Massachusetts Bay Transportation Authority officials said Monday they want to solicit bids to privatize several of their nine bus garages to save about $26 million annually, a prospect that prompted dozens of union supporters to pack the agency’s weekly board meeting.
The MBTA spent about $132 million on bus maintenance during the 2016 fiscal year, and officials estimated that outsourcing the work to private companies could save $26 million annually, officials said.
Brian Shortsleeve, the MBTA’s acting general manager, said the agency must be “ruthless” in becoming more efficient. He has previously pointed to the MBTA’s bus maintenance costs as much higher than those of similar agencies.
“We think it’s really important that we drive productivity everywhere he can,” he told reporters before Monday’s meeting. “Competition is a good thing.”
The MBTA didn’t release a timetable for the bid process, but it has suggested it would make the change before the next fiscal year. The board took no action Monday.
Officials are focused on privatizing four dilapidated garages in the Boston area, which are staffed by about 120 workers.
The garages “are really unable to be used in an efficient fashion, and unfortunately, the T doesn’t have the capital in the capital improvement plan to make the necessary repairs,” said TransPro Consulting’s Mark Aesch, who was hired to oversee the privatization process.
Officials also hope outside companies will find ways to cut about $5 million in costs at the Everett bus garage, and about $6 million at the Cabot Garage in South Boston, which will soon be used only for new buses. Workers at Cabot have also been “challenged” to bring their costs down to private-sector levels, Shortsleeve said.
Shortsleeve told reporters that private companies would reduce costs through a “combination of productivity, management styles, and use of technology.”
Craig Hughes, who represents the MBTA’s machinists union, said it was a mistake to assume that cutting workers is the only way to save money.
“We deserve to be seen as part of the solution, rather than a cost to be cut,” he said to the board on Monday.
Union officials say MBTA buses are able to travel much farther between breakdowns, a key metric of success, than those at other large transit agencies.
If approved, the outsourcing would mark one of the largest privatization efforts under Governor Charlie Baker’s administration, which had pushed for more flexibility in outsourcing public jobs. The MBTA is already privatizing its cash collection and warehousing departments.
MBTA officials have said that the threat of privatization has spurred union officials to reduce worker costs. In December, the MBTA’s largest labor group, the Boston’s Carmen's Union, agreed to give up a bargained raise and cut wages for future workers to protect thousands of jobs from being outsourced.
Three companies — MV, First Transit, and Transdev — have already submitted unsolicited proposals for bus maintenance. The companies pledge to cut costs in half — from $24 million to $12 million, on average — at the Arborway and Quincy garages.
MBTA board member Brian Lang, president of a hotel services union, asked a series of pointed questions about the cost-saving estimates. At one point, Lang asked Aesch, the consultant, for a breakdown on the potential savings.
“We don’t have that today,” Aesch replied, prompting laughter from union supporters.
But a review of the proposals released by the MBTA shows that the companies plan to save money by reducing workers and lowering the cost of fringe benefits and payroll taxes.
In First Transit’s proposal for the Quincy and Arborway garages, for example, the company proposed hiring just 28 mechanics and technicians, instead of 43, and cutting maintenance costs by using an outside party, rather than the MBTA’s Everett garage.
By First Transit’s calculation, the MBTA spends about $26.8 million on bus maintenance, while it plans to spend about $12.4 million.