As Metro’s board of directors considers a range of service cuts and fare increases to balance the agency’s budget, there’s one wild card that could have a significant impact on its financial future: ongoing negotiations with Metro’s largest labor union.
General Manager Paul J. Wiedefeld acknowledged last week that it’s unlikely contracts talks with Amalgamated Transit Union Local 689 will be completed by the time the board is scheduled to vote on a final budget in March. Either negotiations won’t be concluded, he said, or, more likely, the two sides have entered binding arbitration, which could take more than a year.
“I don’t know if we will be there in this cycle,” Wiedefeld said at a board meeting, where members asked if they could expect shored-up numbers for labor costs for the 2018 fiscal year.
Without a final contract, the board will lack a sizable piece of the budget puzzle — and the current estimated $1.3 billion in next year’s labor costs could grow, exacerbating a $290 million budget shortfall.
“It’s a big question mark,” board member Carol Carmody said. “But we’re going to have to be willing to put up with a certain degree of uncertainty and imprecision in this process.”
Wiedefeld’s proposed budget keeps wages at current levels. Keeping wages flat could be viewed as a negotiating tactic, but it also could leave Metro scrambling if it later has to come up with money for pay increases either as a result of negotiations or arbitration.
The budget plan also eliminates 500 jobs — on top of the 500 Wiedefeld cut earlier this year, which included 100 layoffs. He also wants to change the health-care benefits packages, find ways to reduce costs related to absenteeism and workers’ compensation, and outsource some work.
Those propositions are a non-starter for Jackie Jeter, president of ATU Local 689, who said last week that negotiations between the union and Metro have stalled.
“We’re fighting the cuts in benefits, the cuts in wages,” Jeter said, adding that she was displeased with Wiedefeld’s resistance to publicly acknowledge the need to include a wage increase in next year’s operating expenses. “We got a waffly answer, and that’s the same waffly answer that they’re giving us at the bargaining table.”
Wiedefeld does not share Jeter’s gloomy view of the status of negotiations — at least publicly.
“We continue to talk,” he said. “We’re both facing tough situations, and we’ll work through it.”
“We just have to recognize the situation right now, and that’s what I’ve asked them to do,” Wiedefeld added. “See where we are as a region, see what other public agencies have had to do over the last few years — just understand that, and that’s the condition we’re in right now.”
At the same time, the union has ratcheted up efforts to win the support of the public and board members. Last month, a group of Metro track workers testified at a board meeting, accusing managers of forcing them to put speed ahead of safety and claiming that the agency wastes money on contractors and consultants who don’t know the system as well as rank-and-file workers.
Board members say they want additional details from Metro staff about the nature of Wiedefeld’s planned cuts and how a reduced labor force could affect the quality of service delivered to riders. They’ll discuss those proposed labor cuts during one of three budget workshops tentatively scheduled for December and January.
Even so, several board members have agreed that Metro’s labor costs are too high, especially in light of declining ridership. Ridership decreased 11 percent from April to June, compared with the same period last year. And a consultant’s report this summer noted that ridership has dropped to levels not seen in more than 10 years. At the same time, the agency’s workforce has increased by 2,000 since 2009 — to a total of 13,000, due largely to the opening of the Silver Line.
“I totally agree with the general manager that our system needs to be right-sized,” said board member Michael Goldman, and that the agency has more employees than it needs. “We’re operating more trains, we’re operating more capacity, and we’re carrying less passengers. That does not make sense.”
Although few board members have drawn clear lines, many have suggested that the “share-the-pain” approach of Wiedefeld’s wide-ranging menu of cost-cutting measures should include Metro’s workforce.
“I definitely support an approach that is looking at all of the stakeholders — so that does include employees,” board member Malcolm Augustine said. “Everyone is going to be asked for some level of sacrifice.”
But the prospect of job cuts also could be viewed as a bargaining chip when it comes to currying favor with leaders in local jurisdictions, who Wiedefeld wants to pony up more money to help solve Metro’s budget problems, as well as Maryland and Virginia legislators, who have been asked to consider establishing a dedicated revenue source for year-to-year Metro operations.
Matthew F. Letourneau, vice chair of the Metropolitan Washington Council of Governments and its highest-ranking Republican, said conservative lawmakers see Wiedefeld’s willingness to drastically curtail labor costs as a good sign.
Employee wages and benefits, Letourneau said, “is really driving the higher costs” of Metro’s budget. “That’s the piece that is something that no one has wanted to touch,” he said after Wiedefeld released his budget proposal. “That’s why this budget seems a little different — Metro, itself, is imposing its own austerity and getting back in line with what the market is going to bear.”
“It’s certainly encouraging,” he said.