(The following story by Jere Downs, Patrick Kerkstra and Benjamin Y. Lowe appeared on the Philadelphia Inquirer website on March 15.)
PHILADELPHIA — SEPTA and its largest union avoided a city-paralyzing strike last night with a tentative one-year contract that preserves existing health-care benefits and gives 4,700 transit employees a one-time $1,000 bonus.
The unusual one-year bargain – most deals are for three years or more – was possible because SEPTA’s health-care costs are locked in at a relatively low rate for the next 18 months. After that, rates are expected to skyrocket, and SEPTA will again seek major health-care concessions from the union.
But commuters, transit workers and SEPTA managers can worry about that next year. Today, the buses and trolleys will roll in Philadelphia.
“I kind of have to pinch myself. There is a tentative agreement,” said Jean Alexander, who as president of Transport Workers Union Local 234 faces a reelection fight in September. “Our members get to keep their benefits. I can’t even tell you how I feel.”
Union members still must approve the tentative deal, but last night, a date for a ratification vote had not been set.
SEPTA officials were tight-lipped about the agreement, limiting their comments to a prepared statement read to the media two hours before the 12:01 a.m. strike deadline.
“It’s a fair deal for everybody,” said Pasquale T. Deon, chairman of the SEPTA board.
If approved by union membership and the SEPTA board, the deal would buy veteran bus drivers, cashiers, mechanics and other employees another year of prescription-drug coverage for retirees and no monthly health insurance payments.
And it gives SEPTA another year to improve its financial condition. The agency is facing a $70 million deficit in its $875 million fiscal 2005 budget. That comes on the heels of a $55 million deficit this year, which was closed only recently through extraordinary measures.
Yet, considering SEPTA’s shortage of cash and the high future costs of the union’s health-care benefits, next year’s labor negotiations could prove difficult.
Earlier in the negotiations, SEPTA had proposed nixing the lifetime prescription-drug coverage and making all union employees, veterans included, pay between $50 to $100 a week for their health care. SEPTA had also proposed freezing wages for the first half of a four-year contract, with 2 percent increases in each of the remaining years.
To some union members, the new deal simply delayed the day of reckoning.
“It’s like putting a Band-Aid on a gunshot wound,” said Darryl Nutter, 43, a shop steward and engineer on the Market-Frankford Line. “Personally, I wouldn’t accept [the deal]. I would like to have a three-year contract in our pocket.”
But avoiding the confrontation, if only for a year, pleased bus driver Frank Johnson, 40.
“Sounds good to me… . Nobody’s losing nothing. It’s not hurting nobody. People can jump on that,” said Johnson, who had been willing to strike to save the “prestige benefit” of excellent health care.
News of the deal was also welcomed by Kim Smith, 46, of North Philadelphia. Smith, one of the 400,000 city SEPTA patrons that would have been left without a ride by the strike, takes the subway and Route 23 each day to reach her child-care job in Chestnut Hill.
“I am so glad. [The strike] would have left me in a real bind. I didn’t know how I was going to get to work,” Smith said. She was glad negotiators on both sides had recognized that the public’s well-being mattered, too.
The agreement is good news, too, for Philadelphia schools. About 39,000 students take SEPTA to class each day. School district administrators had worried that a strike would increase absenteeism at a bad time. Two important standardized tests are scheduled for forthcoming weeks.
Throughout the contract negotiations, which began Feb. 12, health care loomed as the largest issue.
SEPTA now has a health-care contract with Independence Blue Cross that caps annual price increases at 15 percent. But once that deal expires in August 2005, SEPTA can expect a 30 percent increase in health-care premiums, sources at both SEPTA and Local 234 said.
In its talks with union workers, SEPTA had sought a 16-month labor deal that would last until the end of the Independence Blue Cross agreement.
But Local 234 was wary of any contract that would end in the summer, when ridership is lower and the threat of a strike less potent. So the labor deal was capped at one year.
As part of the deal, SEPTA and Local 234 will continue to work together in Harrisburg. Over the last year, SEPTA general manager Faye Moore and union president Alexander have tried to convince state legislators and Gov. Rendell that transit funding in Pennsylvania is badly broken and must be fixed.
But with no prospects for a large increase in state funding any time soon, SEPTA is expected this month to announce a 2005 fiscal plan that calls once more for fare increases and service cuts.