Sacramento RT’s attempts to balance budget stirs union outcry, claims of discriminatory firings

Departing GM’s compensation also questioned as arena planning, streetcar funding and sales tax measure enter critical phases

The Sacramento Regional Transit District avoided service cuts and balanced its budget through administrative layoffs unions have described as discriminatory.

The Sacramento Regional Transit District avoided service cuts and balanced its budget through administrative layoffs unions have described as discriminatory.


With the July 1 start of its new fiscal year speeding toward it like a light-rail express train, the Sacramento Regional Transit District erased a $3.1 million deficit last week, balancing its budget and narrowly avoiding service cuts to its receding bus lines. But with ridership numbers down and funding uncertain, something had to give.

So days prior to its June 13 board of directors meeting, RT covered roughly half of its shortfall by cutting 20 administrative positions.

Cue the fallout.

The unions representing those positions claimed the move disproportionately affected minority employees and women. It’s a sensitive subject since RT is defending an ongoing discrimination lawsuit initiated by its maintenance department, but the discrimination allegations may not be entirely true. Union officials are also criticizing a retirement package they believe is too generous for departing RT General Manager Mike Wiley.

In some ways, the drama is par for the course for a transit system that has faced mounting financial pressures ever since the recession. But it comes at an inopportune time, with the Golden 1 Center months from opening and regional governments advancing two big-ticket proposals that could affect the next three decades of regional transportation needs—as well as RT’s own funding fortunes.

Unions had been bracing for the layoffs, but they still stung.

Corina De La Torre, vice president of the Local 256 for the Amalgamated Transit Union, said that all but one of the employees RT let go was a woman, a minority or both.

(RT hasn’t released a list of affected employees. Therefore, SN&R was unable to independently verify these figures.)

“There was no rhyme or reason to [RT’s] madness, let’s put it that way,” said De La Torre, whose union lost no employees but had four reassigned to other positions. “They’re not ATU, so I shouldn’t care.”

“They targeted people of color,” added Camille Tyler, president of the administrative unit for the Local 146 of the American Federation of State, County and Municipal Employees, or AFSCME, which lost seven employees.

In a follow-up letter to SN&R, after this story’s original publication, incoming GM Henry Li wrote that both De La Torre and Tyler were incorrect: Four white males were “among the employees identified for the reduction in force,” he wrote. In all, half of the affected employees were white and half belong to minority groups.

Wiley said his staff conducted thorough analysis before recommending the cuts and didn’t discriminate.

“We’re not about that,” he told SN&R. “We definitely did not want to be focused on minorities and women. In fact, our goals are the opposite.”

Meanwhile, union members put the layoffs in an unflattering context by claiming that RT’s board of directors quietly amended Wiley’s contract last November 9 to allow him an additional $75,612 per year in retirement benefits—on top of the $210,000 he’s already due annually.

Wiley said these dollar amounts represent a maximum possible value he’s unlikely to reach.

He also said that, in amending his contract last November after he announced his retirement, the board was simply tidying up language from two previous contracts dating to his February 2008 selection as general manager and that he was always slated to receive that money.

Those contracts, which SN&R reviewed with Wiley at RT headquarters, include language about RT covering some of Wiley’s deferred compensation and supplemental benefits.

“The reality is that my contract has always had this provision built in it, right from the start,” Wiley said. “This is not new. Now I know that some of our employees have looked at this and said, ’Well, geez, you got this sweetheart deal last November.’ That’s as far from the truth as you can say.”

That’s not to say the deal wasn’t sweetened in one respect.

At the June 13 meeting, Fabrizio Sasso, executive director of the Central Labor Council, sharply criticized the board’s decision to award Wiley a personal services contract for $24,299 through November 2017—on top of his retirement benefits—to serve on the executive committee of the California Transit Association and to assist newly appointed GM Li’s transition into the role.

The contract came at the board’s urging.

“That’s insane,” Sasso told the directors. “That’s like asking an arsonist to train a firefighter.”

After Li takes over July 1, Wiley will receive $175,283 for his general manager contract through December 31, which doesn’t include his personal services contract.

“It’s ridiculous,” said AFSCME’s RT Supervisor President Rod Beverly, whose wife was among the ousted employees and whose union lost two employees. “This is not Microsoft. It’s Regional Transit.”

RT remains at a critical juncture.

Beyond the staff reductions, the district made up its $3.1 million shortfall for the upcoming fiscal year by securing $1.2 million from the Sacramento Area Council of Governments and the Sacramento Air Quality Management District, which agreed to redirect the money from their capital program.

RT also cut $270,000 in nonpersonnel costs and got some of its labor groups to agree to a “significant decrease in annual salary adjustments,” a release states.

As RT cobbles together its operating budget and fends off labor accusations, it remains unclear how or whether this latest skirmish will affect a pair of transportation measures that could come before voters.

First, on June 14, the Sacramento City Council approved roughly $3.5 million for a downtown streetcar project that could be used, in part, to ferry Kings fans from parking lots to the new arena. Council members approved the spending during a procedural vote adopting multiple items, without discussion.

The city has moved quickly to secure matching funds for the 3.3-mile streetcar line since President Barack Obama’s budget recommended $75 million for it in February, but may still need nearby property owners to tax themselves to fund a portion of its operating costs. Local voters rejected that very idea last spring.

In partnership with the city, RT executed the first phase of a $10 million design contract for the streetcar at its April 25 meeting, an hour before the board began discussing possible service reductions.

Regardless of the streetcar, the district expects increased ridership to the Golden 1 Center, whose opening helped motivate RT’s board to keep Wiley on beyond July 1. Wiley said RT is pursuing a $1.5 million sponsorship deal to cover increased operations costs and provide free transportation to the arena.

Then there’s Measure B, the Sacramento Transportation Authority’s $3.6 billion tax measure to fund regional transportation projects. RT would receive roughly $1 billion of that money over 30 years.

The initiative had cleared six of seven city councils and the county board of supervisors as of press time, with the Isleton City Council expected to vote June 22. Assuming Isleton signs off, Measure B will still need approval from two-thirds of county voters to pass in November.

If it does pass, RT will be restricted in how it gets to spend its share of the windfall. It will have to use 75 percent of its funds over the first five years for repairs, rather than capital projects the district desires, such as extending light rail service to Sacramento International Airport.

Meanwhile, RT’s six unions face limited options for protesting the staff cuts.

Every union RT contracts with, except for ATU, has a no-strike clause in its latest collective bargaining agreement with RT. Four of RT’s unions can picket or refuse to cross picket lines in the event of labor disputes.

There could also be pushback from ATU, which represents RT’s arguably most specialized workers—its train operators and line maintenance workers.

De La Torre didn’t know of any action brewing. But she expressed outrage at the way the terminated employees were treated, which she said included an undercover police officer escorting them from the building.

“I have never in my 36 years [of working for RT] seen the disrespect that was shown to these people,” De La Torre said.

Wiley countered that RT is covering the employees’ medical insurance expenses for six months, is providing paid administrative leave during the first month of the layoffs and approved $500 severances per service year in some cases, five times above what some of the union contracts call for.

“You don’t just lay people off willy-nilly,” Wiley said.

Roughly half of the terminated employees were members of the Management Confidential Employee Group and the Administrative Employees Association unions, which have neither striking nor picketing rights. But they’re working under a contract that expired in 2013, which could be a game-changer.

A Southern California labor attorney who spoke to SN&R on background said that, under federal labor law, no-strike clauses don’t apply to expired collective bargaining agreements, or CBAs.

Public transit districts in the state are subject to California law, which often borrows from federal labor law, the attorney said. He thought it very likely employees under expired CBAs could strike.

Sasso and others would like to see the 20 employees reinstated, which RT has up to 45 days to do before the terminations become final. Sasso said he has a specific course of action outlined if this doesn’t happen, though he declined to elaborate.

“We’re taking this very seriously,” he told SN&R.

Tyler isn’t relaxing, either.

“There’s the possibility of two more of these cuts coming, which they’re not telling anybody, but they hint around it,” Tyler said.

Wiley denied the rumors.

UPDATE: The word “narrowly” was deleted to more accurately describe the results of a vote related to Sacramento streetcar.

EDITOR’S NOTE: This story has been updated from its original version. SN&R did not specifically ask RT to confirm or refute the discrimination allegations made by union officials before going to print. We regret this error.