Transit Agreement Reached: No PAT Cuts and No Tax Increase

That big gust of wind that you just felt was a collective exhale from across the Pittsburgh region.

Allegheny County Executive Rich Fitzgerald stood with fellow local government leaders at the Allegheny County Courthouse on Tuesday morning, as well as the head of the Amalgamated Transit Union (ATU) Local 85, to review details of an agreement that will prevent a  that was scheduled to begin on Sept. 2.

The cut will be delayed for at least one year while state officials attempt to identify a long-term source of funding for the subsequent years. Should that not happen, the parties involved would renegotiate.

Joining Fitzgerald were Pennsylvania Department of Transportation Secretary Barry J. Schoch, ATU Local 85 President Steve Palonis and Port Authority of Allegheny County CEO Steve Bland.

The group was also joined by members of the Allegheny County delegation in the Pennsylvania House and Senate, as well as members of the Allegheny County and Pittsburgh City councils.

"In January, the Port Authority announced that it would have to cut service by 35 percent because of funding constraints," Fitzgerald said in a news release from his office. "Such a step would have destroyed our system and impacted thousands of residents, employees and businesses in our economy.

"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 Aug. 9, was ratified by ATU members on Sunday and by the Port Authority Board of Directors on Tuesday.

The union commitment provides roughly $60 million in savings to Port Authority over four years, or an average of $15 million per year, according to the news release. The four-year deal will expire on June 30, 2016.

The contract includes:

• A 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;

• An agreement to reopen the contract in 2014 to modify health care coverage and a commitment to reducing spending on health care by $1.8 million;

• The in-sourcing of certain maintenance functions at lower costs than contracting by using existing forces and equipment, resulting in a savings of $300,000.

Port Authority management has also provided 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," Bland said in the release. "We're very thankful to the parties who have been committed to seeking a lasting solution to these issues."

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

Gov. Tom Corbett and his representatives, including Schoch, have participated in the contract talks for several months.

"Since the start of the negotiation process, Gov. Corbett has supported finding a long-term solution, and ratifying this contract is a winning solution for everyone—the ATU Local 85, the Port Authority and Allegheny County," Schoch said in the release. "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.

"The state is also a winner, as this groundbreaking contract exemplifies what the governor was driving for—a lasting solution to the authority's growing legacy costs and recurring fiscal dilemmas."

Fitzgerald also credited the members of the Allegheny County delegation in the Pennsylvania House and Senate and the Allegheny County Council for their support on this issue.

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