...I'm totally in the wrong business.

[arjay57]

Originally Posted by researchnerd

Damn...I'm totally in the wrong business.

$20,000 a month doesn't go nearly as far as it used to.