Taking MARTA private

Moderated by Tom Sabulis

MARTA’s board of directors, writes the leader of the transit agency’s oversight committee, needs to implement recommendations of a new audit which finds that MARTA can realize immense savings by outsourcing several jobs, such as payroll, cleaning services and paratransit service. The opposition says privatization in Atlanta has a track record of failure and the transfer of public assets from government to the private sector hurts ordinary people for the benefit of select profit-seekers.

Commenting is open following Paul McLennan’s column below.

By Mike Jacobs

MARTA is the primary means of transportation for many poor and disadvantaged citizens in metro Atlanta.

MARTA also should be striving to become the transportation method of choice for citizens who are able to choose how to commute from here to there.

Against this backdrop, it is incredible that MARTA has raised fares twice in the past three years.

We now know that inefficient management is to blame for the fare increases and other financial woes of the beleaguered agency.

We know this from the new 114-page audit performed by the national firm KPMG, which finds, “MARTA’s current economic model is structurally unsustainable with costs projected to be greater than revenue for each year through 2021.”

It’s time for MARTA’s board of directors to get serious about fixing its dire balance sheet by implementing the recommendations of KPMG.

MARTA should not put this audit on the shelf and fail to act, like on many studies before it.

Primary among the firm’s suggestions is the outsourcing of seven business functions at MARTA including payroll, employee records and accounts payable which could result in savings of $17 to $27 million over five years.

This is a no-brainer for an agency that needs to transform its operations and culture.

KPMG’s audit also offered the idea of hiring private contractors to run five other operations including cleaning services, customer care and the highly expensive paratransit services. That savings could total $43 to $115 million over five years.

There is no time to wait, according to the auditors, particularly since costs such as high absenteeism rates and overly generous healthcare and retirement plans have created a massive hole in MARTA’s budget.

Thanks to its union, MARTA’s employees have liberal benefits including healthcare plans with lower employee contributions than the national average and a defined benefit pension instead of a 401k plan.

MARTA could save $59 million with modest changes to healthcare and save $34 million assuming it gradually moved to a 401k plan, one common in the private sector.

Of course, these sorts of changes will require MARTA management to demonstrate some real backbone in upcoming collective bargaining negotiations.

With so much red ink on the books, the MARTA board should not stop their cost-saving efforts at implementing the KPMG recommendations.

They should look to other nearby transit systems for tips on how to operate without such massive debt.

If we turn to Cobb and Gwinnett counties, for example, we may find answers. In each county, a private operator is utilized to run the entire bus system.

MARTA is a state-authorized authority. Its enabling law is a state law. The General Assembly’s approach with respect to the KPMG audit findings is likely to follow the advice of Ronald Reagan, “Trust but verify.”

The MARTA board states publicly that they plan to implement the KPMG recommendations, so they should not mind if privatization measures are added to MARTA’s enabling law.

In our current economic environment, we must consider all creative ideas to keep MARTA afloat. If the private sector can execute some MARTA functions more cost-effectively than MARTA does, there is every reason to make it happen.

Rep. Mike Jacobs, R-Brookhaven, is chairman of MARTOC, the legislative oversight committee for MARTA.

By Paul McLennan

For years now, there has been discussion at the state legislature about privatizing MARTA. In recent weeks, it has intensified. The chairman of the MARTA legislative oversight committee MARTOC, Mike Jacobs, has said that “privatizing some MARTA functions is essential.”

Privatization is being presented as a necessary move because of MARTA’s ongoing financial crisis. MARTA predicts a $33.29 million deficit in this year. Just as we saw with Grady Memorial Hospital or the proliferation of charter schools, seizing public services by private interests is the preferred choice of many politicians when dealing with financial problems of institutions.

What does privatization mean? Essentially, it is the transfer of public assets and services owned and performed by government agencies to businesses and individuals from the private sector. Privatization results in the replacement of public participation and institutional responsibility with a profit motive. Private sector decision making is private – the community has no rights to discuss and make policy. Instead of people governing, markets govern. Instead of service-providing, making money becomes the driving force. The people who suffer the most from this policy are those who have been traditionally marginalized from the seats of power – the poor, the working class, people of color (especially women), and those with disabilities.

Who is responsible for the fact MARTA is continually in crisis? The answer is found in MARTA history. MARTA was a public system set up to fail because of its funding structure. MARTA’s operating budget depends on what it collects at the fare box and the one-cent sales tax that Fulton, DeKalb and the city of Atlanta agreed to levy in 1971 in order to create the system. For racist reasons, Gwinnett and Clayton rejected the sales tax and refused to join. This meant a “metropolitan” system was reduced to serving just two counties.

The other huge factor in this set-up has been the fact that MARTA is the largest transit system in the country to receive no operating help from the state.

Privatization has a proven track record of failure. The privatization of the Atlanta water and sewer system in 1999 led to the city cancelling its contract with United Water after four years of terrible service. MARTA brought back in-house its paratransit service in 1997 because of all the problems with the private contractor, Dave Transportation. In 2004, the British multinational, First Transit, began operating the C-TRAN buses in Clayton County. Three years later, MARTA took over the service.

The bottom line is that the profit motive has no place in public transit. There are some necessary services that a society provides that are not designed to make a profit – fire, police, libraries, schools and mass transit.

Other funding mechanisms, including state funding, must be found to restore MARTA to its rightful place at the core of any regional system that will be developed in the future. In order to correct the racist history that has had such influence on the lack of development and maintenance of MARTA, it will take a social movement led by those most affected – transit dependent riders and transit workers – to demand that MARTA remain in the hands of the people not the profiteers.

The Atlanta Public Sector Alliance urges all residents of metro Atlanta to stop this takeover of public assets for the enrichment of a private few. Let’s organize for a regional transit system that is just and equitable, democratic and well-funded, with universal design to facilitate the mobility of all. Only a public MARTA can achieve these goals.

Paul McLennan is an organizer for the Atlanta Public Service Alliance.

11 comments Add your comment

sam

October 10th, 2012
11:48 am

Privatize? Great idea! We did it before.

We had streetcars and a great bus system up until the early 60’s

The city sold it to GM who promtly closed down all the streetcars and decimated the bus service.