CATS managers call consultant’s report ‘worthless’

Capital Area Transit System managers are fighting back against a consulting firm’s report that last month recommended the bus system use outsourced managers from a transit management firm.

CATS management provided written responses to the CATS board members calling the TMG Consulting firm analysis “useless” and “worthless.”

“Based on the magnitude of errors, misrepresentations and omissions, this report was useless,” says a report earlier this month that was signed as coming from “the CATS Management Team.”

CATS solicited the report in October, asking the consulting firm to evaluate the bus system’s management structure.

In January, TMG provided a report to the CATS board recommending it solicit a two-year minimum contract for managers with the option to move into delegated management — which they defined as a private firm contracted to manage, operate and maintain the entire system.

The report acknowledged that contracted management, as recommended, is more expensive than hiring someone directly.

But the report also suggests that CATS invest more money in administration because strong administrative leadership will be required as the bus system expands its operations, using the additional money it is receiving as a result of last year’s successful tax election.

“TMG Consulting stands on our analysis and recommendations as included in our report to the CATS board,” Dwight Norton, senior analyst for TMG, said in a Feb. 19 email seeking response to the management critiques. CATS submitted two responses — one representing the full management team and a separate one from Chief Financial Officer Gary Owens — taking issue with TMG’s evaluation of CATS.

CATS managers took particular exception to TMG’s insistence that the agency spend more on its administrative staff.

The TMG report states: “CATS operations is growing at the expense of and not in concert with the administrative staff.”

Owens wrote that TMG based that claim on information “which was flawed to the point of being worthless and is very misleading to an uninformed reader.” TMG’s report also says CATS had not planned employee raises or new positions in budgets for 2013 and 2014.

Owens wrote that CATS has planned a 3 percent across the board pay increase for 2013 and will spend $380,000 for new administrative hires and $854,000 for new bus operators.

Owens said the mistake in TMG’s report was based on an error on his part because he did not provide the consulting firm with the budget information that reflected these changes.

Owens also pointed out that elements of CATS’ budget were often compared to a peer average used by TMG. He said those comparisons were unfair because the peer agencies the consultant used and CATS classified elements of their budgets differently.

“This is truly comparing apples to oranges and renders TMG’s analysis meaningless,” Owens wrote.

The TMG report says CATS spends 10 percent on administrative costs, which is short of the 19 percent peer average for administrative costs.

Owens, however, said CATS is actually allocating 20 percent of funds to administrative costs, which is in line with the peer average.

“Much of what is proposed by TMG is in direct conflict with what was voted for in April 2012,” the management response says. “Voters voted for a robust transit system, not a robust administration.”

The management response also takes issue with comments TMG officials made to the media. TMG President Anthony Mumphrey told The Advocate on Jan. 15 that a transit management firm has “expertise, it has coordination, it’s a team …. Do you hire a bunch of guys on the sandlot or do you hire the Green Bay Packers?”

Mumphrey said the firm’s written report was intended as a commentary on the structure of CATS management, and not a direct attack on specific managers currently working there.

CATS management responded to the consultant’s report by calling TMG a “sandlot consulting group,” referring back to Mumphreys’s quoted comment.

“The management team found the TMG media comments to be unprofessional, condescending and profoundly separate from what the scope of work was,” the management response says.

Norton, the TMG senior analyst, said TMG’s views were confined to its report to the CATS board.

“Media reports of our analysis and conclusions are not necessarily TMG Consulting views or recommendations,” Norton said in the email.

The CATS board has been hosting finance and executive committee meetings on a weekly basis, prompted by the TMG report, to discuss potential changes to the management structure. Some board members, however, have expressed skepticism over TMG’s recommendations.

Isaiah Marshall, the CATS board president elected this week, noted the board accepted TMG’s report without recommendation.

“The staff responses do not change the decision to accept the report with no recommendation,” Marshall said.

At a recent meeting the board considered, without taking action, to temporarily bring in a project manager from a private firm to oversee the bus system’s transition.

The board was expected to make a recommendation and allow staff to weigh in at a meeting scheduled Friday; however, Marshall postponed the meeting until March 8.