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Bus drivers rejected contract that trimmed rich benefits
by Bill Catlin, Minnesota Public Radio
February 23, 2004

Teresa Baird-Lundblad, a Metro Transit employee, rejected the latest contract offer from the Met Council, primarily because it trims benefits for many employees. (MPR Photo/Bill Catlin)

Negotiators for Twin Cities bus drivers and the Metropolitan Council are expected to return to the negotiating table before a March 2 strike deadline. The Amalgamated Transit Union's nearly 2,200 drivers overwhelmingly rejected an offer last week. Benefits are a key issue in the dispute.

St. Paul, Minn. — Teresa Baird-Lundblad, a garage secretary-maintenance clerk at Heywood garage in Minneapolis minces few words in describing the contract she voted against.

"I think it's a travesty. It's unfair to the new hires, the newest drivers. It is unfair to retirees. It is unfair to people who stay there because the benefits are good. And in the long term, the benefits are what people stay for," says Baird-Lundblad.

The rejected contract tightened eligibility for retiree health benefits -- one of the leading complaints. Baird-Lundbland says she hopes to retire at 62. But under the rejected contract she'd have given up a subsidy for health insurance.

"I'm going to have to work till 65 to get any kind of coverage at all, and to get my benefits," she says.

Baird-Lundblad is one of the 20 percent of union members who would likely have to delay retirement to qualify for retiree health insurance subsidies under the rejected contract. Under those terms, new retirees would have paid a bigger share of the cost as well.

Our final offer ... is still slightly better than what is provided by AFSCME in the recent settlement with state workers, both in terms of current health care benefits as well as in terms of retirees. - Peter Bell, Metropolitan Council chair

Amalgamated Transit Union President Ron Lloyd says drivers have sacrificed to maintain retiree health insurance. But the rejected contract would have eliminated it altogether for new hires.

"We've given up wage increases, cost of living, and we've changed some work rules so management could get by cheaper in order to keep that health insurance. And now 25 years later...they want to take those insurances away," said Lloyd.

"We have great drivers, but they are very well compensated and have a very rich benefit package," says Peter Bell, chair of the Metropolitan Council, which operates Metro Transit.

The current contract allows some employees to retire at age 55 after only 10 or 15 years of service, and Metro Transit pays two-thirds of retiree health insurance. With health care costs soaring Bell labels that "fiscally irresponsible" and says it can't continue.

"Our final offer of our benefits that we are proposing is still slightly better than what is provided by AFSCME in the recent settlement with state workers, both in terms of current health care benefits as well as in terms of retirees," said Bell.

Even though the rejected Metro Transit contract proposal is less generous on retiree health insurance, it's a benefit many other public employees lack.

For the most part there are no retiree health benefits for state employees, except for certain corrections officers. The University clerical workers who struck last fall get no retiree health benefits.

State law requires municipalities to offer retired employees health insurance. Officials with the League of Minnesota Cities say it's not uncommon for municipalities to contribute something towards retiree health insurance even though they don't have to.

In the private sector retiree health benefits are on the wane. Fewer companies subsidize health insurance for retired employees.

The Metro Transit health plan itself is rich but expensive. Office visits and hospital stays are covered at 100 percent with a co-pay of $7.50 for prescriptions. There are two additional lower cost options under the rejected contract. Dave Delahanty, a health care actuary with Mellon Financial Corp. in the Twin Cities says the options are roughly comparable to the plans accepted by the state and University employees.

"The bus drivers have what I could call a richer option where they pay more, but the benefit levels are higher. And then they have the potential for two lesser options, where they would pay less and get lesser benefits. But the benefits that are being offered are comparable to what other unions have accepted in both the rich plans and the lower plans," said Delahanty.

The rejected contract includes two options where employees pay nothing toward their health care for single coverage. However, two of the Metro Transit plans stand out from other recent contracts because workers would have paid a much larger share of the cost for family coverage.

On the issue of pay, Metro Transit drivers recieve the second highest wages among comparable cities, according to Metro Council officials. Under the rejected contract new hires would start at a lower pay rate and have a longer climb to the top. The one-percent second year increase falls between what state and University workers accepted.

Once they're scheduled, last ditch talks will try to find agreement between a union trying to protect what it's got and a Metropolitan Council that says it can no longer afford the current contract's terms.

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