Union claims MBTA overestimating savings from cash handling privatization
BOSTON >> The savings from outsourcing MBTA cash handling will be a fraction of the amount claimed by T management, according to union officials who on Monday accused management of inflating its savings estimates and downplaying costs of hiring the private contractor Brinks.
"The MBTA's analysis does not include the wages for at least five employees to be vendor managers, and discounts the added cost of retaining money room employees as bus drivers," Boston Carmen's Union delegate Patrick Hogan said at a board meeting. "Those money room employees will be at the top of the bus driver wage scale as opposed to the savings of hiring new drivers at a lower rung of the wage scale."
The T's Fiscal and Management Control Board voted two weeks ago to hire the firm Brinks to take over cash collection and counting, moving the union employees currently engaged in that work back to their former positions, mostly as bus drivers.
MBTA Chief Administrator Brian Shortsleeve said the move would improve service and save the cash-strapped system $8.2 million a year, and stood by those goals on Monday.
Board members did not respond to the union officials during Monday's meeting. After the public portion of the meeting, Shortsleeve said the auditing firm KPMG had analyzed fiscal 2016 costs.
"In terms of our ongoing costs, we're looking at that, and we will be deciding exactly how we want to staff it from a contract-management standpoint," Shortsleeve told reporters.
Hogan told the control board outsourcing will save the T $330,000 "at most," which he said is less than has been expended on consultants associated with outsourcing.
The KPMG audit, dated Oct. 5, found the cash-handling operations cost $11.8 million, including benefits. Brinks offered to take over the work for $3.6 million, and the board approved the outsourcing on Oct. 6.
The move to outsource cash handling, which is centered at a money room in Charlestown's Sullivan Square, has escalated labor criticism of the MBTA's new direction. Encouraged by Gov. Charlie Baker and enabled by the Legislature, the T has turned to the private sector for solutions as it struggles with a more than $100 million structural deficit and a more than $7 billion repair backlog.
James O'Brien, president of the Boston Carmen's Union, led a Faneuil Hall rally against privatization last week and on Monday told the board the outsourcing plan relied on a "scorched-earth audit that the MBTA has still not publicly released — a report that made baseless accusations against MBTA employees."
Shortsleeve, who is also acting general manager, said the financial audit of the money room is public. He said some aspects of an analysis of the security of the facility that handles $119 million of MBTA revenue have been withheld because of "concerns about security."
Shortsleeve has argued Brinks is better positioned to take over cash-handling responsibilities as it can integrate the transit system's collections into its overall business, and the company has greater expertise in the business than the transportation authority does.
Labor leaders and their allies in the Legislature have cast the MBTA's privatization moves as benefiting private corporations at the expense of union workers and the general public.
The Carmen's Union on Monday claimed the actual cost of the Brinks contract would be $5.1 million per year because of the need for T staff to manage the contract and the cost of reassigning veteran employees as bus drivers, rather than hiring new drivers at the lowest rung on the wage scale.
The union disputed the T's estimate of $2.8 million pension and retiree health care cost savings, saying it relies on "speculative estimates," and said the MBTA over-counted the number of money room employees.
The T estimated the money room would cost $9 million, leaving aside benefits, for roughly 70 employees. The Carmen's Union said as of Dec. 1 there would be only 42 employees and supervisors in the money room, bringing the cost down to $5.5 million.
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