Oregonian opposes TriMet bond measure 26-119

In this morning’s Oregonian, the editorial board came out against Measure 26-119, the TriMet sponsored bond measure which would continue the soon-to-expire Westside MAX bonds, in order to pay for numerous enhancements to the bus system, particularly to help out the disabled.
Before we get to the meat of the post, a brief introduction. I’ve been a long-time commenter and kibitzer here at portlandtransport.com, and Bob and Chris have kindly asked me to become a contributor. I’ll also be joining the board of the nonprofit corporation that owns portlandtransport.com. I also operate a couple blogs of my own, most notably the Dead Horse Times, although I must admit I’ve been out to lunch for most of September. :) I’m a professional SW engineer and amateur transport nerd, and live out in Beaverton (mainly because I work there).

Onto the meat of the post. In this morning’s Oregonian, the editorial board came out against Measure 26-119, the TriMet sponsored bond measure which would continue the soon-to-expire Westside MAX bonds, in order to pay for numerous enhancements to the bus system, particularly to help out the disabled. Previously, the Oregonian had written that it would take a wait-and-see attitude on the matter–questioning the use of revenue bonds to buy short-term capital equipment such as busses. While not speaking for the paper, metro columnist Steve Duin had a scathing column of his own last week, suggesting that TriMet can have either this measure or Milwaukie MAX, but not both–and predicting which one the agency will choose.

Some of the claims made in the O’s most recent editorial have come under attack–blogger Alex Craghead wrote a blistering defense of TriMet’s rail focus, blasting the paper for its position. And some of the claims of the paper seem silly–it seems to act as though the very concept of debt financing is outrageous (as opposed to questioning the specific proposal on the table). And, as Alex also points out, passage of the measure wouldn’t raise anyone’s taxes, as it continues an existing levy–though on the other side of that coin, defeat of the measure would cause a small tax decrease for metro-area property owners. Craghead also criticizes the apparent “alliance” between libertarian critics of TriMet, many of whom would like to spend as little as possible on public transit, and some of the agency’s detractors on the left.

50 Comments

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50 Responses to Oregonian opposes TriMet bond measure 26-119

  1. R A Fontes
    October 13, 2010 at 4:58 pm Link

    Willamette Week came out for the measure today. Their board feels that the new GM & Board members should be given a chance to straighten out TriMet’s financial mess, especially after the very public pressure put on union members to pay more towards medical care.

    It still feels a lot like extortion, and less than truthful extortion at that: The sympathetic pictures of some of my fellow geezers and absolutely no reference to what would be done with the general funds that won’t have to be used on bus replacement and bus stop improvements.

    I’m having real trouble with this one, especially since TriMet is doing a fair amount of the drum beating to get rid of the decent bus service in my neighborhood in favor of the expensive degradation in service represented by the proposed streetcar extension along Hwy 43.

  2. EngineerScotty
    October 13, 2010 at 5:10 pm Link

    I’ll obviously be voting yes on 26-119, though I can certainly sympathize, RA… in my opinion, the LO Streetcar project ought to be relatively low on the pecking order. One thing it has going for it is that it’s relatively cheap, when you only consider the amount of cash that needs to be fronted, assuming the ROW valuation can indeed be used to get matching funds from the Feds.

    I still like the idea of extending Milwaukie MAX across the river–or even simply building a bus/ped bridge. Obviously, that wouldn’t be built for a long time, but would have tremendous regional benefit.

    Of course, the big elephant in the room is the economy, and the national political situation. (And I’m thinking longer term here, not just the 2010 elections).

  3. Michael, Portland Afoot
    October 13, 2010 at 7:16 pm Link

    Scotty! Welcome! It’s fantastic to see you join the PT team.

  4. Cameron Johnson
    October 13, 2010 at 8:47 pm Link

    What Michael said. Awesomeness!

    And I’m preparing for the measure to fail lately, and trying to prep TriMet for it. A lot of bus service may be cut now, I’m willing to bet.

  5. EngineerScotty
    October 13, 2010 at 11:45 pm Link

    An interesting question: If 26-119 does fail, what message would TriMet take from that? They’ve been shy about raising money via levies since the N/S light rail levy went down in the 90s,

  6. jimkarlock
    October 14, 2010 at 3:01 am Link

    EngineerScotty Says: in my opinion, the LO Streetcar project ought to be relatively low on the pecking order. One thing it has going for it is that it’s relatively cheap,
    JK: How does the cost compare to that of expanding the road?

    Especially using the Tampa Elevated Expressway model that came in at $35million per mile for three lanes + breakdown lanes in a six foot footprint for the piers.

    See the first October 2010 Open Thread for details.

    Thanks
    JK

  7. Curt
    October 14, 2010 at 5:12 am Link

    Good to see you writing again Scotty!

  8. Alexander Craghead
    October 14, 2010 at 7:03 am Link

    Scotty:

    First, congrats and I look forward to reading more from you.

    Second, thanks for the shoutout on yesterday’s response to the Oregonian’s editorial. I must have hit a nerve, as I’ve been getting a lot of response to it, and I don’t just mean on the Internet. It’s kinda weird to physically run into people that read your blog.

    Oh, and even Al M enjoyed it! (Though I know he didn’t agree with it all.)

  9. R A Fontes
    October 14, 2010 at 9:33 am Link

    RE: JK’s comment about expanding 43.

    Congestion on that route has very little to do with it being mostly a three-lane anachronism. It’s all about what’s happening in Johns Landing and LO. It’s awfully hard to even begin to imagine that locals in either area would go for a Cypress freeway north.

    One interesting thing is that Metro’s menu for possible ped/bike trail alignments includes a 12 foot pathway plus buffer adjacent to 43. So, if it’s so expensive to expand 43 for motor vehicles, how would we be able to pay for the trail? Would it just take over the easternmost lane?

    Scotty – please add another person to those who are very happy to see your name as a contributor. Will this have any effect on DHT?

  10. EngineerScotty
    October 14, 2010 at 10:05 am Link

    Lake Oswego commuter might not mind a freeway running through SoWa, Johns Landing, Riverdale, and Dunthorpe (but ending in LO)–but residents of the aforementioned communities might mind.

    One good thing about the LO Streetcar is that at least some of the communities on the route want it (particularly Macadam/Johns Landing). Riverdale and Dunthorpe, probably not so much; and most of the homeowners along the ROW in Riverdale south are opposed to the thing, seeing as it goes smack through their (high-priced) neighborhoods.

    But a 1-2 track streetcar is far less disruptive to neigbhors than a freeway of any size. My main issue with the LO Streetcar is a concern that it doesn’t provide any better service than the #35, and in some ways might provide worse. If you are going to replace a bus line with rapid transit, and convert the outermost branches of the bus line to feeders (as is being proposed), it’s beneficial if the replacement rapid transit line is indeed rapid; in the case of LO Streetcar, that condition seems to depend on OR43 turning into a parking lot due to highly increased traffic volumes. Perhaps if there’s massive development of the Stafford Basin in the future that might happen; but in that case Stafford Road and not OR43 will be the primary bottleneck.

    Regarding DHT–it will stay in business, though posts that are more relevant here probably go here. See here for a bit more.

  11. Jason Barbour
    October 14, 2010 at 10:26 am Link

    It doesn’t surprise me the Oregonian isn’t supporting the measure. I posted last month that I will vote YES on 26-119.

    Among the reasons I listed then, two other very real concerns I have are that TriMet will consider this a referendum on referenda, meaning they’ll use this to see if they will ever again place anything on the ballot, or if every decision the agency ever makes should be decided only at 9 AM Wednesday Mornings. The other is that there is one way to deal with 20-year-old buses other than replacing them, and that is simply remove them from service and eliminate the service provided by those buses. IMO, this is not a desirable option. Nor is canceling service in Washington County when a light rail line along I-205 opens.

    Willamette Week came out for the measure today.
    Unfortunately, Willamette Week doesn’t operate a real newspaper or blog.

    Full disclosure: I’m writing this post in a computer lab at Eastern Washington University. The transit system here, Spokane Transit, decided a year ago to make cuts every year over the next three years, and started the public process regarding September 2011 service in September 2010. Their public service cut materials for September 2010 included verbatim public comment received by the agency and complete information including data used to create the service cut plan on one site, which as I write this is still available (advance warning that the links are deceptively in-depth):
    http://www.spokanetransit.com/about-sta/view/september-2010-service-reductions/

    Compare this to TriMet’s usual service cut process.

    STA also runs a series of ultra-clean buses, including 60′ buses with wifi, and hybrids. I haven’t seen a dirty bus since I got here a month ago because they simply don’t put up with the behavior that leads to dirty bus interiors.

    I’m still an Oregon resident. My absentee ballot should be on its way.

  12. Bob R.
    October 14, 2010 at 11:00 am Link

    JK,

    The elevated freeway to Lake Oswego idea was already discussed to death in the open thread, a topic among those which was closed, in part at your request, just yesterday.

    This is Scotty’s thread and I see he’s already replied as has R A Fontes, so rather than remove the comments I’ll leave it up to Scotty’s discretion as to whether an elevated freeway over Highway 43 has any relevance to this thread.

    Remember, as you’ve been told dozens of times, raising the same contrarian debating points again and again doesn’t mesh with our rules:

    Constructive disagreement is welcome, but simply repeating your disagreement is not. If your disagreement is simply to protest our point of view, you should find another outlet for your views.

    And that point-of-view is:

    … generally supportive of transit and compact development, and efforts to reduce VMT (vehicles miles traveled), including as a strategy to reduce greenhouse gas emissions. This is intended to be the general center of the conversation here. …

    Freeways through Johns Landing and Dunthorpe are outside the scope of that view. The very long discussion in the Open Thread was possible because it was indeed an “open thread” and that’s where occasional contrarian ideas are aired and contemplated. This, however, is not an open thread.

    Back to Scotty.

  13. EngineerScotty
    October 14, 2010 at 11:27 am Link

    Minor off-topic excursions don’t bother me much; wholesale threadjacking is another matter. But, the topic of THIS thread is Measure 26-119, and the reactions of the commentariat thereto.

    Somehow, I suspect JK will be voting no… :)

    In regards to Jason–why do you conclude WW is not a “real newspaper”? It’s won a Pulitzer before (for bringing down Neil Goldschmidt, IIRC)–what fails to make it “real”? Being published weekly rather than daily? Tabloid rather than broadsheet form? Being free? Many Portlanders consider the WW to be more trustworthy than the Oregonian; others consider both to be corporate fishwrap–and conversely, there’s more than a few in town who consider even the Oregonian to be Portland’s version of Pravda or the People’s Daily.

  14. Jason McHuff
    October 14, 2010 at 1:22 pm Link

    Overall, I think there is some argument that TriMet should have been purchasing buses all along instead of e.g. using payroll taxes to contribute to MAX construction. However, the past can’t be changed and I’d question whether voting “No” sends that (or any) message. But it would punish innocent riders.

    In addition, the money for sidewalks should be spent regardless and will benefit all users and not just those going to/from transit. And one way to look at the measure is as more money for transit in general.

    Many Portlanders consider the WW to be more trustworthy than the Oregonian

    Also, I think there’s some truth to that. And WW is not corporately-owned, and Neil isn’t the only person they’ve brought down (or at least scarred). I think they had a hand in the Sam Adams case.

  15. Jason McHuff
    October 14, 2010 at 1:29 pm Link

    Oh, and the Forest Grove News-Times also has an article: Voters support new buses, depending on what they’re for

  16. EngineerScotty
    October 14, 2010 at 3:44 pm Link

    If your a voter who doesn’t use transit, and thinks of transit primarily as a mobility-service-of-last-resort for the poor, I’m not surprised that a survey question posed as “should we spend money to replace old busses with new ones” doesn’t poll well. It’s not hard to imagine that the only motivation for doing so is passenger comfort–and that the old busses are otherwise functionally equivalent to new ones.

    Memo to TriMet: Emphasize just WHY newer busses are important, beyond a cushier ride: Lower maintenance costs, lower fuel costs, better environmental outcomes, better disabled access, etc. Don’t let this be spun into “TriMet wants to spend $125 million on passenger luxury”. Even though the claim is laughable, it’s one I’m sure will be made.

  17. AL M
    October 14, 2010 at 4:12 pm Link

    Why should anyone trust Trimet management when it comes to handling money?

    I sure the hell do not!

    I’m voting yes anyway.

  18. R A Fontes
    October 14, 2010 at 4:27 pm Link

    Must read from Joseph Rose:
    http://www.oregonlive.com/portland/index.ssf/2010/10/will_trimet_bond_measure_get_t.html

  19. Cameron Johnson
    October 15, 2010 at 11:27 am Link

    @R A Fontes

    Good article. Teresa Soto De Roman is a good friend of mine. It’s really worrying though, in fact, it kind of nails the coffin for bus service IMHO.

  20. al m
    October 16, 2010 at 4:36 pm Link

    Oh, and even Al M enjoyed it! (Though I know he didn’t agree with it all.)

    Yes I did Alex (you don’t mind if I call you Alex do you?), it was well written and “mostly” right on!

  21. Steve S.
    October 16, 2010 at 8:14 pm Link

    Shouldn’t the first step be to assess whether or not the levy will actually limit the funds to bus service?

    Can anyone provide any language in the summary that restricts TriMet’s ability to spend the Levy proceeds on “improving transit” by way of Milwaukie Light Rail or the streetcar?

  22. R A Fontes
    October 16, 2010 at 9:16 pm Link

    Even if the actual language of the measure limits use of the bond proceeds for bus replacement, stop improvements, etc; the general fund money that would have been used for those purposes is freed up for whatever.

  23. EngineerScotty
    October 16, 2010 at 10:44 pm Link

    As RA notes, money is fungible.

    To answer Steve’s question, I believe that the specific funds raised by the measure have to be used for the indicated purpose; and as others have noted, Oregon law prohibits bond measures from being used to fund operations.

    That said, I think TriMet missed an opportunity here–were I them, I would have dedicated some of the proceeds from the bond measure to Milwaukie MAX–as a replacement for the payroll tax revenues that TriMet currently plans to bond to fund MAX construction. That money, if not being used to pay off bonds, CAN be used for things like restoring service.

    Here’s the official ballot page at the Multnomah County Elections Division, including the official ballot text and explanatory statement. And FWIW, here’s TriMet’s Facts About Measure 26-119 page–the agency’s official spin on why voters should vote yes.

  24. Jason McHuff
    October 17, 2010 at 11:01 am Link

    Well, doesn’t the Milwaukie MAX line already have a funding plan?

    Also, another thing that the bond revenues could have gone for is the new bus dispatch system, which I believe is also being debit funded. Now, I know The Oregonian doesn’t like bonding for that sort of stuff, but the radios in the current system are REQUIRED to to be replaced per the FCC (and the whole thing’s outdated too). And a bigger problem is that they started it a year ago.

  25. Steve S.
    October 17, 2010 at 7:03 pm Link

    Come on, I know many people “believe that the specific funds raised by the measure have to be used for the indicated purpose”

    But the measure doesn’t include the language that would actually limit the funds to the indicated purpose.

    It easily could have included the right wording.

    But the measure says

    “Authorize bonds to improve transit, particularly for elderly and disabled.”

    “Question: Shall TriMet issue $125 million bonds to improve transit services and access for elderly riders and people with disabilities?”

    “improve transit” could easily be Milwaukie Light Rail or many other expenditures.

    John Charles has a good Analysis of Measure 26-119 here.

    http://www.cascadepolicy.org/2010/10/13/john-charles-debates-trimet-tonight/

    As for having the bond measure include funding for MLR. That would have been great but TriMet couldn’t risk allowing a vote on light rail.

    I suspect TriMet may have difficulty selling bonds for their share. When are expected to attempt their bonding?

    Jason, the Milwaukie MAX line is not funded. Not by along shot. It has an insufficient inter-governmental agreement dependent upon the partners securing their shares.

    The last thing TriMet should be doing is taking on more debt for anything, period. They are upside down as far as the auditors can see.

    In referring back to my original question, is it OK for TriMet to claim one thing and produce a measure that says another?

  26. AL M
    October 17, 2010 at 7:16 pm Link

    Figure Trimet management to skim off 25-50% of the money for light rail or other assorted fixations, that would still leave in the area of 60 million for bus purchases.

    That’s still 120 air conditioned buses which will end the suffering of lots and lots of passengers not to mention us poor schmucks who find ourselves driving them.

    If we don’t pass it we will be driving this junk another 10 years!

  27. EngineerScotty
    October 17, 2010 at 7:18 pm Link

    Steve;

    Are you aware of any deterioration of TriMet’s credit rating? The bond market, I suspect, is fully aware of the pension liability positions of numerous local government agencies–it’s not like this information is top secret.

    As far as whether or not TriMet could divert some or all of the funds raised by this bond measure for purposes outside the scope of their marketing literature (such as the pro 26-119 page I referenced above), that’s a question for lawyers. Obviously, were TriMet to suddenly forget about low-floor busses and spend the entire wad on light rail, it would seriously damage the credibility of the institution (and even if you think TriMet’s crediblity is at a nadir, such a maneuver would make it far, far, worse). And quite possibly open itself up to legal challenges.

    Do you have any evidence that TriMet is planning a bait-and-switch?

    This would be a good question for a Joseph Rose, or some other reporter with sufficient clout to get TriMet officials on the phone, to ask them directly.

  28. R A Fontes
    October 17, 2010 at 7:20 pm Link

    Here’s the actual language of the measure itself, not the summary:

    “Proceeds from the bonds will be used to fund improvements to transit services, including projects that make transit more accessible for elderly and people with disabilities, such as:
    • Improving safety and security at bus stops and shelters used by elderly and disabled riders.
    • Replacing 20+ year old and high stair buses, which are more difficult for some riders to get on and off, with low floor buses.
    • Updating technology for LIFT vans that would make service more efficient and reduce waiting times for elderly and people with disabilities.
    TriMet will provide an independent financial audit and a citizens’ oversight committee will monitor expenditures.”

    It really does look incredibly open ended.

  29. AL M
    October 17, 2010 at 7:25 pm Link

    R A-

    There is no mention of rail in that language, other than that it is completely open ended!

    What the heck is this supposed to mean anyway:
    • Improving safety and security at bus stops and shelters used by elderly and disabled riders.

  30. AL M
    October 17, 2010 at 7:34 pm Link

    TriMet will provide an independent financial audit and a citizens’ oversight committee will monitor expenditures.”

    ~~>Ya and if the oversight is the same as the board of directors oversight then Trimet management pretty much still has total control.

    Why didn’t they break this down into categories;

    1-$80,000,000 to replace Trimet junkers;
    2-$20,000,000 for radios at Lift
    3-$25,000,000 for stop improvements.

    That way we could pin them down on specifics!

  31. Steve S.
    October 17, 2010 at 8:05 pm Link

    AL M,

    You’re obvioulsy onto TM management and board methods.

    Of course it’s open.
    All TriMet need do is commingle the funds and spend away.

    Charles”

    “According to data provided by transit operators in Wilsonville, Sandy, and Vancouver, the average costs for such improvements are $8,000-$10,000 per bus shelter improvement; $45,000-$95,000 per vehicle for LIFT buses; and $375,000-$460,000 for 37-45 seat buses.

    If we take the high end of these estimates, making all the purchases would only cost $81.5 million. That still leaves $43.5 million leftover. Thus, at a minimum the TriMet board did not do its cost estimates properly. More likely, the budget was padded to provide a slush fund for use on the Milwaukie light rail project, the Lake Oswego streetcar project, or anything else the TriMet management team wants.

    Moreover, TriMet claims that buses less than 5 years of age cost roughly $30,000 per year less to maintain than buses older than 15 years. That means that if TriMet actually buys 250 new buses as promised, the agency would save roughly $37.5 million in operating costs over the first five years, with declining levels of savings in years 5-15. Those savings will immediately be fungible for TriMet, meaning they can be spent on anything

    I suspect the measure will fail and TriMet will have to “prioritize” sooner rather than soon and stop the misappropriations on rail projects.

    But the levy passing is far from a bailout. Likewise their offer to labor will not be sufficient to handle the soaring costs even if it’s accepted.

    Why didn’t TriMet spell out the limitations on the levy money?

    I have an answer but it breaks the rules here. :)

  32. AL M
    October 17, 2010 at 8:13 pm Link

    Wait a minute!
    Trimet has already figured out how to buy new buses!

    Sell all the old buses to somebody that wants to make a pile of dough, then lease them back like they are doing at the light rail!

    Voila! With all the money they have raised by selling the buses they can buy new buses!

    They don’t need the bond measure after all!

    :-O :O O_O o_o 8O OwO O-O 0_o O_o O3O o0o ;o_o; o…o 0w0

  33. Jason McHuff
    October 17, 2010 at 8:16 pm Link

    Jason, the Milwaukie MAX line is not funded.

    I specifically didn’t use the term “funded” (as in monies are in TriMet’s control).

    As for the bond measure, spending percentages were given in the presentation to the Board of Directors (starting at about 12 mins in). Also, Willamette Week did an hour-plus long interview about it. It answers questions such as the one Al just asked.

  34. AL M
    October 17, 2010 at 8:23 pm Link

    Leave it to JM to know the answer!
    Good job Jason!

  35. Steve S.
    October 17, 2010 at 8:40 pm Link

    Jason, It doesn’t matter what presentation TriMet gave on percentages when their measure says “Proceeds from the bonds will be used to fund improvements to transit services”.

    Giving Al a raise could be called improving transit service.

    Scotty,

    It’s pretty deteriating to have all or part of a $1 billion unfunded liability added to your financial statement.

    You think that won’t matter to the bond market because it wasn’t a top secret before?

    Also it’s my understanding that there is tremendous pressure on on all credit markets to increase scrutiny of their transactions.

    The measure clearly allows some of the funds raised by this bond measure to be diverted.

    Are you advising voters to just assume the measure will do as promised and let lawyers maybe sort it out after it’s too late?

    Why is the measure written as it is?

    I don’t think TriMet has the time or luxury of worrying about their credibility.

    They’re too busy trying to keep operations and the agenda going at the same time while costs soar and audit reports throw up major obstacles.

    “Do you have any evidence that TriMet is planning a bait-and-switch? ”

    Isn’t the measure’s wording not matching the promise some hefty evidence?

    John Charles did ask TriMet officials about this when he debated the levy at the LWV forum last week.

    The official was sort of lost for words.

  36. AL M
    October 17, 2010 at 8:48 pm Link

    Giving Al a raise could be called improving transit service.

    Now your talking!

    Steve is right however, the “written” measure is what rules, not what they said in the meeting.

    Now if they had put those percentages into the language of the measure then everybody could have a little more confidence!

    There would be only one reason that they did not include the percentages in the actual measure:

    The management wants to decide what to do with the money!

  37. EngineerScotty
    October 17, 2010 at 11:27 pm Link

    Steve,

    Pension liabilities are long-term liabilities, payable over many years. It isn’t as though TriMet has to come up with $1 billion tomorrow. Assuming that TriMet doesn’t commit fraud (i.e. conceal liabilities from risk analysts or otherwise materially misrepresent their financial position), bond markets are usually pretty good at analyzing risk and assigning an appropriate credit rating.

    If you look at TriMet’s 2010 annual report, page 8, you’ll note that all TriMet’s current bond issues are all investment grade; and most of its is AAA-rated.

    And no, the wording of the measure isn’t evidence of a planned bait-and-switch–it sounds like typical lawyerspeak. Drafted to permit flexibility? Certainly. Drafted in order to hoodwink the public? That would be an outrageous and unprecedented maneuver. And yes, TriMet does need to worry about its institutional credibility–were it to engage in the sort of misconduct that has been suggested; it would have a very hard time passing any tax levies again for a long time. Whether Kitz or Dudley wins the election, I have a hard time imagining either one tolerating such a stunt. As far as misconduct goes, a bait-and-switch tax levy is amateur hour.

    In addition, Neil McFarlane himself has gone on the record, several times, stating that the bond will go for new busses, stop improvements, and improved communications gear.

  38. AL M
    October 17, 2010 at 11:37 pm Link

    I’d like to remind you Scotty that Mr Macfarlane has taken the liberty of disregarding the law when it comes to his labor contract.

    He found a loophole and went for it!

    What makes you think that he wouldn’t do it again in the case of the bond measure?

    We all see what Trimet management is capable of to get what they want, and its not pretty!

  39. EngineerScotty
    October 18, 2010 at 12:06 am Link

    The difference, Al, is that picking on the transit union and bargaining hard, will make the public stand up and cheer. Portland is not San Francisco and TriMet is not Muni–providing high paying jobs to bus drivers is not considered a primary goal of a transit agency here. You probably don’t like this, and I can understand why–but public opinion appears to be on the side of management in the ongoing labor dispute.

    Deceiving the voters into voting for taxes for A, and the using the proceeds for B, OTOH, will not make the public stand up and cheer–this is especially true in the current economic climate.

    And were Chris Dudley to win the governor’s race–probably an even-money bet at this point–I’m sure he’d love to find a pretext to replace the TriMet board with someone less transit-friendly. A stunt of the type suggested by John Charles would more than give him the necessary political cover to do so, and would probably make it difficult for Metro to intervene.

    Even if you buy into the theory that TriMet management is a pack of railfans–a bait and switch of this sort would be a Very Stupid Thing To Do. TriMet doesn’t have the political strength to pull of such a blatant and transparent swindle and not suffer server consequences.

  40. Steve S.
    October 18, 2010 at 11:00 am Link

    Scotty,

    “It isn’t as though TriMet has to come up with $1 billion tomorrow.”

    Yeah, of course not.

    TriMet is in a severe fiscal crisis that will only get worse. There is no avoiding it.

    You know as well as anyone that it’s not because they have to come up with $1 billion tomorrow. It’s due to the soaring annual cost of the unfunded liabilities.

    Since there is no trust fund for a billion in fringe benefits TriMet will be forced to pay greater amounts, by many millions yearly, from their operations.

    Bond markets will soon see that liability on TriMet’s financial statement. You think it will not have an impact?

    Of course it will. Just like many other government entities who are becoming maxed out and seeing bond rating decline.

    They too had or have current AAA rated bonding.

    As for the levy, you may be beyond conversation if you keep moving the target. Now it’s “typical lawyer speak to permit flexibility”?

    Why can’t you read what everyone else reads and simply admit the language does not say what TriMet is saying?

    There’s no need to apply “planned bait-and-switch”, or “Drafted in order to hoodwink the public” to their motivations.

    Simply address the wording. It allows some or most of the proceeds to be spent on MLR, Streetcars or anything else deemed to be improving transit.

    And it wouldn’t have to be in a brazen stunt form as the money is spent. As long as some bus and stop improvements start showing up TriMet can easily posture themselves as

    compliant with the prior claims. This sort of shifting revenue is entirely common.

    The question now is are voters being given an honest characterization of the levy? No they are not.

    Quoting what Neil McFarlane said makes my point because he isn’t saying what the measure says.

    You’ve dialed up this scenario where it makes no sense for TriMet to deceive the voters into voting for taxes for A, and then use the proceeds for B when that is exactly what the measure would enable.

    Of course TriMet management is a “pack of railfans”–and they are desperately doing anything they can to keep momentum. That includes many Very Stupid Things.

    I mean how stupid is raiding their own operations revenue? Among other stunts.

    Like the phony savings from the Sellwood bridge being moved over to MLR. Really?

    TriMet has never been weaker. Financially, politically and functionally. And yet they are business as usual as they suspend millions right now to advance their same agenda.

  41. Steve S.
    October 18, 2010 at 11:28 am Link

    as they spend millions

  42. Lenny Anderson
    October 18, 2010 at 12:42 pm Link

    TriMet gets too much of the credit/blame for our region’s transportation priorities. The regional MPO is Metro, an elected body, which coordinates with JPACT, made up mostly of electeds from around the region…cities and counties. TriMet has one vote on JPACT, and is only one of several jurisdictions that are funding the Milwaukie light rail project.
    As we learn more about just how much operators cost, doesn’t it make sense to serve more riders with better service using fewer operators? Light rail does that, hence the region wide agreement with that strategy, which is a model for dozens of other cities from Dalles TX to the Twin Cities to Sacramento, CA.
    And yes, the ballot measure should have called out a portion for the Milwaukie project. In this case TriMet has been too timid.

  43. EngineerScotty
    October 18, 2010 at 2:06 pm Link

    Again regarding TriMet’s pension liablities. As I understand them; they are a potential service problem–future pension payouts may start to consume a bigger and bigger piece of TriMet’s operating budget, especially if the economy does not rebouhd–but they aren’t a creditworthiness problem (the annual payout comes nowhere near the total of TriMet’s operating revenue).

    And given that general obligation bonds both a) are self-funding–they provide the needed funds to retire the debt incurred, and b) can’t be used to pay off pension obligations–i.e. this isn’t money that TriMet could use instead to either better fund its existing pensions, or to make payments on current pension debt–bringing up the pensions as a Reason To Vote No is a red herring. A yes vote gets TriMet a bunch of shiny new busses, and an additional revenue stream dedicated to paying off the loan; a no vote leaves the agency with the status quo. The pension issue is not exacerbated by this, as the levy doesn’t diminsh TriMet’s general fund.

    OOTH, a yes vote on 26-119 will provide several opportunities to reduce general fund expenditures, by a) reducing the need to use the general fund to replace busses piecemeal; b) reducing maintenance costs by reducing the average age of the fleet–and might make the service more attractive (and efficient) by virtue of having air-conditioned busses that don’t need to incur lengthy delays when a disabled passenger gets on or off. These things will improve TriMet’s operating budget–not significantly, but in his Q&A with Joseph Rose, Neil McFarlane threw out a figure of 2-3 million/year.

    The biggest lever remains the economy, however.

    Regarding whether or not voters are being given an “honest characterization”–if TriMet does what they say they are going to do, then yes, they are. If TriMet turns around and says “fooled ya! We’re really spending this money on something else”, then let the lawsuits commence. Neil’s words don’t contradict the measure text at all–instead, they merely constrain it. I’m making inquiries (indirectly at this point) in response to Charles’ statements–but at this point, John Charles’ position smells like FUD to me. Generic language of the sort in 26-119 is not uncommon–I have a hard time believing that any attempt to divert funds from the specific purposes set forth in the ballot text would survive a legal challenge.

    At any rate, even if the measure were to contain a detailed accounting to the penny of what would be done with the funds, I kinda suspect that both you and John would be opposing it regardless. If you have a proposed alternate text which would win your support, by all means post it.

  44. Steve S.
    October 18, 2010 at 2:25 pm Link

    Lenny,

    I don’t get your point on JPACT make up. Yeah several jurisdictions that are financing the Milwaukie light rail project.

    But essentially all of them are doing so by raiding other government service revenue streams without any measure of merit at all.

    JPACT never conducted any evaluation to determine the wisdom in elevating MLR above all other priorities.

    Quite the contrary, such due diligence has been avoided entirely.

    As for the operator [employee] costs, it’s nothing new and has been a growing problem for many years. Made worse by the fact that now 60% of TriMet employees have nothing to do with providing transit service.

    Light rail is an obscene waste of transit revenue and those losing bus service are paying the price.

    Talking about light rail as a means to “serve more riders with better service using fewer operators” flies in the face of affordability and funding sources.

    TriMet diverting their own operations revenue to expand light rail is a stark lesson. 10s of millions which could go to providing better bus service to many more people will be spent instead on MLR. Not because it makes sense but rather just because. It’s high cost, short distance and inability to serve neighborhoods who want more and better service make it the polar opposite to what TriMet must do. To survive, to preserve service and expand to more riders.

    The region wide “strategy” of light rail corridors lined with high density mixed use has been a costly failure which shouldn’t even be a model for MLR let alone other cities.

    What does it take for you to rethink this farce?

    What prior line and development are you holding up as a model for MLR? Eastside MAX? Westside? Interstate? Green line?

    Those are clearly models of gross misappropriation.

    Countless millions taken from basic services without any due diligence and the Green Line we are now told by Michael Jordan was built in the wrong location.

    Oh well?

    So what do you think will be the final price tag for the Green line and 20 more years of subsidized mixed use trying to spur the strategy?

    Lents and beyond will be another Rockwood story?

    Is that what’s in store for Milwaukie and McLoughlin? You betcha.

    Quite the model.
    And again the financing/funding for this model is obscene.

    Too bad TriMet didn’t call out a portion for the Milwaukie project in their levy. It would be sure to lose. That’s why they did not.

    But I don’t think you are really in favor of any light rail vote.
    Like JPACT you just want more of it.
    Even if you can’t pay for it.

  45. Steve S.
    October 18, 2010 at 3:13 pm Link

    Scotty,

    No offense but you seem to not grasp the gravity of TriMet’s situation. Have you read the audit?

    You keep citing what TriMat says. Now you’re echoing their line about the economy being the source of their problems.

    That simply is not true.
    Do you want a real understanding?
    Don’t listen to TriMet.

    Read the audit.

    Consider the $27 million in recent cuts TriMet blamed on the economy.

    It wasn’t the economy.

    Fringe beneifts went up $27 Million & TriMet made $27 Million in cuts.
    It’s in the audit.
    In one year, 09-10 Trimet has a $27 million increase in cost of fringe benefits.
    They publicly blame the economy and make $27 million in cuts?

    But how can they blame the economy when their
    total operating and nonoperating revenues rose 6.5%?
    http://www.trimet.org/pdfs/publications/financial-statments-june09-10.pdf

    “Fringe benefits increased [$27 million] or 16.9 percent, due to increased costs of medical premiums, other post-employment benefits costs and pension funding requirements.”

    Fring benefit soared in the one year by $27 million.
    That’s a big slice of trouble already here.
    And it’s getting worse. With or without a recovering economy.

    Here’s how TriMet spun it.

    “The Oregon economy began slowing in fiscal year 2008, after experiencing strong growth from 2004 to 2007. In fiscal year 2009, the economic recession began to impact the District’s revenues, due to declining regional employment. This impact on revenues continued through fiscal year 2010.”

    And announced 27 million in cuts.
    http://trimet.org/news/september2010proposal.htm

    “TriMet faces a multi-million dollar budget shortfall due to the ongoing recession and declining payroll tax revenues. We need to cut the budget for our fiscal year that begins in July by $27 million.”

    As for the text of the levy? You’re struggling.

    Why didn’t it simply state to “Improve bus transit service” in the place of “Improve transit service”?

  46. Bob R.
    October 18, 2010 at 3:25 pm Link

    But I don’t think you are really in favor of any light rail vote.

    Let’s not venture into the territory of questioning motivations. That one didn’t cross the line, and conversely someone earlier questioned whether you’d genuinely support this TriMet measure if the wording were more to your liking. But I get the sense you’re getting all worked up here and I don’t want this conversation to degrade, so take it easy.

  47. Cameron Johnson
    October 18, 2010 at 4:39 pm Link

    Either way, this is gonna end badly, I can feel it.

    Yep, it’s me, Captain Obvious, to the rescue.

  48. AL M
    October 18, 2010 at 5:23 pm Link

    Just so ya all know, I voted YES!

  49. AL M
    October 18, 2010 at 8:57 pm Link

    YES!!!

    (page got moved)

  50. EngineerScotty
    October 18, 2010 at 11:42 pm Link

    Now that I’ve been home, and the kids are in bed, I’ve time to digest the audit report which Steve mentions. Some of the highlights:

    * As Steve notes, operating revenue went up 6.5% in FY2010 ($26.6M) to $433.6M. Passenger revenue (fares) increased 4% to $93.7M, though ridership declined 2.2%. (Fare increase). $20.6M of the operating revenue increase came from grants.
    * Tax revenue decreased by $1M, with a $4.6M drop in employer payroll taxes, offset by a gain in self-employment tax revenues of $3.6M. This despite a miniscule rise in the tax rate approved in 2004
    * Payroll (excluding benefits) dropped $1.6M in FY10, due to service reductions and layoffs; however, as Steve also notes, fringe benefits jumped over $27M (16.9%) due to rising health care costs. If you look at the 2008 annual report, fringe benefit expenses have doubled since 2006.

    Other than the healthcare issue, TriMet’s operating picture has improved slightly from FY09 to FY10. However, this doesn’t disprove the notion that the recession has impacted TriMet in the slightest–tax revenues have declined since the 2008 peak, as has ridership (the ridership drop elsewhere on the system was offset by the opening of the Green Line). TriMet has been able to compensate somewhat with fare increases.

    But TriMet’s ability to further increase fares or obtain more grants is probably limited.

    Fringe benefits are something that–outside of contract negotiation time–are largely outside of TriMet’s control. Union contracts run for several years, but contracts with insurers typically only last for a year. Again, this is a big reason why we see the agency now playing hardball with ATU.

    Regarding light rail–on the operational side of things, there’s little doubt that it’s beneficial to the agency. Almost 40% of passenger boardings are on MAX, but it only costs a quarter of what the bus system costs to operate. Unless you think that the proper way to run an agency is to dramatically cut everything back to a skeleton service for the poor, in which case mass transit makes little sense, it’s hard to argue that MAX isn’t useful. (The next article will address this in more detail somewhat).

    Regarding the levy text, we may have to agree to disagree. I consider it no big deal–such terse wordings is common in bond measure texts, and were TriMet to try and spend the proceeds in a fashion other than publicly promised, it would cause a major uproar–the entire line of argument from John strikes me as FUD from a transit opponent, trying to drive a wedge between transit supporters. Your mileage may vary, in which case you’re free to vote no.

    And regarding your “light rail vote” comment–on the chance that was directed to me as opposed to Lenny, did you read this?

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