When Gov. Andrew M. Cuomo called union negotiator Anthony Simon shortly after 6 p.m. Wednesday in his room at the Times Square Hilton -- next door to the law office where largely fruitless talks had gone on for days -- it almost instantly changed the tone of the most volatile LIRR negotiation in two decades, union officials said.
"Well, what CAN you do?," Cuomo asked. "How do we get there?" the governor wanted to know. And in the coming hours -- much of it on the phone -- they found the way.
"There's no doubt in my mind that if him and I don't have that talk way past midnight, we have a work stoppage Sunday," Simon said.
The flexibility Cuomo drew from union and MTA negotiators stood in sharp contrast to the rigid stances both sides took during much of the four-year-long dispute over contract terms for 5,400 Long Island Rail Road workers.
Looking back after Thursday's settlement, MTA and union sources pointed to several causes for the logjam: a revolving door in agency leadership, the union leaders' hardened stance after federal mediators largely sided with their demands; and the MTA's long insistence, even after it became clearly unrealistic, on a three-year wage freeze, known as "three net zeros."
Some contended the contract could have been resolved much sooner -- and at lower cost to taxpayers and commuters -- had Metropolitan Transportation Authority negotiators dropped "three net zeros" when the economy bounced back from recession and agency finances looked less dire.
"Obviously, when the 'three net zeros' proposal came out, it was at a different time in a different situation," said MTA board member Mitchell Pally, of Stony Brook.
The MTA leadership declined to comment for this story.
The tentative agreement follows federal mediators' recommendations for raises totaling 17 percent and no changes to unions' cherished work rules. Workers agreed to stretch the raises over 6 1/2 instead of 6 years, contribute to health care costs for the first time, and to have future workers wait longer to reach top pay and contribute more to pensions.
Wage freeze stalled talks
The three-year freeze idea was first pushed by then-MTA chairman Jay Walder, who was brought into the agency in 2009 to staunch unprecedented losses brought about, in part, by the economic collapse. Facing annual deficits of almost $2 billion, the agency relied on a state bailout, steep fare hikes, deep service cuts and other major cost-cutting.
Under the threat of layoffs, the state's two biggest unions, the Civil Service Employees Association and Public Employees Federation, did accept a similar freeze. LIRR unions -- who have the strike as their ultimate weapon because they are governed by federal, not state, law -- immediately rejected it.
Union officials said there was little real negotiating in the first few years after their last contract lapsed in June 2010.
Ricardo Sanchez, general chairman of the International Brotherhood of Electrical Workers Local 589, recalled times "We would show up . . . to MTA headquarters and they'd be like, 'Oh, right. That's today,' and they'd make room in the conference room."
Union and MTA sources said the LIRR talks took a backseat to efforts to reach an agreement with the MTA's largest labor organization -- the Transport Workers Union, representing some 34,000 city bus and subway workers.
Another impediment was a constant rotation in MTA leadership. In the four years without contracts, five different people headed the MTA -- Walder, interim MTA chief Helena Williams, Joseph Lhota, interim MTA chairman Fernando Ferrer and current chairman Thomas Prendergast. He took the job just months before the LIRR unions were released from the strike-delaying restraint of federal mediation -- beginning a countdown to a possible walkout.
"When he got there, he had this dropped in his lap," said Arthur Maratea, national vice president of the Transportation Communications Union.
Maratea believes Prendergast was more willing than his predecessors to make peace but, "It was too late. The ball was rolling down the hill."
So, the MTA stuck to "three net zeros" even as its finances were steadily improving. "A proposal is only good on the day you make it," said Pally. "Circumstances change . . . as the economy changes. You have to be willing to be flexible."
MTA officials appeared to undercut their stand that they couldn't afford pay raises for workers when they reduced a planned fare hike next year by nearly half and offered Staten Island drivers a toll rebate.
Pally recalls he and other board members becoming "very uncomfortable" with the agency's continued insistence on wage freezes as it prepared to make its case before a White House-appointed Presidential Emergency Board. " 'Three net zeros' had a time and a place, but that time and place had long passed," he said.
The MTA argued that, even though its finances had rebounded, the agency had to keep fares reasonable, pay down massive retiree pension and health care liabilities and put cash aside for its next $30 billion, five-year capital plan.
But in December, the three-member board decided that the MTA's fiscal picture had "significantly improved" and it was "not reasonable" to deny raises.
The unions had asked the board for raises totaling 22 percent and continued free health coverage. The mediators recommended 17 percent raises over six years and health care contributions of 2.25 percent.
The unions accepted the recommendations, adopted them as their new demands and dug in. "We believed in what we were saying, and we stuck to it," said Simon, arguing that contributing to health coverage was already a big concession.
The MTA stuck to its wage freeze demand until reaching an April agreement with the TWU that included annual raises averaging 1.6 percent and various new benefits.
Before a second presidential board, the MTA made a similar proposal for LIRR workers. The board -- charged with picking the "most reasonable final offer presented" -- sided with the unions.
Railway law expert Frank Wilner, a former chief of staff at the U.S. Surface Transportation Board and a retired United Transportation Union spokesman, said the MTA could have gotten off cheaper and avoided public fear of a strike, but it overreached, "and they paid the price."