Transit Agreement Reached: No Cuts to Service and No Tax Increase

PITTSBURGH – Allegheny County Executive Rich Fitzgerald, Pennsylvania Department of Transportation Secretary Barry J. Schoch, Amalgamated Transit Union (ATU) Local 85 President Steve Palonis, and Port Authority of Allegheny County CEO Steve Bland stood together this morning to review details of an agreement that will prevent a 35 percent cut in transit service. The group was also joined by members of the Allegheny County delegation in the Pennsylvania House and Senate, as well as members of Allegheny County Council and Pittsburgh City Council.

“In January, the Port Authority announced that it would have to cut service by 35 percent because of funding constraints. Such a step would have destroyed our system and impacted thousands of residents, employees and businesses in our economy,” said County Executive Fitzgerald. “I am proud to stand here today with these partners and announce that because of the cooperation and commitment that the ATU, the Port Authority and the state have shown, there will be no cuts to Port Authority service in September.”

The tentative transit agreement, reached on August 9, was ratified by ATU members on Sunday and by the Port Authority of Allegheny County this morning. The union commitment provides $60 million in savings to the Port Authority over four years, or an average $15 million a year. The four-year deal will expire on June 30, 2016.

The contract includes:

  • Two-year wage freeze, resulting in a savings of $19.6 million;
  • Increase in employee pension contributions from 5.5 percent to 10.5 percent of wages, generating $26.8 million in savings;
  • Changes to vacation eligibility, providing another $11.3 million in savings;
  • Additionally, the union has agreed to reopen the agreement in 2014 to modify healthcare coverage and has committed to reducing spending on healthcare by $1.8 million;
  • Remaining savings of $300,000 will be achieved through the in-sourcing of certain maintenance functions at lower costs than contracting, by using existing forces and equipment.

Port Authority management also has stepped up by providing an additional $10 million in savings achieved by increasing pension contributions of non-represented employees from 4.5 percent to 10.5 percent, as well as departmental cost reductions.

"These changes not only help preserve transit service today, they are a significant step toward protecting public transportation in Allegheny County for many years. We're very thankful to the parties who have been committed to seeking a lasting solution to these issues," Bland said.

Allegheny County is also providing an additional $4.5 million in funding and is doing so without raising taxes. The Executive announced today that $1.5 million would come from drink and car rental tax revenues, with no increase over the current rate. An application will also be submitted to the Allegheny Regional Asset District for the remainder of the funding committed by the county. The Executive has indicated that he will support that application and advocate for its full funding.

Governor Corbett has also played an integral part in this deal and the ongoing conversation related to addressing legacy costs and ensuring that we are not having this conversation over and over again. With his commitment to addressing this issue, the Governor and his representatives, including Secretary Schoch, have participated in the contract talks for several months.

“Since the start of the negotiation process, Governor Corbett has supported finding a long-term solution and ratifying this contract is a winning solution for everyone – the Amalgamated Transit Union Local 85, the Port Authority and Allegheny County. But most importantly for thousands of riders who rely on transit, it means continued access to medical visits and employment in the City of Champions,” said PennDOT Secretary Barry J. Schoch. “The state is also a winner as this ground-breaking contract exemplifies what the Governor was driving for – a lasting solution to the authority’s growing legacy costs and recurring fiscal dilemmas.”

County Executive Fitzgerald also credited the members of the Allegheny County delegation in the Pennsylvania House and Senate, as well as Allegheny County Council, for their unending support on this issue and their recognition of the importance and impact of such cuts on the county and its residents.

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