Thoughts on overtime spending and the MTA’s ’emergency’ Board Meeting

When Andrew Cuomo wants results, things in New York tend to happen quickly. Case in point: MTA overtime spending and, in particular, the LIRR.

The Long Island Rail Road’s overtime spending issues have been a low-level concern for quite a well. Due to various work rules and pension calculations, overtime accrual can benefit workers in retirement, and Gov. Cuomo, who has pressured the MTA to sign off on labor agreements without management-suggested reforms that would combat high overtime costs, has grown tired of bad headlines about overtime payments. The Post recently reported on one LIRR worker who earned over $300,000 last year due, in part by logging over 3800 overtime hours, and the LIRR’s overtime costs have outpaced inflation over the past six years.

And so, Larry Schwartz, Cuomo’s right-hand man and the chair of the MTA Board’s Finance Committee since September of 2016, suggested an emergency meeting. Since Schwartz is Cuomo’s direct proxy, when he says jump, the MTA asks, “How high?” The emergency meeting will be at held at 4 p.m. this Friday afternoon. MTA CEO and Chairman Pat Foye issued a statement on the meeting when it was announced late Wednesday: “The issues of excessive overtime and the inadequacy of the MTA time and attendance systems must be addressed, which is why last week I ordered an immediate investigation into these matters and why I am convening a special Board meeting on this issue this coming Friday. Overtime is an important and useful tool as we urgently seek to modernize our entire system but we must be sure it is being used effectively, accurately and appropriately.”

Now, general overtime spending and the LIRR time-and-attendance concerns are two separate issues. The LIRR issues The Post was willing to put firmly on Cuomo’s shoulders:

Gov. Andrew Cuomo, who controls the MTA, helped renegotiate the [LIRR labor] deal in 2014, averting a looming strike. That contract was renewed in 2016 with minimal changes, delaying any talks of serious reforms until last week, when that agreement expired, sources say. In 2014, Cuomo was happy to accept praise for stepping in to help hash out the contract over a seafood lunch in Midtown, with a subsequent MTA press release celebrating his role in the deal…But when asked on Thursday how he would ensure the next contract curbed overtime costs, Cuomo claimed he had no power to slam the brakes on the off-the-rails spending in a new deal…

In the 2014 contract, LIRR brass were seeking reforms to curtail payroll and overtime costs…Among them: scrapping the system that gives people with the most seniority first dibs on overtime and instead equalizing it among all employees based on attendance and overtime already worked, according to a federal report into the contract dispute. Other proposed measures included changing some double-time payments to time-and-a-half and eliminating extra pay given to conductors when they work on both a passenger and freight train in the same shift. None of the reforms was made, according to an MTA source.

If this sounds like a leader attempting to have his cake and eat it too, that’s because it is, and it’s a prime example of why good governance groups are skeptical of Cuomo’s faux-reform efforts. More on that shortly. Melissa DeRosa, a top Cuomo aide, also sent a strident letter to MTA officials, bemoaning how “abuses in the attendance system demonstrate again that basic management control is lacking.” She has not — and will not — acknowledge how these “abuses” were essentially baked into the system when Cuomo approved the 2014 labor deals.

In the lead-up to today’s “emergency” Board meeting, the MTA first sicced its police force on LIRR workers, alleging that cops would enforce time-and-attendance practices. This drew an immediate backlash from the TWU, and the MTA hastily retreated on this Pinkerton-esque approach. Never mind that the MTA’s cops are among the most egregious abusers of overtime. We’ll see where enforcement goes after today’s meeting.

Meanwhile, back to “normal” overtime spending, a separate issue from LIRR bookkeeping. Here’s a quick snapshot of the MTA’s planned overtime spending and actuals with the total adjusted for inflation set to 2018 dollars during Andrew Cuomo’s entire tenure as governor (which coincides with his entire tenure as being responsible for the MTA). Figures are in “millions.”

As you can see, the MTA is consistently blowing past its overtime budgets, but the problem has seemingly increased significantly in 2017 and 2018. Last year, in fact, that MTA blew past its initial overtime estimates by $400 million. Why? Well, MTA Board materials point the biggest fingers at overtime spending due to Andrew Cuomo’s very own Subway Action Plan. His Emergency Order sets the stage for the MTA to spend without certain budget controls, and the governor’s demands that the MTA realize the goals of his Subway Action Plan have led to a steep increase in overtime spending. In both 2017 and 2019, the Subway Action Plan was one of the key drivers. Here’s what New York City Transit had to say in its Board materials: “Higher overtime expenses of $218.9 million (47.0 percent) were essentially driven by track, signals infrastructure, station maintenance and car equipment requirements, including Subway Action Plan (SAP) initiatives.” (The reports on 2017 expenditures said essentially the same thing regarding overtime and the Subway Action Plan.)

Will today’s emergency Board meeting focus on how Cuomo’s own initiatives are forcing the MTA to rely on increased overtime spending? I wouldn’t hold my breath. After all, Schwartz, the Cuomo confidante who called for this Board meeting, has been in charge of the Finance Committee since 2016 and has been receiving these OT reports monthly since then. Is he blaming the MTA for his own oversight failures? Why hasn’t Schwartz been aggressive in attacking overtime since he began serving on the Board when, as the chart shows, it was already clear the MTA couldn’t project or control overtime costs? It’s hard sometimes to look in the mirror.

Good governance group Reinvent Albany is equally skeptical. They called today’s meeting “political theater” and pointed to three key facts about overtime spending:

1. The Governor controls the day to day operations of the MTA via his ability to hire and fire the CEO of the MTA Patrick Foye. The CEO hires and fires the MTA agency presidents, including the president of the Long Island Rail Road (LIRR).

2. The MTA Board has no say over the day-to-day operations of the MTA and no involvement in day-to-day authorization or tracking of overtime.

3. There is no sudden overtime “emergency.” MTA management asks employees to perform overtime, all overtime is either at behest of management or approved in advance, and is carefully tracked. The MTA board and senior staff have frequently discussed overtime at MTA board meetings. There is no new information about overtime, just public embarrassment to the Governor and MTA caused by press coverage. Further, no public materials or agenda have been released for today’s meeting, showing that this response is being rushed and will not be a serious review.

I’ll give the final words to Reinvent Albany Executive Director John Kaehny: “The public will not trust the MTA until the Governor and his appointees acknowledge simple truths and stop with the political theater. The Governor controls the MTA through the CEO he hires and fires. Today’s ’emergency’ board meeting about overtime is a reaction to press coverage, not new information. MTA and LIRR management completely control the overtime process and know exactly what is going on. They ask employees to do overtime and track it carefully. What’s really going on is that the MTA hiring freeze and management pay freeze are creating dysfunction and shortages of skilled workers that are aggravated by work rules.”