Press Release Article


PORT AUTHORITY BOARD ENACTS SWEEPING EMPLOYEE COMPENSATION AND BENEFIT REFORMS

Date: Mar 29, 2012
Press Release Number: 41-2012

Board Action will Save More than $41 Million Through 2013 and bring the Authority into Line with NY & NJ Public Agencies


Less than two months after a Special Committee of the Port Authority Board of Commissioners issued an Interim Report outlining measures to streamline management, capital and operational practices, the Board today acted to implement sweeping reforms at the Authority. The move responds to recommendations called for in the Interim Report, prepared by Navigant Consulting, and will save more than $41 million through 2013 and reset employee compensation and benefits going forward.

The top three reforms include requiring non-represented employees to contribute to healthcare coverage, eliminating certain add-on compensation, and changes to vacation policies. They account for more than $32 million of the overall anticipated savings. The Board expects the changes, which the Authority will phase in during 2012 and 2013, to generate more than $14 million in savings in 2012, more than $26 million in 2013, and generate tens of millions of dollars of savings each year thereafter.

These reforms reflect recommendations called for in the Interim Report prepared by Navigant, and released in early February by the Special Committee. The changes will bring Authority practices in line with New York and New Jersey public employee benchmarks and help re-focus resources on the agency’s mission as the primary builder and operator of critical transportation infrastructure for the New York/New Jersey region.

"Today’s Board action is the next step in our commitment to Governors Christie and Cuomo, and to the public, to carry through on the Board’s top-to-bottom organizational review of the Port Authority and to implement the constructive findings of the Navigant Report," said Chairman David Samson. "In February, the Special Committee directed the Port Authority executive management team to propose for the Board’s consideration efficient, yet equitable, revisions to compensation and benefit standards so as to bring them in line with appropriate public employee levels. Since this Board remains committed to establishing an agency culture of meritocracy, not one of tenure, these changes are essential; stay tuned for more developments."

"Given the billions of dollars in unmet transportation needs in this region, it’s time that we realign the agency’s management and financial priorities," said Port Authority Vice Chairman Scott Rechler. "We can do the public’s business better, and run this agency more efficiently and at less cost, and that’s what today’s actions are designed to accomplish."

"We must get our own house in order if we are to run leaner and more cost effectively as we return to our primary mission of building and operating the region’s critical transportation infrastructure," said Port Authority Executive Director Pat Foye. "Today’s Board action puts the Port Authority, a public service entity, in line with where it should be. It’s clearly the right thing to do."

"Our agency cannot operate in a vacuum," said Port Authority Deputy Executive Director Bill Baroni. "For us to invest billions of dollars in critical transportation projects – and benefit from the jobs and economic activity they create – we must bring our employee compensation and benefits under control, and take other prudent actions that will enable us to fulfill our capital construction priorities. Business as usual is no longer acceptable."

The action taken by the Board will:



  • Require all non-represented employees to contribute to healthcare benefits effective April 29, 2012. Contribution levels, based on salary, will be phased in over a four-year period with incremental increases through 2015, at which time non-represented employees will contribute up to 35% toward their healthcare premium.

  • Eliminate vacation exchange programs for non-represented employees effective January 2013. This step will eliminate the ability to exchange vacation days for bi-weekly cash payments.

  • Align vacation leave for non-represented employees with paid time-off levels of public employees in New York and New Jersey, effective January 2013. Reductions will range from 1 to 17 days, based on years of service with the average yearly reduction of 5.3 days.

  • Eliminate six add-on compensation programs including longevity bonus programs. The add-on benefits, or pay received by employees in excess of their base salaries will be discontinued effective July 8, 2012.

  • Recognize a revised Labor Relations Instruction so that healthcare will no longer be a mandatory subject of negotiations for PA represented employees for agreements negotiated going forward.


These changes act upon Phase I of the Special Committee’s review and the Board’s overall commitment to reinvigorate the Authority by streamlining and overhauling the agency’s projects, programs, and staff compensation and benefits. The Board formed the Special Committee in the wake of the Port Authority’s August 2011 toll and fare increase in response to calls for a comprehensive review of the Port Authority by Governors Cuomo and Christie.

Phase I of the Special Committee’s work included a review of past and current governance, management and financial practices, capital projects and spending at the World Trade Center site. Phase II of the Special Committee’s review is underway and expected to conclude this summer.

Contact:
Port Authority of New York and New Jersey
Steve Coleman and Ron Marsico, 212-435-7777

The Port Authority of New York and New Jersey, which does not receive tax dollars from either state, operates many of the busiest and most important transportation links in the region. This includes John F. Kennedy International, Newark Liberty International, LaGuardia, Stewart International and Teterboro airports; AirTrain JFK and AirTrain Newark; the George Washington Bridge and Bus Station; the Lincoln and Holland tunnels; the three bridges between Staten Island and New Jersey; the PATH (Port Authority Trans-Hudson) rapid-transit system; Port Newark; the Elizabeth-Port Authority Marine Terminal; the Howland Hook Marine Terminal on Staten Island; the Brooklyn Piers/Red Hook Container Terminal; the Port Authority-Port Jersey Marine Terminal and the Port Authority Bus Terminal in midtown Manhattan. The agency also owns the 16-acre World Trade Center site in Lower Manhattan.


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