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FOR IMMEDIATE RELEASE                                  CONTACT: LYLE V. HARRIS

SEPT. 24, 2012                                                                         404.395.4938



MARTA is today releasing the full draft report by the auditing firm KPMG focused on significant measures to cut costs, improve efficiency and generate revenues to re-position the Authority for long-term fiscal sustainability and growth.

The review was voluntarily undertaken by MARTA as part of a comprehensive, review of its internal management and operations that began last fall. KPMG, one of the nation’s leading audit firms, was charged with first assessing the opportunities and challenges facing MARTA and then making specific recommendations to address them.

The resulting 114-page draft details MARTA’s economic impact on the state and regional economy. For example, the agency had contracts with private companies totaling $288 million between FY 2010 and FY 2011 and is also responsible for supporting about 20,500 jobs across Georgia.

Aspects of MARTA’s operations were also ranked against transit agency peers in San Francisco, Denver, San Diego, Philadelphia and Utah as well as other regional transit providers in metro Atlanta.

The draft report identified steps MARTA has already taken to reduce costs and enhance efficiency such as freezing employee wages for five years, implementing unpaid furloughs for non-union staff, laying off 400 employees and raising the cost of employees’ medical premiums.

As part of its analysis, however, KPMG found that MARTA’s current economic model is “unsustainable” therefore requiring the agency to cut expenses by $25 million annually. Among the other key findings:

  • MARTA is projected to exhaust its reserves by FY 2018, and will fall below its mandated reserve levels by FY 2016
  • MARTA has an estimated $7.1 billion in unfunded capital needs through FY 2021
  • High rates of employee absenteeism cost MARTA about $11 million annually in additional benefits
  • MARTA’s annual retirement costs are $22 million more than the national average in the public and private sectors

The draft report detailed 12 operational areas that could be “sourced” by hiring third-party firms to perform specific functions, internally or externally. Those areas include payroll, computer support, customer service, recruiting, cleaning services and Mobility for paratransit customers.

In order to generate new revenues, the KPMG draft report states that MARTA should consider wrapping more of its vehicles with advertising, developing a billboard program for its properties and facilities, expanding food and beverage concessions, implementing a program for station naming rights, website advertising and charging fees for reserved parking at its lots.

“MARTA must make significant and fundamental changes to operations to avoid across the board cuts that will adversely affect operational and customer service,” the KPMG draft report concludes.

Frederick L. Daniels, Jr., Chairman of the MARTA Board of Directors, said the draft report represents a critical step in preserving the $6.4 billion infrastructure investment MARTA represents and maximizing its value for the future.

“I cannot overstate the importance of this report,” Daniels said. “This study is very important to all of us who are committed to ensuring that MARTA’s financial house is in order and transforming this agency for the benefit of customers who want, and need, the essential transit services we provide.”

An Audit committee meeting to discuss the draft report was postponed. Once the draft has been presented to the full MARTA Board, staff will determine the feasibility of implementing its recommendations. 

A full copy of the KPMG draft report is attached 





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