Options to privatize MBTA service diminished under union deal
The agreement struck between the MBTA and Carmen's Union Local 589 on Monday ends the talk -- or threat -- of privatizing MBTA bus routes, but T officials said they do not intend to look past their ability to seek outsourcing options elsewhere.
As part of the revised and extended contract, the possibility of the T outsourcing the work of driving buses or operating trains on its current system is eliminated, both sides said, but the T retains the right to pursue privatization in other parts of the transit system.
Carmen's Union members currently operate T buses and trains for 2.4 million revenue-generating hours each year, and the new contract guarantees that union members will continue to operate services for the same 2.4 million hours. But anything above that level of service is not bound by the agreement with the union and the work could be given to the private sector.
"We have said, I have said, all along that the issue for the MBTA was not privatization as an ideological matter, but productivity and that we needed to either get productivity gains from our workforce or from the private sector," Transportation Secretary Stephanie Pollack said Monday. "And because the Carmen's Union came to the table and put on the table some meaningful -- insufficient initially -- but meaningful changes in wages and work rules that have now been negotiated into a comprehensive global agreement, I think we are confident that the new cost structure ... justifies the decision to protect a significant percentage of the work that is currently done by members of the Carmen's Union from being privatized."
Under the pressure of a more than $100 million structural budget deficit and an aging system whose more than $7 billion repair backlog translates into delayed trains and frustrated commuters, T leadership has turned toward privatization with the governor's and Legislature's blessing.
Already the T has privatized the operation of its money room to Brinks and is in the process of outsourcing work at its inventory warehouse. And the agency's Fiscal and Management Control Board (FMCB) in a Sept. 1 report signaled it might seek outsourcing of "those areas that make up about 85 percent of all costs, namely operations and maintenance."
In 2015 as part of the annual budget bill, the Legislature enacted a provision first initiated by the House Committee on Ways and Means to give the MBTA a three-year suspension of the so-called Pacheco Law, which requires a privatization proposal to be vetted by the state auditor.
That waiver from the Pacheco Law and the ability to outsource, Pollack said Monday, was "a critically important tool" in negotiating the new agreement with the Carmen's Union.
"It is my personal clear belief that without outsourcing on the table we would not have reached this agreement. We said from the beginning we need better productivity and we need a financially sustainable T, and if we need to go to the private sector to achieve those objectives, we were fully prepared to ... and we still have that option outside the core system," she said. "But because (Carmen's Union Local) 589 stepped up to the table and made a series of changes that allow us to save the money with our own workforce we don't need to do that with the core bus system either. But we still have the tool in the toolkit for outside the core bus system, we still have it for the other ones. So this is not about are you giving up Pacheco or not."
MBTA Acting General Manager Brian Shortsleeve agreed that the mere fact that the T now had the ability to privatize work helped to spur the union to come to the bargaining table.
"I think the goal of the Pacheco waiver was to enable us to reduce our operating expenses and drive productivity," he said. "In this case it's been effective because through an internal negotiation -- which was really driven by the waiver being in place -- we are able to achieve two of those goals. I would say it's been an effective waiver."
James O'Brien, the Carmen's Union president who led negotiations for the union, said that his organization took the T at its word that it intended to privatize union jobs and negotiated with that in mind.
"It was something that was out there that we had to take seriously," he said. "We are glad we were able to negotiate instead of being privatized and protect the current workforce that we have."
Though the jobs of 3,614 T employees represented by the Carmen's Union will be protected, Pollack said negotiations with the union included "a very detailed conversation about what is protected but also what remains available to the (FMCB) to continue the process of outsourcing where it makes financial sense."
Where outsourcing may make sense, Pollack said, is in the area of bus maintenance or any level of service above the 2.4 million revenue hours that are now guaranteed to the Carmen's Union. Pollack and Shortsleeve said it was important to the T to protect only a total number of man hours rather than specific bus routes or subway line operations in order for the T to maintain flexibility in scheduling, or expanding, service.
"As long as there is 2.4 million revenue hours of service going on, those are the Carmen's. If after we do our service delivery reset the T is delivering 2.6 million revenue hours of service, then it would be up to the T to decide which ones stay with the Carmen's Union and which ones they would deliver using others," Pollack said, referring to a planned revision of MBTA bus routes and schedules over the next few years. "It was very important to preserve the jobs but also to preserve the ability to evolve the bus system over time."
She added, "If there are new services -- say, a future overnight service -- that can be outsourced, if that makes sense."
That the union and T management could reach an agreement that protects jobs, addresses the T's financial concerns and that both sides are happy with, O'Brien said, shows "that through negotiation instead of privatization you can garner the same savings, if not more savings than you would have had."
The new agreement will also enable the T to outsource the jobs of driving the buses used when a subway line is shut down for construction, Pollack said. Now the T will be able to hire private companies to drive most of those buses, allowing the agency to schedule more than one bus diversion per weekend to allow crews to repair the system.
"Starting with next year's construction season you're more likely to see two or even more projects going on at the same time because we can hire as many people as we need to run the alternative service while we do shutdowns," Pollack said.
Ultimately, Pollack said, the agreement ratified Sunday by the union and Monday by the MBTA's FMCB represents "a reset in labor-management relations for the MBTA."
"It is critically important for our overall goal of fixing the MBTA -- both the organization that is the MBTA and the infrastructure that supports it and that our riders count on every day -- because this will allow us to put behind us any issues of labor-management disagreements with our largest union and go forward together to work to fix the T," the secretary said.
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