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| (Newsday/Matt Davies cartoon) |
The railroad tracks overtime hours and spending in eight different categories, including OT related to providing service, maintenance, and supporting other projects:
| Type | 2018 Budget | 2018 Actual | (Un)favorable | vs. 2017 | vs. 2012 |
|---|---|---|---|---|---|
| Scheduled service | $26.67m | $27.79m | (4.2%) | +9.4% | +49.8% |
| Unscheduled service | $6.94m | $7.55m | (8.8%) | +17.2% | +20.8% |
| Programmatic/Routine Maintenance | $47.38m | $52.18m | (10.1%) | +14.3% | +150.8% |
| Unscheduled maintenance | $0.35m | $1.69m | (388.2%) | +21.4% | +340.0% |
| Vacancy/Absentee Coverage | $34.63m | $46.66m | (34.7%) | +10.5% | +44.0% |
| Weather Emergencies | $8.74m | $11.03m | (26.1%) | +54.0% | +29.8% |
| Other non-reimbursable | $1.51m | $4.12m | (172.7%) | +24.6% | +22.1% |
| Reimbursable | $35.44m | $67.69m | (91.0%) | +35.4% | +411.3% |
| Total | $161.67m | $218.71m | (35.3%) | +20.4% | +111.3% |
These types of overtime include:
- Scheduled service: crew book/regular shift overtime for train crews, operators, and others directly involved in providing train service (including holiday overtime)
- Unscheduled service: OT caused by unplanned events not related to weather, including injuries, mechanical breakdowns, unusual traffic, late tour relief, etc.
- Programmatic/routine maintenance: maintenance work for which OT is planned (e.g. railroad tie replacement, rail testing, etc.), and maintenance not resulting from unplanned events, including running repairs.
- Unscheduled maintenance: OT resulting from an unplanned event that requires crews to perform repairs on equipment, tracks, facilities, etc. (e.g. derailments, tour length, and weekend coverage)
- Vacancy/absentee coverage: OT for other employees to cover for an absent employee or vacant position
- Weather emergencies: OT coverage due to extreme weather conditions (snow, flooding, hurricanes, etc.) as well as preparatory and residual work
- Other non-reimbursable: OT coverage for clerical, administrative, and other non-exempt positions eligible for overtime
- Reimbursable overtime: OT to support other projects (e.g. capital program).
The graph below shows the total amount in OT the railroad has paid in each of these categories since 2012 (when the MTA standardized the OT categories currently reported now). There has been a steady increase in OT costs in almost every category. Note: the one-year spike in "other non-reimbursable overtime" is a result of retroactive payments made as part of the 2014 labor contract deal.
The LIRR's final operating budget figures, included in the meeting notes for this month's MTA Board LIRR Committee meeting, come just days before fares are set to increase for the seventh time since 2008. As riders will soon be asked to fork over more money for the same level of service, the railroad is continuing to show an inability to keep OT costs under control. High OT costs don't just hurt our wallets now, they result in higher pension costs years down the road, as OT payments are included when calculating an employee's final average salary, which is directly related to the pension amount they receive. These "hidden costs", explained further in this post about a report from the MTA Inspector General on the topic, means that every $1 in overtime the railroad pays this year puts us on the hook for an additional 49 cents in hidden costs in later years...
While increases in OT related to maintenance activities could potentially be explained as a result of increased efforts related to "LIRR Forward", the railroad's performance improvement plan, or last winter's severe weather, most of the increases reflect a struggle to control OT on a railroad that has major spending problems.
Loading up on OT vs. properly managing headcounts also poses potential efficiency, quality, and safety issues. One employee is much less productive working a 16-hour shift than would two employees each well rested and working 8-hour shifts. Piling on OT takes the LIRR's already low productivity and drives it even lower, so we are really getting even less bang for our (double-time) bucks. If you're conducting an inspection or making a repair, you are more likely to miss a potential defect or not catch a new issue that might later delay service when you're towards the end of a double shift than someone with a fresh set of eyes. While federal hours of service requirements (see 49 CFR § 228, appendix A) mandate minimum periods of rest for certain employees, burning workers out with lots of OT is not the greatest thing for the employees themselves, the railroad, or we the taxpayers. The LIRR's seniority-based OT system also allows employees to take extra OT assignments outside of their normal scope of work, and while employees must be qualified in that area to take an assignment, you are likely to be less productive and/or less diligent doing work outside your normal wheelhouse.
It was not possible to perform a department/unit-level breakdown of overtime costs, as the LIRR has failed to respond to a Freedom of Information Law request for payroll data filed back in January within the time period required by New York State Law. The LIRR has also failed to respond to a request by the Empire Center, which posts payroll records on its SeeThroughNY.net website.
The LIRR's failure to control overtime continues to be a major factor contributing towards its runaway cost problem, and will only continue to worsen the railroad's burgeoning value crisis. Getting a handle on OT is possible with public sector unions, management just needs to put in the effort to make sure that our money is being spent as effectively as possible. So far in the first two months of 2019 (the LIRR's financial reports lag by two months), the railroad is already exceeding its OT budget by 11.2%, sending us down a road to repeat these same overruns again this year. While "LIRR Forward" has focused on improving operational performance (to questionable success so far), the plan does not appear to include any measures to improve the railroad's financial performance, which is badly needed. On-time trains will be nice, but will mean little it costs $600 a month to commute from Ronkonkoma because the railroad can't get a handle on spending.
Update to online version, 4/26: since the online version was first published, the MTA fulfilled the Empire Center's FOIL request for payroll records. The records have been posted to SeeTroughyNY.net, and they published a summary of the staggering increases in overtime agency-wide. Last year the MTA spent $418 million more in overtime across all operating units, blowing away the $336 million they expect to raise each year from the latest fare and toll hike that took effect on Easter Sunday.
The spikes in OT spending have spurred some news coverage. Topping the list of OT payouts in 2018 was the LIRR's chief measurement operator, Thomas Caputo, who was paid a staggering $344,147 in overtime, beyond his $117,499 base salary. While the MTA could not explain what Mr. Caputo's role actually was when first asked by the New York Post earlier this week, he is one of a few people who operates the railroad's track geometry car. Though, the MTA later admitted that most of his overtime did not come from operating the track geometry car itself (the car only inspects each track about four times a year), but rather he racked up most of his OT by using seniority to get first grab at OT opportunities in other departments in other areas, including track welder, track walker, and mechanic positions.
This is one of several painful LIRR overtime practices that continue to drive costs through the roof. Under most of the railroad's collective bargaining agreements (available in The LIRR Today's document library), OT assignments are handed out in seniority order, with those with the most experience on the job getting to choose from practically unlimited options both within and beyond their normal scopes of work, allowing them to rack up these staggering amounts of OT. The MTA and LIRR sought to change this practice during the 2014 labor contract negotiations, instead looking to ditch the seniority-based system and equalizing it among all qualified employees based on attendance and the amount of OT already worked. The MTA also sought to change some double-time OT payments to time-and-a-half, and eliminating the second class of service penalty payment for conductors. The MTA failed to deliver these economizations, and the final contract settlement involved no changes to OT practices.
As mentioned above (and in prior posts), high OT costs carry significant "hidden costs" beyond just the payroll checks in the year the extra hours were worked. The seniority-based OT system really exacerbates these overtime costs when it comes time to determine pension eligibility. Since pension payment amounts are primarily determined by the average salary of the employee's last three years of work, the seniority-based OT system allows those approaching retirement (who are at the top of the seniority list) to rack up as much overtime as possible in their last few years of work, then cash out and walk away with us on the hook for a much larger pension than typical. So it should come as no surprise that the MTA's top earner retired earlier this month. According to a report in the New York Post Wednesday, in this particular example, Mr. Caputo more than doubled his pension by racking up OT in the last three years of his employment at the LIRR. Based just on his base salary, he would have been eligible for a roughly $69,000 annual pension in retirement, but by racking up $171k in overtime in 2016, $177k in 2017, and $344k last year, his pension ballooned to the maximum $162,000 payout—an extra $93,000 that we are now on the hook for each year going forward.
This is just one example of how the MTA's failure to control overtime has tremendous cost implications both in the year the hours of worked, and well beyond. To date, the agency has done little to substantively control rising labor costs, though the MTA's recently installed Char and CEO Patrick Foye has reportedly ordered a crackdown on overtime abuse at the LIRR, following the Post's reporting this week. While that would certainly be good news, if actually carried out, controlling labor costs—one of the single largest drivers of the MTA's growing financial stress—will require a comprehensive, across-the-board approach to improve productivity and efficiency agency-wide. So far there seems to be little movement on that front, but hopefully new leadership is up to the challenge.
