THE UNION REPRESENTING EMPLOYEES in the MBTA’s cash collection and counting operation said on Monday that privatization of the work will yield savings of $330,000 in the first year, not the $5.4 million claimed by T officials.
Patrick Hogan of the Boston Carmen’s Union told the MBTA’s Fiscal Management and Control Board that an analysis based on the limited available public information suggests the true cost of outsourcing the work to Brink’s Inc. will be higher than the T is forecasting and the actual cost of retaining the existing money room operation is much lower than claimed.
The T board approved privatization of the money room operation on Oct. 6 after receiving a briefing estimating the full cost of the existing money room operation at $11.8 million. The Carmen’s Union analysis removes $2.8 million included to cover inadequate set-asides for retiree healthcare and pensions (CommonWealth has also removed that amount in its reports), leaving the T’s estimate of current costs at $9 million. The contract with Brink’s is for $3.6 million, yielding the T’s estimate of $5.4 million in cost savings.
The Carmen’s Union analysis says the T overstates the number of employees needed to operate the money room operation by 25, which means the actual cost of running the money room operation is $5.5 million, not $9 million. The analysis also says the true cost of the Brink’s contract is $5.1 million, not $3.6 million, because wages for at least five managers to monitor the contract were not included in the estimate. The analysis also says the T underestimated costs savings from shifting the existing money room employees to bus driver positions.
The Carmen’s Union analysis was done by The Labor Bureau Inc., a Virginia-based consulting firm that does work for labor organizations. Hogan said the analysis was limited because so little information on the Brink’s contract and the existing operations has been released.
“There are no publicly available source documents for members of the press and the public to evaluate this outsourcing proposal,” Hogan said. James O’Brien, president of the Carmen’s Union, said the T’s audits of the money room and other documents were never released. “There has been nothing transparent, or just, about this process,” he said.
Brian Shortsleeve, the chief administrator and acting general manager of the T, said the transit agency would be reviewing the number of employees needed to manage the Brink’s contract, suggesting there may be some validity to that criticism by the Carmen’s Union.
For all other details about the costs associated with the existing money room, Shortsleeve referred reporters to an audit conducted by the accounting firm KPMG. The three-page audit includes most of the numbers the T is using, but a cover letter written by KPMG partner Shawn Warren indicates that all the figures, which he refers to as the schedule, were compiled by T management.
“The schedule and related notes to the schedule, including any assumptions used in the preparation of the schedule, are the responsibility of management,” Warren said in his letter. “The schedule has not been subjected to any auditing procedures, and accordingly we do not express any opinion or provide any assurance on the schedule or related notes.”