advertisement

---

The Greater Cleveland Regional Transit Authority (GCRTA) isn’t the first employer to tie pay raises to how well the organization is doing financially. But the transit agency’s new contract with the Fraternal Order of Police-Ohio Labor Council (FOP) is unusual among public transit systems because it links pay raises to fare revenue gains, as well as sales tax revenue increases, says GCRTA Chief Executive Officer and General Manager Joseph Calabrese.
    
The labor agreement, which covers 104 active FOP members through Feb. 28, 2014, requires that wage increases for 2011, 2012 and 2013 be based on GCRTA gains in fare and sales tax revenue from the previous years. Any annual wage hikes would be capped at 3 percent.

Based on the agency’s fare and sales tax revenue in 2010, GCRTA’s FOP members will receive a 1.75 percent pay increase in September. The 2012 raise, if there is one, will be based on 2011 revenue, which so far is “running strong,” Calabrese says. And if there’s a raise in 2013, it will be based on the outcome of 2012 revenue. If the agency registers no revenue growth, FOP members will receive no wage increase.

The last time FOP members received a raise was in 2009, so a pay hike of 1.75 percent in 2011 — and possibly as much as 2.5 percent to 3 percent in 2012 — is a “very nice increase,” Calabrese says.

During the recession two years ago, the agency laid off some employees and froze wages for others. Now that the economy is recovering — albeit slowly — the proposal to link pay hikes with revenue increases came up during contract negotiations. Sales taxes generate about 63 percent and fares, about 20 percent of GCRTA’s annual revenue.

Otto Holm, staff representative of the FOP/Ohio Labor Council Inc., calls the arrangement “groundbreaking.”

“To the credit of both sides, we have a new contract that we think will be fair to all,” Holm says, adding that the arrangement rewards employees, but remains mindful of tight public transit budgets.

Also discussed with FOP members: the potential impact good customer service can have on encouraging more people to ride public transit systems, Holm and Calabrese say.

“We said we hope you can help us because in our industry, the more customer friendly our employees can be, the more it could drive revenue,”
 Calabrese says. “They [employees] could have a direct role in their future wage increases.”

Calabrese and Otto say they’re not aware of other public transit agencies that connect pay raises with fare and sales tax revenue growth, although a few other public sector employers have been experimenting with the concept. For example: firefighter and police unions in Randolph, Mass., agreed in December to a plan that ties future raises to growth in town revenue; Rapid City, S.D., employees received a mid-year pay increase July 1 based on increased city sales tax revenue; and Faculty Staff Union Inc. at the University of Massachusetts in Boston agreed to a three-year contract that included pay increases based in part on state tax revenue increases.

GCRTA’s new contract with the FOP also includes incentives to encourage employees to practice healthy habits. Employees will pay 12 percent of their health insurance premium cost if they are nonsmokers, get an annual physical and complete an online health-risk assessment survey. Their contributions increase to 14 percent if they don’t complete those three tasks.

“We want to encourage [employees] to live healthy lives and take care of themselves,” Calabrese says. “We feel that’s a positive message we’re sending and it will reduce our health care expenses.”

FOP is one of two labor groups representing GCRTA employees. The other is the Amalgamated Transit Union (ATU), which represents 1,700 GCRTA workers, the bulk of the agency’s workforce. ATU and GCRTA have not reached a new labor agreement, and Calabrese declined to comment on negotiations. However, he did say the wage increase deal with the FOP is one that “makes sense for all of our employees.”

— Julie Sneider