Drastic Service Cuts Loom in Ongoing Labor Dispute
Press Releases
07/27/2010
AC Transit officials today warned that severe service cuts-including the elimination of many weekend bus routes– is likely unless the agency’s largest union agrees to labor concessions.
Last March, the agency reduced service by 7.8 percent and will cut an additional 7.2 percent of service in August to reap $21.7 million in cost savings. But to remain solvent, the agency also must reduce labor cost by $15.7 million to cope with a projected deficit of $56 million for a two-year period ending on June 30, 2011.
Consequently, last month the agency adopted some new work rules for the Amalgamated Transit Union (ATU) after three months of contract negotiations reached an impasse. The new rules keep basic union wages and healthcare benefits intact, but initiates changes related to overtime, co-pay policies for medical care and employee health insurance, and a two-tier pension plan.
ATU, which represents 1,750 employees-including about 1,200 bus drivers, has balked at the changes, sought a court mandate for binding arbitration, and has steadily disrupted service with a rolling “sickout” by bus drivers.
On Friday, the court is scheduled to review a legal challenge by the ATU to overturn the contract adopted by the District. Should the judge overturn the contract, the District may appeal the judge’s ruling because otherwise more layoffs and a drastic cut of weekend service would be unavoidable.
“When it comes to service cuts, we have virtually reached our limit. The only thing left-the only way to really handle our financial shortfall-is to eliminate all weekend service,” said Interim General Manager Mary King. “It would be devastating, particularly for our senior customers who depend on the bus to shop and go to worship, and to those who rely on weekend service to get to work. But the savings have to come from somewhere, if not from labor costs.”
Already the agency has:
• Eliminated more than 70 general and administrative staff positions. In addition, a third of its executive staff has also been eliminated –including the elimination of three executive management staff– the use of district vehicles has been curtailed and management leave benefits have been canceled. Together, that has reduced expenses by $9.2 million. But, as yet, there have been NO layoffs to or concessions from drivers or mechanics.
• Raised fares. Local riders are paying more due to the 25 cents per trip fare increase and $10 increase in the price of a monthly pass. Transbay riders are paying more due to the 50 cents per trip fare increase and $16.50 increase in the price of a monthly pass. Youth, senior and disabled riders are paying more due to the 15 cents per trip local fare increase and 30 cents Transbay increase.
• Cut Service. Riders also had their bus service reduced in March by 7.8% or $10.3 million worth of service hours; they are facing a second round of service cuts in August that will further reduce service by 7.2% or $11.4 million in service hours.
• Reduced Spending. The Board of Directors has cut its salary by 5%, cut travel by 50%, and eliminated a special travel account for transit advocacy.
Even though significant spending reductions have been achieved with these cuts, it is still not enough to balance the budget, given that labor costs account for about 75% of the agency’s operating budget. Without contributions from the ATU members, the budget gap cannot be closed.