Baker taking pass on Pacheco Law

THE BAKER ADMINISTRATION is showing no signs it will push the Legislature for an extension of the MBTA’s three-year exemption from the Pacheco Law, which regulates how state agencies can privatize services.

“At this time we are not planning to seek any changes in that,” said Stephanie Pollack, Baker’s secretary of transportation. “We have not had any conversations about that at this time.”

Joseph Aiello, the chairman of the MBTA Fiscal and Management Control Board, indicated the five members of the panel have discussed what to do about the Pacheco Law. He said the board’s position is likely to emerge later this month when the board releases its longer-term strategic plan.

At Gov. Charlie Baker’s request, the Legislature in 2015 granted the MBTA a three-year exemption from the Pacheco Law.  That exemption is scheduled to expire in June 2018 and Baker, who is coming up for reelection next year, has filed no legislation to extend it. The governor may be wary of getting into a fight with the Democratic-controlled Legislature, where support for the Pacheco Law, particularly in the Senate, is strong.

Pollack and T officials have called the suspension of the Pacheco Law a key tool in their tool box as they go about fixing the T. When the T’s largest union agreed to wage and work-rule concessions in order to protect their jobs, Pollack said the agreement wouldn’t have been possible without the suspension of the Pacheco Law.

Brian Shortsleeve, the chief administrator and acting general manager at the T, on Monday briefed reporters on the transit agency’s latest privatization initiative – a proposal to turn bus maintenance work at four repair shops over to private firms. As he has with earlier proposals to privatize the T’s money collection and warehouse operations, Shortsleeve said outsourcing services is important in helping the T reduce costs and improve service.

“It’s been an invaluable tool,” he said of the Pacheco Law suspension, noting privatization has been responsible for $400 million in savings.

But Shortsleeve begged off when asked whether he thought the Baker administration should pursue an extension of the Pacheco Law suspension. “I’m going to leave that up to the governor and the Legislature,” he said.

The three-year suspension of the Pacheco Law was included in the state budget approved in mid-2015. The House had supported the suspension while the Senate did not; the measure was included in the final budget proposal as part of horse-trading between a handful of lawmakers from both branches.

State Auditor Suzanne Bump, who is charged with enforcing the Pacheco Law, has said all of the T’s privatization efforts so far could have been done without suspending the law. On a recent CommonWealth podcast, Bump reiterated her view that her office is not a roadblock to privatization.

Senate President Stanley Rosenberg said the Senate would likely oppose any measure to extend the Pacheco Law suspension at the T, partly because of Bump’s comments. “All of the outsourcing and privatization requests related to the MBTA could have taken place under the Pacheco Law anyway, based on Auditor Bump’s analysis,” Rosenberg said in a statement. “So the suspension up until now hasn’t achieved anything that couldn’t have been done. The Senate opposed suspending the Pacheco Law when it was first proposed, and I expect that if a request is made to extend the suspension that the Senate will oppose it again.”

Shortsleeve is seeking approval from the T’s oversight board to issue a formal request for proposals to handle maintenance at the T’s Quincy, Arborway, Lynn, and Fellsway garages. All of the garages are in serious disrepair, but three bus maintenance contractors (Transdev, MV, and First Transit) have suggested informally that they could do the work in the existing facilities and save the T significant money. The T currently employs 120 workers at the four facilities.

Mark Aesch, the CEO of TransPro, a Florida-based consulting firm hired by the T, said 74 percent of the T’s existing bus maintenance cost of $132 million is labor, yet he nevertheless suggested that private operators could take the work over and hire the same MBTA workers at their same salaries and achieve savings of as much as 50 percent.

Aesch said such huge savings were possible because the firms would introduce new technology, bring in new management, lower staffing levels, and require workers to comply with standardized repair times. “It will look very different,” he said.

Union officials and workers turned out in force at Monday’s Fiscal and Management Control Board meeting to protest the T’s steady drumbeat of privatization. Craig Hughes, who represents the MBTA’s bus maintenance workers, said the private employers won’t pay the same wages and benefits as the transit agency. He also disputed some of the T’s cost analysis. “It doesn’t add up to me,” he said.

Shortsleeve said he wants to see if T workers at the Cabot garage in Boston can match the savings private firms say they can generate. The Cabot garage is the T’s newest bus repair facility and next year it will be handling maintenance for brand new buses still under warranty. Shortsleeve said the situation provides an opportunity to see if unionized T workers and managers can compete with the private sector. Aesch said he believes the T operation at Cabot would have to trim costs by $6 million a year to compete.

“Competition’s a good thing. It drives innovation. It drives productivity,” Shortsleeve said.

But members of the Fiscal and Management Control Board weren’t ready to approve the bus maintenance proposal on Monday. They asked for more information on where the savings would come from and also wanted to explore in greater detail the bus maintenance facilities themselves. Members wanted to know if they should authorize repairs at the facilities and whether an additional, new facility should be built.