Metro’s board of directors unanimously approved a new four-year contract Thursday for its employees that includes an 11.4 percent pay increase over several years.
The move comes after the membership of Metro’s largest employee union — Amalgamated Transit Union Local 689 — ratified the contract Tuesday in a 2,757 to 1,078 vote. The union represents 10,000 Metro employees.
The new contract, effective July 1, 2012, calls for an 11 .4 percent pay raise over three years, starting this year. There is no pay raise retroactively for 2012. The deal also calls for employees to pay into their pensions, which are now fully funded by the transit agency.
Employees will receive a 3 percent raise in 2013, a 4 percent raise in 2014 and another 4 percent raise in 2015. Workers will begin paying into their pensions at a rate of 1 percent and 3 percent of their pay, starting in 2014 and 2015, respectively. It is the first time in 30 years that employees will pay into their pensions, Metro officials said.
Metro board Chairman Tom Downs said “neither party got a complete package” of what it wanted. He called the deal a “series of compromises.” He said having employees pay into their pensions — a cost that Metro has said is steadily rising — makes them “partners” with the transit agency.
For employees, it is the second time in the past few years that they have seen a pay raise — despite the fact that Metro General Manager Richard Sarles and the board had said before the contract negotiations got into full swing that they would not support pay increases.
Downs said the raises are “gradual” and “keep pace with inflation.”
The latest contract has been in negotiations for months; the last contract expired in June 2012.
Metro’s management has said that rising labor costs is one of its largest expenses. In fiscal 2013, Metro’s pension program costs were projected to increase 34 percent to $150 million. The rise in pension costs was in large part because of changes in the financial markets that required Metro to put more money into pensions.
In the previous round of contract negotiations, the two sides ended up in a long arbitration process. Ultimately, Metro employees received a retroactive pay raise of 9 percent in 3 percent increments for 2009, 2010 and 2011.
Metro officials said they are using a surplus from fiscal 2013 and fiscal 2014 to pay for the union’s wage increases in the first two years of the contract. After that, Sarles said, “we need to seek additional funding.”
In other matters, Metro also dropped the price of a SmarTrip card from $5 to $2. Sarles said Metro was able to drop the cost because “it’s cheaper now to buy the chips” that go into the electronic farecards.