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Source of Port Authority's bailout unclear

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Amalgamated Transit Union Local 85 workers agreed to more than $15 million in annual concessions. Cost-cutting measures include:

$6.2 million: Annual savings from a wage freeze through June 30, 2014

$7 million: Annual savings from increasing workers' pension contributions to 10.5 percent of their wages

$2.7 million: Annual savings from increasing work requirements for vacation benefits

Source: ATU Local 85

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Officials who were involved in negotiations to prevent Port Authority of Allegheny County's largest-ever service cuts said on Monday that the state and county assured them they will provide a combined $35 million to help keep buses running through next summer.

At the same time, the officials said, the state and county will work to devise a plan within a year that increases funding to the beleaguered agency for years to come.

“If that doesn't happen, we're in big trouble,” said Amalgamated Transit Union Local 85 President Steve Palonis.

Exactly how it will happen remained a mystery. County and state officials refused to say where they would get extra money for Port Authority, either in the short or long term, and when it might be distributed.

Allegheny County Executive Rich Fitzgerald said details would be provided on Tuesday in a Downtown news conference with him, PennDOT Secretary Barry Schoch, Port Authority CEO Steve Bland and Palonis. But Kelli Roberts, a spokeswoman for Gov. Tom Corbett, said, “I wouldn't expect a detailed discussion about the financial package at this point. It's still being discussed.”

State House Majority Leader Mike Turzai, R-Bradford Woods, was noncommittal. “We'll have to sit down with the governor and take a good look at the terms. Keep in mind, state taxpayers are already the prime contributors to the Port Authority,” he said. The state supplies almost half of the agency's operating money.

Palonis said terms of the concessionary contract that the union OK'd on Sunday would revert to the more generous terms of the previous contract if funding doesn't materialize and Port Authority is forced to lay off any more than 5 percent of its 2,300 workers. The deal included a pay freeze and increased employee contributions to pension funding.

Before the news conference, Port Authority's board of directors is expected to vote to scrap plans to cut service by 35 percent and lay off more than 500 workers two weeks from now. It could raise non-union workers' pension contributions to 10.5 percent of their wages, from 5.5 percent, in a change that mirrors concessions approved on Sunday by Local 85, Port Authority's largest union.

“How could we object? We're talking about maintaining service and keeping more than 550 jobs from being cut,” Port Authority Chairman John A. Brooks said. “I don't expect any glitches.”

The moves are part of an effort to close a $64 million deficit in the agency's $333.1 million budget.

The pension change for non-union workers, along with other internal administrative cost-cutting moves, is expected to save $10 million annually, officials said.

Contracts approved by ATU Local 85 are expected to save $15 million, and fare increases imposed in July should generate $6 million in revenue. Those changes, combined with $30 million in cash from the state and $4.5 million from the county, should close the deficit and prevent all cuts that had been planned to address this year's fiscal crisis, officials said.

Tom Fontaine is a staff writer for Trib Total Media. He can be reached at 412-320-7847 or tfontaine@tribweb.com.

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