Pension $ seen as ticket to end SEPTA picket

SEPTA commuters packed themselves onto the Regional Rail lines running out of Suburban Station yesterday.
SEPTA commuters packed themselves onto the Regional Rail lines running out of Suburban Station yesterday.
Posted: November 04, 2009

NEGOTIATIONS between SEPTA and Transport Workers Union Local 234 could resume as early as today, possibly ending a strike that left hundreds of thousands of commuters without transportation to work and school.

Workers walked off the job at 3 a.m. yesterday, halting the city's subways, buses and trolleys after intensive negotiations involving Gov. Rendell, Mayor Nutter and U.S. Rep. Bob Brady fell apart over pension and other issues.

SEPTA attorney Brian Pedrow said that both sides were still "considerably far apart," but he would not elaborate.

Yesterday, Local 234 President Willie Brown said that the wage package was acceptable but that he was worried about the underfunded pension fund, funded only 52 percent. He said he believed that SEPTA had not contributed to it for 10 to 12 years.

Pedrow said that a pension valuation is performed annually and that "SEPTA funds what is required, no more, no less."

Brown said that he was willing to withdraw union requests from the 186-page labor contract but wanted SEPTA to "crunch the numbers" to evaluate costs before he would withdraw anything.

"We could wake up and our pension could be completely gone," he said. "We don't want to end up like AIG, " referring to the international insurance giant who got $173 billion since last fall in a U.S. government bailout.

Brown said that earlier this week he had been looking at costs in the labor package to see what he could pull off the table to close what he believed was a $16 million gap between union and SEPTA management proposals.

Brown said that he scaled back the union's request for three years of pension increases, saving what he believed was $9 million. And he withdrew the demand to increase the monthly disability payment to $750 from $500, which reduced the gap by another $1 million.

In health care, the union believed it could save $2.3 million by urging members to switch from a Personal Choice health plan to a less expensive HMO.

By then, he believed the gap was about $4 million, not much when considering SEPTA's budget is $1 billion, he said.

"Now was time for the razzle-dazzle of moving things around," he said. "But the closer we got to closing the gap of $16 million, they stopped talking to us."

During a 13-to-14-hour session, Pedrow said, "Time and time again, they'd ask us to rerun the numbers again and again, and then another set of numbers.

"We've been negotiating for a year," he added.

"We costed out everything they asked," he said, but then added, "SEPTA went as far as it would go."

Brown, who wanted a four-year contract, was then given a "take-it-or-leave-it" five-year contract by SEPTA.

The offer included a $1,250 payment in the first year, a 2.5 percent wage increase in the second year and 3 percent for the next three years. Employee contributions to the health-care plan remained the same.

Rendell said that the offer would have increased pension contributions to 11 percent over five years, but Brown disputed that figure.

Earlier, the governor agreed to provide $6 million in transportation economic development to help in the package.

Rendell and Nutter both missed Game 5 of the World Series to participate in negotiations, and then urged TWU leadership to take what they considered was a "sensational" contract.

"We wanted to break down little things to close the gap, but SEPTA refused," said Brown. "I thought we might be able to get it down to a two, three million-dollar gap."

"What difference will that make?" asked Nutter, according to Brown.

Brown said he believed that Nutter was there to keep a lid on negotiations, because the TWU contract would become the "boilerplate" for contracts with city unions.

Brown was also concerned about "picking rights" - the right of workers to choose which piece of equipment to operate based on seniority - and instances, he says, in which women mechanics and heavy-equipment operators were allegedly discriminated against.

Finally, Rendell told Brown: "Either accept the contract, or go on strike."

Brown walked out with other TWU negotiators.

"I shook hands with Rendell and told him how much I appreciated his contributions," said Brown. "I'm not mad with them."

A Rendell spokesman said that the governor "is communicating with the union and he expects to get together in the near future."

Before meeting with Brady for three hours yesterday, Brown said he was willing to return to talks but wants to resolve specific problems:

* Full disclosure about where the pension money is going, including having an a pension expert give independent evaluation.

Pedrow said that the union asks for pension improvements every contract, which draws down the funding and increases the pension liabilities.

* A timetable of how to get the underfunded pension back where it should be.

Pedrow said that two union members attending pension meetings are given copies of materials, which they can evaluate.

* An end to alleged discrimination against women in the maintenance division, such as working on heavy equipment, or fixing buses.

"If they come off the pension piece and the picking [rights] piece, we'll have a contract," Brown said.

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