A PRIVATE AFFAIR
Politics may make for strange bedfellows, but consulting contracts produce even odder playmates. How else to explain the current business arrangement between the Regional Transportation District and privatized-transit guru Wendell Cox?
Stung by charges of inefficiency and bloat--including complaints about overstaffing leveled by members of its own elected board of directors--RTD management recently commissioned a major study of the agency's organizational structure, with an eye toward slashing costs. The $89,000 study, contracted out to Mundle & Associates of Philadelphia, won't be completed until the end of next month, but it's already being blasted by representatives of RTD's union drivers as a waste of money.
"This study is tainted from the outset," says Bill Jones, political director for the Amalgamated Transit Union Local 1001, which represents 1,600 RTD employees. "It's money wasted to pad the pockets of a few friends. And it's an absolute, total waste because it can be instantly discredited."
What has Jones in an uproar is the involvement of Wendell Cox Consultancy-- a subcontractor in the Mundle study that receives scant mention in the contract documents. Cox, an Illinois-based public-policy analyst, is considered one of the leading advocates of transit privatization--the assignment of public-transit routes to private companies, which bid competitively for the routes and often employ non-union drivers.
The decision to award the contract to Mundle and Cox was made by a panel of three top RTD staffers, headed by general manager Cal Marsella, who is authorized to issue RTD contracts up to $250,000 without board approval. Marsella oversaw privatized-transit operations in Miami before coming to RTD last summer; in the course of the hiring process, Cox wrote a letter in support of his candidacy for the RTD job.
Marsella denies any favoritism in the awarding of the contract. He notes that Cox also recommended "three or four" other applicants for the general manager position. The contract was competitively bid, he adds, and each member of the selection panel "independently" concluded that Mundle's qualifications to conduct the study were the strongest of eleven proposals submitted. "We felt we went with the best contractor, and Wendell happened to be part of that team," he says.
Boardmembers contacted by Westword say that while they were surprised to learn who the contract was awarded to, they don't see anything improper about Cox's involvement. "It makes me a little uncomfortable that he, of all people, was selected," says boardmember David Bishop, "but I don't give him credit for landing Marsella the job. What concerns me is that it was done without informing the board. All of a sudden, we're in the middle of this study."
Cox, who has worked as a consultant to several major transit agencies, has been a critic of public subsidies for mass transit, which he contends have "financed excessive compensation for transit employees, declines in transit productivity and swollen bureaucracies." He is the co-author of America's Pro-
tected Class, a sharply critical study of public-employee benefits, and has served as an analyst for the American Legislative Exchange Council, a Washington think tank backed by a coalition of conservative state legislators. And he was instrumental in bringing the first stages of privatization to RTD eight years ago.
In 1988 legislation sponsored by then-state senator Terry Considine required RTD to seek private bids on no less than 20 percent of its bus routes. The plan drew heavy opposition from union drivers; Jones recalls Cox as being Considine's "mentor" in shepherding the bill through the legislative process. Cox says he served as an "unpaid advisor" to Considine.
"Wendell was everywhere," Jones says. "Terry would field a question at the hearings and turn around and ask Wendell the question."
Initially, studies indicated that RTD saved more than 40 percent on its privatized routes, compared with the public bus system, primarily through lower wages and benefits. The program has since expanded to encompass approximately one fourth of RTD's routes. But in recent years, the cost of operating the privatized routes has increased significantly, from roughly $40 an hour to $60 an hour, while the number of companies bidding for the routes has declined. Jones says that the public and private routes are now almost identical in cost, but he fears that Cox's "bias" will tilt the Mundle study in favor of even greater privatization.
"You have one of the best-known proponents of bus privatization in the country doing the study, and he's supposed to examine both sides? Give me a break," Jones says. "That's like asking a union leader how he feels about unions. If you want an honest review of how I'm doing on my job, don't ask my mother."
"I am not a proponent of privatization," Cox counters. "I am a proponent of saving taxpayers every dollar that can be saved. We should only use the private sector when it saves money."
Marsella points out that the bulk of the Mundle study is devoted to looking at administrative costs and staffing levels, not operations. He says Cox's primary role is to examine the reasons for the rising costs of privatization and to propose solutions. "Something's run amok here," he says. "The savings we anticipated seem to be eroding over time. Who better to bring in to take a look at that, to bring it back on track, than Wendell?"
One sensitive subject the study probably won't address is Cox's opinion of grandiose mass-transit projects, such as RTD's proposed $2 billion, metro-wide light-rail system ("Runaway Train," December 13, 1995). In op-ed pieces and interviews, Cox has argued against "expensive urban rail systems" and ridiculed a proposed $775 million circulator in downtown Chicago as "an amusement park ride." He has written in praise of the American highway system and opposed diverting a portion of the federal gasoline tax to transit projects, citing figures that indicate transit ridership has declined steadily in the past two decades in spite of soaring transit subsidies.
RTD has entrusted its light-rail hopes to other hands. Two weeks ago the board approved the selection of a new lobbying firm, The Jefferson Group, and authorized spending up to $150,000 over the next year in an effort to coax money from Congress and federal transportation agencies for light rail and other transit projects--despite having been rejected by the feds in its quest to obtain start-up funds for a proposed light-rail line to Littleton last year.
The measure barely passed, but only because a substantial minority of the board favored awarding the contract to a competing lobbying firm. Only one boardmember--Bishop, a strong backer of privatization--questioned whether a government agency lobbying other government agencies for more subsidies was money well-spent.
Wendell Cox was not consulted.
Get the ICYMI: Today's Top Stories Newsletter Our daily newsletter delivers quick clicks to keep you in the know
Catch up on the day's news and stay informed with our daily digest of the most popular news, music, food and arts stories in Denver, delivered to your inbox Monday through Friday.