Port Authority drivers, mechanics and first-level supervisors would have their wages frozen for two years and contribute more to the pension fund under a tentative contract agreement that was reached last week.
The four-year agreement calls for union concessions on health care, retiree health care and vacations. It also has unique language that could void the contract if the state and Allegheny County fail to provide adequate funding and the transit agency is forced to lay off workers or close another bus garage.
Details of the agreement were distributed to about 2,300 members of Amalgamated Transit Union Local 85 on Tuesday. A copy of the summary was obtained by the Pittsburgh Post-Gazette.
The contract was hammered out in months of private talks that included state and county officials in addition to Port Authority management and union leaders, as part of an effort to head off a record-breaking 35 percent transit service cut and hundreds of layoffs that are scheduled to take effect Sept. 2.
Gov. Tom Corbett demanded cost-saving measures from the authority and the union before he would consider an infusion of state money to help the authority close its projected $64 million budget deficit without cutting service or laying off employees.
The parties agreed to a framework under which the governor would provide about half of the funding, with the remainder coming from a combination of union contract concessions, management savings and an increased county contribution.
A union ratification vote is scheduled Sunday at the David L. Lawrence Convention Center. If Local 85 approves the pact, the authority board of directors will meet to vote on it within the ensuing few days.
The tentative agreement is retroactive to July 1. After two years of frozen wages, employees would get raises as follows: 2.25 percent on July 1, 2014; 2.25 percent on April 1, 2015; 2 percent on July 1, 2015; and 2.25 percent on Feb. 1, 2016.
Employee contributions to the pension fund would immediately increase from the current 5.5 percent of wages to 10.5 percent. If the pension plan reaches full funding, the contribution rolls back to 4.5 percent.
As another means of reducing authority operating costs, the agreement changes the method of computing the authority's annual contribution to the pension fund, using what it calls a 10-year smoothing period rather than five years.
Post-retirement health care was changed for employees hired after July 1. Instead of lifetime coverage, they will be eligible for a maximum of three years' coverage and will be responsible for the same contributions as active employees.
The union has committed to produce an additional $1.8 million in health care savings over the term of the agreement by encouraging retirees to convert to a lower-cost option or discontinue their coverage.
The agreement increases the number of annual work hours required for full vacation benefits from 1,200 to 1,750.
It also has unconventional language that is intended to motivate state and county officials to enact a long-term solution to the authority's chronic funding problems. Fares have been increased four times and service cut three times in the past decade, not including the scheduled Sept. 2 reductions that would be the largest in the agency's 48-year history and leave riders with about half of the service that existed at the start of last year.
The authority relies on the state for more than half of its operating funds, but those contributions have been flat or decreasing for several years, including a $34 million cut in the 2010-11 fiscal year. Transit advocates for years have urged the Legislature to enact a funding method that produces a reliable and growing stream of revenue so the agency can keep pace with inflation.
If that doesn't happen and the authority is forced to lay off more than 5 percent of its workforce or close a bus garage, either side has the ability to cancel the contract and revert to the one that recently expired.
Amie Downs, spokeswoman for Allegheny County Executive Rich Fitzgerald, has said he would not comment on or disclose contract terms until after the ratification vote.
Port Authority spokesman Jim Ritchie also declined comment on Tuesday.
Stephen M. Palonis, Local 85 president and business agent, said in a statement that "the task of negotiating this contract was daunting. Faced with a possible closing of the Collier garage, the layoff of more than 500 employees, and the destruction of mass transit for our riding public, the overwhelming majority of the officers and Union Executive Board recognize that this agreement will provide long-term stability for transit in this county. We have considered all alternatives and have concluded that it is the best deal possible and as a result the Executive Board has recommended that the Union members approve the agreement."Transportation