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Posted on Sat, Nov. 7, 2009

SEPTA deal collapses amid widespread blame

By Paul Nussbaum

INQUIRER STAFF WRITER

A tentative agreement to end the transit strike by SEPTA workers collapsed in acrimony yesterday, leaving prospects slim for an end soon to the six-day walkout.

Gov. Rendell, who tried to broker a settlement, blamed the leadership of Transport Workers Union Local 234 for the breakdown and called for a direct vote by union members on the proposed contact. If such a vote isn't taken by Monday, the governor said, he would withdraw nearly $7 million in state funds offered to pay for worker bonuses.

TWU Local 234 president Willie Brown said the union's constitution does not permit a direct membership vote on a contract rejected by the union's executive committee.

"We're not going to take it to a vote," Brown said. "For the same reason the president of the United States would not bypass Congress and go directly to the people." He dismissed Rendell's demand as an effort to divide the union.

And, referring to Rendell's vow to withdraw the state funding, Brown said, "I am not for sale."

In a press conference last evening, Rendell, surrounded by Mayor Nutter, SEPTA board chairman Pasquale T. "Pat" Deon and other SEPTA officials, said he will no longer act as an intermediary in the negotiations.

"I'm out," Rendell said emphatically. "I have a state to run."

Rendell, who described himself as "entirely frustrated," called the failure to reach an agreement "nuts," and said he had "never seen anything like it in 32 years in government."

Nutter echoed Rendell's call for a vote on the proposed contract: "I agree with the governor - the members would vote for this deal. It's a good deal."

Rendell said the union made new demands yesterday after a handshake agreement Friday with U.S. Rep. Bob Brady (D, Pa.). The new proposals included an independent audit of the SEPTA pension plan, which the union says is underfunded and mismanaged.

"If we're going to pay more in [to the pension fund], we have to be confident with where the money is going," Brown said last night in his own quickly called press conference. He said the union wants a forensic audit, rather than a less-comprehensive audit offered by SEPTA.

No new contract negotiations are scheduled, and the acrimonious end of the near-deal leaves SEPTA riders with little reason to expect that buses, subways and trolleys will be running again soon.

When Rendell and Brady announced on Friday night that a tentative settlement had been reached, they predicted transit service might be restored by last evening.

Brown yesterday predicted a long strike.

Unless SEPTA yields on the audit and on a provision regarding possible future health-care costs, Brown said, "I guess we will be here for a while."

The proposed contract would have provided for a $1,250 bonus upon ratification, a 2.5 percent raise in the second year, and a 3 percent raise in each of the final three years. It would have increased workers' contributions to the pension fund from the current 2 percent to 3.5 percent and would have increased the maximum pension to $30,000 a year, from the current $27,000 a year.

The union, which represents about 5,100 bus drivers, subway and trolley operators and mechanics who make an average of about $52,000 a year, went on strike at 3 a.m. Tuesday.

Efforts to reach a final settlement fell apart mid-day Saturday.

Brown said he had only agreed to an agreement in principle and that late "smoothing" by SEPTA of financial details upended the deal. Rendell and SEPTA officials said the union at the last minute asked for nine changes in the proposed agreement that would have increased costs by $7 million.

SEPTA agreed to one change, extending the period over which workers' pension contributions would be increased. And the union eventually withdrew six other proposals, Rendell said.

But the two remaining differences torpedoed the deal, Rendell said. One was the forensic audit request. The other was the union's rejection of a SEPTA request to revisit health-care provisions in the contract if national health-care legislation increases the agency's costs.

The pension audit is the biggest obstacle.

"I asked for one thing that blew this thing up," Brown said yesterday. "We are willing to pay for a forensic audit. What are they afraid of?"

The union has made the health of the pension fund a central issue in the strike. The SEPTA pension fund for TWU workers is currently funded at about 53 percent of total liabilities, compared to 65 percent funding for the pension fund for SEPTA managers.

Union leaders have said the fund has been mismanaged and underfunded for years and is at risk of not being able to meet its obligated pension payouts in the future. SEPTA officials say the fund is actuarially sound and has always met its pension payments.

SEPTA officials said the union is already involved in the management of the fund, as it has two representatives on the eight-member board that oversees the pension fund. Brown said the members are not permitted to vote; SEPTA said they are allowed to vote.

SEPTA General Manager Joseph Casey called the pension audit a "red herring." He said all the pension board members, including the union representatives, have access to an independent annual audit performed by national actuarial firm Milliman Inc.

Brady said the union's pension audit demand "is just purely the trust factor."

"They don't trust SEPTA on this," said Brady, who said he was "disappointed" that his deal broke down, but that he would keep working to make it happen. "It's a shame, it's just a shame."

Some participants in the talks said yesterday that the union's executive committee appeared divided and said former local president Jeff Brooks, now an official in the union's international leadership, had taken the lead from Brown in the union's bargaining.

Rendell said Brooks replaced Brown as the union's chief voice on Saturday.

"It's very curious that Willie disappeared after being the point person for so long," Rendell said yesterday. Rendell said he asked Brooks about the Friday night deal, to which Brooks replied, "I wasn't there."

"There's clearly a division within the union leadership and the president about what's going on," SEPTA board member Thomas J. Ellis said. "Right now, we're not sure who's in charge."

Brown, flanked by the executive committee members at his press conference, dismissed that as "the oldest trick in the book....they're trying to divide and conquer."

"Jeff Brooks is a good friend of mine. If he could get us a contract, great....We are not divided," Brown said. Of dissension within the union, he said, "I know there are people who disagree with me, but that's democracy."

He said he has received calls from many TWU members, urging him to "stay strong, we got you."

Contact staff writer Paul Nussbaum at 215-854-4587 or pnussbaum@phillynews.com

Staff writer Jeff Shields contributed to this article.

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Comments

Posted 10:25 PM, 11/07/2009

everydayguy

Big Willie Brown is in way over his head. I'll bet $50 the TWU kicks him out of office when this thing is over for screwing it up so badly.

Posted 10:25 PM, 11/07/2009

ipaymytaxes

Philadelphia Police officers starting salary is $41,151.00 a year, they pay for their healthcare (depending on which plan they choose), though the amount they pay is very low. They risk their lives everyday to keep the citizens of our city safe. SEPTA pays about $1,300 per month, per employee for medical, prescription, dental and vision. Employees pay 1 percent of their pay to their healthcare. What more do they want???Oh that's right they are unhappy that their medical insurance only covers them for 10 viagra pills a month.

Posted 10:31 PM, 11/07/2009

There He Is

Serious question: Is there any way that a lawsuit may be filed against the TWU which would force them to go back to work? Paralyzing the city is a public safety and national security issue.

Posted 10:32 PM, 11/07/2009

Centrist

Nutter, get the injunction TONIGHT!!!!! Rendell and the State Legislature get a bill to force binding arbitration and no strikes for essential employees. Brooks and Willie, shame on you! You are taking food off the tables of people who can't get to work. You are risking the lives of many people especially those who are getting chemo and radiation. TWU union members force the vote; I heard from many of you who want to go back to work. Your union representatives work for you; you don't work for them.

Posted 10:32 PM, 11/07/2009

fakeplastic

If it is true that this trolley cleaner Brown does have the rank and file support, then they should take the state's $7M and train 5100 unemployed to take over the SEPTA workers who are too greedy to see a good deal when one is offered. The union is extorting the public, Enough all ready, out with the whole lot of them, NOW!!

Posted 10:33 PM, 11/07/2009

ResponsibleAmerican

I love how the Gov and the other Dems always have to act tough with a union before they fork over all the taxpayer money they can. This is all a joke. Can't wait until every business in this country is unionized. If that were the case would anything get done?

Posted 10:35 PM, 11/07/2009

donaldsi

FIRE THE WORKERS NOW

Posted 10:41 PM, 11/07/2009

pringleschief

there is no justice in this city if the lowest paid cop or firefighter makes less than the highest paid Septa driver. Period. Please let this strike go on long enough for the union to have its back literally broken.

Posted 10:41 PM, 11/07/2009

DasMetro

Might we be seeing the first cracks in the breaking of the TWU? I put the over/under at 2 weeks until the Union implodes while the membership and the riders watch the spectacle.

Posted 10:43 PM, 11/07/2009

Steelmanpa

I only use Septa 2 times a year to go see the Flyers. But I would volunteer $100 a year in additional city taxes dedicated for transportation if they would get rid of this union and put people in place who did not think they were hostage takers, defecating on all the people hanging on to their mere existence in an economy a long way from recovered. Striking during a depression when you are gettings raises and holding the city hostage. Time for the national guard and an injunction and a reorganization.

Posted 10:44 PM, 11/07/2009

asdfasdfasdf

Well, it does make sense for SEPTA to pay for its drivers' medical care, since no one wants a driver to suddenly collapse of a heart attack while driving a bus. That said, it's obvious that Brown is in a self-aggrandizing mode, as is evidenced by the trivial additional demands he has come up with since the handshake with Rendell. Some of the other high-ups in the union to take Brown aside and speak some sense to him, but those people seem nowhere to be found.

Posted 10:49 PM, 11/07/2009

Frank_Castle

I think that before you fire the workers, you should give the workers a chance to fire that clown Willie Brown. Some people like to think they know how to negotiate, when they don't. I recommend he read "Getting to Yes" tomorrow. For the sake of his membership. If you take a principled position, then you have a better chance of succeeding at reaching a compromise. Willie Brown doesn't have a clue and is just throwing things out now so that he can look good. Septa employees, you are led by a buffoon. I urge you to enter a vote of no confidence and get a realistic leader put in his place.

Posted 10:50 PM, 11/07/2009

SouthPhillyRob

Amen, Centrist.

Posted 10:52 PM, 11/07/2009

southphillyitaliana

Fakeplastic: Right on! Even though I am stuck in my house 24/7 and unable to look for work because of the strike, I'm willing to stay here while the strikers stay on strike if it means taking that 7 mil and replacing them ASAP! But for whatever reason, no one's doing it. Rendell won't even consider it, he said so on Fox News. The ONLY way I'd support giving in to these jerks is by putting a No Strike clause in the contract, but you know that'll never happen. Sickening what's happened to this city - no politician has any real BALLS anymore. Someone dig up The Riz!

Posted 10:54 PM, 11/07/2009

UnionYes99

The issues that are still open were NOT just brought up by TWU at the last minute - they have been on the table the whole time. Rendell has grabbed the spotlight and he talks about what HE wants to talk about and ignores the other stuff. So just because you didn't hear about the audit from Rendell before doesn't mean it just came up.