Now that the Colorado legislature has a solid Democrat majority, the transit union wants to get back some of what they regard as their due. Previous Republican legislatures have ordered RTD, Denver’s transit agency, to contract to private operators half of all bus service in the region. Some of those private operators are non-union, so the unions want to reduce or eliminate such contracting out.
The way contracting works is this. RTD leases its oldest buses to private operators. They are required to maintain and operate the buses to RTD standards. Since they have the oldest buses, their maintenance costs should be higher. They also have to pay various taxes and fees that RTD, as a public agency, can avoid.
Operated by RTD or contracted out? Only the driver knows for sure.
Despite these disadvantages, the private operators cost taxpayers far less than RTD’s own buses. According to the National Transit Database (summarized here), in 2005, RTD spent nearly $119 per hour operating its own buses, but paid the private operators just $59 per hour — slightly less than half as much — to operate their buses. The private advantage per vehicle mile is not quite as good: $4.05 vs. $7.56 (54 percent as much), possibly because RTD gives the private operators the slowest routes.
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If contracting out is so great, why doesn’t RTD contract out all its bus routes? The answer lies hidden in federal transit laws. In order to apply for a federal grant, RTD has to get the approval of its local transit union. If RTD tried to contract out more of its services, the union would nix future grants. By putting a legal floor on the share of services to be contracted out, the legislature was able to get around the union’s veto power.
So last week the union found a friendly legislator to introduce a bill to drop the 50-percent minimum. Senate bill 251 would instead cap the share that could be contracted out at 55 percent. At first glance, this would seem to be benign. After all, the bill allows RTD to contract out half, which is all that it is doing now. But don’t forget that union veto power over federal grants. The union would be certain to use this power to demand that RTD ratchet down the routes that it contracts out.
Fortunately, a powerful opponent has arisen to the bill: RTD itself. If RTD ran all the buses itself, it would cost the agency $35 million extra per year, says RTD’s general manager, Cal Marsella. He pointed out that all of the FasTracks financial projections were based on the assumption that half the buses would be contracted out. Marsella knows that, years before construction is actually scheduled to begin, the FasTracks revenue projections were about $1 billion too high and that its costs are already $1.8 billion over budget so he is naturally panicky about any further financial burdens.
RTD’s board naively proposed to seek to have the bill amended to forbid the union from trying to reduce the share that is contracted out during collective bargaining. But that is not the only time that the union negotiates with RTD, so if that is all that happens, RTD will be in even more financial trouble than it already is.
The Bureau of Labor Statistics says that drivers who work for urban transit systems (which are mostly public) earn 25 percent more than drivers who work for charter bus systems (which are mostly private). And some agency drivers manage to earn more than $100,000 per year including overtime. If transit is to be a viable form of urban transportation, we have to decide that our public transit systems are to be run for the benefit of the riders, not the drivers.
