Mayor’s wage hike pact with labor may deal a $14M blow to SFMTA 

click to enlarge Hazards ahead: The SFMTA might have to compensate for a possible $14.6 million shortfall with service cuts to Muni. - S.F. EXAMINER FILE PHOTO
  • S.F. Examiner File Photo
  • Hazards ahead: The SFMTA might have to compensate for a possible $14.6 million shortfall with service cuts to Muni.

A landmark agreement between The City and unions helped finalize Mayor Ed Lee’s $7 billion budget plan, but it punched a new $14.6 million hole in Muni.

The San Francisco Municipal Transportation Agency, which operates Muni, passed a two-year balanced budget in April, contingent on the agency realizing $7 million in annual savings from labor concessions from its union.

However, citywide labor pacts unveiled in Lee’s budget changed that.

While the SFMTA is the lead negotiator for labor talks with its operators union, the Mayor’s Office is at the forefront when dealing with other labor groups. The latest talks focused on the latter unions.

Instead of a 3 percent wage decrease, which the SFMTA was hoping for, Lee and the unions agreed to a 1.75 percent pay raise for workers.

As a result, the SFMTA now faces a $14.6 million shortfall for the upcoming fiscal year, and must patch that hole by either cutting service or raising revenue.

Christine Falvey, Lee’s spokeswoman, said the Mayor’s Office, the SFMTA and The City’s Human Resources Department worked together on the labor deal.

“The mayor understands that adjustments will need to be made by the SFMTA,” Falvey said. “All told, The City’s labor negotiations resulted in more than $28 million in savings and protected city

No plan has been finalized for how the SFMTA will make up the shortfall, but staff members expect to present a list of options at a board of directors meeting June 19, SFMTA spokesman Paul Rose said.

Tom Nolan, chairman of the SFMTA board of directors, said the labor pact was out of the agency’s control. He is not sure how the shortfall will be solved, but he does not want the money taken away from the SFMTA’s proposed maintenance improvement program. The cornerstone of chief Ed Reiskin’s budget, the maintenance plan calls for $46 million in extra investments over the next two years.

“Hopefully we can find some more efficiencies in our operations” to deal with the shortfall, Nolan said.

Board member Cheryl Brinkman said the new budget hole is “frustrating.”

“Now, Ed [Reiskin] has the unenviable task of coming up with solutions and we have the unenviable task of deciding on those options,” she said.

While the board will discuss those options at its June 19 meeting, it does not have to take action before the start of the new fiscal year July 1.

Money troubles: Mayor Ed Lee’s budget could leave Muni scrambling

  • $14.6M Two-year deficit the agency will now have to fill, due to lack of concessions and slight wage increase for workers
  • $1.66B Two-year budget total for agency
  • 0.8 Deficit as percentage of total budget

Source: SFMTA

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