Private fixes for MARTA?

Moderated by Tom Sabulis

MARTA privatization is the focus of House Bill 264, currently in the General Assembly. State Rep. Mike Jacobs writes about cost savings the private sector could bring to the strapped transit agency. But the transit union argues the bill will mean lost wages and jobs.

Commenting is open below Curtis Howard’s column.

Private-sector fixes needed for MARTA

By Mike Jacobs

It’s no secret that MARTA, metro Atlanta’s flagship transit agency, is in dire financial shape. If necessary changes are not made, MARTA will continue to run an annual deficit of about $30 million, and costs are projected to outstrip revenues every year through at least 2021.

MARTA provides some services that are worthy and essential but carry an astronomical price tag. For example, MARTA’s paratransit bus service picks up and delivers the disabled and elderly. But at a cost of $50.43 per trip per rider — compared to the $4 fare actually charged each passenger — the price is unbearable. Estimates say the average new-car payment last year was $452. For frequent users of paratransit, it’s almost cheaper for MARTA to buy a new vehicle for each passenger and have someone drive them than to retain this service.

That is why the General Assembly is moving forward this session with House Bill 264, to require the MARTA board to competitively bid paratransit to the private sector so it can operate at lower cost. When private companies compete for contracts, costs drop for taxpayers, and the service usually is much better. Private companies may also retain current employees if they are doing a good job.

KPMG released an audit last fall that said MARTA could achieve as much as $15 million to $43 million in savings if a private company provided paratransit bus service. Both Cobb and Gwinnett counties utilize private companies to operate their entire bus systems.

HB 264 also follows the lead of the private sector in other ways. According to the KPMG audit, only 41.7 percent of private-sector companies had “defined benefit” or fixed pension plans. MARTA is spending $22 million more than the national average on retirement annually — even above other public-sector pension plans — and it should follow the trend and embrace the 401(k) “defined contribution” model

HB 264 would prohibit all new employees hired after Jan. 1 from joining the pension system. This would require MARTA to embrace a defined contribution system so new employees contributed to their own pension accounts.

The legislation also requires privatization of back-office functions within five years — accounting, human resources, recruiting, data collection, telephone operations, information technology, computer support, workers comp processing, customer care hotlines and bus and train cleaning.

All of these critical financial reforms have prompted MARTA’s employee union to lash out. Nevertheless, it is time to end the sweet deals that in part have caused the transit agency’s red ink and two fare hikes in three years.

What MARTA pays for in bonded debt is likewise startling. Debt repayment equals about 42 to 43 percent of MARTA’s prior-year sales tax collections. MARTA’s debt is anticipated to increase every year for the next 10 years. HB 264 requires MARTA to reduce its debt to 40 percent of sales tax collections within three years and 35 percent within six years.

Metro Atlanta deserves a flagship transit agency that is poised to grow and thrive. This cannot happen if MARTA’s business practices — many of which date to the 1970s — continue to hold the agency hostage to red ink.

Mike Jacobs, R-Brokkhaven, is chairman of the MARTA leigslative oversight committee.

Outsourcing slashes services and jobs

By Curtis Howard

Pundits who say government is sluggish and complain about political gridlock missed a Guinness Book of World Records entry last week at the State House.

In what seemed like record time, a so-called MARTA privatization bill was passed out of the Transportation committee, first by allowing state Rep. Mike Jacobs, who chairs the MARTA legislative oversight committee MARTOC, to filibuster for nearly an hour, after which public comments were shut down.

The next day, citizens were prevented by full committee Chairman Jay Roberts from exercising their right to speak to their elected officials on a bill that could cost the city three-quarters of a billion dollars over 10 years by violating federal laws protecting workers.

Attendees had already listened to a disingenuous defense of his bill by Jacobs, which will turn over nearly a dozen job titles to private companies, one of which is the French company Veolia Transportation.

This bill should be forever known as “The Veolia Gravy Train.”

The business of Jacobs and other politicians across the country is to reduce the wages, benefits and pensions of American workers.

Profits made by outsourcing and service cuts will be taken out of our economy and shipped to France. Seven hundred MARTA workers — whose ancestors helped build Atlanta — may lose their jobs.

Jacobs said his bill will “bring MARTA into the 21st century.” Actually, it could return us to the early 20th century (and the mid-19th century on wages), when private transit companies bribed city officials for franchises. The companies were corrupt and the service so bad that municipalities had to take over the companies.

Recently, the MARTA workers’ union asked for public documents, including the actual detailed numbers from the KPMG report on how MARTA will save money by “outsourcing.” At first, MARTA CEO Keith Parker said we could have them, but later said the numbers will not be released because KPMG considers them “proprietary.” That’s an absurd claim; we all paid for the report.

Parker and Jacobs also made stunning admissions to us last week: They never saw the KPMG numbers, so they don’t really know if the bill will save or lose MARTA money.

Who makes public policy this way?

Before the bill was introduced, Veolia officials were on MARTA property inspecting operations. The company has a history of hiring political insiders to do its bidding. In Georgia, former state Sen. Chuck Clay is the lobbyist for Veolia. In Phoenix, it was a friend of the mayor. In New York, it was former U.S. Sen. Alphonse D’Amato.

Jacobs said outsourcing “works well” in Nassau County, N.Y., where Veolia is making money by slashing service by 60 percent and proposing fare hikes. In West Palm Beach, Fla., paratransit service was outsourced, and it has been such an abysmal failure that some lawmakers are clamoring for the government to take it back.

“Privatization” of MARTA is highway robbery and should be stopped in its tracks.

Curtis Howard is president of the MARTA chapter of the Amalgamated Transit Union.

15 comments Add your comment

BPJ

February 19th, 2013
6:36 pm

Yes, certain functions can and should be outsourced, if the private companies can be chosen on merit rather than campaign contributions to legislators. On the other hand, the basic function of providing transit is a public service which should be underwritten (as it is everywhere else) by taxes, from both local and state governments. As hard as it may be for some to believe, those of us who live in Fulton and DeKalb do pay state taxes, and we should have some say in how OUR state taxes are spent.

Robert

February 19th, 2013
4:57 pm

also, change from GRTA Xpress to MAT Xpress as well.and new hours of operation:weekdays, 4am-1am. weekends & holidays 5am-1am.this will save money, reduce fares, more transit customers,time and on-time performance on everyday service.and make improvements on bus routes-#8 and #36.#8-brookhaven-avondale via north druid hills rd/e ponce de leon ave.#36-midtown-avondale via n decatur/e college ave.#75-tucker/lawrenceville hwy-should add sunday/holiday service as well.LRT should be a good deal too.from lindbergh to avondale, that’s good too!

Robert

February 19th, 2013
4:32 pm

maybe it’s time to change the name to MAT-Metro Atlanta Transit. with MAT, we should have metro counties like cobb, clayton, dekalb, fulton and gwinnett and the city of atlanta will be involved.MARTA is NOT worth anymore.people of the metro atlanta area wants a better and the only one mass transit that works for us.1-cut that sorry, slow braves shuttle and replace it with regular bus routes to and from turner field as a everyday services-Bus #32, 49 & 55.2-get the bus route #32 as a new route, #32-bouldercrest-west end. 3-get a few bus routes out of five points station area, because its too crowd it and get those few bus routes to go other places like-civic center station,edgewood-candler park station, etc.4-Bus #2-north avenue sta-decatur sta via ponce de leon ave(fernbank museum).5-couple of bus routes to and from stone mountain park-bus #119,#121,#520 or #120.6-expand the entire rail system! including-blue line to stonecrest mall.green line to stone mountain park.red line to hapeville or forest park, north fulton-north point mall.gold line to oakcliff road or norcross-airport.and a new line-cumberland mall to turner field or south dekalb.7-get the streetcar(east-west line) finish and open for service and get the north-south streetcar line under construction now! and 8-get 2 new bus routes-one for brookhaven-medical center sta and one BRTs on buford hwy in dekalb and for south dekalb via I-20 east.also- a BRT route for Fulton Ind Blvd.MAT is one mass transit we will count on and MAT is better than MARTA! thank you.

Veteran Observer

February 19th, 2013
2:08 pm

Marta should be dissolved and a new regional transportation authority created, folding in all the suburban bus lines. Representation on the new authority’s board should be based on population and government entity! This has been the real issue all these many years, taxation without representation! When Marta was first formed, the suburban counties opted out of the system for two reasons. First, they were absorbing white flight from intown neighborhoods on the west and southsides of Atlanta. Second, they were offered no or only token representation on the board, but expected to pay substantial taxes for that priviledge! The first reason has gone away as the suburban counties have diversified. The second reason is still valid and glaring! Hopefully, the defeat of the transportation boondoggle tax will serve as a wake-up call to our leadership and they will dissolve Marta and get to work on a true transit system, that would serve all Atlantans! By the way, I live in the city and ride Marta whenever I can. And in answer to the union leader(who has probably never driven a bus or sold a train ticket)Marta is not a jobs and benefits program, it is a transit system that is rapidly pricing itself out of existence! Wake up and quit whining and work with the leadership or there may be bigger hardships(like no jobs) ahead for your little group!

markoo

February 19th, 2013
1:20 pm

The private sector wouldn’t tolerate bus drivers leaving the MARTA facility on Laredo Dr. and making their first stop with the bus at McDonald’s on Covington Highway. Or drivers that milk the clock by leaving the Laredo Dr. and going 15-20 MPH to their first stop so they can get paid for more time on the clock.