Outsourcing 74th Garage

[csl3407]

There has been chatter for awhile about outsourcing operations and maintenance management at a CTA garage. Now that the CTA has chosen 74th Garage as the first location to have outside management run the garage, some interesting questions come to mind.

I'm wondering - is this a legit plan or is this just a bargaining tool to use with Local 241 in some way? Any posters with inside info who could shed some light? Any posters with experience who could explain why this is or isn't a good idea? (Any comparisons to the City's experience with outsourcing garbage pick-ups?)

[artthouwill]

There has been chatter for awhile about outsourcing operations and maintenance management at a CTA garage. Now that the CTA has chosen 74th Garage as the first location to have outside management run the garage, some interesting questions come to mind.

I'm wondering - is this a legit plan or is this just a bargaining tool to use with Local 241 in some way? Any posters with inside info who could shed some light? Any posters with experience who could explain why this is or isn't a good idea? (Any comparisons to the City's experience with outsourcing garbage pick-ups?)

I haven't heard of CTA specifically trying to do this, but it is not a new concept. Many TAs outsource to companies like First Transit to manage their operations, driver hiring, training, etc. in CTAs case, I don't know what management is still considered union and what part of management, if any, is not.

[Busjack]

There has been chatter for awhile about outsourcing operations and maintenance management at a CTA garage. Now that the CTA has chosen 74th Garage as the first location to have outside management run the garage, some interesting questions come to mind.

I'm wondering - is this a legit plan or is this just a bargaining tool to use with Local 241 in some way? Any posters with inside info who could shed some light? Any posters with experience who could explain why this is or isn't a good idea? (Any comparisons to the City's experience with outsourcing garbage pick-ups?)

You do mention "chatter," while would negate the certainty of "has chosen," since Frosty the Claypool hasn't said anything.

But when you bring up "bargaining tool" the issue is that while the contract is supposedly now under negotiation, contracting out is always part of a contract, which, in this case, would include whether the union members are public or private employees. I doubt that making the drivers and mechanics private employees is part of any serious negotiation.

However, if you are talking about "outside management" and, as art points out, if those managers are not union employees under the state Public Labor Relations Act, and hence protected by the union contract, CTA could do that unilaterally.

As art points out, other places have some privatization. First Transit has both Fixed Route Operations and Transit Management Services. Veolia operates the transit systems in places like Las Vegas and Phoenix, and describes how they took over management in New Orleans. The NORTA site says that new hires are "direct employee of Veolia."

Maybe also comparable is that after the RTA took over the Chicago suburban systems, but before Pace was organized, the various companies were run by "Transit Management of ..." I don't know if the employees were still technically private at that time, but I doubt it, as the RTA had taken ownership of the various companies, such as West Towns and Suburban Transit System.

Personally, I can't see privatizing one garage while keeping the others under public management. That's sort of similar to when the union gave permission to "roster" NP and 74th, but then withdrew it when the next contract came up.

However, I would be in favor if the CTA actually got professional management and got rid of all the political hacks at 569 West Lake. But nobody is posting chatter about that.

[csl3407]

You do mention "chatter," while would negate the certainty of "has chosen," since Frosty the Claypool hasn't said anything.

First, there was "chatter" that operations at a garage would be outsourced.

Now, as I understand it, CTA "has chosen" to outsource a garage's management, and has selected 74th as the first garage to outsource. (I'm not using the first statement to support the second.)

But when you bring up "bargaining tool" the issue is that while the contract is supposedly now under negotiation, contracting out is always part of a contract, which, in this case, would include whether the union members are public or private employees. I doubt that making the drivers and mechanics private employees is part of any serious negotiation.

However, if you are talking about "outside management" and, as art points out, if those managers are not union employees under the state Public Labor Relations Act, and hence protected by the union contract, CTA could do that unilaterally.

Personally, I can't see privatizing one garage while keeping the others under public management. That's sort of similar to when the union gave permission to "roster" NP and 74th, but then withdrew it when the next contract came up.

As I understand it, only management (managers 1 & 2, lead managers, general manager, and other admin staff) are going to be outsourced. There was no mention of outsourcing union employees such as operators, repairers and servicers.

My question, to others who have more knowledge of these types of operations, is there a direct impact on conditions for union employees and could this plan be a bargaining tool or negotiating tactic with 241?

[Busjack]

First, there was "chatter" that operations at a garage would be outsourced.

Now, as I understand it, CTA "has chosen" to outsource a garage's management, and has selected 74th as the first garage to outsource. (I'm not using the first statement to support the second.)

No, I was not saying that, but that the first contradicts the second. You don't seem to be in a position to post a press release about the second.

As I understand it, only management (managers 1 & 2, lead managers, general manager, and other admin staff) are going to be outsourced. There was no mention of outsourcing union employees such as operators, repairers and servicers.

My question, to others who have more knowledge of these types of operations, is there a direct impact on conditions for union employees and could this plan be a bargaining tool or negotiating tactic with 241?

If they aren't going to outsource the union employees, then no, because it doesn't affect them, unless they are quaking in their boots that private managers might actually make them work to the rules, but that isn't a negotiable item, but management prerogative.

[newport]

You don't seem to be in a position to post a press release about the second.

Why so dismissive if the info isn't announced in a press release (or announced by Claypool)?

So CSL isn't Mark Feld - it's still interesting info and led me to look for more details.

Here's the link to the contract opportunity .

It confirms CSL's info, but raises even more questions.

Art, Cta5750, others - any insight?

[Busjack]

Here's the link to the contract opportunity .

...

Thanks for providing an actual source.

After downloading it, it indicates:

• A prebid inspection at 74th Garage, so that report seems correct.
• Manage "labor, materials, and maintenance requirements to assure adherence to schedules..."; "maintain the revenue fleet..."; "work to improve vehicle availability and on time service"; "evaluate performance of the fleet and adopt an inspection procedure"; "respond to customer complaints and initiate corrective action" (sound familiar sw?); "at the direction of CTA, act as liaison with collective bargaining units"; "work with CTA to process data for ID badges for CTA personnel"; "advise CTA with respect to incident management".
• An Appendix, starting at page 207, describes the various management positions at a garage: "General Manager, Bus Operations"; "Manager II Transportation"; and "Manager Transportation."
• "Coordinate with CTA to support discipline."
• "Manage overtime ... and absenteeism."
• Update route information each pick.
• Maintain a harmonious workplace environment

At least from my reading, the main emphasis is being in charge of fleet and schedule management, but act as a go-between with CTA on personnel matters.

Whether the people in those jobs that are listed in the Appendix will have a job if the proposal is accepted is beyond me.

However, this does sound like what First Transit calls Transit Management Services, and there are 4 companies I know that provide it (besides the two listed, MV and Stagecoach).

[Busjack]

Since the question was how this could affect ATU Local 241, I'll throw out one suggestion and open it to comment:

If you remember, a couple of years ago, Huberman posted PowerPoints about how by doing certain things, the time to do a bus inspection could be cut by 75%.

Now, contracting out fleet management to a consultant indicates that the brass has run out of ideas. Claypool promised work rule changes to get $83 million or so of savings out of this year's budget, but hasn't come through with anything yet.

Assume that First Transit gets the contract and says "if you let us do it like we do in Phoenix, it can be cut another 50%, but the work rules under the collective bargaining contract don't allow it."

Since the consultant can only be a liaison with regard to labor relations matters, it couldn't impose it unilaterally; either the union agrees or an arbitrator has to decide for the next contract

The "consultant saying so" might give the CTA a bit more evidence to convince the arbitrator--including to come up with something binding on the other 6 garages-- but, if not, CTA will be paying someone to run the garage, but not with authority to do anything to make the CTA employee/union members work outside the contract.

However, if you ask me, the real threat to union labor would be at Skokie Shops, if the CTA had gone through with the no bid contract to rehab the 3200s to be compatible with the 5000s, and then set up a Bombardier service facility to do post-warranty work.

[artthouwill]

Since the question was how this could affect ATU Local 241, I'll throw out one suggestion and open it to comment:

If you remember, a couple of years ago, Huberman posted PowerPoints about how by doing certain things, the time to do a bus inspection could be cut by 75%.

Now, contracting out fleet management to a consultant indicates that the brass has run out of ideas. Claypool promised work rule changes to get $83 million or so of savings out of this year's budget, but hasn't come through with anything yet.

Assume that First Transit gets the contract and says "if you let us do it like we do in Phoenix, it can be cut another 50%, but the work rules under the collective bargaining contract don't allow it."

Since the consultant can only be a liaison with regard to labor relations matters, it couldn't impose it unilaterally; either the union agrees or an arbitrator has to decide for the next contract

The "consultant saying so" might give the CTA a bit more evidence to convince the arbitrator--including to come up with something binding on the other 6 garages-- but, if not, CTA will be paying someone to run the garage, but not with authority to do anything to make the CTA employee/union members work outside the contract.

However, if you ask me, the real threat to union labor would be at Skokie Shops, if the CTA had gone through with the no bid contract to rehab the 3200s to be compatible with the 5000s, and then set up a Bombardier service facility to do post-warranty work.

The way I looked at it, the CTA will realize some savings by contracting out management. If the managers are paid hourly, that should reduce overtime, and whether they are hourly or salary, savings on not paying out benefits and pensions should occur. It would be up to the "consultant" to find savings or other ideas within the parameters of the union contract which, to me doesn't seem very flexible. In an earlier post you brought up rostering, which doesn't appear to be happening at 74th now, so finding savings in overtime and cutting absenteeism will not be an easy task.

If I remember correctly, First Transit had a strike within the last few years because it would not give its drivers raises. I think it was U of Alabama's crimson ride, but I will have to look it up again. You can bet the union is going to fight everything that the outside "consultant" will come up with tooth and nail to discourage CTA from expanding this idea to other garages. Outsourcing drivers is down the pipeline, and the union knows this, they will fight. I really believe that Rahm will try to broach that subject sooner or later. He needs to be able to say that he has come up with ideas to stave off fare increases and service cuts, but the union's rigidness forces him into one or the other or both.

Nassau County on Long Island switched its service from MTA to Veolia and renamed it NICE as of Jan 1, 2012. According to wikipedia, they've already implemented service cuts effective this April. This is the rebranded service in Long Island.

http://www.nicebus.com/

[Busjack]

The way I looked at it, the CTA will realize some savings by contracting out management. If the managers are paid hourly, that should reduce overtime, and whether they are hourly or salary, savings on not paying out benefits and pensions should occur.

I'm not so sure about that. Looking at the CTA Salary List (Excel document), a General Manager, Bus Operations is in straight salary at about $104K, a Manager II at $90K, and Manager $74K. The question then is how many are at each garage.

The bidder here is to provide a price based on a monthly fee and a percentage split of savings between CTA and the bidder.

So, regardless of savings, the bidder is going to get its fee.

Of course, we don't know what will be bid, but in the case of the "open fare system," CTA is freed of some of its responsibilities regarding collecting fares, gets the open fare system and new equipment, and says that this is saving them money, but is paying Cubic $454 million over 10 years for the service. I assume that these bids will be similar, and not just "it'll cost you $200K per year for 3 supervisors."

In an earlier post you brought up rostering, which doesn't appear to be happening at 74th now, so finding savings in overtime and cutting absenteeism will not be an easy task.

As I remember, they had a deal with the union to try it at NP and 74, and they did, but when the next contract came up, the union withdrew that. Both were during Kruesi's tenure.

If I remember correctly, First Transit had a strike within the last few years because it would not give its drivers raises. ... Outsourcing drivers is down the pipeline, and the union knows this, they will fight. ...

Andre was complaining on the Yahoo chicagotransit forum that when he was working in Las Vegas (maybe then ATC, now Veolia), the pay was bad and the turnover was huge.

I wonder how New Orleans RTA could make the staff Veolia employees, but I would bet that the state public labor laws there aren't what they are in Illinois. Heck, the state public labor laws in New York aren't what they are in Illinois.

Nassau County on Long Island switched its service from MTA to Veolia and renamed it NICE as of Jan 1, 2012. According to wikipedia, they've already implemented service cuts effective this April. This is the rebranded service in Long Island.

http://www.nicebus.com/

ibebobo brought this up about a year ago. The main distinction seems to be that Nassau County was not part of the MTA and was contracting with the MTA for the service, sort of similar to what Oswego did with Pace. However, it would raise the issue of what happened to the MTA employees who used to work the Nassau County routes, but that would be the MTA's, not Nassau County's problem.

On the other hand, since CTA service is operated by its employees, CTA would have to, in effect, fire the entire workforce and say "try to get a job with the contractor." I'll bet about 9999:1 that the Illinois public employee labor laws wouldn't allow that, and even though Emanuel got some changes to the teachers' labor laws, the Illinois General Assembly, while it could, would never pass such a law.

Finally, while the proposed CTA contract includes improving schedule performance and suggesting changes, any service cut would still require public hearings and board action. BTW, the NICE site says that the cutbacks proposed by MTA would have been far worse.

[Tcmetro]

As to my understanding, Nassau County provides a very small amount of money to the system, meaning that Veolia is responsible for the rest. Unlike other contract operations, Veolia has power over the schedules, and can make significant changes. Here in the Twin Cities, the schedules are predetermined by the Metropolitan Council, then sent out for bid. The Council provides subsidy for the route like a regular "in-house" route, it's simply that money is given to the contractor to operate the garage and buses.

[Busjack]

As to my understanding, Nassau County provides a very small amount of money to the system, meaning that Veolia is responsible for the rest. Unlike other contract operations, Veolia has power over the schedules, and can make significant changes. Here in the Twin Cities, the schedules are predetermined by the Metropolitan Council, then sent out for bid. The Council provides subsidy for the route like a regular "in-house" route, it's simply that money is given to the contractor to operate the garage and buses.

From the description on the NICE site, the county didn't give up policy making control over the system, just changed management. Look at the Nassau County-Veolia Partnership --> Background page, which says: "The county's decision to partner with a third-party bus operator, while retaining control of much of the strategic decision-making control ..." and "Under this arrangement, the county will still own all the assets (buses, garages, transit centers, equipment, etc.), receive all the Federal and State transportation grant funds that it did previously, and retain ultimate policy control over fare structure, routes and service levels. Veolia will manage all day-to-day aspects of the bus system agency under contract with the county. Its responsibilities will include operations and service, safety issues, vehicle maintenance, customer care, route design and scheduling, human resources, administration, ridership growth, capital planning, grant administration, communications, purchasing, and other functions."

Since they are getting federal funds, service cuts would need to be preceded by a public hearing.

Also, with regard to funding, while they said that this cost the county less than staying with the MTA, even though the MTA was subsidizing the service, and Veolia undoubtedly has some incentives, the reference to "receiving grant funds" indicates that Veolia is not acting like one of its predecessors, ATC, which ran bus lines as a private business until that business model pretty much fell apart in the early 1970s.

In fact, one could argue that whoever takes over 74th would have a bit more authority, as making schedule adjustments would be within the garage manager's discretion, and the CTA Board doesn't exercise any oversight, as a practical matter (pretty much like any legislative body in Chicago). On the other hand, the 74th manager's authority would be constrained to the extent that the workers are not its employees.