Contract’s Deadline Taking Its Toll on Turnpike and Parkway Collectors

Tara Nurin | March 31, 2014 | More Issues, Transportation
Workers say they had little choice but to agree to private takeover that will likely lead to pay cuts and layoffs

State Senate President Stephen M. Sweeney.
They’ve held fundraisers, agreed to massive pay cuts, asked their top bosses to try their jobs for a day and brought in some of the state’s most powerful lawmakers to speak on their behalf.
But toll collectors on the New Jersey Turnpike and Garden State Parkway are working against one particularly perilous reality as they struggle to convince New Jersey Turnpike Authority (NJTA) board members not to privatize their jobs:

Three years ago, the workers voted to accept the elimination of their positions come July 1, 2013. While the toll workers got a reprieve when the authority voted to extend their contract by one year, toll collections are supposed to be turned over to a private company in a decision tht could come as soon as this summer .
That’s why toll collectors and their union representatives are intensifying efforts against privatization as authority board members await a May 7 deadline for interested private parties to submit proposals to take over management of human and electronic toll collections on the Turnpike and Parkway.

At this month’s regular board meeting, held last Monday, nearly 20 people used the public comment session to speak against privatization. While no one spoke in favor, those opposed included Senate President and ironworkers union administrator Steve Sweeney (D-Gloucester), state Senator Loretta Weinberg (D-Teaneck) and Assemblyman Tom Giblin (D-Clifton), all of whom warned that privatization would bring layoffs, lower pay and benefits, and less accountability to the public.

But as these advocates and stakeholders pleaded with board members to recognize that, in 2011, toll collectors took pay cuts of as much as $16,000 per year in exchange for keeping their government jobs, no one mentioned a memorandum of understanding (MOU) that was signed as part of those contracts.

The MOU stated that on July 1, 2013, all public collector positions would be eliminated – presumably in favor of a privatized system. Their jobs only remain today because the authority wasn’t ready to restart privatization discussions last year. Employees are still laboring under the extension to that expiring contract.

International Federation of Professional and Technical Engineers Local 194 President Kevin McCarthy says his members, who collect tolls on the Turnpike, agreed to that provision, along with the severe cuts to salary and benefits, because the authority didn’t give them any choice – it was either postpone privatization or face it immediately.

“They got to a point where they stopped meeting with us,” he said of authority board members and staffers. “At the eleventh hour they did come through with the current MOU and it was pretty much, ‘Take it or leave it.’ It was pretty much just shoved down our throats.”

Take It or Leave It?

McCarthy says that after months of asking board members to come back to the negotiating table, the authority finally voted to offer the contract extension on a Friday. The following Thursday, they informed union reps that they had until 5:30 p.m. Tuesday to ratify it. Meetings were quickly scheduled for Friday and Saturday, and the general union membership overwhelmingly accepted the terms.

“I think everybody understood the significance,” McCarthy said.
But now that the deadline has passed, authority board members are again actively seeking a single company to run all of toll collections.

Right now, Xerox – which acquired the previous EZPass contractor, Dallas-based Affiliated Computer Services Inc., in 2011, and also runs the electronic toll collections in New York state — manages the EZPass electronic system under a contract that expires in 2016.

It’s likely that if the authority selects another firm, that firm will take over human toll collections at some point in the near future and phase in its own electronic system after the Xerox contract expires.

So far board members haven’t set a date to vote on the proposals but it’s expected that sometime this summer they’ll either pick a contractor or decide not to privatize after all … for now.

The push to privatize toll collections beyond what’s already in place gained traction in 2010 after a gubernatorial task force recommended it as a way to save $35 million to $42 million on the $85 million the authority was spending on Turnpike toll collectors every year.

In its report, the task force wrote, “Based on experience in other states, the Authority is paying between 40 percent and 50 percent more per hour per employee than a private vendor might charge,” and that a private vendor would likely pay 67 percent to 72 percent of the authority’s hourly rates to workers. It suggested that, “As a stopgap until the Turnpike Authority transitions to all-electronic, cashless tolling, it should issue a Request for
Proposals for a private vendor to assume the manual toll collection function.”

All-electronic collections do not appear to be in the authority’s near future, and opponents of privatization argue that the state did realize $30 million in savings from 2011 to 2013 by severely cutting salary and benefits. A full-time Turnpike toll collector’s salary used to top out at $65,700 per year. Now, the 60 full-time collectors who opted to stay after the 2011 contract went into effect earn $49,000 annually, with reduced benefits and vacation time, and 490 additional collectors make between $12 and $16 per hour.

“I was forced into $9-an-hour decrease in salary; forced to accept this or be privatized and lose our jobs,” 20-year toll veteran Nicholas Pappas told board members on Monday. “We breathe your fumes, endure the elements and take one for the team.”

Pappas has been able to afford to keep his job because he and his wife own a small business that helps sustain them. Without it, he says, they would have “gone under.”

Indeed, a strikingly high number of collectors have left since 2011, choosing to retire or escape to another position – like maintenance – within the authority. According to the authority, 119 of 199 full-time Turnpike collectors were hired since July 1, 2011; on the Garden State Parkway, it’s 114 of 136.

Overall, privatization would affect more than 800 collectors and supervisors on the Turnpike and Parkway, a number that would have been far higher before EZPass accounted for a full 80 percent of the authority’s toll collections.

Regardless, those who would be affected are outraged that their employer is willing to sell them out to a private company that they believe will lay them off and then, if they’re lucky, rehire them at an even lower pay rate.
Local 194 is looking to the South Jersey Transportation Authority’s (SJTA) experience with a private vendor on the Atlantic City Expressway to make its point that privatization would hurt Turnpike and Parkway workers without saving much money for the authority.

A spokesperson for the SJTA did not return a call seeking pay-scale figures for collectors, McCarthy says his staffers have heard that the SJTA’s private contractor pays collectors approximately $12 an hour with no sick time, one week’s vacation after a year of service, and no family health coverage. This, despite charging the SJTA between $22.13 and $23.65 per hour per employee, plus $495,000 annually for administration and management fees, according to McCarthy.

The Atlantic City Expressway covers 44 miles while the authority’s two highways run just under 300 miles.

The authority is not projecting how much it hopes to save by privatizing. The authority’s budget remained relatively flat in fiscal 2014; it last raised tolls on January 1, 2012.

At Monday’s meeting, Weinberg decried last year’s veto of a bill she sponsored that would have required all state privatization contracts of more than $250,000 to undergo a cost-benefit analysis by the comptroller’s office to ensure that the public would not pay more or receive less by outsourcing services. The bill would have also required rehired workers to earn as much or more as they were paid before, with laid-off employees receiving training and placement elsewhere.

On Monday, she and others cited problems with previous attempts to privatize state functions. One notable example is the implementation of EZPass in the late 1990s, whose early troubles the State Commission of Investigation blamed on a “lack of due diligence, flawed contract documents, manipulation of the bid evaluation process, and failure to heed reasonable warnings.”