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MTA, Lawmakers Trade Barbs Over Strike's Savings

Hearing: Agency denies it is prolonging impasse for fiscal reasons. State officials criticize lack of progress.


Angry state lawmakers were told Monday that the monthlong transit strike has already saved the Metropolitan Transportation Authority $10 million to $15 million in labor, fuel and other costs, prompting calls for a state audit and a renewed push to break up the agency's powerful governing board.

During hearings Monday by an ad hoc group of Los Angeles County legislators downtown, MTA officials acknowledged for the first time that they have spent $1 million on strike-related public relations, including radio, television and print advertising at times sharply critical of striking drivers. The MTA also revealed that it has paid more than $1 million to labor consultants and to maintain its negotiating headquarters at the Pasadena Hilton.

Instead of moving toward a settlement on Day 31 of the strike, MTA management and union leaders representing 4,400 striking drivers and rail operators initially seemed to move farther apart, as elected officials threw barbs at one another in Los Angeles and Pasadena.

But by nightfall, there was an air of anticipation at the talks in Pasadena as the Rev. Jesse Jackson, acting as a mediator, shuttled between the two sides searching for the breakthrough that would lead to a settlement.

The exchanges earlier between the state lawmakers and MTA officials centered on the issue of money, and whether the MTA was prolonging the strike because it is making money by keeping its buses and trains in storage and its drivers on the picket lines, where they don't draw pay, pension or health benefits.

From the beginning, the MTA has said it is willing to give its drivers a reasonable wage increase of about 3% a year over the next three years, while protecting their pensions and liberal fringe benefit package.

In return, the MTA has said it wants about $23 million in long-term savings over the three-year life of the contract by significantly cutting overtime payments and eliminating what executives called "antiquated work rules."

Legislative critics on the Democrat-dominated Senate-Assembly legislative committee took direct aim at the proposed $23 million in savings, calling witnesses who challenged the transit agency's position by pointing out that it already is very close to its savings target.

The millions in savings were explained to the committee by consultant Thomas A. Rubin, a former treasurer of the Southern California Rapid Transit District, MTA's predecessor, and one of the MTA's first financial officers.

Rubin, now a consultant for the drivers' United Transportation Union, alleged that the MTA is saving $20 million to $25 million a month on fuel, pay and other expenses.

The transit agency's chief operating officer, Allan Lipsky, and Terry Matsumoto, an MTA financial officer, agreed in general with Rubin's analysis but said it did not go far enough in accounting for extraordinary expenses.

Matsumoto said Rubin was ignoring $10 million to $11 million in added costs caused by the strike. The MTA, the two executives said, was losing fare revenues, had to pay extra security costs, was financing a special bus line along Red Line subway routes, and was reimbursing municipal bus lines for accepting MTA passes on their buses.

When those costs are subtracted, the net savings shrink to $10 million to $15 million.

Hours after the hearing, the MTA sent a more detailed breakdown of its costs to the lawmakers.

The revised accounting showed the agency could experience a $22.5-million loss if it does not receive local sales tax receipts and state and federal assistance because of the strike. Matsumoto, however, acknowledged late Monday that the MTA is continuing to receive its share of the sales tax and other state subsidies even though it is not providing any service.

Moreover, the agency's projected loss assumes that the state will penalize it for loss of ridership during the strike--which is unlikely.

As for the roughly $2.5 million in public relations and other costs associated with the strike, Lipsky said: "I believe we have spent an outrageous amount of money on this strike."

In breaking down the costs for lawmakers, Lipsky said the MTA will pay up to $450,000 to Tom Webb, an independent transit consultant from Scottsdale, Ariz.; $250,000 to a second consultant, and $130,000 to Brenda Diederichs, chief labor relations officer.

Lipsky also said the MTA has been paying $50,000 to $60,000 a month to the Pasadena Hilton, where it has established its negotiating headquarters, for a total of $232,000.

An additional $482,000 has been spent on print and radio ads, on top of $570,000 paid to outside public relations firms.

Given the high price the MTA is willing to pay in its dispute with the drivers union, legislators and union members accused the transit agency's leaders of a much broader agenda than winning $23 million in savings over three years, namely a desire to pave the way for a breakup of the nation's second-largest bus system by replacing full-time drivers with part-timers and weakening the union.

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