Editorial board: Capital Metro on right deal track

Check out Sunday’s editorial in the Austin American-Statesman:

Capital Metro on right deal track

Editorial Board

Sunday, August 28, 2011

If Capital Metro is going to become financially solvent and provide better transit services to Central Texas communities, then labor and management are going to have to work together. That requires compromise.

We believe the proposed terms the Capital Metro board is offering in its move to hire an outside contractor to run bus services strike the right balance for all parties. Monday approval by the board is likely.

The proposal does not give the labor union everything it is demanding, but it does treat bus drivers and others who are affected fairly, by requiring private contractors to continue a good wage and benefit system. The proposal by Capital Metro goes in the right direction, and now it’s time for the labor union to show good faith by moving toward a compromise.

The wild card in this scenario is the federal government, which will decide whether Capital Metro’s push to change the current structure of the labor agreement is legal as it transitions to one or more outside private contractors.

The union has put its eggs in that basket, saying Capital Metro’s proposal falls short of what federal law stipulates. It has dug in and that has not helped employee morale.

There are real consequences for the public while the stalemate continues: Failure of both sides to reach an agreement puts at risk millions of dollars in federal funds Capital Metro needs, and likely would get, to improve transit services. Also, Capital Metro officials told us the cash-strapped agency might have to cut transit services to the public if an outside contractor had to adopt the current labor agreement as-is.

Lawmakers passed a bill this spring requiring Capital Metro to bring all its workers in-house or competitively bid all bus services with private contractors. The deadline to get that done is Sept. 1, 2012, The goal was to force the agency to save money in labor costs by using private contractors to run bus services.

The proposed terms would be part of a labor framework the agency is requiring of contractors bidding for Capital Metro’s bus service business.

Those terms would reduce Capital Metro’s costs by as much as $40 million between now and 2020, agency officials told us. At the same time, those terms do offer some stability and protection to workers.

They require that contractors hire all current workers who want jobs — so no employees should lose jobs in the transition to an outside private contractor. The terms also require contractors to hire employees at existing wages — so employees don’t lose ground on that front. The terms would give workers comparable health coverage, although workers might have to pay more in premiums or co-pays. Contractors also would have to honor accrued pension benefits and recognize the existing union, the Amalgamated Transit Union Local 1091, as the representative for collective bargaining for bus drivers and mechanics.

Even if the labor union wins the legal fight at the federal level, it is likely to lose community support and confidence because the costs for continuing business as usual are too high. About $2.6 million of potential federal funding, money the agency plans to use for buses for its services for people with disabilities, could be lost or delayed. The union can object to the grants based on its argument that the terms Capital Metro is proposing violate federal law. And there are trade-offs; the more the agency spends on labor costs, the less it has to spend on improving service for customers.

In working toward a solution, both parties should move toward a compromise that offers workers good pay and benefits while lowering Capital Metro’s overall operating costs. The terms Capital Metro is proposing achieve that goal.



8 thoughts on “Editorial board: Capital Metro on right deal track

  1. There is precedent in other transit agencies for this type of action and those actions did not violate Federal law. The North County Transit District in California transitioned from a directly operated system to a contract operated system. In Capital Metro’s case, all you are doing is shifting from one contract operator, who happens to be non-profit, to another contract operator, who happens to be for-profit. This, in my opinion, would not violate any FTA regulations, particularly section 13. So the union would have to come up with a more compeling arguement for opposing this.

    1. John Tanner

      If Cap Metro is going to make any money then they would have to do some changes. First and foremost the head of this organization has to take a pay cut because quite honestly the service on the rail and scheduling is token at best. You can’t run an organization in transportation and run it cheaply run it like a business and expect to make money. If you’re cheap on schedules and if you’re cheap on the routes especially on a rail system it is doomed to fail. We here in Leander are paying $1 million a year for what a minor train route that does not fit the scheduling needs of the people living here. It does not run all day and does not run on the weekends and does not run on Friday evenings so what good is it. You need to have a much more aggressive routes to make any money. You need to have feeder buses running major routes to destinations in Austin and Cedar Park. You need to add Cedar Park or do an aggressive campaign to include them in the routes. But to do that you have to make the routes and schedules attractive. Reading this organization cheaply will lead to bankruptcy of this organization.

  2. erik

    Contracting is not a solution, it’s just another problem. You’ve essentially admitted that government is inefficient, so why not just hang up the towel and sell your business to the private-sector instead of creating yet more bureaucracy and accountability gaps? Don’t fool yourselves into thinking you’re on the right path just because “it adds up.”

      1. erik

        Right, and the new law states you can bring all employees in-house. You’ve chosen not to do that. That’s fine, but it’s not going to do anything but create more problems.

      2. Adam

        That wasn’t Capital Metro’s choice. The in-house option would have required union approval, but the union voted against it. So that left us with the private structure.

      3. erik

        Adam, thanks for that. It would’ve been helpful if CM was more communicative about the union’s decision to go private, and offered some transparency into the cost involved going in-house.

      4. Adam

        Here’s some additional info that may be helpful. This document from 8/22 includes a link to the timeline of all the major steps in this process as well as an updated link with the core terms, including wage and benefit assurances, that the board approved on 8/29:


        Also, it’s worth checking out the presentation and discussion from our June board meeting (Skip ahead to item VI-11, unless you want to watch the entire meeting):


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