The Chicago Transit Authority may have found alternative solutions to financially stay afloat as it’s faced with a $227 million deficit in the upcoming fiscal year. CTA riders could dodge fare hikes and service cuts under a 2012 budget plan announced by CTA President Forrest Claypool on Oct. 19.

However, according to a CTA press release, the only way the transit agency could prevent possible fare hikes and service cuts is through deep management cuts and work rule changes through labor unions.

“Since May [2011], the CTA has launched a series of service improvements while cutting hundreds of positions and implementing management efficiencies that are saving tens of millions of dollars,” Claypool said. “The result is a lean management structure and the smallest number of employees in the CTA’s history.”

Claypool said management savings will help eradicate $117 million from next year’s deficit, and the proposed $1.24 billion operating budget will help with the remaining gap through limitation on wage growth, work rule reforms and health care benefit changes.

According to Claypool, the CTA’s proposed budget is $66.2 million—or 5.1 percent—less than the 2011 budget.

The CTA has added new service improvements, such as station renovations and renewals, as previously reported by The Chronicle on Oct. 10.

There have also been security improvements with the addition of new surveillance cameras, as well as an installation of a new tracker at bus shelters.

Claypool said even with all of the service improvements and management cuts, the CTA’s spending is still high and blamed extremely high labor costs and end-of-the-year borrowing.

“But even the most innovative service and the leanest management cannot make up for a cost structure that far exceeds the national norm [which is] mostly driven by antiquated work rules that benefit a small number of individuals at the expense of everyone else,” he said.

In such cases, Claypool said the proposed budget heavily relies on union workers’ work changes. He said without these reforms, the CTA would be forced to lay off 1,000 employees, reduce bus and rail services and possibly increase fares.

However, Lee Crandell, The Active Transportation Alliance’s director of campaigns, said he didn’t agree with that alternative.

“There are definitely no winners when our transit agency is forced to make decisions about fare increases or service cuts, so it has a very big impact on our daily lives in Chicago,” Crandell said. “It ultimately comes down to funding, and transit is significantly underfunded because our elected officials have put it on the back burner.”

However, Claypool’s focus is on labor unions, and he explained that approximately 70 percent of the CTA’s budget is spent on labor costs and 91 percent of the labor force is unionized.

He said two-thirds of the CTA’s budget is made up of labor expenses, and in 2012, labor costs are estimated to be $963.1 million—6.8 percent more than the 2011 budget.

Claypool wants to cut union work rules that he said cost the agency millions of dollars, “encouraging absenteeism, unnecessary overtime and redundant costs,” such as employees paid for birthdays and anniversaries of employment, which earn two-and-one-half times pay if they choose then to work on those days.

“Absent fundamental reform, including an end to cumbersome union work rules, the CTA’s longstanding financial problems will remain,” Claypool said. “But with leaner and better management, labor reform and aggressive service improvements, we can permanently fix CTA’s finances, preserve good jobs, increase ridership and invest in our future.”

With the CTA’s union collective bargaining agreements expiring on Dec. 31, Claypool said he has already initiated the negotiation process with them.

However, Robert Kelly, president of the Amalgamated Transit Union 308, said Claypool’s statement was completely false and the CTA hasn’t even provided the labor unions with budget papers.

“So I’m at a disadvantage because I haven’t seen what [the media] has seen,” Kelly said. “I can tell you that in the past couple [of] weeks, Claypool has gone to the media and has been negotiating the contract through the media, trying to get the public mad at the workers of unions 241 and 308, and that’s not very productive for him.”

Kelly said he doesn’t know what the union would be willing to give up because there is a lack of communication between CTA and the unions.

“When the time comes, we will sit down with him, come up with some offer and whatever we arrive at, I will present it to the membership and they will either vote yes or no,” Kelly said. “That’s our job here, to get the best and most fair contract we can for our members and let the members vote on it.”

According to Claypool, CTA customers and the general public will have the opportunity to provide comments to the transit agency on the 2012 budget recommendations, which are all posted on the CTA’s website.