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.


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]

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