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Out-of-Control Transit Costs in Boston or Attack on Public Services?

Thursday, 24 April 2014 00:00 By Ellen Dannin, Truthout | News Analysis
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An MBTA bus heads to Salem Depot through snowy conditions.An MBTA bus heads to Salem Depot through snowy conditions. (Photo: David Moisan / Flickr)

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ALEC affiliate Pioneer Institute is targeting both Massachusetts Sen. Marc Pacheco and the Massachusetts Bay Transit Authority. They must be doing something right.

Rumors that the Massachusetts Bay Transit Authority's bus costs are out of control have reached a fever pitch lately, thanks to claims by Greg Sullivan, current Pioneer Institute Research Director and former Massachusetts Inspector General, and the circulation of the ALEC-affiliated Pioneer Institute's 2013 report on the Massachusetts Bay Transit Authority's (MBTA) bus maintenance costs. Even Massachusetts Gov. Deval Patrick has been attacked as part of this manufactured controversy.

The Pioneer Institute - an affiliate of the far-right State Policy Network - marshals its statistical "evidence" in a way that shows accurate fact-finding is not its goal.

Pioneer Wants to Take Us for a Ride

According to Pioneer, the "MBTA's bus maintenance cost per mile was fourth highest of 379 US bus transit agencies as measured in maintenance cost per bus mile traveled." Pioneer's 13-page document presents its case mainly by comparing the MBTA's costs per mile with the costs of 19 other bus companies.

According to the US Department of Transportation's 2012 National Transit Database - Transit Profiles: Top 50 Agencies, Boston's MBTA is one of the top 50 transit systems in the United States. So it is fair to assume that Pioneer's comparison of the MBTA with 19 transit systems would have to include only other Top 50 transit systems.

Pioneer's list of 20 transit systems included eight non-Top 50 transit systems and also included eight transit systems in areas where it never snows.

According to Craig Hughes, secretary-treasurer and organizer of the International Association of Machinists and Aerospace Workers Local Lodge 264, size matters when it comes to transportation systems because size leads to greater complexity. But for reasons that are unclear, Pioneer's list of 20 transit systems included eight non-Top 50 transit systems and also included eight transit systems in areas where it never snows. Snow also causes complexity for transit systems. Some of the systems on Pioneer's list were included in the transit systems NTD Top 50, but were a tenth the size of the MBTA. In fact, the choice of public transit systems on Pioneer's list is so odd, it is like comparing oranges and orangutans. To see the list, please scroll to the end.

Here are the figures for the service areas and populations for each of the bus companies on Pioneer's list and also on the NTD's list. It is difficult to get comparable figures for systems not on the NTD list, so links are provided to the non-NTD systems' websites.

In the case of the MBTA, factors that most affect its costs are geography, street layout, congestion, population, density, area served, and inclement weather, in particular, snow and ice.

In the case of the MBTA, factors that most affect its costs are geography, street layout, congestion, population, density, area served, and inclement weather, in particular, snow and ice. Eight of the 20 systems Pioneer lists do not get snow - Houston; St. Petersburg and Jacksonville in Florida; and Santa Clara, Alameda, Sacramento, San Diego and Orange County in California.

The only transit systems on Pioneer's list that are at all comparable to the MBTA are the New Jersey Transit Corporation and two somewhat smaller systems - the Pace-Suburban Bus Division (Illinois), which serves an area of 3,513 square miles and a population of 5,630,238, and the Washington DC Metropolitan Area Transit Authority, which serves 3,719,567 people and an area of 950 square miles.

Finding comparable systems is a challenge because there are so many variables, but Pioneer's list is idiosyncratic, to say the least.

Repair Costs Per Mile Questioned

Since the purpose of a bus system is to transport people, it may seem reasonable to focus on bus repair costs per mile. Indeed, that measurement is included in the NTD Top 50 list. But it is not the only standard. The NTD also uses a cost-per-hour standard. Can choosing one over the other make a difference? The answer is yes.

For example, if a bus travels in congested areas, it will have higher costs per mile, because the bus costs continue to increase as it idles in traffic. According to Machinists Local 264 Secretary-Treasurer Craig Hughes, "Large agencies tend to have higher operating costs due to higher costs of living, heavier congestion, more wear and tear on their equipment." Hughes says that other NTD data, such as "unlinked passenger trips" or ridership compared to maintenance costs, puts the MBTA 3 percent below the costs of the large agencies that are more similar to the MBTA.

Pioneer must have been aware that choosing a cost-per-mile standard would put the worst face on the MBTA's performance and that neither a bus driver nor a mechanic could do anything to change that situation.

Pioneer also claims that MBTA costs are unreasonably high because MBTA administrators are hamstrung by the Pacheco law. The Pacheco law requires that, before Massachusetts work can be privatized, evidence must be presented that shows that the work will cost less, that the work does not cost less by cutting pay and benefits or by providing work of lower quality, that the current public employees can submit a bid to keep their work, and that the bidder has not violated state or federal laws.

The truth is that, if MBTA bus repair costs are high, it is not because administrators cannot privatize bus maintenance work or because of the Pacheco law. All the Pacheco law does is protect the people of Massachusetts by providing standards for analyzing the cost of doing work by current employees versus someone else. In other words, the Pacheco law sets out a reasoned basis for making decisions.

Geriatric Buses

One cost factor "overlooked" by Pioneer is that the MBTA has an old bus fleet whose average age is 8.4 years, and it has only 12 percent of buses in reserve. Compare those figures with Sacramento, which has 56 percent of buses in reserve and a fleet whose average age is seven years. Sacramento's reserve buses mean that if every Sacramento bus broke down, there would still be more than enough buses to fill in immediately. That reserve means that repairs can be made during regular working hours.

Or consider the bus reserve of 19 percent for Minneapolis-St. Paul. That is close to the MBTA figure, but the average age of buses in Minneapolis-St. Paul is five years only, so they need fewer repairs.

The MBTA has the worst of both worlds with an old bus fleet, few buses in reserve, high passenger use, challenging routes, and long hours of operation. As a result, because the MBTA must have a quick turnaround on bus repairs at all hours of the day, it will need MBTA mechanics to work additional hours at overtime rates.

The MBTA's performance and costs could be improved if it replaced its oldest buses with new buses and if it had enough reserve buses that repairs could be done during ordinary working hours. However, in this anti-tax era, Massachusetts (like other states) must make do with the cash it has. In fact, according to the Federal Transit Administration's Useful Life of Transit Buses and Vans, the MBTA is not alone. Many transit systems are pushing their buses past their normal useful lives, and that may also be the MBTA's strategy.

Would Privatization Help?

In fact, privatizing the MBTA's bus maintenance and repairs is likely to increase costs. For example, transitions in a workplace are often a disruptive factor that leads to lower productivity. In addition, privatization may actually cause greater costs. For example, rather than continuing to do bus repairs and maintenance at the MBTA's facilities, buses may transported to the contractor's location. Transporting equipment in need of repair to the contractor's site adds costs and delays. Other factors, such as contractor employees' lack of experience with equipment or of MBTA routines and standards, may also generate costs.

In fact, the MBTA's bus repair costs may already be lower than Pioneer claims, because Pioneers' per-mile standard has made it appear that maintenance costs are higher than they really are.

Why MBTA Mechanics Aren't Overpaid

Pioneer claims that the MBTA has 58 percent more mechanics than necessary and that those mechanics are paid more than they deserve. The Pioneer report also claims that the MBTA's mechanics do not do a good job, as shown by the rate of major mechanical failures compared to the Minneapolis-St. Paul system. It ignores the fact that the Twin Cities' fleet has far newer buses.

Pioneer reached that conclusion because (1) it chose the per-mile measurement which overstates the MBTA's maintenance costs, and (2) it ignores important factors that determine pay rates.

To understand why MBTA mechanics have a high number of overtime hours, look at data from the most recent US Department of Transportation, 2012 Reporting Year, Transit Profiles: Top 50 Agencies Summary (October 2013) for the MBTA, Sacramento, and Minneapolis-St. Paul. The data for Minneapolis-St. Paul is included because Pioneer identified that system as being similar to the MBTA. Sacramento is included because it is on Pioneer's list, and its data highlights important issues.

Pioneer Overstates Maintenance Costs

Pioneer identified Minneapolis-St. Paul as a system that is most similar to the MBTA in terms of climate. The two bus fleets are also almost the same size, and annual passenger miles are nearly identical.

  MBTA Sacramento Minneapolis - St. Paul
Service Population 4,181,019 966,629 1,805,940
Service Area 1,873 221 607
Buses 767 151 747
Annual Passenger Miles 301,812,834 121,226,088 295,697,928
Average Fleet Age 8.4 years 7 years 5 years
Percent Spare Buses 12% 56% 19%

 

However, important differences between the two systems explain the MBTA's higher costs. The MBTA system population is 2.3 times larger than that of Minneapolis-St. Paul, and its service area is 3.1 times larger. A bus breakdown while on its route may require dispatching a mechanic or tow truck to that site. Given the large size of the MBTA system and traffic congestion, a mechanic's travel time may be longer than it would be in other areas that do not face these challenges.

A newer fleet is less likely to need repairs and especially more likely not to need expensive repairs.

At the same time, the MBTA's average fleet age is 8.4 years old, while the Minneapolis average fleet age is five years old. That is, the Minneapolis bus fleet is only 60 percent of the age of the MBTA's fleet. A newer fleet is less likely to need repairs and especially more likely not to need expensive repairs.

The MBTA's bus service cost is the direct result of the very low percentage of spare buses. The shortage of buses means that buses must be repaired as quickly as possible to get them back in service. The high age of the fleet, the low percentage of spare buses, and the need to get buses back in service as quickly as possible leave only one alternative - overtime.

Boston Is an Expensive City

Pioneer claims that the MBTA mechanics have "excessive compensation levels," while ignoring important factors that affect bus mechanics' pay rates, especially the high cost of living in the Boston area. Pioneer claims MBTA mechanics are paid too much, but their pay is higher than other locations because, otherwise, the MBTA mechanics could not afford to live there. They would have to move to places they could afford - Spokane, Washington, for example.

According to Forbes, median income in Boston is about one-third higher than Spokane and about 14 percent higher than Minneapolis. Boston's cost of living is 20.3 percent above the national average, while Spokane's is 1.8 percent below the national average, and Minneapolis' cost of living is 1.2 percent below the national average.

Those differences are most clearly seen in the cost of housing. Spokane and Minneapolis median home prices are less than half that of Boston. Unemployment is lower in Boston and Minneapolis than Spokane, so that creates pressure on employers to pay higher wages to attract workers.

  Boston, MA Spokane, WA Minneapolis - St. Paul - Bloomington
Median Houshold Income $68,583 $46,797 $63,772
Median Home Price $358,400 $168,100 $169,400
Unemployment 5.6% 8.0% 5.1%
Job Growth 1.5% 1.0% 2.0%
Cost of Living 20.3% above national average 1.8% below national average 1.2% below national average

 

What if Boston Prices Drove Out Mechanics?

Claiming that the Pacheco Law is to blame for the cost of MBTA mechanics' pay rather than the normal operation of economic forces is plain silly.

Claiming that the Pacheco Law is to blame for the cost of MBTA mechanics' pay rather than the normal operation of economic forces is plain silly. The factors that affect mechanic's pay have little to nothing to do with "competitive procurement" and everything to do with not replacing equipment.

It is no secret that Boston is an expensive place to live for everyone. If the people who make the transportation system function can no longer afford to live in the Boston area, Boston will become a place that is no longer an attractive place to live. If the bus system deteriorates because the mechanics go elsewhere, people who depend on the bus system will have to find some more congenial place to live.
Meanwhile, the Pacheco Law offers a rational way to make decisions as to whether to make or buy a service.

Transit Systems on the Pioneer List

  Square Miles Population Served Annual Passenger Miles

Maryland Transit Administration (MTA) including Baltimore 

1795 2,203,663 1,845,573,805

New Jersey Transit Corporation

3450 18,351,295 3,082,675,382
Greater Cleveland Regional Transit Authority 458 1,412,140 221,179,837

San Diego Metropolitan Transit System (MTS)

716 1,960,088 385,281,424

Metropolitan Transit Authority of Harris County, Texas (Houston)

1285 3,527,625 534,552,036
Washington DC Metropolitan Area Transit Authority 950 3,719,567 2,017,100,468

Pinellas Suncoast Transit Authority (PSTA) (St. Petersburg)

Not on the NTD list

Delaware Transit Corporation (DTC)

Not on the NTD list

Santa Clara Valley Transportation Authority (VTA)

346 1,880,876 234,727,090

Alameda-Contra Costa Transit District (AC Transit)

524 1,425,275 194,937,308

Spokane Transit Authority

Not on the NTD list

Suburban Mobility Authority for Regional Transportation (SMART)

Not on the NTD list

Palm Beach County, PalmTran, Inc.

Not on the NTD list

Sacramento Regional Transit District (Sacramento RT)

221 966,629  121,226,088

Albuquerque

Not on the NTD list
Southwest Ohio Regional Transit Authority (SORTA/Metro) Not on the NTD list

Jacksonville Transportation Authority

Not on the NTD list

Pace - Suburban Bus Division (Illinois)

3513 5,630,238 256,396,723

Orange County Transportation Authority (OCTA)

464 3,014,823