T abandons privatization of bus garages
Signs new contract with machinists that will save $4.1m a year
THE MBTA ON MONDAY abandoned efforts to privatize bus repair work at three garages after the union representing the existing workers agreed to wage and work rule concessions that will save the authority $4.1 million a year, an amount that was well below the original estimates of savings with privatization.
The deal was negotiated after Local 264 of the International Association of Machinists mounted a year-long long political campaign against privatization and the T’s bid to entice private sector operators yielded only one applicant who turned out to have a checkered past in Massachusetts.
The new contract with the machinists, who represent about 6 percent of the T’s workforce, is patterned after a similar contract with the much larger Boston Carmen’s Union that was negotiated last year. Both contracts protect the union’s existing workforce while offering the T concessions.
The new, four-year contract with the machinists slows the growth in wages and provides the T with more flexibility in deploying its workers. The union agreed to no increase in wage levels during the fiscal year that ends June 30, 1.5 percent increases in fiscal 2019 and fiscal 2020, and a 2.5 percent increase in the first half of fiscal 2021 and a 1.5 percent increase in the second half. The contract also sets up new classifications for workers so newcomers will start at lower salaries and have to work their way up.
According to a T handout, the agreement will yield $4.1 million a year in savings over the length of the four-year contract. When the T first began pushing the idea of privatizing several bus maintenance garages, it forecasted savings of $26 million annually. Several private companies said they could achieve $12 million in savings by privatizing just two garages.
But after the union launched its campaign against privatization, which was backed by many of the state’s Democratic politicians, only one company bid on the contract. The company, First Transit of Cincinnati, had walked away from a contract to operate the T’s paratransit service in 2012 and subsequently had to pay a $7.3 million legal settlement to resolve the issue.
Until Monday, the T had refused to confirm First Transit was its only bidder. T General Manager Luis Ramirez acknowledged the dearth of applicants on Monday, but insisted “the process went well.”
Jim Stergios, executive director of the Pioneer Institute, a conservative think tank that had lobbied hard for privatization, said the prospect of contracting service out to private companies gave the T leverage at the bargaining table but much more was possible.“Privatizing bus maintenance at even just three garages would have given the T a side-by-side financial comparison with authority-run garages and, importantly, hard data to overcome future anti-privatization decisions by the state auditor under the Pacheco Law,” Stergios said in a statement. “In a rapidly changing sector like transportation, outsourcing is about a lot more than saving money. It’s about taking advantage of technological advances, service quality improvements, access to purchasing networks, staffing efficiencies, and time and quality standards offered by private companies. The Legislature took a bold step when it gave the Fiscal and Management Control Board authority to generate savings through competitive procurement. If this is the control board’s last big push to use the Pacheco Law exemption, it went out not with a bang but a whimper.”
The Carmen’s Union contract allowed the T to privatize operations outside the core service. The machinist contract does the same, giving the union’s members the repair work associated with the T’s existing fleet of 955 buses. If the T expands its bus fleet, the agreement allows the transit authority to use private contractors, but only if they maintain the same procedures and quality standards followed by the machinists.