Last week, we interviewed TriMet General Manager Neil McFarlane using your suggested questions as a basis for the discussion.
The result is a series of 4 videos of the major topic areas of that discussion. Today’s video focuses on the labor relationship between TriMet and the ATU.
This is the fourth year we’ve produced these chats. The last two times, we’ve worked to release transcripts along-side the videos. This year, in an effort to get the videos out faster (and therefore be more relevant to evolving topics), we’re posting the videos ahead of creating the transcripts. As always, we’d love to hear from volunteers who can assist in the transcription process.
Transcript for part one is now available after the jump.
Chris Smith: Well, Neil, I’d like to thank you for taking the time to sit down and answer a few questions on the minds of Portland Transport readers. This is our fourth year, and we’ve enjoyed, and hope you do as well.
Neil McFarlane: It’s my pleasure, and again I want to thank you for great work at the transport blog in terms of providing a great voice within the community, so I appreciate that.
CS: All right, well lets get started. The questions are divided into four major sections. The first is the labor relationship, whats on everybody’s mind. Lets start with the existing contract. There have been several arbitrations and court rulings, but there are still some things on appeal. Could you tell us what still is yet to be decided, and what the impacts are for riders if it goes either way?
NM: You bet. So first thing is, just to note, and I think your question implies this, which is there is a great deal of uncertainty as related to labor costs, which is over half of our operating budget when you really think about it, as we move into the budget for fiscal year 2014. One of the challenges we’ve got is we feel we’re building uncertainty on top of uncertainty. So related to the contract that ended Nov 30 of last year, recall that our arbitrator, in August, rewarded the contract proposal that TriMet had made, so TriMet was the winner. ATU appealed that. That appeal was to the Employee Relations Board. That appeal was heard in terms of oral briefing and it’s been briefed since by the attorneys since then, and now we’re awaiting a decision. It could be any day, or it could be a couple of months, nobody really knows the timeline of that. That’s a pretty important decision, because it is really the foundation from which both our budget is built, and we’re assuming that that arbitration decision is sustained, in the current budget moving forward for this year.
CS: And that allows you to make some service improvements next year.
NM: Exactly, And it allows us to have no fare increase, no service cuts, and some service improvements. So it’s really its significant. It also is a building block for negotiations for the next contract. Now, I think the important thing to note, is you asked for the impact on the riders. In any case, we believe that we can sustain the level of service as proposed in the FY2014 budget, through that fiscal year. But were we to lose that appeal, then we’re going to be in the service reductions and fare increases, and this sort of cutback mode next fiscal year, through fiscal year 2015, unavoidably. It’s probably $6-8 miliion a year of cost. Now all of that is underlaid by what’s the economy doing, what are the other issues of the day, so we’ll obviously fine-tune that as we progress, but it will be a signifiant building block. The other remaining issues have to do with, and part of that, by the way, is wrapped in all of this on the last contract, is the Unfair Labor Practice (complaint) that the ATU won, and based on that we owe the employees about $3.6M. We’re appealing that to the Court of Appeals, because we don’t believe that the ERB was completely right in its analysis of that decision. But also as part of the arbitration, just to make things totally confusing, there is a reimbursement of medical premiums from employees over time. Now that $3.6M and the reimbursement of employees are one-time only costs, so they are important, we have to pay attention to them, but the real fundamental for us is what is the base of the agreement moving forward, and what we call our continuing expense category.
CS: Well let’s talk next about the current round of labor negotiations that have started. ATU has asked that the current round be open to the press and/or to the public. What’s TriMet’s stance on that, and where are we at now?
NM: So first of all, we have coming this Saturday on the 27th, the first meeting, which is really to set the ground rules for negotiations. And the admittance of press or public, I think the issue really comes down to the press at this point in time, will be what are the conversations of those ground rules. TriMet’s position is that the press should be admitted, and you talk about sort of the major elements of the press. We think that that provides good public transparency and accountability, having the press there. We don’t wait it open to the public. And the main reason for that, is these are really serious conversations. WE don’t need cheerleaders in the back rows. We don’t need people playing to a crowd. We need very serious rapt attention to difficult issues that we have. And just to reiterate, the key issues there, the key drivers of TriMets cost structure are health benefits for active and retirees. And I’m really cautious to say, that nobodys, this is really nobody’s fault, it’s important I think to note that. But right now the benefit that we have is just not sustainable. The math doesn’t work. So that’s a reality that both players have to understand and come to. Those kinds of issues are very hard work. And a lot of mutual education needs to go on, and that what the collective bargaining process is all about, and that’s why we’re looking forward to get going.
CS: Leading into the next question, you’ve highlighted that the health costs are an important part of the budget and labor negotiations. The union has made a lot of hay recently about the way that raises were handed out in this last budget, and the perceived lack of transparency around that process. I think it’s hard for the public to know, charges and counter-charges going back and forth, who to believe, what’s the truth. In a post on Portland Transport a few months ago, I suggested that the public might benefit greatly from an independent audit and benchmarking against other agencies to see where TriMet’s financials really stack up against other comparables. Is that an idea you’ve considered? Are you open to it?
NM: You know, I’m certainly open to it. But I will also tell you, that if you look at our arbitration presentations from last August, you’ll find all those benchmarks. You’ll find all those peer comparisons that you’re talking about in terms of wages and healthcare benefits. So all of that exists and is in the public record, in the public realm, right now.
CS: But that’s TriMet’s compilation of the data as opposed to an independent review.
NM: And you know, an independent review is fine but, you know, these are generally pieces of information that are pulled from the National Transit Database. These aren’t exactly you know secret sources of information by any means, they’re very public pieces of information. So, I mean I understand the charges and countercharges and think it’s really important for both TriMet and ATU, as we enter into this round of negotiations, to try to lower the tone and volume and try very hard to make sure that we both are doing a good job of educating not only ourselves but our constituents about the issues that we face. Our cry about the healthcare benefit is not for the detriment of our employees, who we have a great deal of regard for, all of them, who we hold in regard, but it is simply the math that is not sustainable, and there’s lot of ways to begin to deal with that. And if we begin to hear what’s important from the ATU, maybe we can find some mutual ways to get to a right solution. But that’s what collective bargaining is all about.
CS: Healthcare is clearly a big deal in our whole society. And we have changes happening, with the Affordable Care Act, and the state of Oregon will soon be setting up health exchanges to make it easier for people to buy insurance. Will any of that help TriMet’s situation?
NM: Not that I see right now. There’s some potential horizon, I think, but what we’re learning from this, and we have a lot of brown bag lunches and other kinds of exchanges with people in the healthcare industry at TriMet, and we need to do, to broaden that exchange i think, with some of our untion leadership and union members, but the changes within the healthcare industry are obviously dramatic. Largely because of the Affordable Care Act, and particularly because Oregon is an innovator in that. What we’re learning is literally its one of these 80-20 rules, where 20% of our enrollees in healthcare cause, or are responsible for 80% of the costs. So what many intelligent insurance programs, and I think Kaiser, for example, is one of them, are doing is really working with that 20% to make sure they’re getting excellent care but also not wasting the dollars for extra tests or other things along the way. Meanwhile, looking at those that might be close to entering that 20%, working with them to stay healthy. So there’s a lot associated with that that I think can be done and will be layered on to what are sort of considered normal insurance policies as we move ahead.
CS: So you talked about the portion of population that drives the expense, and efforts to make the employees healthier. Driving a bus has got to be a challenge from a health area, you’re sitting all day. I’m fortunate enough to have a desk job, but even in my world people have standing desks and treadmill desks, as people recognize that sitting is not good thing to do all day. Anybody ever built a bus that you can drive standing up or in some healthier posture than sitting in that chair all day?
NM: I’ve never seen that, but there’s an awful lot of work that goes into ergonomics of the driver’s seat and the driver location. A lot of people don’t realize acutally there’s some work we’re doing to fine tune this, but the newest busses we’ve bought, the 55 new busses, they actually have pedals that can move back and forth on a plate, so that for example, I interviewed one relatively petite driver, said these are actually the best busses you’ve ever had, but are particularly true for her, because her feet didn’t have such a hard time reaching the pedals. So there’s a lot that I think we can do to the ergonomics of the job and really focus on, and our safety department is doing that on a regular basis. Matter of fact, our Type 5 LRVs coming for the Portland Milwaukie project have another remodel, if you will, of the cab, to make sure we’re doing what we can with the ergonomics. But I’ll also say, you know, there are lots of times during the operator’s day where you could get out and walk at a layover, or take advantage of the times at a transit center. So that’s one of the things we have to really encourage. It is a sedentary job, sitting, and there’s lot of stress associated with it. It’s very important to work that out when the opportunities avail themselves.
CS: So we’ve had one very contentious contract negotiation that went way over the timeline, we’re headed to another, it appears, very contentious. What’s the prospect for getting to a more productive and cooperative labor relationship where we’re more not having every contract be putting service to riders at risk and have all this uncertainty for everyone?
NM: Well, my view, and I know it’s not one that’s held by everyone, is that the binding arbitration statute is one of the mistakes. Allowing that to go through without a word of protest was a mistake of TriMet in 2007. The thing about normal collective bargaining is there is a deadline and there is a cliff and there is a need to come to agreement. And if you look at forty years of TriMet’s history, that’s what happened. Time after time again. The problem right now with binding arbitration is that it’s not very timely, as you’ve noted, you first go round, and the second go-round doesn’t seem to be performing much different. And that puts everybody, including our employees, a great deal of uncertainty and risk. But it also the question with ERB review of the arbitrator’s decision, is it really binding? So, I think there’s a problem there, number one, but number two, if that’s going to be the rules of the game, than what we have to do is operate the best we can, and I think the best we can is really honest and straightforward and businesslike negotiations. I’d like to say that I think the ATU is stepping up to that, in a very good way, and an example of that was our revised hours of service policy that was negotiated with the ATU. And I give Bruce Hansen, president of ATU, very high marks for stepping up to a real problem and helping us solve it, so my hope is that is an indicator of the kind of work, hard work, that we can do together. But it is very hard work, and it takes a long time, and remember union leaders is that he’s the leader of an organization, and he has to bring and communicate with the membership in order to bring them along, so you have to be respectful of that process as well.
CS: So let me play devil’s advocate a little bit here. If we don’t have binding arbitration as the methodology than we have the potential for a transit strike, which would obviously have big impacts on the community, particularly the portions of the community that are transit dependent. How do we weight that risk against the challenges we are having now, in the current form of the process?
NM: Well, so lets sort of flash forward where you’re weighing the chance, the chance of a strike, which you know if you look historically around the country, very few, and pretty short when they occur, the only one that’s happened in Oregon in modern times if you were, was the [inaudible] strike in Eugene, that’s what led to the 2007 law, vs the continued erosion of service with the benefit and wage program primarily health care benefits that are not sustainable, and so you’ve got potential for long term erosion, versus getting it fixed, even if take a little pain up front. So those are the tradeoffs, It’s an intelligent.. our state legislature can help make those has obviously made those tradeoffs. And we’ll play by the rules of the game, obviously, but you know I think there’s really something to be thought about.
CS: And the bill this session that would have changed that is dead, is that correct?
NM: That’s my understanding.