TriMet today released its Fiscal Year 2014 budget, and while there remains uncertainty ahead, the agency expects that there will be no service cuts or fare increases. The key foundation of the $485 million operating budget assumes that the arbitration award for the just-expired contract with the Amalgamated Transit Union is upheld and TriMet’s offer stands, providing some breathing room and ability to invest in critical infrastructure.
The agency’s revenue projections are $28 million higher than previously projected. Part of the increase is due to a $9.5 million increase in additional federal funds dedicated to rail capital maintenance, and about $4 million is related to higher inflation assumptions compared to last year.
“While there is still financial uncertainty ahead, we are focusing on improving service for our riders, our employees and the community,” said General Manager Neil McFarlane. “This includes new buses, a small increase in bus service to relieve overcrowding, plus no service cuts or fare increases.”
- Accelerate new bus purchases, eliminating all older high floor buses four years earlier than anticipated and reducing the average age of the fleet to eight years, which is the industry standard; $8.8 million for three years.
- Increase bus service to address schedule reliability and rush hour overcrowding; $1.6 million annually.
- Continue the Access Transit Fare Programs (previously called the Low-Income Mitigation Program); $1.3 million annually.
- Hire 10 operators to comply with new Hours of Service policy for bus operators; $1 million a year.
- Increase the contribution to union unfunded defined benefit pension fund; $4 million in FY14, $2 million in FY15.
- Increase light rail vehicle and track maintenance, plus improve lighting and stations renewal along the MAX system; $9.5 million.
- No fare increase (a loss of $2 million in revenue).
TriMet still faces a future of service cuts and fare increases if the agency does not win the arbitration award challenge and prevail in making reforms in the upcoming contract. Current contract negotiations are at a standstill as the ATU has refused to come to the bargaining table.
Unsustainable union benefits
Union employees have the most generous health care benefits in the country. Health care benefits continue through retirement and a surviving spouse continues to receive the benefit for another 16 years. The just-expired contract shifted union health benefits to a 90/10 plan and began to reduce benefits. The family PPO plan premiums cost TriMet $30,000 a year and are growing, while employees pay only 10% out-of-pocket costs up to the $1,500 out-of-pocket maximum.
- If no other contract reforms are made in the upcoming contract, TriMet will face a $19 million service crisis beginning in FY17 that grows more extensive every year.
- TriMet is also on a path to pay 47 percent of its base payroll taxes to active and retiree health care benefits by FY2020 if there is no contract reform.
“In the long-run our financial future hinges upon reforming our union contract so we can invest in service that our riders and the entire region are demanding,” said McFarlane. “The choice is clear, rein in health care benefits and be able to restore and expand service or face years of cuts.”
Budget process & public comment
The public can comment on the budget via:
- 503-238-RIDE (7433)
- At the Wed., March 27 board meeting and at Wed., May 22 board meeting when the budget is scheduled to be adopted.
The FY14 budget begins July 1, 2013 through June 30, 2014.