With revenue surging to record levels and riders flocking to standing-room only trains, BART would seem like an unlikely place for a bitter showdown over employee pay hikes as workers threaten another strike in two weeks.
But a closer look at the agency's financial data by this newspaper shows a fast-growing problem is threatening the future growth of the Bay Area's biggest train line: Half of the $69 million in new revenue BART raked in since 2010 has gone toward the rising cost of employee health care and pensions.
BART's total cost per employee appears to be the highest in the Bay Area among major transit agencies, according to payroll data reviewed by this newspaper. AC Transit and the Valley Transportation Authority both saw their benefit costs per employee go down in recent years as BART's went up.
While BART's operating revenues climbed 11.5 percent in the last three years, its health care and pension costs rose nearly 35 percent.
That's left a smaller share of the budget pie for everything else -- including worker salaries, which have remained roughly flat for more than three years -- and BART's most pressing need: chipping away at $2.8 billion worth of upgrades to expand service, including $1.9 billion needed to buy new rail cars.
Agency officials on Monday showed off a mock-up of future train cars they say will provide a cleaner, more reliable ride. But they say they can afford them only by keeping overall employee compensation the same over the next five years.
That would be accomplished by asking workers to chip in more for their health and pension benefits, a goal the agency prizes so much it's willing to give out small wage bumps so each employee's net take-home pay would stay the same. If employees agree, BART would save money over the long term because employees would foot a bigger share of the rising cost of health care and pensions.
"Something has to be done. If we keep kicking the can down the road, then our children pay for it," said Terry Moe, a professor of political science at Stanford. "It's not normal for the private sector. This is a huge benefit that workers have had."
While government agencies across California grapple with rising health care and pension costs, BART's problem is exacerbated because employees pay a comparatively smaller share of the cost: $92 a month toward health care and nothing toward pensions.
Robert Cervero, a UC Berkeley transportation expert, pointed toward decades of BART worker strikes and threatened strikes as having a cumulative effect for unions in negotiating attractive deals.
The average worker in BART's largest union, the local Service Employees International Union, earned $77,366 in gross pay and $32,235 worth of benefits in 2012. Their average benefits cost is up about 12 percent since 2010, the first year this newspaper began collecting benefits data, while gross pay has remained roughly flat since their last contract was signed in 2009.
Out of the $568 million operating budget for the fiscal year that began this month, BART plans to spend about 70 percent on labor and 30 percent on electrical power, equipment and other programs needed to run service.
On top of service costs, BART is spending another $157 million toward programs outside operations, like payments on the new rail cars and chipping away at its debt.
Before state mediators issued a gag order nearly three weeks ago, BART had offered an 8 percent pay hike that would be balanced out by increases to benefit contributions while unions wanted a 20 percent wage bump with a very slight increase to benefit contributions.
"It seems like the large majority of the public is upset with the unions for being rigid," said Sarah Anzia, assistant professor of public policy at UC Berkeley. She said a lot of people realized that "compared to what I contribute toward my retirement or health insurance, this is nothing."
SEIU officials did not return messages seeking comment.
A 30-day cooling off period ended a 4½-day strike that began when BART's current labor pact expired at the start of the month. Unions say they will shut down the rail line that carries 200,000 people a day if a deal is not reached before Aug. 5.
All indications are that both sides remain far apart despite regular negotiating sessions aided by mediators appointed by Gov. Jerry Brown, with both sides continuing to publicly express their anger.
On Monday, the SEIU released a 40-page report outlining their problems with the private chief negotiator hired by BART, accusing him of being a union buster, while management countered with a heated statement blaming the unions for stalling.
El Cerrito resident Maggie Binckard is one rider swayed by the union's argument that their pay hasn't budged over the past four years.
"The economy has recovered, and BART has made a lot more money because they have a lot more riders now," Binckard said. "It's only fair (to) play fairly with their employees."
But in interviews, most commuters who agree with BART say they think workers already make enough money and have good benefits and would rather see BART's riches go toward long-term projects than increased compensation.
"I think (management) should hold out," said rider Shaina Alcaraz, 19. "I feel like the projects should be put first."
Staff writers Brittny Mejia and Daniel J. Willis contributed to this report. Contact Mike Rosenberg at 408-920-5705. Follow him at twitter.com/RosenbergMerc.