MARTA union predicts bumpy road for privatization

Source: Steve Visser, Atlanta Journal-Constitution, May 7, 2013

But a Columbia University economist, hired by the Amalgamated Transit Union, contends the KPMG study that recommended that MARTA explore privatizing those areas is a severely flawed guidebook… MARTA officials contend that the KPMG management audit is their “road map” to stabilizing the authority’s finances. They have acknowledged the upfront costs to privatizing certain services may be more costly in the start-up years and some KPMG areas might not result in savings. Still, Parker’s plan to be running a surplus within five years closely tracks the KPMG recommendations. … But Sclar contended the increased costs often continue because the transit agency has to add bureaucrats to manage its contracts with private companies and that contracts ultimately often cost the public more in terms of worse service and deferred maintenance. He said even the KPMG study found that MARTA’s back office staff performed better than Denver transit system, which outsourced 40 percent of its employees….
With privatization, 800 MARTA jobs could be cut
Source: Steve Visser, Atlanta Journal-Constitution, March 13, 2013

MARTA privatization plans might cut nearly 800 jobs from the system, although transit officials are downplaying that number, which would be nearly 20 percent of the workforce.General Manager Keith Parker, an advocate of judicious privatization, acknowledged a management audit says the transit authority might eliminate nearly that number by outsourcing functions such as cleaning and para-transit service over five years, but he believes many of those people might transfer to whatever private company that will be performing the service…Union officials and other analysts, however, contend privatization usually mean forcing down wages and benefits and cutting jobs because private companies need to perform the same work at a lower cost while making a profit….

Fight over Atlanta mass transit raises race issues
Source: Ray Henry, Associated Press, February 17, 2013

A proposal to change the power structure of metro Atlanta’s mass transit system raises the complicated politics of race in Georgia…. His bill, even if unintentionally, has political consequences that unfold along race lines. It would keep MARTA’s board at 11 voting members but change who appoints some of them….Others aspects of Jacobs’ plan would privatize back-office support functions to save money, put limits on MARTA’s debt and eliminate a defined-benefit pension system for new unionized workers. In return, Jacobs’ plan would extend a temporary suspension of a rule forcing MARTA to spend half of its revenues on its capital budget — a restriction that is unique in state government….

Private operations for MARTA?
Source: Moderated by Tom Sabulis, Atlanta Journal Constitution, Atlanta Forward blog, September 24, 2012

Following the failed transportation tax referendum — and with a major audit of MARTA about to become public — one local leader says the transit system requires a transformation through funding and governance. Privatization is not a panacea, but should be carefully explored. Another expert writes flatly that MARTA went wrong favoring rail over buses, and privatization would save $400 million.

MARTA Releases Draft Management and Operations Review
Source: MARTA, Press Release, September 24, 2012
…The draft report detailed 12 operational areas that could be “sourced” by hiring third-party firms to perform specific functions, internally or externally. Those areas include payroll, computer support, customer service, recruiting, cleaning services and Mobility for paratransit customers….

Leave a Reply