Archive for Transit Labor
Shortly after Gov. Andrew Cuomo made a show of riding in on a white horse to rescue the Long Island Rail Road riders when no one else would, the MTA and its Long Island unions have brokered a deal ensuring labor peace. Word of the deal first leaked late Thursday morning through a statement issued by IBEW Local 589, the LIRR’s electricians union, and Cuomo brought together MTA Chair and CEO Tom Prendergast and United Transportation Union President Anthony Simon to announce the deal this afternoon.
During the press conference, details were sparse, and not until reporters asked did Cuomo unveil that the LIRR workers will get a deal markedly similar to that in the two Presidential Emergency Board decisions but with some key differences. “This is a compromise by both parties,” Cuomo stated. “Neither side gets everything they wanted to get.”
The degree to which Cuomo’s statement is an accurate reflection of the outcome can be debated for a while. The LIRR union workers will earn raises totaling 17 percent over 6.5 years after the MTA initially proposed no wage increases. As Cuomo and Prendergast repeatedly noted that these wage increases will have no affect on the MTA’s fare structure or capital plans, the money will come from the benefits pool (as well as from future hires who, by definition, are never represented in labor discussions). For the first time in LIRR history, employees will contribute to their health insurance costs while new employees will have, according to a subsequent release, “different wage progressions and pension plan contributions.” The unions will vote on this plan over the next month while the MTA Board members will receive a full assessment of its economic impact prior to their September meetings.
“The agreement we reached today with the assistance of Governor Cuomo is just what he advocated – a fair and reasonable contract that will enable the nation’s busiest commuter railroad to continue to serve the people of Long Island,” Prendergast said. “Both sides have compromised to reach an agreement that gives our employees the raises they deserve while also providing for the MTA’s long-term financial stability.”
Throughout the short press conference, Simon continued to note that “this was about the riders,” and he pressed that angle to a degree that seemed nearly insincere. Had this been about the riders, the MTA would have pushed for work rule reform, and the unions would have accepted it. Instead, under pressure from Cuomo, the MTA squandered again a chance to enact real labor reforms that would improve efficiency and cut down on unnecessary spending. Although 300,000 riders won’t have to experience the pain of a strike, this wasn’t really about the riders at all.
Meanwhile, a few blocks away from the press conference touting this deal, the MTA Reinvention Commission soldiered onward. It was hard not to think that the MTA had let a prime opportunity for reinvention slip through its fingers. Such are the costs of labor peace.
The funny thing about labor discussions, disputes and negotiations is that they are nearly impossible to predict. It’s hard to separate theater and posturing from actually productive conversations and negotiations, and whatever’s happening with the LIRR unions is proving this point perfectly. A day ago, I would have said a strike was a near-certainty. Today, after some politicking from Albany and revived discussions, I’m hedging my bets. With just under three days until the MTA has to start paring back service, time is definitely of the essence.
After a few days of posturing in which the MTA went hard after the union and the union seemed to dig in for a strike, Andrew Cuomo, as expected, slowly started to step in. He issued a terse statement (and apparently had a chat with his people at the MTA as well). “The Long Island Rail Road is a critical transportation system for Long Island and New York City. We must do everything we can to prevent Long Islanders from being held hostage by a strike that would damage the regional economy and be highly disruptive for commuters,” he said. “Both the MTA and the LIRR unions need to put the interests of New Yorkers first by returning to the table today and working continuously to avoid a strike.”
Later that day, the MTA and LIRR unions pledged to talk, and the LIRR labor leaders have since dialed back the rhetoric. They’re no longer vowing a strike, but significant differences remain. Matt Flegenheimer summed up Wednesday’s goings-on:
Four days before a possible strike, the Long Island Rail Road and its unions resumed talks on Wednesday and pledged to continue informal discussions throughout the night — a conspicuous shift in tone after negotiations broke down earlier in the week. The sides were expected to remain in touch by phone and video conference on Wednesday evening and return for face-to-face meetings on Thursday morning.
The gathering came hours after Gov. Andrew M. Cuomo called on both sides to return to the negotiating table. Transportation experts have long expected Mr. Cuomo to intervene to head off a possible strike on the railroad, which handles about 300,000 rider trips on weekdays. He oversees the Metropolitan Transportation Authority, which operates the railroad. Less than an hour after Mr. Cuomo’s statement, the transportation authority said that it had asked its unions to resume negotiations.
Anthony Simon, the leader of the railroad’s largest labor group, said the unions “never wanted to leave the table.” Earlier in the week, Mr. Simon predicted that a strike was all but certain. On Wednesday, he was much more reserved. “Let’s leave the percentages off for now,” he said when asked about his past claim that the chances of a shutdown were 100 percent. “We don’t want to alarm the public anymore.”
It’s worth noting that the MTA’s offers to date have been generous, and I don’t believe the MTA should move from their position. According to materials the agency released after talks fell apart on Monday, the MTA has promised 17 percent raises in exchange for some health care contribution concessions. It’s unclear if badly needed pension and work-rule reforms are on the table, but so far, the MTA hasn’t shown a willingness to fight for much reform in a way that would overhaul the labor problems the agency currently faces.
I’m worried about Cuomo’s interference because the MTA almost needs the strike. In the short term, it would mean headaches for subway riders and major hassles for Long Island commutes (including reverse commuters), but in the long time, the MTA has to fix systematic problems with LIRR workrules, pensions and other benefit obligations. They won’t be able to do so if Gov. Cuomo is putting pressure on to settle before voters get upset. Such are the travails of labor relations during an election year. Can we look beyond the next three months?
As the dog days of summer descend upon us, the threat of an LIRR strike any time beginning in 11 days looms larger and larger. While the MTA brass and LIRR unions met on Tuesday, the sessions lasted only around four hours, and the MTA is looking not to Albany but to Washington for help.
It’s interesting to see the buck pass from Andrew Cuomo, up for reelection, to Congress, a deeply unpopular, highly partisan federal agency. As the LIRR is overseen by the feds though, Cuomo can punt. Whether voters will recognize this in November will depend upon the outcome. Earlier this week, though, while speaking with reporters, Cuomo, who was willing to take the credit for bridging Transit’s and the TWU’s labor impasse, effectively punted on the LIRR. WNYC offered up this transcript:
“It’s actually Congress that can end a strike and impose a settlement one way or the other,” Cuomo said on Monday. “So right now it seems that Congress is pivotal to what happens here, and from what I read in the newspapers it’s going to depend on what Congress intends to do and what they say they’re going to do. Congress can order them to go back, Congress can order a settlement, Congress can order mediation, Congress can order arbitration, Congress can do almost whatever they want, because they are in control of the resolution of the strike.
“The possibility of a strike causes so much anxiety I don’t even like to think about it. There is no good alternative to the LIRR on Long Island. The commute would be horrendous, however we do it. And they talk about contingency plans — we’ll have buses, we’ll have carpools — and you can do all of the above; it is still a miserable situation. So I have said to both parties: I truly hope it doesn’t get to that point. If it does get to that point, I hope Congress acts immediately to resolve it, and resolves it in a prudent way. But that they resolve it.”
Small comfort to the people of Long Island, but MTA CEO and Chairman Tom Prendergast, clearly at the behest of his boss in Albany, has asked Congress to assist. He’s traveling to Washington, D.C., on Wednesday to discuss the situation with lawmakers and sent a letter ahead of his arrival to Harry Reid, Mitch McConnell, John Boehner and Nancy Pelosi asking Congress to do something. He wrote:
I am writing to you to seek clarification on what role Congress intends to play in the event that 5,400 employees of the Long Island Rail Road (LIRR) walk off the job as early as Sunday, July 20th and paralyze the nation’s largest regional economy. Tomorrow I will be traveling to Washington D.C. to meet with members of Congress on the MTA’s position and request a clear answer on whether the United States Congress is prepared to take action if LIRR’s unions decide to stage a strike.
Over the past several months the New York Metropolitan Transportation Authority (MTA) has made a number of attempts to settle a labor dispute with unions representing LIRR’s employees. As Chairman of the MTA, I strongly believe that a resolution can be reached in a fiscally responsible manner; unfortunately, the union’s leadership has taken the position that the MTA must meet its demands or it will strike, a threat they feel comfortable making because they assume Congress will stop their strike after a few days.
As you may know, the MTA’s negotiations with the LIRR’s unions are governed by the federal Railway Labor Act (RLA), which gives commuter railroad employees the right to strike, which is a right that no other public employee in the State of New York has. Once LIRR employees walk off the job, absent a settlement, it will require an act of Congress to bring these employees back to work. The MTA will continue to push for a resolution that does not overly burden our passengers; however, we believe that the union’s leadership has made a tactical decision that Congress will intervene on their behalf in the event of a strike. As a result, the union’s leadership has been unwilling to work constructively with the MTA to come to an agreement.
Prendergast has presented Congress with three options — prevent a strike, allow a strike and require settlement sometime later, or allow a strike and take no action — and wants to know which one will be the likely outcome. It’s a move designed to put pressure on Washington and gain clarity into a situation that will likely not be resolved without outside influence.
It’s hard to read the tea leaves right now, but Congress doesn’t do much passing of resolutions these days. I wouldn’t be surprised to see a strike, and to that end, it’s not clear how the region will be affected. It won’t be pretty, and one way or another we’ll find out soon enough how this story ends.
Here is an interesting bit from Newsday: While the UTU has not officially requested a 60-day delay for its looming summer strike, union officials have floated the idea of pushing the strike back from the summer to mid-September. The strike would begin on September 17 instead of July 19, seemingly sparing Long Island’s summer tourism season.
“Our members care about Long Island and its economy,” Anthony Simon, general chairman of the Sheet Metal, Air, Rail and Transportation Union/United Transportation Union, said to the Long Island newspaper. “All we would need is the MTA to mutually agree on the extension.”
The MTA seems willing to entertain the request, thus giving both sides more time to work out a deal. Overall, though, this is an interesting political move by the UTU. It shows their willingness to recognize the public need, and it pushes the strike date closer and closer to Election Day. I have a hard time believing Gov. Andrew Cuomo, looking for a resounding victory, would allow a strike seven weeks before New York voters head to the polls, and the UTU knows this as well. As always, stay tuned.
When the MTA adopted a proposal, nearly five years ago, to shore up their finances by, in part, raising fares every two years, the plan of attack involved biennial increases of around 7-8 percent. The rate of these fare hikes outpaced inflation but was designed to overcompensate for years of fare policies that didn’t align with inflation. After a fare hike last year, though, Tom Prendergast announced that the 2015 hike would be only four percent, and I wondered if the MTA had jumped the gun.
At the time, the MTA had still been pressing for a net-zero labor increase, and it wasn’t clear how strong the MTA’s finances would be, even in the face of an improving economy. Now, we’ve been led to believe that the MTA can afford something more than net zero without rigid work rule reform, at least for the TWU, and the Long Island labor dispute has become the center piece of the battle over MTA dollars. Last week, it seemed as though a summer strike would be more likely than not, and the question on everyone’s mind concerns the money. While the Presidential Emergency Board again failed to account for the MTA’s razor-thin margins and lack of financial flexibility, the PEB still awarded the LIRR union 18 percent raises. Where would this money come from?
In a piece last week in the Daily News, Pete Donohue attempted to answer. For starters, Prendergast said at least week’s MTA board meetings, the fare hikes won’t be increased, but what about everything else? Donohue summarized:
Prendergast said that if an agreement calling for 17% raises for LIRR workers were reached, there would be an impact on MTA budget models, but members of the authority’s board still want to limit next year’s fare hike to 4%, as previously planned. “Fares we’re pretty firm on,” Prendergast said after an MTA board meeting on Wednesday.
MTA officials will meet with LIRR union leaders and attempt to negotiate a less expensive contract, Prendergast said. LIRR workers have been without a contract for more than three years. Union leaders have said they will call a strike if they don’t have a deal by the July deadline. Federal law permits strikes by commuter railroad workers after a multi-stage process of independent mediation and cooling-off periods.
Prendergast said “we’ll have to see” if the MTA would be able to afford service improvements if its budget plans had to be adjusted to accommodate LIRR raises in line with the mediation panel’s non-binding recommendation. Top transit officials last week had begun discussing implementing a package of service increases and improvements that could total $20 million, the Daily News reported.
If the MTA has to dole out more dollars than it anticipated to the LIRR union, the riders wouldn’t see planned service increases, but more alarming are the unsaid sources of revenue. The MTA would possibly have to figure out a way to use pay-as-you-go capital funding to cover labor wages for a union in bad need of reform. Such a move would leave fewer dollars for emergency repairs, component upgrades and maintenance and upkeep efforts. Clearly, that’s not a positive.
I don’t know what will happen. No one wants a strike, but as I said last week, there are some long-term gains to be had from a strike. Still, it’s important to remember that the MTA’s finances are better but still on shaky grounds, and the most vulnerable monies are the ones the agency needs the most. Instead, those dollars could go to the UTU as the city’s transit system faces a potential capital crisis.
For the second time since last 2013, a Presidential Emergency Board convened to help mediate the long-simmering labor dispute between the LIRR and UTU Local 645 has sided with the union. In a non-binding decision, the PEB urged the MTA to adopt the UTU call for wage increases of 17 percent over five years, no change in pension obligations and only the promise to negotiate over work rules with no real reforms in sight. As the MTA is unlikely to accept this decision, such a ruling paves the way for the UTU to strike in 60 days.
During the recent negotiations, the MTA had proposed a deal similar in form to that accepted this week by the Transport Workers Union Local 100. The offer included modest increases, both retroactive and in the future, as well as substantial pension reform and wage structures. The PEB did not view this as a comparable or fair offer and has rejected it. Unlike last time, though, when the first PEB stated that “It simply cannot be concluded that the MTA’s current financial position is one in which it is unable to pay for wage adjustments that are otherwise warranted,” the new decision (available here and below) stays away from a discussion of the MTA’s finances.
Still, it is highly unlikely that the MTA will accept the PEB-backed proposal, and the agency said as much tonight while hoping to stop a strike before it begins:
The MTA is disappointed that the Presidential Emergency Board did not accept as the most reasonable offer our proposal for 11 percent raises over six years for the Long Island Rail Road unions, consistent with the agreement overwhelmingly ratified by the Transport Workers Union. Our proposal is a fair and reasonable way to recognize our employees’ hard work and provide them with competitive wages, retroactive pay, quality healthcare and secure pensions. If adopted, the Board recommendation would significantly reduce funds available for the MTA Capital Plan. We still believe a fair, reasonable and affordable agreement can be negotiated at the bargaining table, as it was with the TWU.
In all likelihood, though, the UTU will strike, and the MTA is probably OK with that. Had the PEB sided with the LIRR, the optics of a strike would have been more favorable to the agency. The UTU would have been the side to reject the contract offer, but instead, the MTA will appear as though it is goading on a strike when it eventually rejects this deal. But it’s hard to say that a strike shouldn’t happen; as I discussed last night, a strike could be beneficial in the long run even as it exacts short-term pain.
So now we wait. The UTU and MTA have 60 days to attempt to negotiate something palatable to either side, and the PEB decision is nothing more than advisory. If I were a betting man, though, I’d put money a strike, and that may not be the worst outcome around.
After the jump, read the PEB decision. Read More→
As the MTA Board gears up to validate the new TWU contract on Wednesday, the union met for a vote yesterday, and the deal passed with an overwhelming majority. Over 80 percent of the rank-and-file voted in favor of the agreement — which grants modest retroactive and future raises while requiring higher healthcare contributions. It doesn’t have the work rule reform many had hoped, but it ushers in some peace after years of rancorous negotiations between the TWU and various MTA heads.
Now, attention will turn to the east as the Long Island Rail Road, whose workers can legally strike, gears up for some labor unrest. The UTU has already authorized a strike for late July, and unless the MTA and its LIRR union can come to an agreement soon, the eastern suburbs will be look at a rough summer. The TWU though may be the savior for Long Island riders hoping against a strike. The subway union and the new contract may also be just the thing the MTA needs to put some added pressure on the UTU.
In a paywalled article for Newsday, Alfonso Castillo follows that thread. It could be worse; it could be better. Castillo writes:
An LIRR union source, who spoke on condition of anonymity, said the TWU’s approval of the contract increases the likelihood of a railroad strike, as LIRR unions have lost some leverage at the bargaining table. “The MTA is going to dig their heels in now,” said the source, adding that the subway workers’ ratification gave the MTA’s case “validity.”
Without an agreement in place, 6,000 LIRR workers could legally strike as early as July 20, stranding some 300,000 daily riders who use the nation’s largest commuter railroad. The LIRR unions have said the MTA’s proposed contract is worth far less to LIRR workers than to subway workers, who will see several new perks that would not benefit railroad workers, including free rides on the LIRR. Railroad workers would also see a far bigger increase in employee health benefit contributions than transit workers will under the contract.
The unions have demanded that the MTA accept the more lucrative terms of a White House-appointed mediation board, which in December called for 17 percent raises for workers, and smaller health care cost contributions. A second Presidential Emergency Board was set to issue its recommendation for a fair LIRR contract Tuesday, just 60 days before a strike could be called. Losing the presidential board’s support a day after subway workers ratified their contract would be a “worst-case scenario,” the union source said. “That would definitely lead to a collision course.”
TWU officials, rightly so, declined to take a stance on the United Transportation Union situation. “I’m the president of the TWU Local 100. I’m not the president of the Long Island Rail Road coalition,” John Samuelson said to Newsday. “We have long-standing benefit issues that the Long Island Rail Road folks didn’t have.”
The MTA, meanwhile, claims they are committed to resolving the outstanding dispute with the UTU at the bargaining table and preferably before a strike. The clock is ticking though, and in two months, the LIRR would effectively shut down for substitute bus service until the two sides agree. As workforce reform goes, it’s more important for the MTA to extract concessions from the LIRR union at this stage in the game, and a strike almost feels inevitable. We’ll see where we are in 60 days.
Let’s play catch-up with a few shorter stories:
Upper East Side votes for bus countdown clocks
It’s no secret that the MTA doesn’t plan to spend money bringing countdown clocks to bus stops. Although BusTime is now available on smartphones and via text message on all bus routes throughout the city, the MTA hasn’t shown a willingness to spend money for countdown clocks or identify which stations deserve such clocks. They have, instead, left these clocks up to everyone else. Businesses could supply them in their windows or politicians could pay for them through discretionary funding.
On the Upper East Side, residents want these clocks, and in a recent round of participatory budgeting sponsored by Council member Ben Kallos, his constituents voted for them. While westbound countdown clocks came in second in the voting, they’ve earned $300,000 for installation, and fifteen signs along the M96, M86, M79 and M66 routes will be installed on the East Side. Additionally, Kallos will spend another $340,000 in discretionary funding to install countdown clocks at downtown M31 stops.
This is how countdown clocks will arrive at bus stations and shelters throughout the city, but it’s a very piecemeal approach. These timers will be available at downtown- or west-bound stops only, and anyone headin east or north won’t enjoy easy access to the information. Maybe, eventually, as participatory budgeting and discretionary funds are doled out throughout the years, we’ll see this technology emerge everywhere, but for now, as other entities take over this project, it will be imperfect at best.
MTA Board votes to explore mobile ticketing
Kicking and screaming, the MTA will soon begin to adopt 21st Century ticketing technology. The MTA Board this week voted to approve the LIRR’s and Metro-North’s first foray into mobile ticketing. The contract is with Masabi, LLC, and it will allow the rail road customers to purchase train tickets on their phones, tablets or mobile devices. Conductors can visually verify digital tickets or use handheld devices to scan and validate tickets much as Amtrak conductors do today. (For background on Masabi, check out this Wall Street Journal article. They already provide mobile ticketing for transit services in London, Boston and San Diego.)
“More convenient ticketing options means a better experience using the train,” said Metro-North President Joseph Giulietti. “We want to make riding the train as easy and convenient as we can. We now offer real-time train status via app, and this next step – tickets via app – promises to be another big step toward increased convenience.”
There is, of course, a catch: It’s likely to be a year before mobile ticketing is available for widespread use. Even though this isn’t a new technology, the MTA seems to be suffering from a case of not-invented-here-itis and must test this thing thoroughly. That year, though, is sooner than the Metrocard’s replacement will be ready. At least it has that going for it.
Bustitution, LIRR strike looms
A few weeks ago, the LIRR’s largest union voted to authorize a strike if it cannot reach an agreement on a new contract with MTA management by the end of July. As rank-and-file TWU members are already speaking out against their 8 percent raises, it’s likely that the LIRR union will push hard for a more generous deal. Thus, the likelihood of a strike — with Nowakowski in charge — looms large, and the MTA must plan for it.
After a contentious discussion in which it seemed as though the MTA Board wouldn’t authorize the move, the Board finally approved issuing an RFP for bus service in the event there is no LIRR service come late July. For a few minutes this week, it appeared as though the MTA Board was content to bury its head in the sand and pretend a strike wasn’t a distinct possibility. Ultimately, though, saner minds prevailed, and the RFP is out there. A strike would be very disruptive to Long Island, but at least the MTA has recognized that substitute bus service can’t materialize overnight. I’ll follow this story as the spring unfolds.
For the past few years, through the tenures of three different MTA heads, “net zero” had become a mantra. Without a net-zero labor increase, the MTA’s budget would be deeply in the red with the costs expected to fall on the riders in the form of service cuts, fare hikes or both. As late as February, the MTA warned of steep fare hikes if they couldn’t toe the net-zero line. The Citizens Budget Commission has long since endorsed the approach, and the MTA and TWU were at war.
Then, suddenly, it was election season, and the MTA and TWU were, with the help of Gov. Andrew Cuomo, shaking hands and best buds. Without exacting much in the way of labor reform — and certainly without anything close to net-zero — the MTA gave the TWU a new contract with only a few concessions. The raises — 8 percent over five years — are deserved, and there are some givebacks. But ultimately, the MTA’s labor costs are going to increase by $411 million through 2016. That ain’t net-zero.
In a document released yesterday to bond investors [pdf], the MTA offered the public its first glimpse at the ramifications of the deal. The Memorandum of Understanding won’t be released until after the TWU votes on it, and such a vote isn’t likely until after next week’s MTA Board meeting. So what we know is that the MTA is on the hook for a lot of money. The deal includes retroactive payments of $126 million and a current bump in labor expenses of around $55 million. In 2015 and 2016, the MTA expects to spend $116 million and $114 million respectively, though some experts — notably Nicole Gelinas — believes these estimates to be low.
To cover some of the costs, the new deal includes an increase in the amount of employee contributions to health and other benefits as well as a new “wage progression schedule.” Still, someone has to come up with $411 million, and MTA Chairman and CEO Tom Prendergast insists it won’t fail to the fare paying public this time around. So how is the MTA going to pay? Read it (and weep):
MTA anticipates that the onetime payment for retroactive wages in 2014 will be funded from monies derived from released 2013 general reserves budgeted for voluntary deposits to the MTA Long Island Rail Road Plan for Additional Pensions that would have reduced the unfunded liability and future expenses. Increases in current year and annual ongoing costs are anticipated to be paid from funds budgeted for voluntary deposits to the MTA Long Island Rail Road Plan for Additional Pensions, and a portion of monies earmarked for voluntary deposit into the OPEB trust for future retiree healthcare costs.
It gets better. If other unions that do not have contracts in place sign similar deals, the MTA would have to find another $300 million. This money, the agency says, will come from voluntary deposits into the OPEB trust and a reduction of PAYGO capital funds of approximately $70 million. To say this doesn’t fall on the riders is sleight of hand accounting. In fact, this entire budget is sleight hand accounting.
But now we know: The MTA is robbing future riders to pay for the present. It doesn’t bother Cuomo because he’ll be gone from Albany before the bill comes due, but for the rest of us, this isn’t a good deal. We may not pay now because the MTA will keep those looming fare hikes low, but give it a few years. We the riders will be paying then or else the system will suffer.
Gov. Andrew Cuomo, MTA CEO and Chairman Tom Prendergast and TWU Local 100 President John Samuelson just wrapped up a press conference during which the MTA and TWU announced a tentative agreement on a new labor deal. It’s a five-year deal with raises in all five years — 1 percent retroactively for the first two and 2 percent for each of the last three years. There are no work rule reforms, but TWU healthcare contributions will increase from 1.5 percent to 2 percent. And the MTA does not expect this deal to impact its planned fare hikes or razor-thin operations margins in the out-years in its financial plan. You may be wondering how; I know I am.
We don’t yet have any of the details behind the math, but estimates are that this deal could add around $150-$200 million per year to the MTA’s operations budget. The MTA has continually noted that need to secure net-zero wage increases in order to avoid jeopardizing its capital plan, but this deal contains none of that. So where does that leave us? It leaves me concerned that the riders will bear the brunt of the costs either through more deferred maintenance, no real capital expansion plans, higher fare hikes down the road, service cuts or a combination of everything. I hope I’m wrong, but this is an election year we’re in. These are the transit politics coming from up high in Albany.