Oversight Hearing on Delays in Funding Mass Transit

Prepared Testimony of Mr. Jim La Sala
International President
Amalgamated Transit Union

10:00 a.m., Tuesday, April 25, 2000

Mr. Chairman and members of the Committee.

Thank you for the opportunity to testify on transit employee protections and the federal transit grant program.

My name is Jim La Sala, and since 1985, I have served as International President of the Amalgamated Transit Union. Our organization represents 170,000 employees in the urban mass transit, over-the-road, and school bus industries in 46 states with more than 250 locals.

Our members work for both public and private transit service providers in a wide range of urban, suburban, and rural settings, providing fixed route, paratransit, school bus, intercity, and other specialized services to our nation's citizens.

We operate both bus and light rail services in such diverse communities as Baltimore, Boston, Dallas, Las Vegas, Los Angeles, Chicago, Hartford, St. Louis, Kansas City, Jacksonville, Wilmington, Salt Lake City, and Raleigh, North Carolina.

For over 35 years, the ATU and all transit labor, with the full support of the AFL-CIO, has worked with this committee, the Congress, and the Department of Transportation to help shape and develop an effective mass transit program that responds to our nation's changing transportation and mobility needs.

Most recently, we have been involved with this committee and the Congress in developing the Transportation Equity Act for the 21st Century (TEA-21), which provides many expanded and innovative programs designed to provide greater job access and transport to all segments to our nation's communities. We continue to be a major partner, Mr. Chairman, in helping to bring about constructive working relationships, among all interested parties, including the federal government, state and local officials, local transit providers, and unions, for the administration, improvement, and strengthening of this program.

Currently, six billion dollars are disbursed under TEA-21's urban formula, discretionary (bus and rail), paratransit, job access, new rail starts, non-urban rural transit grant programs, and to assist intercity bus employers in meeting the new bus-lift requirements under the Americans With Disabilities Act (ADA). It is now beyond question that mass transit development increases employment opportunities, economic growth, and improves the environmental quality and vitality of our nation's communities. Without question, achieving these goals requires making difficult and complex decisions that often reflect the limited financial, natural, and other resources available at all levels of government.

It has been the hallmark of the federal transit program that the collective bargaining process, maintained through the Section 13(c) transit employee protection program, has functioned to enhance stability and service within the industry. (1) This approach has enabled transit management, labor, and governmental agencies to participate as partners in all facets of transit research, planning, and decision making to ensure the safe operation and universal access of transit services within our communities.

In fact, with the foundation for collective bargaining and the job security provided through the Section 13(c) program, transit labor has been a strong voice for innovation and change within the industry. It was the ATU that first called for "no fare" and ultimately "exact fare" as a method for speeding entry onto our nation's transit systems and to improve security for all parties. We have supported increased funding for improved safety and systems operations and are supportive of the transportation university research project to ensure that the industry is prepared to meet anticipated demographic changes, apply new technology, and maintain its historic record of innovation.

We have supported both capital and operating assistance, the development of state infrastructure banks, the modernization of our bus systems, and the development and integration of light rail services within our nation's larger cities, as well as initiatives aimed at bringing improved access to all citizens through expanded paratransit, vanpool, and other demand responsive programs. Most recently, through TEA-21, we championed funding increases for services in our nation's rural areas and new resources to provide job access and reverse commute services to employment centers, and respond to changing commuting patterns of the transit dependent.

Throughout this period, the transit industry has experienced technological change, productivity improvements, and a remarkable stability fueled in part through ATU and federally sponsored labor-management cooperation programs and ultimately the agreements reached through the collective bargaining process.

Without question, the ATU has been outspoken opponents of forced privatization, believing that such decisions are best made at the local level by individual transit authorities in compliance with applicable labor agreements and the service needs of their communities. There should be no doubt that transit labor opposes decision making rooted in efforts to undercut transit workers' bargaining rights, wages, and working conditions by substituting a low wage, casual, or part-time nonunion labor force for the better paid career oriented professional transit workers.

From labor's viewpoint, the essential function of the labor-protective provisions of Section 13(c) is to preserve jobs and collective bargaining rights.

When federal capital assistance for transit began in 1964, the transit industry was undergoing a major restructuring. This process showed that public takeovers could result in the loss of collective bargaining rights, reduced pay and benefits or even the loss of jobs by private sector employees. There was also concern that advances in technology, particularly automation and other ongoing structural or operational changes, could adversely affect workers.

The legislative history shows that Congress was acutely aware of these concerns and sought to protect employees from these adverse effects. Thus, the so-called 13(c) provisions were included to ensure that federal transit assistance would not adversely affect transportation employees. The same concerns continue today, and these protections have remained in every federal transit act enacted since 1964 (1968, 1974, 1978, 1982, 1987, 1991), including the TEA-21 bill.

With bipartisan support, it has been recognized that it is in the national interest to provide a uniform standard and framework for the conduct of labor-management relations in the transportation industry, given its critical importance to the economy of the country as a whole. In this regard, Section 13(c):

In keeping with principles of federalism, individual Section 13(c) protective arrangements are enforced under state and local law, subject to the standards mandated by the federal statutory requirements.

Section 13(c) requires, as a condition of federal assistance, that fair and equitable arrangements are made, as determined by the Secretary of Labor, to protect the interests and employees affected by such assistance. These arrangements must include, without being limited to, provisions which (1) preserve the rights, privileges, and benefits (including the continuation of pension rights and benefits) of employees under existing collective bargaining agreements or otherwise; (2) continue collective bargaining and similar derivative rights; (3) protect individual employees from a worsening of their positions in relation to their employment; (4) provide assurances of employment to employees of acquired transit systems; (5) provide assurances of priority of reemployment to employees terminated or laid off; and (6) provide paid training and retraining programs.

These provisions help ensure that nearly 300,000 urban, suburban and rural transit employees are not hurt when federal dollars are invested in their local transit systems.

Apart from the basic requirements set forth in the statute, Congress made no effort to prescribe the complete and detailed arrangements necessary to ensure the fair and equitable treatment of employees in each case. Legislative history shows that Congress intended the means for providing these protections to be worked out in advance of the Secretary of Labor's certification of a particular project and through the local bargaining process. The legislative history further establishes that the Secretary of Labor, as the principal official of the government concerned with labor matters, would have the sole responsibility to develop guidelines and criteria as to the types of provisions that may be considered necessary to ensure that worker interests are adequately protected in the different types of situations that may arise and to make the determinations required by law.

In our view, claims of so-called delays in Section 13(c) case processing are a manufactured myth, based on the experience of only a few transit properties each year. Under newly established guidelines effective since January 1996, a DOL certification permitting the release of transit funds must occur within 60 days from the date the DOL begins processing a grant application. This may be an "interim" or final certification. Either way, it authorizes the FTA to release transit grant funds.

The process is triggered when the Federal Transit Administration forwards a prospective grant for 13(c) processing to the Department of Labor. Upon DOL receipt of a transit grant from DOT, certification will occur automatically if there are no transit employees represented by a union in the service area of the project. Similarly, DOL will also certify a grant based on existing arrangements and without referring the grant application to unions representing affected employees, when it will fund only routine replacement equipment and/or facilities of like kind and character and no potential material effect on employees is apparent. DOL proceeds to certification without a referral to involved unions for job access and reverse commute grants involving populations under 200,000. In all other cases, upon receipt of a transit grant from DOT, DOL will refer the grant application to unions representing transit employees in the service area of the grant project. Congress intended that when transit employees were represented by a union, the Section 13(c) arrangements would be the product of local negotiation, with unresolved issues settled by the DOL.

When a grant application is referred to the parties, DOL makes an initial recommendation of terms and conditions to serve as the basis for certification. The parties have 15 days to inform DOL of any objections to the recommended terms, including reasons for such objections. If no objections are registered or if objections are found insufficient, DOL will certify the project on the basis of the recommended terms. If DOL determines that the objections are sufficient, the parties will be directed to negotiate for up to 30 days, limited to issues that DOL deems appropriate. If the parties are unable to reach agreement within 30 days, DOL will review the final proposals and issue an interim certification permitting FTA to release funds on the project, provided no action is taken relating to the issues in dispute which would irreparably harm employees.

Following the interim certification, the parties may continue negotiations. If they are unable to reach agreement, DOL will set the terms for final certification within 60 days. DOL may request briefs on the issues in dispute before issuing the final certification.

Grant processing statistics provided by the DOL, for the years 1996 through 1999, indicate that, with few exceptions, all complete grants in every category have been certified in well under 60 days.

In fact, more than 4,000 grants have been certified by DOL since January 1996. Of these, 98 percent were certified in 60 days or less, and the average processing time was under 30 days.

In 1999 alone, the ATU processed over 680 grants including some 500 full grant applications, 140 amendments to previously certified projects, and 36 statewide grants under the non-urban Section 5311 program. Nearly one of five grants was for funding under the newly authorized Job Access and Reverse Commute Program and 20 were for intercity bus operations under the Rural Transportation Accessibility Incentive Program. In every case, the ATU complied with the time limits specified within the DOL guidelines and never missed a deadline. Every job access grant referred to the ATU was certified, making much needed funds available to provide access to jobs and related employment opportunities. Grants were thus approved to such diverse service providers as the City of Detroit Employment and Training Department in Detroit, Michigan; the East Bay Asian Local Development Corporation in Oakland, California; the Maricopa County Human Services Department in Phoenix, Arizona; the Georgia Department of Human Resources in Fulton County, Georgia; the St. Charles County (Missouri) Work Connections organization; the North Carolina Department of Transportation; the Wayne County (West Virginia) Community Service Organization, Inc.;and the Minnesota counties of Anoka, Dakota, Hennepin, Ramsey, Scott, and Washington.

By every measure, the Section 13(c) program is accomplishing its purpose, working well, and assuring that transit systems throughout our nation's communities benefit from well-trained, professional individuals committed to providing safe and effective transit services.

To those who have raised questions with respect to the so-called "costs" associated with 13(c), we say look at the facts.

The costs of the Section 13(c) program have been minimal over the last 30 years. The program is designed to protect the process of collective bargaining and to enable labor and management to structure their organizational changes in a way to minimize any settlement payments to adversely affected workers. Indeed, this is the way it has worked. Individual employees' claims over the last 30 years have totaled a minuscule fraction of the 120-130 billion dollars distributed through the program since 1964.

And to those who argue that 13(c) has outlived its usefulness, we respond that the underlying concerns which justified its enactment in 1964 remain as true and as necessary today.

The national interest in maintaining a minimum level of protection for transit workers in exchange for the substantial federal investment in state and local transit infrastructure is sound public policy. Transit industry collective bargaining and the fruits thereof continue to provide, as they did in 1964 and long before that, the foundation for progressive and responsible labor-management relations in the majority of the public and private sectors of the transit industry.

To date, no less than 40 states, and the District of Columbia, have adopted statutory mechanisms mandating or otherwise providing for the continuation of public transit employee collective bargaining rights as required under the Section 13(c) program.

We understand that certain provisions agreed to and accepted by the parties for more than 25 years are now being questioned. With respect to the "sole provider" clause, this provision was initially included in the "model" National Section 13(c) Agreement negotiated in 1975 by APTA and transit union representatives to ensure the timely flow of federal operating assistance. This National Agreement has been universally applied and relied upon by most transit systems in more than 40 states, including Texas, where this or similar arrangements have been agreed to by the transit systems in Austin, Beaumont, Laredo, San Antonio, and Waco. We are aware of no case where it has been found contrary to state law or incompatible with federal grant requirements.

The sole provider clause states that a grant recipient shall be the sole provider of transit services funded by the project, provided, however, the parties recognize that, to the extent past practice enabled the parties to contract out work, such practices would continue in accordance with applicable collective bargaining agreements or other local terms and conditions of employment. Clearly, it does not bar or prevent all contracting out. Rather, it is one element in an agreement designed to protect existing employees from job losses or benefit reductions while enabling management to operate its system in the best interests of the community it serves.

In some cases, disagreements have occurred over so-called "carryover rights" where one provider is replaced by another, often as a result of an acquisition or a change in contractor following a competitive bid process. In those circumstances, including Las Vegas, our objective was and is to secure continued employment opportunities for individual employees, union and nonunion alike, who have established homes and send their children to school in the communities in which they live and work. This is not only good federal policy; it is the right policy for all of us.

With much attention focused on the potential benefits of contracting out, the example of the RTD in Denver demonstrates its many pitfalls. Independent studies examining the Authority's experience with privatization from 1990 to 1995 indicate that, at best, the RTD's costs have remained neutral; and, at worst, privatization may have cost the system over nine million dollars, as some 25 percent of its transit services were contracted out. Indeed, over the last 12 months, the system has experienced significant service, safety and operational difficulties with its private operators and has canceled a number of those contracts taking their services back in-house. A summary of the 1997 Denver privatization report, Paying More Getting Less, the Denver Experience with Bus Privatization (1990-1995) by Elliott Sclar, Ph.D., Columbia University, is attached to this statement.

Finally, Mr. Chairman, I am compelled to point out that the 13(c) program is about far more than just grant processing times or economic principles. It is about individual transit employees, union and nonunion alike, who live and work in virtually every state in our nation. It is about Samuel Thompson from Dallas, Texas, who for more than 33 years has been employed on the city's transit system, operating first trolleys and now buses, providing safe and effective service to literally tens of thousands of individuals throughout his career.

It is about Maija Edmonds, who in the 1960s emigrated from Finland to Utah. For more than 20 years, she has driven a bus in Salt Lake City, and is now, along with 150 other members of ATU Local 382, working with the Salt Lake City Olympic Organizing Committee to provide safe bus service to our nation's citizens as they gather for this extraordinary event in 2002.

It is also about Clifford Green of Baltimore, Maryland, who during his 35 years of driving has experienced the extraordinary expansion and modernization of Baltimore's transit services from trolley, to bus, to light rail.

And finally, it is about Mary Craig from Mobile, Alabama, a bus driver who, as we speak, is fighting to ensure adequate funding in that city for its transit dependent ridership.

By any measure, the labor protection program has enhanced the partnership between the federal, state and local governments, as the transit industry, labor, and the government have worked together to provide the necessary resources, operations, and services so dearly needed by our nation's workers and their families.

We have participated in administrative reforms to make this a more timely and effective program. We believe the facts demonstrate that the system which is currently in place has accomplished that purpose and that the program goals recognized in 1964 are as valid today as they were some 35 years ago.

In closing, we wish to underscore that we will continue to work with all parties benefitting from the federal transit program to ensure they fully understand the opportunities it provides and the requirements for compliance in order to receive these much needed funds.

At this time, we would be pleased to answer any questions the committee may have.

Thank you very much.


1. When federal funds (most recently authorized under TEA-21) are used to acquire, improve or operate a transit system, federal law requires arrangements to protect the rights of affected transit employees. These arrangements must be approved or "certified" by the Department of Labor (DOL) before the Department of Transportation's (DOT) Federal Transit Administration (FTA) can release funds to grantees, typically city transit authorities. The terms and conditions of the protective arrangements are then included in the grantee's contract with the FTA. The requirement to protect transit employees is contained in Section 5333(b) of Title 49 of the United States Code (formerly Section 13(c) of the Federal Transit Act).

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