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Much of New York Transit Agencys $560 Million Overtime Tab 'Cant Be Justified,' Exec Says

May 21, 2010
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New York’s Metropolitan Transportation Authority said it would cut millions of dollars in overtime expenses as part of the transportation agency’s ongoing effort to plug a $790 million budget deficit.

The MTA said it would reduce its $560 million annual overtime spending by $22 million this year and $60 million next year, but added that concessions from the transit agency’s unions were needed to achieve some of the reductions.

“Some overtime is needed to put out a reliable service and respond to emergencies, but much of it is unnecessary and can’t be justified,” MTA chief operating officer Charles Monheim said in a statement. “MTA leadership is now committed to eliminating unnecessary overtime, and we expect new controls to save millions. We will do our part, but a real partnership with labor is the only way to make a real dent in unnecessary overtime.”

The MTA detailed ways outmoded union work rules, high employee absenteeism and pension-related incentives bloat overtime expenses.

For example, some locomotive engineers at the Long Island Rail Road can receive an extra day’s pay simply for switching between electric and diesel trains.

Employees also use overtime to make up for absences. In addition to 37 holiday and vacation days, a quarter of unionized New York City Transit employees take 15 or more sick days each year, the authority said.

John Samuelsen, president of Local 100 of the Transport Workers Union, said he had not been informed by the MTA of its cost cutting proposals, but he defended the union’s benefits, which was negotiated under its current contract.

“Transit workers get paid vacation. We get paid sick time and we get paid holidays and we’re not apologetic for that,” he said. “We work hard. We’re exposed to the elements. We work around rats.

“And when we call in sick, the company that should be embracing us and telling us what a wonderful job we do moving millions of riders every day, goes to the media and tries to portray us as slackers who use too much sick time,” Samuelsen said.

The authority said employees whose pensions are calculated using the highest five years of earnings try to load up on overtime to increase pensions as they near retirement. One MTA Bridges and Tunnels employee who retired in 2007 is paid $20,000 a year more in retirement—$73,000—than his annual base pay because he worked 35 shifts of 16 hours or more in his final year.

In addition to union work rules, the transit authority blamed some of the wasted overtime costs on its own sloppy management. It said reliance on overtime enabled low productivity. Unusually high overtime costs meant bus repairs at the Castleton Depot were $2 million more each year than at another depot and that some jobs, such as air conditioner maintenance, took twice as long as at other depots.

The authority’s budget situation deteriorated sharply this year when revenue from a new payroll tax fell far short of expectations. Proposed state budget cuts have also worsened the MTA’s budget prospects.

Today’s announcement is the fifth such cost-cutting measure introduced by the MTA since April. The measures would plug about half of the projected budget gap. The other half, or $378 million in savings, will come from previously announced layoffs and service changes.

Filed by Jeremy Smerd of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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