BART proposal preserves salaries, eliminates $100 million in labor costs

Today, BART management outlined its proposal that ensures BART workers keep their current salaries while still meeting the target of $100 million in labor costs savings over the next four years.  BART’s proposal offers a menu of options totaling more than $100 million – options that reduce BART’s deficit without decreasing employees’ base salaries or placing anyone on furlough. Some of the several options proposed include:

• Choosing the Kaiser full family health insurance plan for $85/mo or pay the difference for more expensive health insurance plans
• Contributing toward their pension (currently employees pay $0 toward their pension)
• Eliminating wasteful work rules
• Reducing or eliminating BART’s payments into their secondary retirement accounts

"BART’s proposals would reduce the benefits package or increase the amount employees pay for their benefits or some combination of the two approaches as well as eliminate outdated work rules in order to improve efficiency and reduce unnecessary overtime costs," BART General Manager Dorothy Dugger said.

BENEFITS & WORK RULES - THE HEART OF CONTRACT TALKS
BART is working to eliminate a $250 million, four-year deficit. The BART Board is seeking $100 million in cost savings through labor negotiations. The average union worker makes $114,000 a year in wages and benefits. Even without an increase in salary, the cost of simply maintaining the current benefits for BART employees over the next four years accounts for nearly half of BART’s shortfall. Just to illustrate the order of magnitude, to maintain BART’s current benefit contributions would be the equivalent of a nearly 15% increase in total compensation over four years.  

"Saving on benefit costs is one of the two key issues in negotiations," BART Board President Thomas Blalock said.  "We’re asking BART employees to reduce benefit costs or to pay a larger share of their benefits so the riders and taxpayers don’t have to.  The other key issue in contract negotiations is by improving productivity by changing wasteful work rules."

WHAT BART WORKERS RECEIVE NOW

The only amount BART currently deducts from its employees paychecks to offset the cost of their benefit package is $81.95 per month. That amount will increases 3% to $84.41 on January 1, 2010. That money goes toward defraying the costs of an employee’s medical benefit. BART employees can choose from any one of six medical plans that cover their entire family.  The other benefits they receive are free to them.  They include:

• Fully funded CalPERS pension
• Health insurance in retirement
• Dental insurance & vision care
• Fully funded tax-favored 401(a) savings plan (A secondary retirement fund) in lieu of Social Security
• Vacation & sick leave banks

PROPOSAL TO CHANGE MEDICAL PLAN
One option BART is proposing is to limit BART’s payment for medical coverage at the Kaiser family plan – which is one of the six medical plans BART offers its workers. Beginning on January 1, 2010, employees would continue to receive full coverage under the Kaiser family plan for themselves and their entire family for just $84.41 per month.  However, if an employee wanted a more expensive plan, they would pay the difference between the Kaiser rate and the other plan’s rate.  Beginning in January 2010, the monthly difference between Kaiser ($1,384.66) and the most expensive plan ($2,257.24) will be $872.58 per month.

SECONDARY RETIREMENT ACCOUNT PROPOSAL
Another option is to reduce or eliminate the contribution BART makes into an employee’s 401(a) savings plan. 

PROPOSAL TO CHANGE PENSION PLAN CONTRIBUTIONS
Union leaders could also agree to the option of having employees pick up some, if not all of the "employee share" of their California Public Employee Retirement System (CalPERS) pension plan. Currently BART pays both the "employee share," which is 7% of base income as well as the "employer share," whose percentage of a worker’s base income varies.  Many cities including San Jose, Oakland, Fremont and Richmond require most workers to pay some if not all of the "employee share."

PROPOSAL TO ELIMINATE WASTEFUL WORK RULES
Union leaders could reduce costs by agreeing to eliminate wasteful work rules that cause BART to pay millions of dollars in unnecessary overtime or prevent BART from assigning the right people to be in the right place at the right time. Some of these wasteful work rules include: 

• Paying 2 hours of overtime if Station Agents are required to miss their 30 min paid lunch break
• Requiring extra staffing at stations during times when there are few customers
• Requiring two people to change out one seat on a BART car

BART TOP EXECS & MANAGERS COMMIT TO GIVING UP BENEFITS
BART’s top executives and managers have committed to matching on a proportional basis any benefit reductions or increases to employee payments for benefits that the unions agree to.  "The cost of benefits is a central focus of contract talks because reducing these costs is a fair way to help close the deficit while preserving employee salaries," Dugger said.

BART DIRECTOR PAY & BENEFITS
While BART’s nine elected members of the Board of Directors only make approximately $1,300 per month, they do receive most, but not all of the same benefits BART employees receive.  Their level of benefits depends, however, on when they were elected and most are not eligible for PERS retirement.