With no immediate solution apparent, the AC Transit Board of Directors declared that contract talks have reached an impasse between the District and the Amalgamated Transit Union, Local 192 which represents the majority of the agency's workforce. The directors then imposed new work terms and conditions to yield $15.7 million in savings that are necessary to close an impending budget deficit.

After more than three months of talks and dozens of sessions, the ATU labor agreement expired on June 30th without a consensus on a new contract. The District has offered a plan that preserves basic union wages and healthcare benefits while reducing costs by $15.7 million by initiating work rule changes, co-pay policies for medical care and employee health insurance, and a two-tier pension plan.

"I think we are definitely at an impasse because the union has so far offered less than 50 percent of what is needed to close the budget deficit," said Director Greg Harper.

Overall, the District is seeking to reduce labor cost by 8 to 9 percent to help close a projected funding gap of $56 million for the two-year period ending on June 30, 2011. So far, AC Transit riders, general and administrative staff, and the Board of Directors have made significant financial concessions, including:

• Local riders are paying more due to the $0.25 per trip fare increase and $10 increase in the price of a monthly bus pass. Transbay riders are paying more due to the $0.50 per trip fare increase and $16.50 increase in the price of a monthly pass. And youth, senior and disabled riders are paying more due to the $0.15 per trip local cash fare increase and $0.30 transbay cash fare increase.
• Riders also had their bus service reduced in March by 7.8% or $10.3 million worth of service hours, they are facing a second round of service cuts in August that will further reduce service by 7.2% or $11.4 million in service ours.
• Over 70 general and administrative staff positions have been eliminated resulting in layoffs.
• Total general and administrative overhead reductions-- including the elimination of three executive management staff, district vehicles and management leave benefits-has reduced expenses by $9.2 million..
• The Board of Directors has cut its salary by 5%, cut travel by 50%, and eliminated special travel account for transit advocacy.

Negotiators for the District and ATU have met since March, including 10 sessions with a state mediator during the month of June. Unfortunately the ATU negotiating team left earlier than expected on the final day of mediation and an agreement was not reached by the June 30th deadline as the Board of Directors had hoped. New talks have yet to be scheduled.

So, to protect the District's budget, the District declared an impasse and the Board of Directors adopted revised terms and conditions of employment for employees represented by ATU that will become effective July 18, 2010. The District is hopeful that ATU leadership and membership will understand the reason for the Board's action and continue to work under these new provisions.

However, given the impasse, the District recognizes that ATU members have the legal right to strike. The agency has advised all of its employees of the potential for a strike in the coming days or weeks and is poised to modify the District's operations should a strike occur.

ATU is asking the courts to order interest arbitration to resolve this bargaining dispute but the District has not agreed to that procedure. One of the primary reasons is that the California courts have determined that interest arbitration allows a non-elected third party to make key financial decisions that are supposed to be made only by the elected Board of Directors.