The great train robbery: An audit of MTA overtime costs

In Audit Findings by Hal PetersonLeave a Comment

As I have mentioned in previous columns, the Metropolitan Transportation Authority (MTA), with over 71,000 employees, is, without question, the most beleaguered, problem prone and costly public authority operating in New York state. To illustrate how ludicrous, absurd, ridiculous, preposterous, nonsensical, comical, farcical, foolish, stupid, and daft things are, I suggest we start by examining how the MTA has managed and controlled its overtime costs.

My source of information is Audit Report 2009-S-88 prepared by Office of the State Comptroller and issued to the Chairman and C.E.O. of the MTA, Mr. Jay H. Walder, on August 5, 2010. Hang on – you’re in for a rough ride.

Between 2004-2009, the MTA’s annual overtime costs increased by 32 percent. In 2009, overtime payments to over 7,635 employees equaled at least 30 percent of their annual salaries; 3,127 employees came to at least 50 percent and 145 employees exceeded 100 percent of their annual salaries. To put these numbers in real terms, a Long Island train car repairman earned $207,772. Another, whose duties included toll collection and security, capped out at $180,604. As you are well aware, these overtime payments occurred prior to retirement, and will result in long term ramifications beyond anyone’s imagination.

The audit also identifies many examples of work rules that would never be tolerated in a business other than a public authority. These conditions are so pervasive they are almost impossible to quantify.

A draft of the audit was released to the MTA’s chief operating officer on May 20 and acknowledged on July 7. The response is rather predictable. The finding regarding overtime costs were affirmed; and, the MTA agreed that “gaining control of our overtime expenditures is essential.” They listed some new practices they’ve put in place and predicted they can reduce annual overtime costs by $88 million over the next two years.

There was however, one important caveat in the MTA response. “Some of the specific initiatives contained in the report cannot be implemented unilaterally.” One example, any attempt to “establish caps on the amount of overtime compensation that is taken into account when employee pensions are calculated requires legislation to implement and possibly union agreement as well.” I beg to differ. The abuses cited cannot be resolved at the bargaining table without costly offsets. The law cannot be used to establish administrative policy; and, last but not least, the Boards of Managers of the MTA have a fiduciary responsibility managing our money that cannot be abrogated. I’d like to know if you agree.

I have discussed my concern with the director of audit staff who feels union management relations are improving and stands by his recommendation “to work with Transit officials to establish caps on the amount of overtime compensation that is taken into account when employee pensions are calculated.”

The audit once again reaffirms a culture of habitual foolishness in managing and controlling overtime costs totaled $590 million annually. A considerably more aggressive approach to reform, well beyond the scope of this audit and its findings is required. The day and age of transferring this burden to the public in the form of higher fares and taxes must stop.

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