What TriMet Needs Now: A Really Good Audit

Full disclosure: I was one of the “stakeholders” who got briefed beforehand on the presentation TriMet GM Neil McFarlane gave to the board last week, predicting dire financial straights if TriMet’s labor agreement, particularly health benefits, is not modified.

There is clearly a messaging war going on. ATU has an “open letter” to passengers out for circulation (it was published in my neighborhood newspaper, and others), raising claims of many flavors of agency mismanagement and mis-allocation of resources.

As to TriMet’s message – this tweet I saw last week pretty much says it all:

Cue complete lack of credibility of #Trimet, again.

What’s a poor transit supporter to think? TriMet needs to show its house is in order before it can credibly ask for increases in the payroll tax – an important opportunity to restore bus service. But is the agency bloated as ATU says? Or is the labor agreement the main source of its long term woes?

It seems to me that the entire conversation would benefit from credible independent scrutiny – not just a thorough financial audit, but also benchmarking of the agency’s metrics against other well-regarded transit agencies.

But who would we call on to perform this review? The City, County and Metro all have well-respected auditors. But all of those governments, particularly the City and Metro, have strong partnerships with TriMet and may not be perceived as objective.

Would Secretary of State Kate Brown’s office be perceived as sufficiently independent? If not, who would?

14 Comments

14 Responses to What TriMet Needs Now: A Really Good Audit

  1. al m
    February 18, 2013 at 6:01 pm Link

    It’s a great idea and needs to be completed by some firm that has absolutely no connections with governmental bureaucrats from around here.

    It’s long overdue.

    As should be obvious to anyone paying the least bit of attention, Mcfarlanes fiscal crisis only applies to portions of his empire.

    The fiscal crisis does not apply to him or any of the non service related departments.

    Something is really rotten over there and we need somebody to look into that place that has independence of movement.

    Trimet has gotten away far too long with complete control of the wheels over there.

    From hand picked boards of directors and advisory boards, to the plethora of inside executives all picked due to allegiance rather than competence

  2. EngineerScotty
    February 18, 2013 at 6:04 pm Link

    Agreed, in principle:

    However, there is an important prelude to this, that needs to happen. The proper purpose of an audit is to verify conformance to something. The purpose of a financial audit is to verify that an entity’s financial statements are an accurate assessment of its financial position. TriMet already publishes annual financial reports (the most recent of which is here), which are audited and approved by an independent accounting firm. The auditor’s remarks mean, essentially, that the auditor claims to have a) examined TriMet’s financial disclosures, b) examined TriMet’s private records, and c) found them to be consistent.

    Indeed–the primary purpose of a financial audit is to permit investors and stakeholders to have confidence that a company’s financial statements are correct, while permitting the company to keep the details a secret.

    What needs to happen with TriMet is not to verify the work of the existing auditors. What needs to happen with TriMet is the public needs to see the details. TriMet’s published financial statements, by themselves, provide no insight as to whether its spending decisions are wise.

    What needs to happen, then, is for more of b) to become public. The problem isn’t that I (or others) are concerned that the published financial reports contain material misstatements–it’s that they divulge too little, and provide little transparency, into the agency’s operations. TriMet is not a private company that has competitors it needs to keep secrets from, or a black-ops agency that needs to protect national security or military secrets or diplomacy, or anything like that. It’s a municipal public agency, providing a mundane public service, and as such, its books should generally be public records.

    In addition, all its vendor relationships going forward (including terms and conditions) also should be matters of public record; and companies that aren’t willing to accept these terms should no longer get to do business with TriMet. (This standard should apply to all aspects of state and municipal government, BTW). Exceptions should exist for things like personnel records, pending contract negotiations or tenders, etc, but the default position of a public agency should be transparency.

    Now, if there are a published set of Transit Agency Best Practices (or even general best practices) to audit TriMet’s operations against, that would be an audit worth having. But in calling for an audit, we need to be very clear just what it is we are auditing, and what we are trying to discover and/or verify, and how and whether the audit will demonstrate performance to the standard we articulate.

  3. al m
    February 18, 2013 at 6:16 pm Link

    Now, if there are a published set of Transit Agency Best Practices (or even general best practices) to audit TriMet’s operations against, that would be an audit worth having. But in calling for an audit, we need to be very clear just what it is we are auditing, and what we are trying to discover and/or verify, and how and whether the audit will demonstrate performance to the standard we articulate.

    ~~~>There needs to be very basic comparisons made.
    Instead of “the richest benefit costs in the country” we need to see in a real side by side comparison to other agencies like MUNI-METRO-MTA-MBTA.

    We need to see how TRIMET management ratios compare to other transit districts.

    Every single department has to be compared to other transit districts cost for such departments.

    I think every single penny of these billion dollar contracts should be available to the public without going through the costly ‘request for public records’ barriers that they have set up.

    The fact that I have to bring the board meetings into the public domain needs to be addressed,why is it that Trimet has no responsibility in that area.

    The fact of the matter is folks that Trimet management has gotten away with murder for decades with no resistance.

    It’s about time for the public to demand some change over there in the way they do business, because what the public is getting from them is squat right now.

  4. al m
    February 18, 2013 at 6:26 pm Link

    And also, as way of illustrating the absolute crazy standards they have there, Jason Mchuff, who does all the videotaping of those board meetings and has even gotten cable access TV to carry the board meetings requested a complimentary pass from Trimet for the public service he does.

    They said no, can you believe it, they won’t even let him have a transit pass for doing the work they should be doing.

    Everything about Trimet is a disgrace, the super secretiveness of everything they do needs to be ended, right now.

    Mcfarlane buys new furniture, add executives, and generally acts as if there is no budget crises when it comes to his needs.

    Everybody else has the budget problems.

    There is no defense of this management, what you see at Trimet is government at its absolute worst.

  5. EngineerScotty
    February 18, 2013 at 6:35 pm Link

    No sleight intended towards Jason, of course–but it might be regarded as improper for TriMet to give a transit pass (or anything else of value) to someone that covers them in the role of journalist. I don’t have a free TriMet pass, nor would I ever ask them for one, nor would I accept one if offered by TriMet as a result of PT coverage–even if the offer came with no strings attached.

  6. al m
    February 18, 2013 at 7:00 pm Link

    No sleight intended towards Jason, of course–but it might be regarded as improper for TriMet to give a transit pass (or anything else of value) to someone that covers them in the role of journalist.

    ~~~>Fine, what they really need to do is bring these meetings to the public without people like me and Jason.

    Right there is all you need to know about Trimet management.

    They will bring nothing to the public unless forced to.

    And that is the thinking that has to stop.

  7. zefwagner
    February 18, 2013 at 7:11 pm Link

    Scotty, I think you are taking a very narrow view of what “audit” can mean. King County Metro up in Seattle received an audit from the King County Assessor several years, which had the express purpose of identifying cost-saving measures (efficient practices, cheaper vehicles, delayed purchases, labor savings, etc) to get them through the recession. They did this because they knew the public would never approve tax increases unless they showed they were doing everything they could to keep costs down. I agree with Chris completely that TriMet needs such an audit. I suspect it will confirm that both labor and management need to be willing to make substantial sacrifices.

  8. al m
    February 18, 2013 at 7:31 pm Link

    I want to make one thing clear, I just took at 28% cut in my pension.

    28%!

    That’s the kind of stuff going on in Greece right now but American mass media has diluted and covered up the story.

    Now its the executives and all the non union employees turn to take that kind of cut.

    Now if they did that, I would stop complaining about Trimet management immediately.

    But they won’t. they never will.

  9. Lenny Anderson
    February 18, 2013 at 8:44 pm Link

    TriMet is a state agency. Don’t we have an elected state treasurer. Seems like the one to do it. I would be very happy to see TriMet’s costs and benefits compared to other comparable agencies.
    But when I think back to 2008-2009 when the Great Recession, what hits me in the face was 85 Swan Island ridership…from over 500/day to 350/day in one year. Layoffs on Swan Island were deep and wide. So TriMet received less fare money and less tax money. That’s tough to buck, and they have done a lot better than other transit agencies. Jobs are coming back, but we are not where we were in 2007 before the economy collapsed.
    Last, remember a lot of service cuts were on bus lines (my 85 included) that just didn’t put the butts in the seats! An overdue slimming down?

  10. Erik H.
    February 18, 2013 at 9:36 pm Link

    TriMet is a state agency

    TriMet is not a state agency, it is a Transportation District authorized under ORS 267.

    The only thing common between a state agency and TriMet is that the Governor gets to pick an agency head as well as TriMet’s Board of Directors. If TriMet were a state agency, TriMet’s budget would be part of ODOT’s budget; TriMet’s General Manager would either be a direct report to the Governor (no Board of Directors) or more likely to ODOT’s chief; and there would be no payroll tax as TriMet would be funded through the state income tax (since the gas tax is Constitutionally off-limits, the state does not collect property taxes, and there is no sales tax.)

  11. Chris Smith
    February 18, 2013 at 9:57 pm Link

    The audit authority at the State level is vested with the Secretary of State, not the State Treasurer.

  12. Alexis
    February 19, 2013 at 7:18 am Link

    Glad I could sum up the situation nicely. :-)

    I think an audit is a great idea. What I mostly want is the ability to look at today’s situation for TriMet, and evaluate whether given the situation they have, they’re doing the right things. A bigger question is whether their overall behavior and future projections can be trusted, and I’m not sure how they would restore that kind of credibility. I surely don’t trust them now, even as a transit supporter.

  13. Nathanael
    February 20, 2013 at 12:14 am Link

    Dire “STRAITS”. It’s a maritime reference to dangerous, hard to navigate waterways.

  14. EngineerScotty
    February 20, 2013 at 8:03 am Link

    Dire “STRAITS”. It’s a maritime reference to dangerous, hard to navigate waterways.

    Well, if TriMet only had some money for nothin’…

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