Category Archives: Transportation

Federal Labor Lawsuit Accuses LAZ of Failing to Pay Overtime

Source: Robert Storace, The Connecticut Law Tribune, September 15, 2017

A Georgia man has filed a prospective collective action lawsuit claiming Connecticut-based LAZ Parking company violated federal labor laws when it failed to pay for overtime. The federal lawsuit filed Wednesday in U.S. district court claims Hartford-based LAZ Parking regularly does not pay assistant managers overtime in violation of the Fair Labor Standards Act. …

… The company has been the target of several lawsuits including at least one class action. Most recently, LAZ agreed to pay $5.6 million to settle a lawsuit with the Massachusetts Bay Transportation Authority. LAZ was accused of failing to detect and stop the theft of millions of dollars in cash belonging to the MBTA. Separately, the parking company agreed to pay $1.1 million to Massachusetts to settle allegations it failed to implement contractually-required revenue controls and auditing tools at 13 MBTA parking lots. LAZ is also a defendant in a February 2017 class action claiming the ParkChicago app resulted in false parking tickets. That suit is still pending. And, in 2010, LAZ paid $46,000 to settle a U.S. Equal Employment Opportunity Commission religious discrimination lawsuit. …

Labor Unions, Civil Rights, Progressive Groups Unite To Oppose ATC Privatization

Source: Aero News Network, September 13, 2017
 
The Professional Aviation Safety Specialists (PASS), AFL-CIO, along with 36 other unions, civil rights groups and progressive associations representing thousands of employees across the country, united to send a strongly-worded letter to lawmakers on Capitol Hill late last week opposing any efforts to privatize the U.S. air traffic control system. In addition to PASS, the letter was signed by the NAACP, the American Federation of Government Employees (AFGE), American Federation of State, County & Municipal Employees (AFSCME), American Federation of Teachers (AFT), Service Employees International Union (SEIU), United Steelworkers (USW), the Leadership Conference on Civil and Human Rights and many more. …

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Trump’s Dire Air-Traffic Claim Contradicted by Government Report
Source: Alan Levin, Bloomberg, September 7, 2017

Efforts to upgrade the U.S. air-traffic system are on budget and steadily improving flight efficiency, a government watchdog found, contradicting assertions by President Donald Trump and airline executives. Just as the House is set to debate a bill that would separate the air-traffic system from the Federal Aviation Administration, a Government Accountability Office report requested by lawmakers shows that the existing system is performing well, undercutting one of the chief arguments by proponents of the change. …

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Unions representing air traffic controllers, flight attendants support House bill to reauthorize FAA
Source: Kim Riley, Transportation Today, August 29, 2017
 
Two of Capitol Hill’s prominent aviation-related labor unions have found more than one thing to support in the House proposal that aims to reauthorize the Federal Aviation Administration (FAA).  Specifically, one of the main thrusts of the 21st Century AIRR (Aviation Innovation, Reform, and Reauthorization) Act, H.R. 2997, would be to transfer air traffic control (ATC) operations currently overseen by the FAA into a private, separate, not-for-profit corporation. The bill also would reauthorize FAA funding and other programs. …

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Opinion: Trump’s infrastructure order falls far short of his campaign promises

Source: David A. Super, The Hill, September 9, 2017

… With congressional Republicans allergic to finding new resources from anywhere except cutting programs for the poor and his own political influence flagging, the president has effectively abandoned his infrastructure plan without a fight. Indeed, his proposed budget would further starve already underfunded domestic programs — necessitating still more deferred maintenance — to fund a defense build-up and a ludicrously expensive border wall. Among the big losers would be wastewater treatment programs, the highway trust fund, and maintenance in our national parks.

Rather than press Congress for the infrastructure funding he has admitted we need, President Trump has shifted to blaming environmental regulations such as the Establishing a Federal Flood Risk Management Standard that limits building in areas likely to become flooded. Wildly exaggerating the role environmental reviews play in delaying critical infrastructure projects, his executive order would short-circuit environmental reviews of projects that could leave communities excessively vulnerable to natural disasters, destroy cherished recreational opportunities, or expose children in nearby communities to toxic chemicals. …

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Trump Wants States and Cities to Pay More for Infrastructure
Source: Daniel C. Vock, Governing, August 31, 2017

The White House envisions that a long-promised infrastructure package would streamline the federal approval process for major projects and also require states and localities to shoulder more of the financial burden for building them. It’s a shift in focus from the Obama administration, which had pledged to increase infrastructure funding but never came up with a long-term solution. … Mulvaney not only said they wanted to reduce Washington’s role in state and local projects but also offer new “incentives” to help them complete projects. “We’re trying to figure out how to use a little bit of [federal] money to generate a lot of money, to give state and locals the incentives to do stuff you might not otherwise do,” he said. …

Rebuilding Our Country Should Boost Good Jobs, Not Privatization Schemes
Source: Roxana Tynan, HuffPost, August 23, 2017
 
We’ve seen a decline in infrastructure spending the last several years, and The New York Times reports that “In 34 states, spending on government construction projects was lower last year than in 2007, adjusting for inflation. The trend has continued this year. Public construction spending in June was 9.5 percent lower than during the same month last year.”  As state budgets are cut, projects are halted. So where will this outpouring of money come from? Private investors will step in, with the promise of big tax incentives.  Companies will undoubtedly focus on projects that are the most profitable, keeping labor and supply costs down in the process, rather than on building the infrastructure that is most needed. …

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Construction of long-awaited Purple Line begins in Prince George’s

Source: Sara Gilgore, Washington Busines Journal, August 28, 2017
 
The latest investment in the 16.2-mile, $5.6 billion project is a $900 million infusion of federal dollars, including the $325 million already appropriated for the project — funding the Trump administration had proposed cutting but saved partly because the public-private partnership building the Purple Line could serve as a model for other U.S. transit systems. The Purple Line P3, to be funded by the federal, state and local governments and the private sector, is the largest in the country’s history.  The system’s construction alone will mean thousands of jobs for the state — more than 6,000 construction positions and more than 400 ongoing jobs — and is expected to generate millions of dollars in economic development. …

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MD: ARTBA: Purple Line legal woes seen as bad precedent for transportation P3s
Jim Watts, Bond Buyer, August 25, 2017 (subscription required)
 
A year-long legal delay in Maryland’s $5.6 billion Purple Line light rail system being financed as a public-private partnership poses risks for the future of similar transportation P3 projects, the American Road & Transportation Builders Association said in a brief filed with a federal appeals court. In its friend-of-the-court brief, ARTBA contends that federal Judge Richard Leon of the District Court for the District of Columbia misapplied the National Environmental Policy Act (NEPA) when he revoked the project’s environmental permits, stopping work on the project.  “Unless reversed, this precedent will have adverse consequences for complex transportation and related infrastructure projects across the country.” ARTBA said. “The district court’s holding injects new delay and litigation risks, thereby stifling the growth of this key financing mechanism to leverage and combine governmental and private dollars and responsibilities to meet the nation’s exigent transportation needs.” …

Purple Line P3 back on track for $900 million federal transit grant
Source: Jim Watts, Bond Buyer, August 22, 2017 (subscription required)

Maryland and federal officials will sign a federal funding agreement next week for a promised $900 million federal grant to help fund the construction of the $5.6 billion Purple Line light rail system being financed as a public-private partnership. The Purple Line would connect with the Washington Area Mass Transit Authority’s Metrorail system and Amtrak at several points on its 16-mile route through the Maryland suburbs of Washington, D.C. A spokesman for Maryland Gov. Larry Hogan said late Monday that the Transportation Department agreed to move ahead on the grant following “very productive, high-level conversations” between Hogan and Transportation Secretary Elaine Chao. …

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FAA airport privatization program grounded by financing concerns

Source: Jim Watts, Bond Buyer, August 24, 2017 (subscription required)
 
A 20-year-old federal pilot program of airport privatization has found few takers because of restrictions on how the Federal Aviation Administration allows private operators to fund related infrastructure projects, the Congressional Research Service said. A CRS report, released earlier this month, points to challenges that may lie ahead for the Trump administration, which says it is preparing a 10-year, $1 trillion plan that will focus on leveraging private investments in infrastructure through public-private partnerships.  The CRS focused on the FAA’s Airport Privatization Pilot Program (APPP), created by Congress in 1996 to increase airports’ access to private capital for infrastructure projects. Only two airports have been privatized since the law was enacted, and one of them, Stewart International Airport in Newburgh, N.Y., reverted back to public ownership after seven years in private hands. …

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Airport Privatization: Limited Interest despite FAA’s Pilot Program
Source: U.S. Government Accountability Office (GAO), GAO-15-42, Published: November 19, 2014

From the summary:
Since the FAA started to accept applications to the Airport Privatization Pilot Program (APPP) in 1997, 10 airports have applied to the pilot program (see figure). Of these 10, 2 were privatized, 7 did not complete the program, and one application is currently under FAA review. Public-sector airport owners’ objectives for full privatization varied, but the overriding reason cited was financial benefit. The 7 applicants that withdrew did so for varied reasons, such as changes in market conditions that reduced expected privatization benefits.

Several factors reduce both public and private sector interest in airport privatization in the U.S.—such as higher financing costs for privatized airports and the possible lack of state and local property tax exemptions. Also, while the APPP reduces some of the challenges to privatization that we identified in 1996, privatization still requires considerable time and cost to navigate. Furthermore, public sector airport owners have found ways to gain some of the potential benefits of privatization without ceding control under full privatization, such as entering airport management contracts and joint development agreements for managing and building an airport terminal.

The potential effects of airport privatization on airport efficiency, the federal aviation trust fund, federal tax revenues, and airport employees and concessionaires are difficult to determine. Privatization’s impact on these areas depends on many different factors such as how each airport privatization is structured, making it difficult to estimate the overall impact.

Different airport ownership and financing structures and motivations have driven more extensive overseas privatization efforts, as at least 450 airports around the world have been privatized to some degree. Stakeholders mentioned a variety of lessons learned from the U.S. and international experience, including ensuring public-sector due diligence, involving all stakeholders and creating a transparent privatization process. Stakeholders also provided a range of suggestions for modifying the APPP, from increasing the clarity of the program’s rules to reducing the federal role in airport privatizations.

Opinion: Judge orders O’Hare contractor to rehire workers who led strike

Source: Mark Brown, Chicago Sun-Times, August 23, 2017

Barnett and Subijano were abruptly fired from their jobs as private security guards at O’Hare Airport on April 13, 2016. Two weeks earlier they had joined other low-wage airport workers in a well-publicized, one-day unfair labor practice strike at O’Hare organized by the Service Employees International Union. The women’s employer, Universal Security Inc., contends it fired them because they made statements to the news media revealing “sensitive security information” about airport operations. That was always nonsense. They were fired because they had the nerve to publicly speak up about why they wanted to join a union, which included criticism of their limited training. …

Indiana bond sale to complete P3 takeover financing

Source: Nora Colomer, Bond Buyer, August 21, 2017 (subscription required)
 
The Indiana Finance Authority will price $180 million of highway revenue refunding bonds Wednesday to complete the financing piece of its takeover of a troubled public private partnership highway project.  The bonds will take out $210.7 million of bond anticipation notes issued by the IFA last week to redeem $246 million of private activity bonds as part of settlement agreements that terminate its contractual relationship with I-69 Development Partners LLC and put direct control of the I-69 Section 5 project under the Indiana Department of Transportation. …

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Indiana Highway Gives ‘Black Eye’ to Private Investment in Infrastructure 
Source: Cameron McWhirter, Wall Street Journal, August 9, 2017

At a time when Washington is promoting private investment in roads, bridges and other infrastructure, a 21-mile stretch of highway in Indiana provides what critics say is a cautionary tale.  The project, a partnership between the state and private investors, was signed by Vice President Mike Pence in 2014 when he was the state’s governor. It is two years behind schedule and only 60% built. The state is in the process of taking it over and will have to issue debt to finish it. …

If Pence Shapes Trump’s Infrastructure Plan, Who Would Profit? Who Would Pay?
Source: Lydia O’Neal and David Sirota, International Business Times, August 9, 2017
 
President Donald Trump’s $1 trillion plan to rebuild America’s infrastructure may be unprecedented in its size and ambition — but it promotes a controversial model championed by Vice President Mike Pence in his home state of Indiana. The Hoosier flavor is hardly surprising: After his gubernatorial experience with road privatization, Pence has been a public face of the White House initiative, and executives from financial firms that helped privatize Indiana’s roads are now the Trump administration officials sculpting the details of the national plan.  As that federal proposal now moves forward, Indiana’s experience with infrastructure privatization has become a political Rorschach test. Pence and his allies are extolling Indiana’s record selling control of major roads to private firms as an ideal model, arguing that such public-private partnerships prompted corporations to invest money in Indiana infrastructure that taxpayers would otherwise have had to sponsor. …

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MBTA union blasts Baker’s privatization plan

Source: Christian M. Wade, Gloucester Times, August 14, 2017
 
Union workers at the MBTA are pushing back against Gov. Charlie Baker’s plans to privatize bus maintenance, saying it will cost jobs and compromise safety.  Hundreds of workers rallied Thursday outside the MBTA’s Lynn garage, where they blasted Baker’s support for hiring private companies to take over bus maintenance.  “Gov. Baker has chosen to gamble with the taxpayers, the safety of riders and the livelihoods of these hardworking men and women,” said Michael Vartabedian, who heads the International Association of Machinists Local 264, a union representing 120 MBTA bus maintenance machinists. “We won’t let core public services like MBTA bus maintenance be dismantled and destroyed.” …

Senators, reps urge T: Negotiate with your workers instead of privatizing
Source: Nicole Dungca, Boston Globe, April 20, 2017

The state’s congressional delegation is urging the Massachusetts Bay Transportation Authority to negotiate with a machinists union in hopes of preventing dozens of jobs from being outsourced.  In an April 17 letter to Governor Charlie Baker and the state’s transportation secretary, Stephanie Pollack, the legislators called on the MBTA to negotiate with the International Association of Machinists Local 264 less than a week after the agency’s board approved a budget that could privatize dozens of jobs. …

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State Inspector General looking into MBTA deals
Source: Matt Stout, Boston Herald, Thursday, April 13, 2017

The state’s independent Inspector General has launched a “proactive” review of at least one of the MBTA’s newly outsourced contracts, bringing the first outside scrutiny to the T’s privatization efforts since the lawmakers granted it a waiver from the Pacheco Law. Inspector General Glenn Cunha’s office said the “interim analysis” — which is not required by law — will be led by a unit specifically created in 2009 to monitor MassDOT, the MBTA and its various programs. Cunha’s office declined to say which contract it’s scrubbing, but it will focus on one of two: a five-year, $18.7 million contract with Brink’s Co., to take over the T’s so-called “money room”; or a five-year, $28 million contract with Mancon to run a parts warehouse.

MBTA officials hope to can save $26 million in bus maintenance costs
Source: Nicole Dungca, Boston Globe, March 6, 2017
 
Massachusetts Bay Transportation Authority officials said Monday they want to solicit bids to privatize several of their nine bus garages to save about $26 million annually, a prospect that prompted dozens of union supporters to pack the agency’s weekly board meeting.  The MBTA spent about $132 million on bus maintenance during the 2016 fiscal year, and officials estimated that outsourcing the work to private companies could save $26 million annually, officials said.   Brian Shortsleeve, the MBTA’s acting general manager, said the agency must be “ruthless” in becoming more efficient. He has previously pointed to the MBTA’s bus maintenance costs as much higher than those of similar agencies. … The MBTA didn’t release a timetable for the bid process, but it has suggested it would make the change before the next fiscal year. … Officials are focused on privatizing four dilapidated garages in the Boston area, which are staffed by about 120 workers. … Officials also hope outside companies will find ways to cut about $5 million in costs at the Everett bus garage, and about $6 million at the Cabot Garage in South Boston, which will soon be used only for new buses. Workers at Cabot have also been “challenged” to bring their costs down to private-sector levels, Shortsleeve said. … If approved, the outsourcing would mark one of the largest privatization efforts under Governor Charlie Baker’s administration, which had pushed for more flexibility in outsourcing public jobs. The MBTA is already privatizing its cash collection and warehousing departments. MBTA officials have said that the threat of privatization has spurred union officials to reduce worker costs. In December, the MBTA’s largest labor group, the Boston’s Carmen’s Union, agreed to give up a bargained raise and cut wages for future workers to protect thousands of jobs from being outsourced. …

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The Untapped Wealth of American Cities

Source: Bruce Katz and Jeremy Nowak, CityLab, August 6, 2017
 
Americans who travel abroad sometimes wonder why many of our airports are lacking in comparison to the best international airports. Or they want to know why other nations seem to do a better job with public transportation and the management of other public assets, from ports to parks. The answers we are tempted to give are that we do not invest as heavily in public infrastructure as many other nations and that a market-oriented American ethos with an entrepreneurial culture prefers private solutions (cars versus trains) to public ones. … But there’s another answer: Compared to many other nations, in the United States government has more direct control of public assets such as airports, convention centers, and transport, water and sewer systems (just to name a few). And the government does not, for the most part, manage them well, failing to leverage the market potential and value of the assets they own. Far from being broke, many cities and counties have enormous untapped wealth, which could be used to finance not only infrastructure but investments in children and other critical needs. …

There is a better way, teased out in detail and with great authority in The Public Wealth of Cities, a new book co-authored by Dag Detter and Stefan Folster, two Swedish experts in public finance. The pair have studied public asset management and are promoting a third alternative to political management or full privatization—public ownership that relies on professional, private-sector management.… The authors’ core argument is a disruptive idea in public policy that links management systems, public asset value, intelligent financing, and the proper role of politicians in a democracy. …

Infrastructure Borrowing Drops as U.S. States Await Trump Plan Details

Source: Reuters, August 6, 2017

President Donald Trump arrived in office having promised a bold $1 trillion infrastructure investment plan over 10 years for roads, bridges, airports and transit systems crumbling by the day across the United States. But nearly seven months later the administration has produced few details on the future of federal infrastructure funding, one reason why state and municipal governments have issued fewer bonds to improve roads, water systems and other projects so far in 2017. … Through July, new municipal deals to fund transportation, utilities and power projects totaled $50.7 billion, down 19.4 percent from the same period last year, according to an analysis of Thomson Reuters data. That decline outpaces a broader drop in the U.S. municipal bond market overall, with total issuance down 13.1 percent thus far in 2017 to $201.7 billion. New deals have lagged since November’s post-election selloff, when state and local governments quickly issued bonds fearing potential policy changes and rate increases by the Federal Reserve.

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Lacking White House plan, Senate focuses on infrastructure
Source: Melanie Zanona, The Hill, August 4, 2017

Amid growing frustrating that President Trump’s infrastructure package keeps getting pushed to the back burner, some members of Congress are taking matters into their own hands. A bipartisan coalition from the Senate Commerce, Science and Transportation Committee has been discussing pushing its own bill if the administration doesn’t release something by the fall. The Senate Environment and Public Works (EPW) Committee has also been gathering input with an eye on drafting an infrastructure plan this summer. And several Republicans met at the White House last week to try to get the ball rolling there on the issue.

White House: Infrastructure bill remains Trump priority
Melanie Zanona, The Hill, July 31, 2017

President Trump remains committed to working with Congress on a massive infrastructure bill, White House press secretary Sarah Huckabee Sanders said Monday. The reassurance from the White House comes as GOP leaders have signaled that the timeline for Trump’s $1 trillion infrastructure package — which has yet to be unveiled — will likely slip to next year. “The president’s been very outspoken on the need for a massive overhaul to the country’s infrastructure, and that certainly is still a priority, both legislative and in any capacity that he has the ability to carry that out,” Sanders told reporters at the daily briefing.

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