To say Steve Palonis is beginning his tenure as president of Amalgamated Transit Union Local 85 at a volatile time would be a bit of an understatement. The Port Authority of Allegheny County is currently facing a $64 million budget deficit as a result of flat state funding and growing legacy costs from former contracts. Riders just began dealing with a July 1 fare increase and are bracing for massive cuts to service, including eliminated routes, severe modification of paratransit and nearly 500 employee layoffs. Add to that ongoing negotiation of one recently expired union contract and the pending expiration of another, and you get pretty tough conditions to start a new job under. Palonis, who began as a bus operator in 1993, spoke to City Paper about the challenging road ahead.
One ATU contract expired on June 30, another will on July 31. What happens next, since there's no collective-bargaining agreement?
A couple of things ... can go on. ... [There's] a process where we go to status quo — everything we have currently is still locked in, the provisions [of the current contract] say we're mandated to a fact-finding process if we don't make [any] progress.
How are negotiations progressing?
We've had a couple meetings. I can tell you that we agreed we wouldn't talk about where we're going with the contract. [Allegheny County Executive Rich Fitzgerald] has a handle on it and we agreed that we weren't going to discuss integral parts of the negotiations.
Is there any chance of a work stoppage?
There has to be things that take place before we even consider doing that. ... There's no talk of strike. The process will work itself out.
One of the authority's largest financial strains is legacy costs. In retiree health care alone, the agency estimates paying $33.8 million in 2013. More than half of the ATU's membership is retired. In negotiating, how do you balance their needs with those of the current employees and an agency that may not be viable in September?
First of all, I have to be clear the retirees that are already out there — we cannot change their benefits, we cannot. Future retirees and future pension benefits, we can work on that as far as legacy costs. We know there is an issue. We started back in 2005 to concede. We had never paid into health care at that point. There have been major concessions from the local in the last two contracts ... [but] we understand we have to do some things based on the economy. 2008 killed us in the stock market. For almost 17 years [the ATU pension fund was] 100 percent funded, Port Authority never provided one nickel into that pension. Local 85 continues to contribute 4.5 percent of their wages.
Are there reasonable givebacks and concessions you can negotiate to alleviate some of the financial difficulties of the $64 million budget deficit, or is this more of a systematic change in your eyes?
I think we can alleviate some of the problems, but the only way we're going to do that is if there's four legs in that thing. One is: The governor has to come up with a reliable source of dedicated funding that's going to grow the system. We can agree to concessions and be back in the same boat next year — they'll be shutting down another garage. That can't happen. Two, the county's going to have chip in a little bit more, the authority also has to chip in, and quite frankly, Local 85 is going to chip in.
County Executive Fitzgerald has been involved with negotiations from the outset. Is he involving himself more in the process than his predecessors? [See related story, page 10.]
He has. [Former County Executive] Dan Onorato [did] the same thing. Dan was involved any time we had negotiations. ... Not ... like we are today when [Fitzgerald and the state] got in at the beginning. ... Rich Fitzgerald is the one who started and wanted us to get together early based on where we're at with a $64 million budget deficit, and quite frankly, I don't think Rich Fitzgerald or the governor want to see that 35 percent cut.
There seems to be a big difference between you and outgoing president Patrick McMahon, in that he had a very fiery public relationship with PAT Executive Director Steve Bland. Did McMahon's tack in dealing with the agency hurt you at all?
I think when you're out there vying for every dollar you can from the state and county executive, you better be united ... and you have to go with the same message. You can't go with two different messages. I think if we can get the rapport built up as a company and a union [of] "this is what we want to see. This is what we've done to get where we're at today."
How are you approaching your leadership role with the union and the agency?
There's a lot of mistrust — [the authority] burned some bridges, we burned some bridges. That's my goal — to rebuild some of those bridges right now. We've had some open discussions, quite frankly. As president-elect, I agreed to allow the Port Authority to do some things to get the manpower [for the North Shore Connector as a result of the increased rail demand for summer North Side events] and they appreciated that. There's been an open dialogue — if something needs changed, we can look at it.
Corbett's taking a lot of heat for the transportation-funding issue, including from the former union president. How do you strike the balance between criticizing the governor in one rally, then sitting down with his office to negotiate a contract? It seems counterintuitive.
I think politicians understand that, I really do. They know they're going to come under heat. For Corbett, for any politician, they're going to get heat ... if they lose service. Some of it's deserved [and] some of it's probably not deserved.