Next year’s draft budget, Raisegate, and more

Today, TriMet released a draft budget for Fiscal Year 2014 (which runs from July 1 of this year to June 30, 2014). The agency wants everyone to know that this year’s budget doesn’t contain the unpleasant news that was in last year’s (no service cuts and fare hikes), albeit with the usual asterisk (a favorable deal against ATU Local 757). Ignoring the continual haranguing of the union (it’s getting tiring, guys… really), this draft budget is good news.

Of course, TriMet’s day in the sun was rather thoroughly undermined by the revelation early this week that it secretly gave raises to a whole bunch of management personnel last year–while pleading poverty–and tried to bury the matter in its contingency fund.

More after the jump.
The proposed budget

The proposed budget contains the following highlights:

  • No fare increases
  • Some service increases, particularly to relieve overcrowding in the peak. Service is still not anywhere near where it was before the Great Recession and all the cuts that occurred, but I would much rather write about adding hours than cutting them.
  • A few items to respond to recent safety concerns, including some new operators to improve staffing flexibility and reduce dependence on overtime, and to improve inspection and maintenance of the rails.
  • A small contribution to the pension fund for union employees and retirees, which TriMet claims it can have fully funded by 2031. This does not include OPEB–other post-employment benefits, such as medical, which remain unfunded.
  • The bus purchase program will be accelerated, TriMet claims it can have an entirely low-floor fleet, and an 8-year average vehicle life, by 2016.

Raisegate…

As noted at the top, however, TriMet’s week was ruined somewhat by the near-simultaneous stories, one by Portland Afoot’s Michael Andersen, and the other by The Oregonian‘s Joseph Rose, that TriMet had quietly awarded nearly $1M in pay raises to administrative staff, including managers and executives, at the agency–and buried this in the “contingency” line item in its last year’s budget. At the time the budget was discussed and adopted, OPAL and others had objected to the unusually large amount of the contingency fund (about $20M, double what TriMet typically budgets for contingency). TriMet defended the large contingency fund as necessary to hedge bets against an unfavorable arbitration ruling (TriMet won, though the union is appealing), but at least $910k was concealing the pay raises. (In this year’s budget, the contingency fund is about $15M).

TriMet spent much of the day apologizing for it, with both GM Neil McFarlane and board member (and downtown condo developer) Tiffany Schweizer offering mea culpas and pledging to “do better”. While I’m not going to entertain any debates as to whether the pay raises are justified or not, and $910k is a drop in the overall bucket–this was not cool.

Nor was it acceptable finance/budgeting practice, by any standard. The adopted 2013 budget states rather clearly, on page 59, that the general manager’s salary was budgeted to be $215,837. As it turns out, Neil’s salary was actually $221,450. As this was negotiated well in advance of last summer, the discrepancy was known at the time the budget was adopted. In other words, the adopted budget contained knowingly false information. Likewise, contingency funds are monies held in reserve to cover unplanned or unforeseen expenses; using them to conceal known and planned expenses, is fraudulent. (Whether any crimes or professional violations were committed, I have no informed opinion on–though I would think that both the GM and whoever is in charge of finance, have some explaining to do beyond pleading a lapse in judgment).

The big problem with all of thus, is that on many recent issues, TriMet’s position has been, essentially, “trust us”. If we can’t slash the cost of union healthcare benefits, we’re gonna have to cut service by 70%. Trust us on that. We need to slash service, but we need $20M for a rainy day. Trust us. Safety is our most important priority. Trust us. A wolf is comin’ to eat the sheep. Trust us. We try to fix those ticket machines on a regular basis–they’re just fussy, that’s all–and aren’t trying to entrap riders into $175 fines. Trust us. We really are trying to develop a cost-effective transit system, and aren’t (as some critics allege) turning into a sausage factory, doling out pork to connected developers and other politically-influential interests. Trust us.

The problem with this position should be obvious. It’s getting awfully difficult to trust TriMet. (And it’s apparent that they don’t trust the community at large). It’s not that I believe some of the wilder conspiracy theories about TriMet (generally, I don’t), but they get harder and harder to refute when the agency and its management does get caught lying to the public. When you are unimpeachable, it’s easy to dismiss wild allegations as tinfoil-hattery. But when you develop a reputation for finding new and inventive ways to hide the ball, then the more outlandish theories that are promulgated start to look reasonable. Which is not a good position for an agency that depends on the public’s goodwill (both as taxpayers and as customers) to be in.

[Note: One small correction from TriMet–administrative staff other than managers and execs were included in the pay raises]

34 Comments

34 Responses to Next year’s draft budget, Raisegate, and more

  1. Andrew Seger
    March 14, 2013 at 4:45 am Link

    It’s especially galling Tiffany Schweitzer is still on the TriMet board after the illegal parking lot in the Pearl. Based off of Joe Rose’s tweets from board meetings she seems to be pretty out of it to, “board member Sweitzer apparently wasn’t listening to GM’s presentation: “Is there a timeline 4 increasing service?” (https://twitter.com/pdxcommute/status/311882316869943296)

    That Metro takeover of TriMet gets more appealing everyday.

  2. Nick theoldurbanist
    March 14, 2013 at 8:43 am Link

    I’m curious. What are some of the wilder conspiracy theories about Trimet?

  3. VS
    March 14, 2013 at 8:46 am Link

    Who exactly is on the executive cluster at TriMet? Or, more specifically, what exactly do they do? I haven’t yet been able to find information on why so many of these individuals are so well qualified and irreplaceable as to give them pay bumps. Much of this could have been avoided obviously if TriMet had been more forthcoming about this turnover problem. But really, is the turnover rate as much a financial issue as it is a managerial problem? I’m curious to find out more.

  4. EngineerScotty
    March 14, 2013 at 9:20 am Link

    One of the links above gives the pay raises for each individual by name; while the Proposed Budget doesn’t give any names, it goes into detail of each department, and gives the salaries of the various budgeted position within the department.

    Many of the people mentioned are not executives, but most if not all are managers. In some cases, the managers manage a department or other unit within TriMet (and have direct reports), in other cases they are managing a program. (Since TriMet receives lots of federal money, dotting all the is and crossing all the ts on the various grant programs TriMet participates in, and regulatory requirements TriMet is subject to, can be a full-time job).

    @Nick–I mention some in the article; it wouldn’t surprise me to see a few of our regular contributors here pipe up with a few more. If you use twitter, try following @trimet or #trimet; you’ll see lots more there.

  5. Chris I
    March 14, 2013 at 9:22 am Link

    What can we do? What would it take to change the culture or make them accountable to the voters?

  6. EngineerScotty
    March 14, 2013 at 9:33 am Link

    I’ve heard much grumbling about “maybe there should be an initiative petition (at state level) to make the TriMet board directly elected”. I’m not aware of any organized (and reasonably-well-funded) effort to put such a thing on the ballot.

    Right now, ’tis appointed by the Governor. While many of the current board members are holdovers from the Kulongowksi administration, Governor Kitzhaber’s appointments haven’t done anything to shake things up–and he raised some flags a while back by getting rid of the Teamster’s Lynn Lehrback, and not replacing him with another labor representative (TriMet’s board had long included at least one member representing organized labor).

    both Governors K seem to follow the common M/O in staffing such things: appoint “well-respected” members of the business community, whose job it is to make sure the boat isn’t rocked too much. Unfortunately, the needs of the business community don’t always align with the needs of riders (even when board members act in good faith), and an overly-homogenous board can miss some interesting perspective.

    A good sign of a well-functioning board is one where there’s more decisions made by a 5-2 or 4-3 vote. In a board where most of the decisions are unanimous or 6-1; either you have tremendously excellent management in place and oversight is not needed, or the board is functioning as a rubber-stamp. I don’t think TriMet is an example of the former…

  7. Max
    March 14, 2013 at 12:19 pm Link

    The public shouldn’t be allowed to be present for labor notations…trust us.

  8. R A Fontes
    March 14, 2013 at 12:40 pm Link

    The proposed budget is just positive enough to set the status quo in Jello, if not concrete.

    As we go another year with unrestored cutbacks, what we have is accepted more and more as the norm. Throwing yet another $6 million at WES with no hope of it ever achieving even a mediocre level of success is of course the way we do things. Going well beyond the law requiring half-fares for the old, disabled, or medicare recipients continues to force TriMet to have high regular fares while eliminating services for those who are supposed to benefit from the discounts. TriMet continues to be committed to eventually cover 85% of streetcar’s operational losses without requiring it to meet a single performance standard. Management continues to point to the ATU as the source of all of TriMet’s problems…

  9. al m
    March 14, 2013 at 12:51 pm Link

    $910k is a drop in the overall bucket–this was not cool.

    ~~~>NO, this is not cool and this is the point I have been making right year for how long now? YEARS!
    These people have not sacrificed one single thing since the misnamed “great recession” which in reality was the GREAT REDISTRIBUTION. They didn’t get a raise for 3 years, poor them. I’ve lost 25% of my measly pension. My information is that Fred Hansen has since an increase in his pension to 16K!
    The “GREAT RECESSION” is only for the little people, not the executive classes.

    This is the problem in America today. People thinking they are above other people.

    They (Mcfarlane and all his pals he has hired at nice six figure salaries) have given nothing. Just the employees and the riders. It’s sickening.

    Nor was it acceptable finance/budgeting practice, by any standard. The adopted 2013 budget states rather clearly, on page 59, that the general manager’s salary was budgeted to be $215,837. As it turns out, Neil’s salary was actually $221,450. As this was negotiated well in advance of last summer, the discrepancy was known at the time the budget was adopted. In other words, the adopted budget contained knowingly false information.

    ~~~~>WOWOWOWOW!

    WOW, you finally understand Scott, Impressive piece of blogging here!
    It’s real news! Let’s see if anyone in the major media follows up on it!

  10. al m
    March 14, 2013 at 1:17 pm Link

    GUESS what I will be filing today after reading this post.

  11. al m
    March 14, 2013 at 1:49 pm Link

    Joe Rose is looking into this.

  12. al m
    March 14, 2013 at 2:19 pm Link

    “We’re sorry”
    “We need to do better, and we will”

    Oh what a tangled web we weave,
    When first we practise to deceive!

  13. EngineerScotty
    March 14, 2013 at 3:49 pm Link

    Speaking of TriMet’s flaky ticket machines, and the $175 fine you face should you get ticketed for riding anyway… it appears that Channel 2 has noticed.

  14. al m
    March 14, 2013 at 4:30 pm Link

    Speaking of TriMet’s flaky ticket machines, and the $175 fine you face should you get ticketed for riding anyway.

    ~~~>I can’t believe that have gotten away with this abusive policy this long.

  15. Dale W (@hybotics)
    March 14, 2013 at 5:31 pm Link

    TriMet wants me to just trust them? NO WAY, that is happening, since they totally mishandled and hid what happened to me in 2010. Trust has to be EARNED, and with things as they are now, I am not sure TriMet will be able to do that. I absolutely will not ride fixed route buses or MAX now, since 2010.

    I have seen first hand how TriMet hides and manipulates facts to support whatever they want.

    I find it VERY difficult to believe in or trust anything TriMet says or does now.

  16. Dale W (@hybotics)
    March 14, 2013 at 5:32 pm Link

    TriMet wants me to just trust them? NO WAY, that is happening, since they totally mishandled and hid what happened to me in 2010. Trust has to be EARNED, and with things as they are now, I am not sure TriMet will be able to do that. I absolutely will not ride fixed route buses or MAX now, since 2010.

    I have seen first hand how TriMet hides and manipulates facts to support whatever they want.

    I find it VERY difficult to believe in or trust anything TriMet says or does now.

  17. al m
    March 14, 2013 at 5:42 pm Link

    Better read THIS!

  18. dwainedibbly
    March 14, 2013 at 5:46 pm Link

    Wait, It sounds like the Board has a really sweet deal. How do I get on it?

    Yes that was sarcastic. What would be the first step towards getting Metro to take it over directly or to make the Board members elected officials?

  19. al m
    March 14, 2013 at 7:13 pm Link

    I filed an ETHICS complaint against Mcfarlane based on this post (and another post)

  20. al m
    March 14, 2013 at 7:49 pm Link

    Regarding the above, I realized I got the names in the wrong place so I fixed it before I mailed it

  21. Joseph E
    March 14, 2013 at 9:09 pm Link

    1) The hidden pay raise is super sketchy. If it’s not illegal, it should be.

    2) The managers and administration (secretaries, etc?) may have needed a raise. I would support salaries a little below the median compared to other US transit agencies, but they can’t be too much lower – Portland is cheaper than SF or NY, but it’s more expensive than many other cities. If the managers think their pay will keep going down every year, some will start looking for work elsewhere.
    The same thing goes for bus and train drivers, but they are getting cost-of-living raises every year, no?
    But the administrators should have had the guts to make the raise public in the budget, even if was only 3%.

    3) Scotty, do you personally believe that “Trimet” as a whole has a “trust” problem? I’m sure the Oregonian is happy to drum up this controversy, but it really seems to be a fact that healthcare benefits will be taking up a huge percentage of Trimet income in the future based on current trends. The irresponsibility should be laid on past union and management leaders who set up the unsustainable healthcare benefits. And there is no evidence of safety problems due to management (the sleep problem was due to drivers who WANTED those shifts, and the rails were shown to be fine). Ticket machines break sometimes, it’s a problem with every transit system, and if that was an easy excuse it would be a get-out-of-jail-free card for fare evaders (though the machines should warn you to buy a ticket at the next station if they are out of order)

  22. al m
    March 15, 2013 at 11:07 am Link

    I have a hard time believing how many people have fallen for the con of ‘its the health care benefits’

    Trimet pays less for health care benefits than it does for debt service.

    Furthermore Trimet has already changed the health care benefits.

    The media and the stupid public don’t seem to be aware of that!

    But Trimet is not happy with the first arbitration ruling they want more give backs now.

    And they continue to use the same propaganda that they were using BEFORE they changed the health benefits.

    Almost the entire population has been fooled into thinking we still have free health care.

    Is there any way to wake up people from the incessant propaganda?

    Americans just fall for this stuff over and over.

    And there is no more pension either. They also ended that.

    I don’t see anybody reporting it.

    And if anybody at all was paying attention Trimet has said they cannot continue expanding and paying for health care.

    They want the continued expansion on the backs of the employees.

  23. al m
    March 15, 2013 at 1:41 pm Link

    And now Mcfarlane and his over paid pals have lost the UNFAIR LABOR PRACTICE

    See how they have been operating since Neil has been in charge?

    Maybe you guys starting to get it finally?

  24. Cameron J
    March 15, 2013 at 3:14 pm Link

    Also notable is that Neil McFarlane also gets over $70k extra year for extra expenses for himself and the board.

  25. jimbobpdx
    March 15, 2013 at 4:49 pm Link

    Hi All –

    Interesting times. I’m a regular reader here, but seldom comment. I have yet to see the discussion of what the health TriMet care obligation really means long term – that seems like the actual important conversation. But right now there’s so much attention to peripheral issues, it’s hard not to join in the fray. So here I go.

    Full disclosure – I have worked for TriMet, most recently just under 10 years ago. I’ve also worked for municipalities and transit agencies in Oregon, Washington and California. I don’t know if 30+ years in the field disqualifies my comments or not. Related to that, I’m happily retired with no favor to curry, and I don’t pay TriMet payroll taxes. 2nd caveat – the info below is not recently researched, but is based on work I did and that I have seen. In any case, I offer these thoughts and observations here in hopes of increasing the light/heat ratio here at Portland Transport.

    What TriMet does and how they do it: I offer my unsupported, but confident opinion that there are few agencies that accomplish what TriMet does for the money. My background is in planning for large projects; I am not an experienced Operations person. It is well established that TriMet outperforms its peers in places like Denver, Phoenix and San Jose on the basis of ridership (as adjusted for regional differences like population and area). Not that comparison with those places is enough, but it’s worth noting TriMet is as good as or better than the competition.

    What I saw at TriMet was culture of focus and hard work that kept complex projects on track with far fewer overruns, claims and lawsuits than are typical in the industry. The staff successfully manages contracts with tough outfits like Kiewit and Siemens who don’t play beanbag, but who respect a worthy opponent. With very active rail expansion programs in LA, The Bay Area, Denver, Seattle, Phoenix and elsewhere, the market for these skills is hot right now. If Portland wants competent staff, they are going to have to compete for them.

    Elected Board – I’d encourage proponents to 1) consider our neighbors to the South – AC Transit and BART, who have elected boards and levels of infighting and dysfunction that should curl any Portlander’s hair; and 2) to consider what an elected TriMet Board might look like. Since TriMet’s biggest revenue source is payroll tax, the business community will take an outsize interest in making sure they are well represented. Look at how the 7 districts lie across the region and consider the local politics within the districts – OPAL-friendly candidates might succeed in 2, maybe 3 districts – if they had killer fundraising and volunteer efforts.

    Anyone out there with examples of effective directly-elected Transit Boards serving a population of around 1.5m? Seems a productive area for some internet research.

    A Challenge: Can Portland Transport host a thoughtful, analytical dialogue on how to get the transit service we need going forward? It’d be nice to have an alternative to the toxic swamp provided by our daily paper. I don’t think TriMet is above criticism – far from it. But the degree of reflexive piling on, even here, is distorted. I look forward to your responses.

  26. Anthony
    March 15, 2013 at 6:07 pm Link

    Chapter 9 is the only solution.

  27. zefwagner
    March 15, 2013 at 6:34 pm Link

    jimbobpdx, there is a middle-ground between an appointed-by-the-governor board and a directly elected board. Namely, we could have Metro take over TriMet, in which case either the Metro Council could be the TriMet board or the Metro Council could appoint a TriMet board. Either way would provide more local control and accountability without a directly elected transit-only board with the problems you mention.

  28. al m
    March 15, 2013 at 8:30 pm Link

    But the degree of reflexive piling on, even here, is distorted.

    ~~~>Umm, where would I start? I guess you are not paying attention like most people.
    Did you not read the post?
    They LIED and then tried to HIDE these facts.
    Toxic swamp?
    Ya Trimet management created a toxic swamp and now they have to swim in it.

  29. Lenny Anderson
    March 15, 2013 at 9:10 pm Link

    Thanks jimboxpdx for your comment. Its easy to forget that little old Portland, the 25th largest market in the US, ranks in the top 10 for transit ridership. So somethin must be going right here.
    A million bucks in a almost 500 million budget is a rounding error that only ardent opponents of public transit should get riled about.
    I still want our data guy…you know who you are…to line up what union emps get benefitwise here vs SF, Seattle, Twin Cities. I’m with the Governor on the health care deal…put all public employees (including TriMet) in the same pool with the same benefits; eventually we should all be in the same pool with Medicare for All!

  30. al m
    March 15, 2013 at 9:14 pm Link

    I just put the 2009 top wage earners list up next to the 2013 top wage earners list and every single one of the people on the two lists is doing just great.
    And they have had raises in addition to the recent raises.
    So more lies.
    Check the list for YOURSELVES!

  31. al m
    March 15, 2013 at 9:16 pm Link

    eventually we should all be in the same pool with Medicare for All!

    ~~~~>And that IS THE SOLUTION!

    Instead of dragging everyone down to China status, bring up people to European standards.

    S-I-N-G-L-E
    P-A-Y-E-R

  32. Lenny Anderson
    March 16, 2013 at 9:04 am Link

    Yes, but all those “Cadilac” plans out there will go, so watch out!

  33. al m
    March 16, 2013 at 10:44 am Link

    Yes, but all those “Cadilac” plans out there will go, so watch out!

    ~~~I am an advocate for single payer! The ‘Cadillac’ benefits which is a powerful propaganda phrase has left the building.
    We don’t have that anymore! There was an arbitration, the union lost. We now have 3000/member co-pays. I can’t even buy one of my medications locally anymore, I have to get it from Canada.

    Be that as it may, I am not nor was I ever against ‘give backs’

    What I am against, is only certain segments of Trimet’s employees/users ‘giving back’.

    I lost 25% of my pension and still lost the premium health care I had.

    The riders suffer daily because of Trimet cut backs and deferred maintenance.

    The suffering has to be equal for everybody.

    The executives have had Z-E-R-O give backs.

    Now if Mcfarlane could stop lying for a minute and instead to the right thing, as in “I am announcing a 20% decrease in all salaries over $100k, Then I would gladly give back some of the gains that we have made over the years.

    Union president Bruce Hansen took a 20% cut in his salary,
    lets see that spoiled selfish executive class running the show at Trimet do the same thing.

    I’m not going to hold my breath waiting for these shameless careerists to do the right thing, I know them, I worked there for 15 years.

    This is the way of the world now, the people at the top keep getting richer and richer and the people at the bottom keep getting poorer and poorer.

    I’m gonna fight that paradigm right till the end.

    And I would give up anything to see single payer implemented in this country.

    After all, this whole ‘crisis’ is over health care.

    Something not even in control of the union or Trimet. (although Trimet could find a middle ground between Kaiser and Blue Cross, something that doesn’t seem to interest them because what they are really interested in is breaking the union.)

  34. Tracy
    March 16, 2013 at 12:44 pm Link

    Some quick rebuttals for Joseph E. –

    1) I agree with you here. No issues so far.

    2) The only tri-met employees who got raises of any kind (not including McFarlane and his amazing friends) were non-union employees. ATU guys got left out of that.

    3) Yes, Tri-Met does have a trust issue. First they blame health benefits for their budget woes. It was THIS board that approved those benefits in the first place. So McFarlane and pals clearly had no problem with these benefits at the time, otherwise they wouldn’t have signed off on them in the first place.

    Also yeah the rails were shown to be fine when ODOT inspected them. Inspectors came to do the inspection six days AFTER the KOIN report was aired. And between that time, Tri-Met had ample time to make the changes that management was so violently opposed to before this report came out. I witnessed a lot of these repairs being done firsthand. In fact, there were numerous MAX delays because of it.

    And yes, ticket machines regularly break. Unlike here though, ticket machines regularly get repaired. The stop I take the most to get around (1st and Oak) for example, has a machine that hasn’t worked in over a month now.

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