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HomeMy WebLinkAboutAgenda Statement 1979/03/20 Item 14.. CITY OF CHULA VISTA COUNCIL AGENDA STATEMENT 'Item IVo. 14 For meeting of 3/20/79 ITEM TItLE Resolutio,l 9737 At:c~ptin< ,=sport on U. Labor's 13 {c) Regulations Impact on t}ice. ICarains and authorizing payment o $2500 SUBMITT D BY Director of Public 4works ITEM EXPLANATION S. De~~t. of: City by Tyro & (4/5TH'S VOTE REQUIRED YES NO x ) y Roso3.ution No. 929°, the Couincil ~-uthorized ~.nd approvECl n ay resment on September 2!=~ r 197 ~ , wi ttl th.~ 1a4i f i r.n o_ yr` fie T.~linlnS t0 prOVl:e tFCf1r11Cc'.l ianC{ iJrOft?SSl.Orlcdl 5:;'rv1CE.:c3 n =~n~]lyzinU alb. possibly: lE:~~al ~=;nc~ economic irnpa;,ts that ti~~u S. Dc>purtrn~~-nt of L~~}JO.r l3 (c) Ragula.tiorls soul: .~r=ve on t.'r1F. ity. Th=~ City ,aoai~a il.:~ve to a-~:~oa=~ ~~ sign~:eory to this (c) ~.~jreelnenl; before it can r;ccept any F,~cier~l transit apical or operating <.ssista.nce :~rGnt furies. e consultant a~Idressr_>s t"lo follo:aing issuesjconcerns: ,. Irlpact of ~_. 1? (c) a~,ree,n~~nt_ on th~~ curreizt <;nc~ fur.ure sal~:ries ~znu frirl3.4 b n~::fits of AztE~c. Du,~ Links ~~.nployees. i'l'lO COnSUItc.'.r1tS S'tc;t%'.t~l file".it ~1ZtEC; 1S ~UUnC' tU 1tS :.'l.].St].T1~~ CUll~'C't1VE' burgalning c'~?rC~/i?lent ~^Tlt}i ti:? pr:1c~lC~cil:ic"'tc(+ Transit Uniorl (A7'U) tr,rotlgr .7urly, 19:s~). f~ ?..3 (c} l~:bor protection ac~ri~elaent ~TOUld protect curren'~ Aztec ~nlploy2~~s Ero~ll r-, ~aorsLrling of their erlploym~nt conditions, inciu~ling, but not limited to, wvges ~;nd pc=.r~sions. Any successor ~sn~~loy~r to the current Azt~::c-:'1TU ~grecment Uroulc'. be obliga:tec~ to recognize the union ~~nd barg~1in in good f?itil for ~~ ne.w agre~~sm~ent; and if tilu parties were FINANC STAFF RI BOARD/Cl COUNCIL JA~:nr/ DPOll ement Resolution x (continued on supplemental page) EXHIBITS Ordinance Plat Notification List r Report ENVIRONMENTAL DOCUMENT: Attached Submitted on IMPACT ILTF will finance the $2500.00 cost of this report. ',The contract with Tyre & Kamins authorized by Resolution #9298 on September 26, 1978, for a maximum fee of $2500 is budgeted in the Transit Services Fund. ENDATION Accept report and award $2.500.00 payment to TYRE AND KAMINS. ISSION RECOMMENDATION ION R/111I r:7i~,~11 15 i,5 :.~~ v`...~i e I ~.J i~f~;: ® 3 " ~-° -? 3/20/79 PAGE ? Item 14 unable to re~~ch agre~-aent, under 13 (c) both parties would probably be obligated to submit the issuoJ in dispute concerning the: new contract to arbitration. CVT would be financially responsible for any worsening of employment conditions for every Aztec employee. Effect that 13 (c) would have on t}ie current and future salary and benefit package of city employees should the the City decide to take over operation of its municipal transit system either prior to or after the signing of 13 (c) . Tyre & Kamins found t}~i,,t City employees would be bound to their respective collective bargainin~~ agreements and would not be covered by 13 (c) protection provisions. i't-e City of Chula Vista would continua to be obligated to bargain in good faith with unions representing current City employees. If the City of Chula Vista signed a 13 (c) agreement and was still under the current Aztec contract when it took over operation of its r,-unicipal transit system, CVT would also probably be required to bargain in good faith with the Aztec/ATU bargaining unit. If CVT took over its own transit operations, it would probably be a successor to Aztec under the current ATU contract. Impact on C}-ula Vista if the City signs a 13 (c) ~;greement, and a re~~ional or subregional transit district is formed in the near future to operate the City's transit system. Tha law firm stated that a. regional or subregional transit district could not worsen Aztec ernployoes' working conditions without CV'P incurrir-g 13 (c) labor protection payments. payments. ~1'IDB will by statute be required to maintain present employment benefits whenever it acquires transit facilities. Accordingly, if M19`T'DB took over SDTC's or CVT's operations, it presumably could not lower the employment benefits under the applicable collective bargaining agreement. 4. Responsibility for Aztec operators if Chula Vista Zither (1) terminated the Aztec contract and assumed full operating responsibility on its own, or (2) f~ngag~d a contractor other than Aztec, if the City did become a signatory to a 13 (c) agreement. Tyre & Kar~iins said that th.~ answer to both subparts (1) and (2) was y~~~s under current U. S. Dept. of Labor r~:gulations. It would not matter whether the operator is Gaither ar- independent operator or one that is operated by CVT. _~7 _~ PAGE 3 Item 14 3/20/79 ~s c'iscussed at the larch Council Conference, staff ecomiaends that the City dogs not become a signatory to the opt, of Labor l; (c) rgrr'ement for the following reasons: Only about 1C)-15~ of tho City's annual transit r_apital and operating needs will be met with FY79 and FY30 allocated FederGl Section 3 and 5 grant funds. If the employer and employees could not rEach a collective bargaining agreement, then tyre matter must be submitted to interest arbitration. a. AlthougYr the City would not be directly involved in arbitration proceedings ~~ precedont could wall be set in regard to its negotiations with the otYior City bargaining units. b. There is a good possibility that based on pest arbitration experiences, the grieved transit employees' wares would be increased gat a drastic rate. 9S3 TYKE S~ KAMINS L A W Y E R S 7800 CENTURY PARK EAST LOS ANGELES. CALIFORNIA 90067 273/879.2177. 553.6822 MILTON S. TYRE RICHARD J. K MINS December 12 , 1978 DONALD S. SI ONS ROBERT M.SHA TON PETER M. APP ETON BARYON W. ROBE SON CAMERON WIL IA MS JOHN F. SO KUP RAN DALL H. KE NON VIDA M.HO GUIN Jack A. Bloom, PETER M. LOAN Transit Coordinator City of Chula Vista Public Works Department 276 Fourth Avenue Chula Vista, California 92010 Re: Chula Vista Transit Dear Mr. Bloom: This letter is in reply to the questions posed by you and the City of Chula Vista on the. legal and economic impacts of a proposed Urban Mass Transportation Act (UMTA) Section 13(c) labor protection agreement on the City of Chula Vista. FACTS The City of Chula Vista is eligible as a certified transit operator to obtain capital improvements and .operating funds under UMTA. Chula Vista Transit (CVT), a City agency, contracts out transit operations to Aztec Buslines (Aztec). CVT's contract with Aztec expires December, 1980. Neither Aztec nor CVT has signed a 13(c) agreement. CVT coordinates its transit system with the San Diego Transit Corporation (SDTC). SDTC provides bus service to the general San Diego are a, and is a signatory to a 13(c) labor protective agreement. SDTC has 3 routes through Chula Vista. CVT and SDTC have a joint transfer policy, and CVT coordinates its schedules with SDTC. SDTC services cost CVT $192,000 for the fiscal year 1978-79, one-quarter of CVT's transit expenses. CVT's transit costs are $1.35 per mile. SDTC's costs are $2.35. CVT does not compete for passengers with SDTC. There is an existing collective bargaining agreement between Aztec and Amalgamated Transit Union Local (ATU), which expires June, 1980. The top hourly rate therein for bus drivers is presently $5 and $6.50 for mechanics. Chula 37 TYRE K A M I N S Jack A. Bloom December 12, 1978 Page 2 Vista would pay a bus driver approximately $5.25 per hour under its current wage classification structure. The top hourly rate for a Chula Vista City mechanic under the City's wage schedule is approximately $7.18 per hour. CVT has its own facility for vehicle maintenance. With UMTA grants, CVT plans to expand its existing maintenance facility by adding 2 maintenance bays. CVT also plans to construct a small transit terminal near the Chula Vista Shopping Center with UMTA funds. The transit terminal would serve as a major transfer site to CVT and SDTC routes. Under the Meyers-Milias-Brown Act (MMBA), California Government Code Section 6200 et seq., the City of Chula Vista has negotiated labor contracts with Chula Vista Police Officers Association, Chula Vista Employees Association, Interna- tional Association of Firefighters and Western Council of Engineers. Wage increases have recently been 5% per year. QUESTION NO. 1 What would be the impact of a 13(c) agreement on the current and future salaries and fringe benefits of Aztec employees? ANSWER Present Aztec is bound to its existing collective bargaining with ATU through June, 1980. A 13(c) labor protection agreement would protect current Aztec employees from a worsening of their employment conditions, including, but not limited to, wages and pensions. Future t Any successor employer to the current Aztec-ATU agreement would be obligated to recognize the union and bargain in good faith for a new agreement; and if the parties were unable to reach agreement, under 13(c) both parties would probably be obligated to submit the issues in dispute con- cerning the new contract to arbitration. ~, TYRE & ~KAMINS Jack A. Bloom December 4, 1978 Page 3 DISCUSSION Present Impact A 13(c) agreement would obligate CVT to extensive labor protection arrangements. 13 (c ) of U1vITA provides "It shall be a condition of any assistance under Section 3 of this Act that fair and equitable arrangements are made, as determined by the Secretary of Labor, to protect the interests of employees affected by such assistance. Such protective arrangements shall include, without being limited to, such provisions as may be necessary for (1) the preservation of rights, privileges, and benefits (including continuation of pension rights and benefits) under existing collective bargaining agreements or otherwise; (2) the continuation of collective bargaining rights; (3) the protection of individual employees against a worsening of their positions with respect to their employment; (4) assurances of employment to employees of acquired mass transporation systems and priority or reemployment of employees terminated or laid off; and (5) paid training or retrain- ing programs. Such arrangements shall include provisions protecting individual employees against a worsening of their positions with respect to their employment which shall in no event provide benefits less than those established pursuant to Section 5(2)(f) of the Act of February 4, 1887 (24 Stat. 379), as amended. . The contract for the granting of any such assistance shall specify the terms and conditions of the protective arrangements." No Worsening Of Employment Conditions. 13(c) labor protection agreements cover employees that are employed by the facility, service, or operation assisted by federal funds, and provides coverage for the worsening of an employee's position based on organizational, operational, technological or other changes which are a result of the assistance provided. CVT would be financially responsible for any worsening of employment conditions for every Aztec employee. This would mean making up for any losses to employees in wages and ~~ TYRE & K.~M1~lS Jack A. Bloom December 4, 1978 Page 4 other conditions, including pensions, and including making whole for layoffs and terminations and other situations for a period equal to either 6 years or the length of continual service of that employee on the date of said layoff or termination, whichever is less. As a practical matter, since Aztec's labor costs are lower than other major transit authorities in the Southern San Diego area, the maintenance of Aztec's current employment conditions would not appear to be unacceptable. If maintenance of Aztec employment costs become unacceptable, current routes might be eliminated without 13(c) protective payments under Section 24 of the National ATU 13(c) labor protection agreement. (See discussion below under "13(c) Broad Coverage" at p.7.) However, if CVT, to avoid the unacceptable employment costs, or for any other reason, were to subcontract to a transit operator other than Aztec at lower costs, that is, at wages or conditions for employees worse than those under Aztec, it is not improbable that if the matter were brought to arbitration under 13(c), an arbitrator would find that CVT was a party to subcontracting for a worsening of employment conditions for Aztec employees and would be liable for 13(c) labor protective payments. There are obvious logical and factual arguments that may be made against this contention; but to proceed on the basis that this is not a likely result would not be advisable. The cost ~f error is too great. Future Interest Arbitration. Under 13(c) labor protection agreements, in the event of any labor dispute where collective bargaining does not result in an agreement, the labor dispute can probably be arbitrated. (See further discussion below.) Interest arbitration arises when the parties, after bargaining in good faith, reach an impasse on a new or renewed collective bargaining agreement, at which time they submit to arbitration, upon the request of either party, those issues on which the parties have reached an impasse. Normally, when an employer and a union reach an impasse in negotiations for an agreement or a renewal agreement, either party is free, subject to restrictions, if any, by law, to engage in such economic action as that party may see fit. _~~ / TYRE 8~ ~CAMINS Jack A. Bloom December 4, 1978 Page 5 This could include a strike or a lockout. Neither party can compel the other to arbitrate for an agreement or a renewal agreement. With interest arbitration, the parties would arbitrate the dispute. While it is more likely than not that interest arbitration is available, there is little decided case law on it. In Division 580, Amalgamated Transit Union v. Central New York Regional Transportation Authority, 556 F.2d 659 (2d Cir. 1977), the Federal 2d Circuit Court of Appeals affirmed a denial by the lower court of a preliminary injunction against the employer to restrain it from pursuing fact-finding procedures under the New York State Taylor law. When the parties had reached an impasse, they then proceeded to con- ciliation and fact-finding under the New York State Taylor law. Thereafter, the union sought to abandon that procedure and instead to proceed under interest arbitration pursuant to its 13(c) agreement. The court, in denying the injunction, said that the union had not shown a substantial likelihood that it would prevail in its argument that the 13(c) agreement committed the employer to proceed to interest arbitration. The court stated: "The statute's legislative history makes it reason- ably clear that section 13(c) was intended to preserve the rights of employees under existing collective bargaining agreements and to maintain the status quo with respect to the employer's obligation to bargain collectively, not to create new rights for the employees or enhance existing ones." (p. 662) (Emphasis added.) The court cites no cases but only the Congressional Record for legislative history. On the other hand, the 8th Federal Circuit Court of Appeals on August 21, 1978 decided Division 1287, Amalgamated Transit Union, AFL-CIO v. Kansas City Area Transportation Authority, 582 F.2d 444 (8th Cir. 1978) in which the court appears to have reached a conclusion opposite to the 2d Circuit. The 13(c) agreement in the Kansas City Area Transportation case seems to have been a little different from the language in the Central New York Regional Transt~ortation case. In r,~~ TYRE & KAMiiVS Juck A. Bloom December 4, 1978 Page 6 the former, a labor dispute which prevented a new agreement from being executed appears to have been subject to arbitra- tion. However, the contract also expressly provided that "all contract conditions shall remain undisturbed and there shall be no lockouts, strikes, walkouts, or interference with or interruption of service during the arbitration proceedings." If there were such language in the Central New York case, it was not quoted by the court. But in the Kansas City case, the court cited the labor protection agreement that nothing "shall be construed to enlarge or limit the right of either party to utilize, upon the expiration of any collective bargaining agreement, any economic measures that are not inconsistent or in conflict with applicable law." This last paragraph would appear to cancel out the prohibition against strikes because the paragraph says that nothing in that paragraph (such as the prohibition against strike) shall limit the right of the union, upon the contract's expiration, from striking. Nevertheless, the 8th Circuit ordered the employer to interest arbitration. The 8th Circuit refers to the Central New York case only in a footnote, and then only in connection with a jurisdiction question and not for support of the proposition that interest arbitration is provided ur_der the 13(c) agreement. The crucial difference between the cases might be the absence of any no-strike language in the Kansas City case in connection with the so-called interest arbitration provisions. Generally, a no-strike provision is concomitant with binding arbitration. Teamsters Local 174 v. Lucas Flour, 379 U.S. 95, (1962}. Although the right to case, the court there concludes simply that to arbitration, which includes interest arb to say: strike existed in the Kansas City does not discuss its significance. It the agreement to submit labor disputes includes a failure to make an agreement, itration. However, the court goes on 9_s3 TYRE & ~CA~IAt~IS Jack A. Bloom December 4, 1978 Page 7 "Our conclusion is bolstered by the history of negotiations between the parties that are revealed by the record and by the fact that on two occasions prior to 1977 contract differences between the Authority and the Union were in fact resolved by interest arbitration rather than by strikes or either economic measures." Interest arbitration is not allowed under MMBA because it requires an unlawful delegation of power from a local govern- mental agency. City of Manhattan Beach v. Bagley, 18 Cal. 3d 72 (1976); San Francisco Firefighters Local 798 v. City and County of San Francisco, 68 Cal. App. 3d 896 (1977). However, the Kansas City court rejected the argument of "interest" arbitration as an unlawful delegation of power: "We think, ., that when a state. forms a public transit agency for the express purpose of obtaining federal money to enable it to take over the business of a private transit company, and where the agency in order to obtain the money enters into a 13(c) agreement that calls for interest arbitration, the obligation to arbitrate is binding on the agency, regardless of general state law or policy." While we can labor to distinguish the Kansas City case from our own case and to urge acceptance of the Central New York case, the safer approach is to assume that a dispute over the making of a new agreement would be subject to interest arbitration. 13(c) Broad Coverage. 13(c) agreements require that the employer notify the union 60 days in advance of any changes which may result in the dismissal,~displacement, or rearrangement of the working forces as a result of the project. 13(c) agreements cover events occurring in anticipation of, during, and subsequent to the project. In cases of contested claims, the burden would be on CVT to prove that factors other t~lan the project caused the adverse effect on the employee. 13(c) arbitration could thus arguably apply virtually to every condition of employment. For example, if SDTC were to reduce its routes through Chula Vista and CVT accordingly reduced its connecting routes, this might be a "worsening" of employment conditions under 13(c) if Aztec employees lost their jobs. TYRE & 1~A1`+71NS Jack A. Bloom December 4, 1978 Page 8 If employees are not replaced as certain routes are eliminated, those employees remaining could argue that they have less choice for change in routes and possibly for promotion to supervisory positions as the number of positions is decreased. It might also weaken the union's collective bargaining posture. If a busdriver loses the opportunity to work overtime, the busdriver might claim entitlement to 13(c) protection payments for a worsening of employment conditions. The New York . Metropolitan Transit Authority and the Los Angeles-Southern California Rapid Transit District have suggested this possi- bility. These arguments could probably be met successfully because there are limitations that can be made in 13(c) labor protec- tive arrangements. Article 24 of the National ATU agreement states: "An employee covered by this agreement, who is not dismissed, displaced, or otherwise worsened in his position with regard to his employment as a result of this Project, but who is dismissed, displaced, or otherwise worsened solely because of the total or partial termination of the Project, discontinuance of Project services, or exhaustion of Project funding, shall not be deemed eligible for dismissal or displace- ment allowance. ." In addition, the Department of Labor, which supervises 13(c) matters, recognizes that specific labor arrangements may limit 13(c) liability for experimental projects. "[San Antonio] management acknowledged an experi- mental line extension in which an agreement was reached with the union that there would be no 13(c) claims if the experiment failed. While there may be some addi- tional time and effort involved in reaching such an agreement, we see no reason why similar agreements can't be reached in similar situations and no reason why the ~ arties should not attempt to reach them in good faith." The Economic Cost Impact of the Labor Protection Provisions of Section 13(c) of the Urban Mass Transit Act of 1964, p.363. (Department of Labor, 1978.) TYRE &' KAMINS pack A. Bloom December 4, 1978 Page 9 CVT can also lawfully refuse UMTA grants. There is nothing unlawful in a public agency that supplies funds or purchases services insisting that it cannot afford to pay the high price that it had previously been paying for services. Amalgamated Transit Union, Division 819 v. Byrne, 568 F.2d 1025, 1029 (3d Clr. 1977). QUESTION NO. 2 What is the effect that 13(c) would have on the current and future salary and benefit package of city employees should the city decide to take over operation of its municipal transit system either prior to or after the signing of 13(c)? ANSWER Present City employees would be bound to their respective collective bargaining agreements and would not be covered by 13(c) protection provisions. Future The City of Chula Vista would continue to be obligated to bargain in good faith with unions employees under 1~'IBA. If the City operation of its municipal transit probably be required to bargain in DISCUSSION Present representing current city of Chula Vista took over system, CVT would also good faith with ATU. City employees are covered by MMBA and are bound to their respective collective bargaining agreements. Glendale Citv_ Employees Association v. City of Glendale, 15 Cal. 3d 328 (1975): "In applying the Meyers-Milias-Brown Act, 'the courts have uniformly held that a memorandum of under- standing, once adopted by the governing body of a public agency, becomes a binding agreement. "' Glendale City Em loyees Association v. City of Glendale, supra, at 337. TY R E ~ K A M I N S Jack A. Bloom December 4, 1978 Page 10 Future If CVT took over its own transit operations, it would probably be a successor to Aztec under the current ATU contract. N.L.R.B. v. Burns International Security Services, Inc., 406 U.S. 272 (1972). "A successor employer is ordinarily free to set initial terms on which it will hire the employees of a predecessor. ." N.L.R.B. v. Burns International Security Services, Inc., su ra, at 294. However, the employer is required to recognize the union and bargain with it when the union's majority status is evident. Spitzer Akron, Inc. v. N.L.R.B., 504 F.2d 841 (6th Cir. 1970). Thus, even if CVT were not a technical successor, it could, nevertheless, be bound to recognize ATU as the collec- tive bargaining representative. Whether CVT is a successor or only bound to bargain with ATU is presumably academic. Once CVT becomes a signatory to a 13(c) agreement, it would be bound to the provisions of that agreement and could not "worsen" employment conditions. If the parties could not agree on whether there was a worsening of employment conditions this, probably, could be arbitrated. QUESTION NO. 3 If the City signs a 13(c} agreement, and a regional or subregional transit district is formed in the near future to operate the City's transit system, what would be the impact on the City? ANSWER A regional or subregional transit district could not worsen Aztec employees' working conditions without CVT incurring 13(c) labor protection payments. DISCUSSION The 13(c) impact of a regional or subregional transit district would depend upon the specifics of the particular arrangement, including whether or not the regional or subregional transit district has a 13(c) agreement and whether or not CVT has a 13(c) agreement. However, there are 13(c) problems inherent in any regional or subregional takeover of CVT's transit TYRE 5~ KAM I NS Jack A. Bloom December 4, 1978 Page 11 system. A takeover by a regional or subregional transit district that has a 13(c) agreement and combines other transit systems with CVT could result in a worsening of employment conditions for other transit employees who have greater benefits than Aztec employees. Article 5(v) of the National ATU agreement states: ". .[N]egotiations shall include determining the selection of forces from among the employees of other urban mass transportation employers who may be affected as a result of the Project Any party to the dispute may submit it to arbitration. ." If, for example, SDTC employees covered by a 13{c) agreement were required to work on present CVT routes as part of a regional or subregional district which has a 13(c) agreement, SDTC employees could argue that their employment conditions were worsened if they received the lower benefits under the Aztec-ATU agreement. Also, if Aztec employees covered by a 13(c) agreement worked on SDTC routes, Aztec employees could claim that they were entitled to the higher SDTC pay. The most r:otable example of "whipsawing" employment benefits and wages occurred in the Bay Area Rap~_d Transit (BART). Attempts t.o negotiate terms and conditions for employment with the 24 signatory unions under 13(c) were unsuccessful. The issue of selection of work forces from employees among the 24 signatory unions for all BART positions except guards, supervisors, managerial, confidential, and professional employees thus was submitted to an arbitrator. The arbitrator determined, for the parties, the method for selecting new employees from the unions. The arbitrator required that BART offer employment positions to employees of 5 transit companies in the Bay Area. If the employee had higher benefits than existed at BART, the arbitrator ruled, the employee was to be "red-circled" and was to continue to receive higher benefits than originally provided by BART. The employee remained "red-circled" until benefits for BART employees were equal. The method of hiring employees for a new regional or subre- gional mass transit system, therefore, can apparently be arbitrated, and it is thus possible for employment benefits to be equalized, as occurred to BART. Accordingly, it would be highly desirable for CVT to negotiate specific arrangements with ATU long prior to joining a regional or subregional transit district. L TYRE S~ KAMINS Jack A. Bloom December 4, 1978 Page 12 In addition, if the Metropolitan Transit District Board (MTDB) acquires a regional or subregional transit district, it is precluded from lowering employment benefits. Public Utilities Code Section 120520, which becomes effective January 1, 1979, states: "Whenever [MTDB] acquires the San Diego Transit Corporation, or other existing facilities, from a privately or publicly owned ulitity, either in pro- ceedings by eminent domain or otherwise, to the extent necessary for operation of facilities, any of the employees whose duties pertain to the facilities acquired who have been employed by the corporation or utility, as the case may be,, for at least 75 days shall be appointed to comparable positions by the board without examination. These employees shall be given sick leave, seniority, and vacation credits in accordance with the records of the corporation or other acquired utility, as the case may be. No employee of the corpora- tion of any acquired utility shall suffer any worsening of wages, seniority, pension, vacation, or other benefits as they exist at the time of and be reason of the acquisition. "The board shall assume and observe all existing labor contracts of the corporation or of the acquired utility, as the case may be, insofar as they relate to the acquired facilities. "The provisions of this section shall apply only to those officers or supervisory employees of the corporation or of the acquired utility, as the case may be, as shall be designated by the board." Thus, MTDB will be statutorily required to maintain present employment benefits whenever it acquires transit facilities. Accordingly, if MTDB took over 5DTC's or CVT's operations, it presumably could not lower the employment benefits under the applicable collective bargaining agreement. As a practical matter it might end up paying the higher SDTC wages and benefits. QUESTION NO. 4 If CVT became a signatory to a 13(c) agreement for operating or capital assistance, would it have any responsibility for Aztec operators if the City either (1) terminated the Aztec contract and assumed full operating responsibility on its own, or (2) engaged a contractor other than Aztec? TYRE 5. KAMINS ' 'Jack A . B1 oom December 4, 1978 Page 13 ANSWER The answer to both subparts (1) and (2) is yes, and it would not matter whether the operator is either an independent operator or one that is controlled by CVT. DISCUSSION If it became a signatory to a 13(c) agreement, CVT would be committed to the labor protective provisions under the 13(c) agreement for a maximum of 6 years for every employee at the time employment became affected. Thus, if any employee is terminated or laid off by reason of moving the routes to another operator, then such laid off or terminated employees must be protected to the extent in effect of being made whole for any loss of pay or other benefits, including pension, for a future period starting with the date of layoff or termination and equal to the period commencing with that employee's continuous employment with SDTC to the date of such layoff or termination, but not to exceed 6 years. CONCLUSION It is obvious that the potential for 13(c) protective payments is substantial. BART expects to be liable for $1-1/2 million in 13(c) payments. Yet the Department of Labor reports only $6,893 in actual 13(c) labor protection payments for 1964-1974 during which period UMTA grants were in excess of $4-1/2 billion. Thus, the practical experience thus far with 13(c) labor protection payments is that they occur infrequently. I enclose five additional copies of this letter. Sincerely, Peter M. Sloan for TYRE & KAMINS PMS/rk Enc. Form No. CA 102 ~` 93 3~l 7-6'S CERTIFICATE OF CITY FINANCE OFFICER Certification of Unappropriated Balance I HEREI3Y CERTIFY that the money required for the appropriation of funds for the purpose set forth fortis attached resolution is available in theandeaouotherwise anticipated to come into the Treasury, unappropriated. Fund Amount $ Purpose Bidder Finance Officer The City of Chula Vista 235 2: By Date Certification of Unencumbered Balance I HEREBY CERTIFY that the indebtedn~eemena abthdr- ation to be incurred. by the contract or ag ized by the attached resohotlrovisions fctheeCharte~uof the violation of any of p the City of CY1ula Vista, or the Constitution or the laws of_ the State of California, that sufficient monies hthat been appropriated for the purpose of said contract, sufficient monies to meesurhe oblagetaotic~pated toncomet are actually in the Trea Y~ ro riation from into the Treasury to the credit ondtthatpPaid monies now which the same are to be drawn, actually in the Treasury, together with the monies antic- ipated to come into the Treasury, to the credit of said appropriation are otherwise unencumbered. Amount Not to Exceed $ 2,500 52oi Finance Officer The City of Chula Vista Date 3/20 7~ By Dept./Activity Transit Services Fund Transit Services Purpose A reement with Tyre & Kamins Bidder 69 Certificate N o . _________ -. ~ ~' ~--.- . .r`/ ~ ~N •' ., _ ~: JENNIE ~y_ Office of ULASZ~ CITY CLERK f City o~ C~u.Qa ~Ucsta CALIFORNIA ~ bject; ~ ) Resolution No. nance Yo will find enclosed a ~ ) Ordi No. do ument a certified copy of the PProved at the meet' City Council ing of ~~ z~/ 1 JENNIE / City C1erkFULASZ, CAgC Enclosures ~ ~ S R NEWS: and~endu ah ~h~ docurnevr~ on copy Son ocut ~'~~-Hance oo ~ 1 RE ORDFR: e~~~eco~c e~scLC:d conv vu.ence Uc~e~ and ~~WCn ~ ~o ~ a,~ yon 276 Flourth Avenue, Chula Vista, CA 92010 (714)575-5041 CC-685 (Rev