With Audit as Blueprint, MARTA Looks To Address Shaky Finances
A day after hiring a new general manager, the MARTA board today screeched back to reality with a nuts-and-bolts discussion of the financial challenges that lie ahead.
The meeting centered around a board-commissioned audit released last month.
In a lengthy presentation, representatives of the auditing firm KPMG reiterated the point that MARTA was on an unsustainable path.
“Without changes, MARTA will fall below the 10 percent minimum reserve funding requirement (as called for under the MARTA Act) and by [fiscal year] 2018, MARTA will exhaust its reserves, so fundamentally something has to be done,” said report author David Dennis.
The report shows MARTA is overspending by as much as $50 million per year. Much of those costs come from employee health and retirement benefits that are above the national average.
On the other hand, MARTA employees are among the lower paid transit workers in the country in terms of wages.
MARTA’s union has not responded to requests for comment, but MARTA employee Nikita Howard, speaking towards the end of the meeting, said she thought the report unfairly targeted workers.
“Why are so many represented jobs being attacked in this KPMG report and we don’t see the other side… these are numbers to these gentleman but to the union they’re people.”
About two-thirds of MARTA employees are unionized and their current three-year contract ends in June.
MARTA officials said they were hopeful the union would come to the negotiating table open to reform.
“We understand this is going to be tough,” said Robin Howard, MARTA’s chief auditing officer. “No one is really looking forward to this, but it really has to be done. The KPMG report provides a blueprint for our future and we can’t shy away from the difficulties and challenges that may arise from the negotiations.”
The audit also recommends privatizing some aspects of the transit agency, which board chair Frederick Daniels said would be an important consideration moving forward.
“Many people have said outsourcing means you’re giving away MARTA to someone else. We’re not giving up MARTA to anyone. We’re trying to put forth what is the most efficient system possible so we can reinvest in the system.”
Despite acknowledging unsuccessful attempts at outsourcing some services in the past, outgoing general manager Beverly Scott said everything would need to be on the table.
“The bottom line is if we don’t wind up changing, by the time we get to 2018, it’s going to be absolutely hit-the-wall. The organization will be absolutely unsustainable and that’s not acceptable”
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