Tag Archives | WeAllRideTheBus opal trimet funding

WeAllRideTheBus and reform at TriMet

One of the interesting developments of the past few weeks is that the organizational efforts of OPAL Environmental Justice Oregon seem to be bearing fruit. TriMet’s recent scaled-back service cuts seem to take many of OPAL’s concerns into account (notwithstanding the warning that additional cuts may be back on the table if labor negotiations don’t go TriMet’s way), and now OPAL has managed to recruit some more serious political muscle into its advocacy, with its new campaign, We All Ride The Bus. In this organizational effort, OPAL is joined by several heavier hitters, including Gunderson (a railcar manufacturer in NW Portland, adversely affected by proposed reductions to Line 17 service) and SEIU Local 49, to campaign for improvements to TriMet’s basic transit service, primarily the bus system..

This past week, We All Ride The Bus held a press conference in which they released their proposed Alternative Solutions for the TriMet budget, which are reproduced after the jump. (They can also be read at OPAL’s Facebook page).

First, TriMet must ensure full transparency and accountability by using the most current projections for next year’s budget. TriMet should update its analysis of the payroll tax revenue and federal grant projections so everyone can be more fully informed of the situation.
Second, instead of resorting to fare increases and service cuts, TriMet should fully analyze alternative cost-savings and revenue-generating options. Some initial alternatives include:

  1. Premium Fares for Premium Service: Portlanders currently have access to a variety of free and convenient services that come at a high price to TriMet and its budget. Charging a reasonable user fee for Park-&-Ride lots can generate $1.5 million per year, while charging a premium fare for the Westside Commuter Service (WES) can generate $500,000. Services that cost the region more money to build and operate should be proportionately priced.
  2. Portland Streetcar Subsidies: TriMet should trim payments to the City of Portland (currently $6 million each year) to subsidize the expansion and operation of the Streetcar. Although the city’s investment in the Streetcar has brought many new businesses and economic opportunities to the area, these investments shouldn’t be at the expense of bus service or affordable fares for other areas of the region.
  3. Performance Efficiency Measures: It is imperative that TriMet start investing in our bus system for the long term. TriMet should be looking at ways to get buses moving faster, such as installing ticket validation machines to expedite the boarding process and maximizing the use of bus jump lanes and traffic signal prioritization. A more efficient bus system will save money, allow TriMet to increase frequency and will give its customers reason to believe in – and ride – the bus again.
  4. Reevaluate Future Capital Rail Project Investments: Keeping our current commitments is important, but in a budget crisis, future capital investments in rail expansion projects should be put on hold until current services can be funded sufficiently. As with any business facing operational cut backs, TriMet should exhaust all options to postpone future capital expenses if they are restricting operating expenses for the bus system.

In general, I agree with the substance of these proposals. While I’m hopeful that rapid transit can be added to the SW Corridor in the mid-term, and don’t object to planning activities now underway, I think that in the nearer term, strengthening the existing transit system, in particular our bus system, is vitally important.

But beyond the above suggestions, there’s a few other things I think need to be on the table.

A conversation about the purpose of transit

A big disconnect that I’ve long noticed is that TriMet, and many transit wonks, are convinced that the current program of building out light rail is fundamentally a good idea–yet many existing patrons, who may not use the new services but see their own bus lines being cut–beg to differ. Cameron Johnson of Bus Riders Unite (another OPAL project), in testimony before the TriMet board meeting, compared the agency to a slumlord that neglects his rental properties (the bus system) and instead concentrates his resources on building the nicest swimming pool on the block (MAX) to impress friends and outsiders. The analogy reveals a fundamental belief about rail expansion that some hold–that it’s a frivolous boondoggle, unrelated to the agency’s primary mission. On the other hand, about a third of all TriMet boarding rides are on MAX–so clearly, it can be argued, it’s providing living space, to continue the analogy. (A better analogy might be that MAX is shiny the new apartments going in next door, while the old ones are being neglected).

Why the disconnect? Different people have different beliefs about the fundamental mission of TriMet.

Two years ago, I did a post over at Dead Horse Times on the different missions (and anti-missions–go read the article) that a transit agency might seek to fulfill. OPAL, BRU, and other rider organizations are generally most concerned about mobility-oriented missions: comprehensive and thorough basic transit service, with a particular focus on social justice. Making sure people can use the system to get from point A to point B, in a reasonable fashion and at a reasonable price. And if one is primarily concerned with these ends, a comprehensive, distributed bus network is one of the best ways to achieve it. Concentrating resources in dedicated corridors, which is what rapid transit necessarily involves, doesn’t serve these missions very well.

Many in our political leadership, however, have environmental-oriented missions in mind: Attracting people out of cars. Transforming the built environment to a more sustainable form. Reducing emissions, including of transit rolling stock. And the way you support these missions is to build electric-powered rapid transit (which generally means rail, as trolleybusses are not effective in rapid transit roles), build out to suburbia, provide amenities to so-called “choice” riders who might otherwise choose to drive, curtail or shorten “low-performing” routes, and encourage (or even invest in) transit-oriented development–including providing transit service to new developments on a speculative basis.

This, I think, is a big part of why the two sides in this are not communicating well. People trying to get to their jobs and live out their lives are not as likely to be sympathetic to more abstract environmental concerns, which frequently are found higher up on the hierarchy of needs. It’s easy to conclude that rather than being driven by an environmental agenda, leaders are being driven by pork-barrel politics or other base motives (a desire to make Portland appear more cosmopolitan or “European” is often suggested as a hidden rationale for capital transit investment). Of course, leaders, for their part, are in many cases following the law–regional plans include environmental goals (reduce VMT, reduced emissions) that leaders have to adhere to.

Rather than continuing to talk past each other, the political leadership of the Metro area and OPAL and other ridership groups need to come to an understanding on this. And rather than diverting resources from existing to new service as an operations detail, a public conversation ought to be had as to how much of our transit dollars will be spent on providing basic service, and how much will be spent on projects with a primary environmental rather than mobility bent.

Endowment

In Part 3 of our recent interview with Neil McFarlane, he noted that TriMet board policy limits the agency’s debt ratio to 7.5% of operating revenues. (I suspect that this policy excludes the unfunded pension and OPEB obligations, which are closer to 200% of operating revenues–albeit most of this debt will not come due for years if not decades). And there’s a good reason for this policy, beyond the obvious one of not getting too far into hock: operational dollars are the most scarce kind. The FTA will happily throw money your way for capital projects, but operating grants are rare–most operating revenue comes from fares, the payroll tax, and a small amount from other sources such as advertising.

One of the major criticism of the Milwaukie MAX project is that TriMet is issuing $60 million in bonds backed by payroll tax revenues to get to $745 million dollars. While the FTA matches that $60M, the bonded money represents revenue lost to operations until the bonds are retired. The Oregon Legislature has approved a small hike in the payroll tax to offset this, but that’s money that could go to service (or to funding the aforementioned pension and OPEB obligations).

Not funding operations has been a longstanding FTA policy. It’s a dumb one in my opinion, but it’s unlikely to change soon.

However, Uncle Sam only provides half of the capital costs for MLR–the other half is provided by local sources: Metro, municipal governments, and the state of Oregon. And these local governments don’t have a set-in-stone policy of only financing capital costs.

Thus–rather than going to the Oregon Legislature and asking for lottery dollars to build the next MAX line; what about instead asking for money to start an endowment–a pool of money which sits in a safe place, possibly managed by a trustee? Having such a thing in place could solve several problems:

  • First, the interest on this could be used to fund operations, or short-term capital needs (like bus replacement).
  • Second, the endowment could be nominally pledged to the pension/OPEB obligations, helping TriMet clean up its balance sheet.
  • Third, the money might be drawn down (borrowed from) in lean times as a way of tiding the agency through recessions, to help avoid service cuts at a time when additional service is often needed

The downside of this sort of an endowment is large piles of money tend to attract people looking to capture it for themselves: Labor might try to use it to justify pay/benefit raises; anti-tax groups might try and demand a reduction in payroll taxes, etc. So this has to be managed carefully. But all else being equal, I’d rather TriMet be earning interest rather than paying it.
Separation of operations and capital planning
This next suggestion is as much a political suggestion as anything else. In many ways, TriMet is two agencies, joined at the hip. One is a transit operations company, which provides bus and train service to the general public. The other is a capital projects agency, which designs and builds stuff. Many of the things these two halves of the agency do are separate–operations are mostly funded as noted above, capital projects are mostly funded through grants–but this distinction is not often well-understood.

If TriMet had a dollar for every time somebody suggested solving the budget crisis by laying off planners or engineers, it wouldn’t have a budget crisis. The fact of the matter is, though, most of the folks on the capital projects side of the house are being paid by funding sources that simply can’t be diverted to operations.

Given that–might it be useful if the capital planning function was housed elsewhere (Metro, perhaps), or at least treated as a separate agency with separate books?

There would be many consequences to such a re-org, so at this point I’m mainly proposing it as an area of further study–but it might be worth considering.