MARTA union predicts bumpy road for privatization

MARTA union leaders said this week that management is driving the company down a dead-end road of privatization that ultimately will undermine public transit.

MARTA General Manager Keith Parker has made outsourcing some MARTA functions such as para-transit service, cleaning, payroll and information technology a cornerstone of his strategy to stop bleeding its cash reserves and instead reach a solid financial footing.

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.

“It is just back of the envelope analysis,” said Elliott Sclar, who specializes in the economics of public services. “They have no cost data — they don’t know how much it will cost.”

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.

“We are moving forward with our assessments,” MARTA said this week in a prepared statement. “Our work has not been completed to determine if we would realize the cost savings that have been projected by KPMG.”

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.

Moreover, Sclar attacked the study as: “A biased report based on false comparisons, illegitimate cost measures, incomplete data and short-sighted observations.” Additionally, he wrote “The report’s omissions are glaring. It would be highly irresponsible for any public policy to be crafted based on this slanted, incomplete and predetermined report.”

MARTA has refused to provide the union with the data KPMG used to reach its conclusions, said Curtis Howard, head of ATU Local 732 that represents most of MARTA’s 4500 employees. MARTA officials contended they have provided “relevant documents” requested by the ATU in accordance with the state Open Records Act.

Sclar was in Atlanta to attend the ATU’s executive board meeting, which Larry Hanley, the president of the international union, said was being held here because MARTA administration is moving toward privatization and because it plans to cut worker benefits — particularly in health care and pensions — in upcoming labor contract negotiations.

Much of Sclar and union presentations focused on contracting out bus service, which isn’t included in MARTA’s current plans. To that point, Howard responds, “Yet.”

Howard notes that MARTA privatized para-transit service — which assists disabled people — and the cleaning service in the past only to bring much of back in house after disappointing results. The much smaller Gwinnett and Cobb county bus systems contract with a private company to provide the service.

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