DiCiccio Questions First Transit “Union Friends” Award

Phoenix City Councilman Sal DiCiccio is questioning just how Mayor Greg Stanton and the majority of the City Council can give $1.5 million to “union friends while claiming financial hardship.” DiCiccio is referring to the Council’s 6-3 vote today that awarded an additional $1.5 million to First Transit and the Amalgamated Transit Union.

DiCiccio said a “backroom deal” was made in January 2015 and the public was not told about it until two weeks ago. DiCiccio says that City staff has been unable to provide documentation to show there was any earlier notice.

“The same elected officials claiming poverty and the need for a property tax increase are handing over $1.5 million to their union friends at the expense of hardworking taxpayers,” Councilman DiCiccio said in a statement released today. “It’s time for these backroom financial shenanigans to end.”

DiCiccio’s statement reads in part:

This new $1.5 million union payout was never disclosed when the original contract was approved last year and never mentioned to the public or Council. The problem with deals like this is not just that they are costing the taxpayers millions, but they also degrade the public’s trust and violate our fiduciary duty to protect the taxpayers. This deal was crafted behind closed doors for special union interests and sprung on the council at the last minute.

Councilmembers Gallego, Pastor, Stark, Valenzuela and Williams and Mayor Stanton voted for the union giveaway of $1.5 million.

Councilmembers DiCiccio, Waring and Nowakowski voted against this special interest payout.

According to the Council’s agenda:

On March 20, 2013, the City Council approved a five-year contract award to First Transit for fixed route transportation services for the period of July 1, 2013 to June 30, 2018 for $132,000,000. As part of First Transit’s labor negotiations with the Amalgamated Transit Union Local 1433 during 2014 and 2015, the City agreed to request an amount not to exceed $500,000 per year in funding an increase in bus operator medical expenses to be incurred by First Transit during the remaining term of its contract with the City.

The final results of First Transit’s open enrollment period, which occurred in the final months of 2015, were required to determine the overall change in medical expenses First Transit expected to incur from both a change in the employer’s contribution to employee coverage as well as employees transitioning from current plans to new medical coverage plans. Staff evaluated this data and concurs that changes to First Transit’s medical coverage cost exceed $500,000 per year.

All other stipulated terms and conditions of Agreement 135719 remain in effect.

In May, the Phoenix Business Journal reported that Mayor Stanton said the City would cover certain health care and benefit costs for drivers up to $1.5 million as part of a negotiated settlement between First Transit Inc. and its drivers from winter 2014-15.