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CTA chief knocks ‘archaic’ work rules, projects $277 million deficit

CTA President Forrest Claypool warned Tuesday agency faces $277 millibudget deficit for 2012. | Rich Hein/Sun-Times

CTA President Forrest Claypool warned Tuesday the agency faces a $277 million budget deficit for 2012. | Rich Hein/Sun-Times

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Updated: January 23, 2012 3:45AM

The CTA is facing a $277 million shortfall — 20 percent of its operating budget — because of “skyrocketing” labor costs and “archaic” work rules that must be changed to avoid fare hikes and service cuts, CTA President Forrest Claypool warned Tuesday.

In a speech to the City Club of Chicago, Claypool said the CTA’s financial problems have been masked by $554 million in borrowings from the RTA, the state and from its own capital budget.

The day of reckoning has arrived, he said.

Claypool repeatedly refused to say whether the 2012 budget he will unveil later this month will include fare hikes, service cuts or a combination of the two.

He would only say that at least some of those painful solutions can be avoided, if only CTA unions would agree to do what city unions refused to do for Mayor Rahm Emanuel: alter work-rules in a way that reduces CTA operating costs.

“We need labor reform. These cumbersome, kind of crazy work rules cost the agency tens of millions of dollars annually that could be used to provide service or relieve pressure on fares,” Claypool said in a follow-up interview.

Claypool noted that the Amalgamated Transit Workers Union Local 241 representing bus drivers has been placed in the hands of a trustee after allegations of financial improprieties.

“I’m hopeful the new leadership will have the interest of the total union workforce at heart, rather than a handful that have typically driven some of these crazy work rules,” Claypool said.

He added, “We have to make the case that it’s in the interest, not only of our riders but our union members to provide work rule reform because that will preserve their jobs and salaries and benefits. The alternative is layoffs and service reductions if we don’t get work rule reform.”

Two years ago, Gov. Quinn brokered a state borrowing deal that froze fares until Dec. 31, 2011. The CTA still cut bus service by 18 percent and L service by 9 percent while laying off 1,057 workers.

The state now owes the CTA $102.7 million and is five months behind in payments, officials said.

By sounding the alarm, Claypool appears to be setting the stage for a fare increase, the first since 2009.

But when Emanuel, who promised to hold the line on CTA fares, was asked whether riders should brace for higher fares as a result of Claypool’s warning, he said, “No. That’s not what he’s talking about. ... What he said when we met is there have to be changes in the work rules.”

The mayor added, “Forrest has been very smart about the approach. He has made a number of changes at CTA. ... Forrest is also clear that the days of stealing money from the future to pay current bills is over. And I expect certain reforms to make up that difference. That’s what he’s presenting.”

Pressed to identify specific work rule changes, CTA spokeswoman Molly Sullivan talked about the overtime the agency pays and the “extra board” of back-up employees it carries to cover for absenteeism rates now 2.5 times the no-show rate in the private sector.

She also talked about limits on discipline built into union contracts that make it difficult to punish no-shows. For example, an employee can only be discharged for excessive absenteeism after seven occurrences while consecutive absent days are considered one occurrence.

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