T board makes budget choices – in public

AT A TIME WHEN MORE AND MORE of state government deliberations are taking place behind closed doors, the MBTA’s Fiscal and Management Control Board on Thursday debated and acted on a series of politically sensitive issues dealing with privatization, commuter rail, and paratransit service – and did so  in front of the press and public.

More than a dozen state lawmakers, T union workers, and advocates for the disabled and elderly crowded into the hearing room at the state transportation building to plead their cases for an hour-and-a-half. Then came a lively give-and-take between the five unpaid members of the board, state Transportation Secretary Stephanie Pollack, and T staff over the transit agency’s privatization philosophy, its ability to deliver on promised savings, and the ethics of running alcohol advertising in T stations.

What made the debate fascinating – by Beacon Hill standards – was that no one knew how it would turn out. In the carefully scripted world of Beacon Hill, the budget debate of the Fiscal and Management Control Board represented a rare example of live policy-making.

For example, MBTA officials last month unveiled a series of budget-balancing measures that included elimination of weekend commuter rail service. The pushback to that $11 million savings initiative was so strong that Gov. Charlie Baker took it off the table. On Monday, T staff proposed $6 million in unspecified commuter rail cuts, and then pulled that proposal off the table, too. The Fiscal and Management Control Board surprised everyone on Thursday when it green-lighted $5 million in commuter rail cuts, most likely by eliminating routes or trips that are under-utilized. Pollack called them “unproductive trains.”

In the end, the board unanimously approved a nearly $2 billion MBTA budget that includes $7 million for hiring 56 new employees in operations and $2.5 million for staffers expected to be brought in by a yet-to-be-hired general manager.

To make the budget ends meet, the board mandated $8 million in savings on bus maintenance work, $6 million in savings from privatizing in-station customer service personnel, $5 million in commuter rail service cuts, and $1 million in savings on paratransit service. The board also approved $2 million in new revenue initiatives, including dropping an existing ban on alcohol advertising on digital screens in T stations.

Overall, the board was less aggressive than T staff in pursuing privatization and wringing savings from paratransit service. The board concluded it will need $30 million of a $187 million legislative appropriation to balance the fiscal 2018 budget, with the balance going for longer-term capital improvements.

The budget hearing started with nine Democratic legislators urging the board not to privatize four bus garages and three Republican lawmakers telling the board to privatize away. The Legislature in 2015 gave the T a three-year exemption from the Pacheco Law, which restricts how public agencies can privatize public operations. Sen. Jamie Eldridge of Acton suggested many lawmakers feel the T board had already gone far enough in privatizing T work.

Rep. Sean Garballey of Arlington said the T board should look for savings wherever it can, but not at the expense of the union machinists at the four garages. Rep. Daniel Cullinane of Boston praised the T’s machinists as “the best in the country in terms of bus maintenance.” Rep. Mike Connolly of Cambridge urged the board members to incorporate “Massachusetts values” into their deliberations. “It is just shameful what we are doing to these employees,” he said.

Brian Lang, a member of the control board and a union leader himself, kicked off the deliberations by suggesting commuter rail cuts should be back on the table. He also said his preference would be to have  T staffers work with the machinists union to achieve savings rather than just turning the garages over to private companies. “If there’s a way to attain savings without privatization, let’s have that discussion,” he said.

Several board members raised the possibility of setting savings target for certain T operations and leaving it up to T staff to accomplish them. Pollack and board member Lisa Calise pushed back against that approach, urging the board to set clear priorities and savings targets. Monica Tibbits-Nutt, another board member, said the board cannot just pass the buck to T staff. “It cannot be aspirational,” she said of the savings targets. “They have to be achieved.”

Tibbits-Nutt said she doubted the T could carve $3 million in savings out of the budget for paratransit service, which is called The Ride. Board chairman Joseph Aiello said he was wary of opening the door to liquor advertising on digital screens in T stations, even if the ads didn’t run at times when school children were riding on trains.

On bus maintenance, board member Steven Poftak said he was skeptical the T could achieve $13 million in savings in fiscal 2018. T staff had recommended what they call a hybrid approach on bus maintenance. They favored turning over four bus maintenance garages to private firms, privatizing some operations at a fifth garage, and working collaboratively with the machinists union at a sixth garage to achieve savings. Poftak said $6 million in savings seemed like a more realistic number.

Board chairman Joseph Aiello seemed prepared to go along with Poftak, but other board members and Pollack said they thought the $6 million figure was too low.

Pollack, in fact, said she had trouble listening to the public testimony about privatization of bus maintenance. She said privatization of bus maintenance would not endanger public safety, as some lawmakers had suggested. She also pointed out that the state provides $80 million a year to regional transit authorities around the state and all of them provide service with private companies. “These comments are somewhat insulting to the RTAs,” Pollack said.

Baker’s transportation secretary also said Poftak’s $6 million savings figure was too low, given that $5 million is expected to come from working with the existing machinists union at the Cabot Garage to achieve savings that will still be far less than what a private contractor is charging the T on another contract. She said the T is paying three times more per hour for bus maintenance at its garages than the private contractor.

Lang suggested trying the collaborative approach being used at the Cabot Garage at the other four garages the T wants to privatize. That remark prompted a strong response from Tibbits-Nutt.  “The debate about public versus private workforces has to end,” she said, noting quality work is done by both public and private workers. “Quite frankly, we have a system problem here,” Tibbits-Nutt said. “The system is not working.”

Lang backed off a bit, acknowledging private sector and public sector workers both do quality work. But he said the T has exceptional machinists and his preference would be to work with them to achieve savings.

Poftak and Aiello said the T can’t wait for negotiations with the machinists union to yield savings. Aiello noted the T’s three-year exemption from the Pacheco Law ends next year. He and Poftak said the T must pursue privatization offers at the same time it negotiates with the machinists union for savings.

Lang said he would go along with Poftak’s approach as long as the board members would embrace the “spirit” of his proposal that the preferred approach would be working with the machinists union. The four board members agreed.

Mike Vartabedian, the area director of the machinists union, who watched the whole debate unfold, said after the meeting he was encouraged. “Hopefully it leaves the door open for us to come to some sort of agreement [with the T] to provide taxpayers with relief while keeping high-quality machinists working for the MBTA,” he said.

Vartabedian said he hopes the machinists can reach a deal similar to the one the T negotiated with the Carmen’s Union. The Carmen’s Union last year agreed to wage and work-rule concessions in order to preserve jobs. Vertabedian said the union has a lot of ideas for how to generate savings. “There’s a million things we could do,” he said.

As the board debate would down, Aiello circulated among individual members running numbers by them. The board eventually voted unanimously to approve the budget, but adopted different numbers than T staff in some areas. On bus maintenance, the board set a savings target of $8 million instead of the T’s $13 million. On paratransit service, they adopted a $1 million savings figure rather than the T’s $3 million. And they added $5 million in commuter rail cuts, which the T staff had zeroed out.

The MBTA initially urged the board not to use any of the legislative appropriation for operations expenses, but by Thursday had recommended tapping the funding for $28 million. The control board settled on $30 million, which Aiello described as 40 percent reduction from last year.

“We are clearly moving in the right direction,” Aiello said.