Pierce Transit raises under scope

Most Pierce Transit employees stand to get a 4 percent raise this summer even as the agency considers major service cuts and tax increases to balance its budget.

Until recently, Pierce Transit also planned to give employees 4 percent raises each year through 2015. That would have raised the agency’s spending on wages 35 percent over six years.

Pierce Transit now is revisiting employee pay as it considers eliminating bus service in much of the county or asking voters to approve a sales tax increase.

It’s asked the union representing most of its 980 employees to renegotiate the 4 percent raise set for this summer. And it’s now planning for 2.5 percent annual raises in future years.

Pierce Transit officials say they’re trying to contain costs, including employee pay.

“I think the idea of continual increases in (employee) contracts when inflation is basically flat is something that needs to be discussed,” said County Councilman Terry Lee, who serves as chairman of the Pierce Transit Board of Commissioners.

Scrutiny of employee pay and other costs comes as Pierce Transit struggles to balance its budget.

The agency has seen its sales tax revenue – 70 percent of its $119 million operating income – fall more than $40 million from 2007 through 2009. It has saved about $72 million by cutting staff, reducing service and raising fares. But sales taxes aren’t expected to recover until 2016.

In February, Pierce Transit announced it might eliminate bus service in much of Pierce County in 2012 unless it can find more money to balance its budget.

Under one scenario, the agency said it would ax 28 of its 51 bus routes. Service would be eliminated in most of East Pierce County and Northeast Tacoma.

To offset those cuts, Pierce Transit may ask voters to approve a three-tenths of 1 percent sales tax increase in November or next February.

RAISES IN QUESTION

It’s also rethinking employee raises.

From 2007 to 2009, as sales tax revenue fell $40 million, Pierce Transit spending on wages grew $6.7 million, or 13 percent.

Last year, median earnings for the agency’s transit operators was $58,889. With overtime, a handful made more than $90,000.

This year Pierce Transit eliminated cost-of-living raises for nonunion employees. But under Pierce Transit’s current contract with the Amalgamated Transit Union Local 758, most employees will get a 4 percent pay raise July 1. The raise is based on past inflation, but also on pay of employees at comparable agencies around the region and country.

Until recently, Pierce Transit’s six-year financial plan also assumed employees would get 4 percent raises each year through 2015.

Because of those raises, the agency’s spending on wages was projected to rise 35 percent – or $20.5 million – from 2009 through 2015, even though the number of employees would remain flat. Total employee compensation – including benefits – was projected to rise 46 percent.

This year union employees will pay $110 toward the $1,375 montly cost of one family health insurance plan. Single employees pay $85 for a plan that costs the same.

In a recent interview, Pierce Transit chief executive Lynn Griffith said the projected 4 percent raise in future years was just a “place holder” based in part on inflation estimates that preceded the economic recession.

Based on more recent estimates, the agency earlier this month revised projected future raises to 2.5 percent annually through 2015.

“I think 2.5 percent is reasonable,” Griffith said. “Nobody should have expectations beyond that.”

UNION ASKED TO GIVE

Nonetheless, correspondence between Pierce Transit officials and the transit workers’ union suggests the agency is mindful of how employee raises might play with voters if they’re asked to consider a tax increase.

In a November letter, Griffith and former board Chairman Mike Lonergan asked the president of the transit workers’ union to renegotiate the 4 percent pay raise scheduled for July. They said Pierce Transit “must be able to assure our citizens that this agency has done its due diligence in cost reductions prior to asking taxpayers for more revenue.”

The union is not obligated to renegotiate the contract once it’s approved. Despite several requests, it has rejected the idea of reopening negotiations.

Isaac Tate, the union president, said he wouldn’t rule out concessions in the next contract, which would begin in 2011. But he wants to know if the agency is willing to trim management positions and other costs before discussing employee pay.

“To many members, it appears the agency is top-heavy,” Tate said.

Griffith said the agency has reduced the size of its administrative staff. The number of vice presidents has fallen from seven to three over the last four years. The total number of nonunion employees has fallen from 75 to 60, she said, a 20 percent cut.

Griffith said Pierce Transit will continue to cut its administrative staff if the agency is forced to scale back its budget.

If the 4 percent raise takes effect July 1 it will cost the agency about $1.7 million. Griffith said she has no specific savings goal in mind from reopening the union contract.

“Let’s come back and talk about the balance of the contract to contain costs,” she said.

Before contract negotiations begin, Tate wants to know exactly how employees would be affected by possible service reductions.

“The union is not fighting Pierce Transit,” Tate said. “We just really need some kind of clarification of what’s happening.”

Clarification may not come until this summer. The agency’s board is still wrestling with budget options and isn’t expected to make a final decision until July.

If the board orders deep budget cuts, Pierce Transit officials might ask employees once again to take a pay cut, Griffith said.

“If we’re confronted with reductions, everything from management to service on the street would be affected proportionally,” Griffith said. “We’re just not there yet.”

‘SOMETHING’S GOT TO GIVE’

Pierce Transit employees aren’t the only ones anxious about the agency’s budget. Five communities in East Pierce County have threatened to “de-annex” from Pierce Transit if the agency eliminates service there. They don’t want to pay for services they don’t receive.

Orting Mayor Cheryl Temple said the communities have waited for years for improved transit service and are “very, very frustrated” with the prospect of losing service altogether.

In light of the proposed service cuts, she said 4 percent raises for Pierce Transit employees “seems very high.”

“I wish that employees would understand that if they want to keep their job they might not get a raise this year,” Temple said.

Orting’s 30 employees – union and nonunion alike – volunteered to take a pay freeze last year as the city suffered through the recession, Temple said.

“It wasn’t even difficult,” she said. “We just had to ask.

“I know it’s difficult. The larger the agency, the more difficult it is to negotiate (pay) freezes,” Temple added. “But something has to give, and I don’t know what it is yet. I think small cities have waited long enough.”

As state and local governments wrestle with declining revenue, public employee pay has come under increasing scrutiny. Tate said it “seems like we’re under attack.”

“Why are people upset?” he asked. “Wouldn’t they like to have a good-paying job with good benefits and take care of their families? That’s what we do.”

“I wish everyone had union benefits,” Tate added. “I wish everybody had seniority so they couldn’t arbitrarily be laid off. I don’t think we’re being the bad guys at all. We just want answers.”

David Wickert: 253-274-7341 david.wickert@thenewstribune.com blog.thenewstribune.com/politics