The newly selected director of the MBTA was required to undergo counseling with a business psychology consulting firm while she was running the mass transit system in Atlanta, a fact that state officials say they were not aware of when they hired her.
Beverly Scott’s relationship with her board of directors in Atlanta had grown so strained that the board in 2010 paid $144,000 to a business psychologist to help Scott and her leadership team improve their management styles.
After a preliminary, two-month round of interviews with board members and Scott’s senior staff, the business psychologist reported back to the board that Scott’s performance could significantly improve if, among other things, she met monthly with the psychologist “for individual coaching and consultation.”
The results of the full, yearlong evaluation and counseling of Scott and her staff did not become public as the consultations were underway. As the consultations wound down, Scott first told the board of directors in Atlanta in December 2011 that she would not seek renewal of her contract.
Scott’s five-year contract in Atlanta expires at the end of this year. Her total compensation is reported as $370,000 a year. She is scheduled to take over as MBTA general manager Dec. 17, under a three-year contract that would pay her far less — $220,000 a year.
Cyndi Roy, a spokeswoman for the Massachusetts Department of Transportation, said state officials learned of Scott’s evaluation and counseling by The Business Psychology Company LLC only after signing Scott to a contract. Roy said MassDOT was alerted to Scott’s evaluation and counseling by officials at the Atlanta transit system — called MARTA — after the Globe and reporters in Atlanta made inquiries to MARTA in the days after Scott accepted the T job.
Likewise, Roy said MassDOT was previously unaware of a major management audit of MARTA that was conducted in the months leading up to Scott’s candidacy for the T job. The results of that audit by the national firm KPMG were made public in Atlanta on the afternoon of Sept. 24, at the same time Scott was busy in Boston meeting with state officials to finalize her hiring at the MBTA.
The KPMG audit found MARTA to be in deep trouble, with a operating budget deficit of as much as $33 million a year, a shortfall that is being made up by dipping into reserves. The audit projects complete depletion of the system’s reserves in 2018. The “current economic model is unsustainable,” the audit said.
KPMG itemized tens of millions of dollars in potential savings that could be realized if MARTA privatized certain functions, restructured excessive compensation to employees, and curbed high absenteeism among its 4,500 workers.
“Successful strategies to reduce costs in healthcare, retirement, absentee, and workers compensation areas could save up to $50 million a year,” the audit says.
Roy said there’s no reason to rethink Scott’s hiring, based on either revelation.
Scott “took whatever feedback she got and made improvements, and that’s the hallmark of a good leader,” she said. “She will be an excellent leader.”
Further, Roy said “it is our understanding that she requested the audit to identify areas of improvement at MARTA.”
Scott, 61, a nationally known and well-regarded transit leader with decades of experience, was recruited by a three-person committee made up of Richard Davey, the state transportation secretary, and two members of the MassDOT/MBTA board of directors.The full board later confirmed her selection by unanimous vote. She declined a request for an interview for this story. Instead, a spokesman for the Atlanta transit system provided a statement to the Globe.
“The MARTA Board of Directors hired an organizational consultant to further assist its leadership team in building trust, promoting openness and fostering teamwork which has strengthened this organization to the benefit of our customers and our employees,” the statement said. “We stand by that decision which has enhanced individual and overall team performance.”
Walter Kimbrough, one of the MARTA board members who hired Scott in 2007, helped arrange Scott’s evaluation and counseling in 2010. He said in an interview that management problems were obvious and pressing and that the board felt a “moral obligation” to step in and do something.
“There was strong recognition by the board that assistance was needed,” said Kimbrough, who is no longer on the board.
Kimbrough said he, like others, was interviewed by the business psychology firm. “They wanted to know what was going on . . . to get at whatever issues might be existing,” he said. Asked whether Scott welcomed the evaluation and counseling, Kimbrough said, “I can’t say she happily accepted it.”
Liz Levin, a former member of the MassDOT/MBTA board who chaired the committee that recommended final candidates to the full board, said she was not aware of the The Business Psychology Company evaluation and counseling or the KPMG audit. She said she strongly supports Scott’s selection.
“She has so much energy and that for some people can be complicated,” she said. “She demands a lot of people. I never heard anything negative about her. She’s a good choice and we are lucky to get her.” She added that Scott was a “change agent, and that is often difficult and not always appreciated in an entrenched organization.”
In December 2011, at the time Scott told the Atlanta board she would not seek an extension of her contract, the position of general manager at the MBTA had been vacant for almost four months. However, MassDOT kept Jonathan Davis, the T’s chief financial officer, on as interim general manager for what will be almost a year after Scott’s decision to leave MARTA. One provision of Scott’s contract in Atlanta gives her a $125,000 bonus only if she completes her five-year term as chief executive officer and general manager, a bonus she appears likely to collect by using accrued vacation or other leave to stay on the MARTA payroll even after arriving in Boston in mid-December.
Scott, when she assumes her duties, will be the first T general manager in recent years to have not previously worked in either a local transportation or government position. She will also be the first African-American woman to lead what is the fifth-largest transit system in the country, with 6,500 employees and an annual budget of $1.8 billion.
In the first weeks of his tenure as the Patrick administration’s top transportation official in September 2011 , Davey publicly pledged to appoint the first woman to head the MBTA. Scott and another candidate for the position — a man — were invited to be interviewed by the MassDOT/MBTA board on Sept. 24, but by then the governor’s office had already signaled to MassDOT that Scott was to be selected,according to a Sept. 20 story in the Globe that cited people familiar with the selection process.
It was also on Sept. 24 that MARTA publicly released KPMG’s management audit.
Mike Jacobs, a state representative in Georgia who heads the legislative committee that oversees MARTA, said he knew nothing of the The Business Psychology Company’s evaluation and counseling until last month, when the Atlanta news media cited recently obtained documents in reporting the story as Scott prepared to leave for Boston. Her successor, Keith Parker, who headed mass transit in San Antonio, Texas, is to take over in Atlanta Dec. 10.
“Had it come to light earlier I would have made sure it got a full airing,” Jacobs said. “It’s cause for concern when a consultant is hired for this sort of purpose to address a major leadership position.”
He said there is no point in his looking into the matter any further. “She’s in the past for us,” he said of Scott.
“But,” he added, “not for Boston.”