Pioneer: T needs to cut repair costs

Projects $500m in savings by cutting wages


A CONSERVATIVE-LEANING THINK TANK on Wednesday said the MBTA could save half a billion dollars over the next 10 years by curbing high wages at its maintenance facilities and reforming uncompetitive bidding practices.

At a press conference on the State House steps, the Pioneer Institute’s Greg Sullivan said the T’s maintenance employees are overcompensated compared to other public and private sector workers, resulting in work that costs too much. Sullivan, the state’s former Inspector General, said the T employs 60 percent more employees than other municipal transportation systems and pays them more. He said the top 10 highest-paid mechanics at the T earn an average salary of $134,000 a year and all of them as a group average $110,000.

“Would you bring [your car] to a garage that employs 60 percent more full- time employees being paid at a rate of $110,000 a year and expect to receive a reasonable bill?” Sullivan asked a crowd of mostly reporters.  

MBTA spokesman Joe Pesaturo questioned the Pioneer Institute’s data and analysis. In an email, he said each US transit system reports statistics differently, which makes comparisons difficult. He said the T will need to spend more time assessing the numbers to determine their accuracy, but he released a three-page compilation of figures entitled “Doing more with less,” which asserted that the agency has reduced its staff by 400 over the past five years, pays their mechanics a lower hourly wage than transit agencies in San Jose and San Francisco, and has reduced many generous retirement benefits in recent years.  Additionally, the three-pager said the MBTA’s bus maintenance cost per mile is significantly lower than transit systems in Washington, DC and  New York/ The report mentioned that the MBTA has outsourced busing services to a number of private companies.

Pesaturo suggested that transit agencies in different parts of the country may face different road conditions and therefore different maintenance costs. “One thing is certain, however, the MBTA has successfully managed its limited staff and resources to achieve maximum benefits,” wrote Pesaturo.  

Sullivan said he blames the so-called Pacheco law for the T’s problems rather than T management itself. The Pacheco law, passed in 1993, requires public agencies to prove that a privatization initiative would not only save money over the status quo, but over the level of efficiency state employees might achieve operating at maximum efficiency. The law also requires contractors to pay public-sector wages and pay the same percentage of their employees’ health care costs as government agencies do.

Sullivan said the Pacheco law explains why 25 firms expressed interest in bidding on the Bay State’s $1 billion commuter rail contract, but only two placed bids. “The MBTA commuter rail contract procurement is a case study for how not to generate competition for a large contract,” said Sullivan.  

Keolis America INC., one of the bidders on the commuter rail contract, has alleged that the incumbent contractor, Massachusetts Bay Commuter Rail, withheld critical information on employee benefits, making it difficult for Keolis to compete for the work.

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A former state representative from Norwood, Sullivan said the Legislature should give MBTA management more liberty in granting contracts to outside providers. “[The MBTA management] is handcuffed by a culture at the MBTA garages that’s called ‘don’t kill the job,’” said Sullivan. 

Jim Stergios, executive director of the Pioneer Institute, said there is almost no legitimate argument for keeping the Pacheco law.  “This is just about political muscle short and sweet,” said Stergios. “It is all about who has their bread and butter currently and does not want to lose the butter.”

Sen.  Marc Pacheco, a Democrat from Taunton who authored the 1993 privatization law, said the law combats corruption and waste, requiring transparency and cost-benefit analysis by the auditor to prevent state officials from handing their friends expensive contracts.  “It’s not whether private management or public management is better,” said Pacheco. “It’s whether you have good management.”