by: TRIBUNE PHOTO: CHRIS ONSTOTT - TriMet General Manager Neil McFarlane presented his proposed budget to the agency's board of directors Wednesday, including vice chairwoman Tiffany Sweitzer.TriMet General Manager Neil McFarlane released a proposed $485 million operating budget Wednesday morning that may — or may not — provide a couple years of relief from fare increases and services cuts.

The difference is expected to be determined soon by the state Employment Relations Board, which is considering a challenge to TriMet’s current labor contract with Amalgamated Transit Union 757.

That contract was imposed by a state arbitrator last year. It includes health benefit reductions sought by TriMet but strongly opposed by the ATU 757. The union has challenged the legality of the arbitrator’s action with ERB.

If the ERB sides with TriMet, McFarlane says the next two TriMet budgets can be balanced without fare increases or service cuts. That would be a dramatic reversal from last year, when the board increased fares and cut service to close a $12 million budget gap.

In fact, McFarlane says TriMet can make some service improvements, including increasing frequencies on a few overcrowded lines.

But if the ERB sides with ATU 757, the previous contract will be reinstated. If that happens, McFarlane says TriMet will probably need to cut an additional $7 million to $9 million from its 2015 budget, with service reductions hitting in September of that year.

Even if the ERB sides with TriMet, McFarlane says the relief is only temporary, however. Without additional health benefit reductions, McFarlane says, TriMet will have to begin increasing fares and cutting service again in the 2017 fiscal year. If that continues, McFarlane says the regional transit system will be a ghost of its already diminished self by 2025.

Union officials strongly disagree with that assertion. ATU 757 President Bruce Hansen says TriMet should instead cut management salaries and stop expensive new rail projects. The union has taken its case to the public with press releases, newspaper advertisements and a website. The ATU 757 campaign is being funded by a temporary monthly dues increase approved by its members.

Despite the campaign, the four TriMet board members at Wednesday’s briefing all expressed support for McFarlane’s proposed budget. The TriMet board has scheduled a March 27 public hearing on the budget, and could approve it then.

ODOT rail inspections

McFarlane’s presentation came two days after the release of an internal TriMet budget document that showed 47 agency managers received salary increases totaling just under $1 million during the current fiscal year. The document had been obtained by ATU 757 through a public records request. Hansen says he only recently became aware of the increases and was shocked by them.

“They prove management is making secret decisions that contribute to TriMet’s budget problems,” Hansen told the Portland Tribune.

McFarlane had previously stressed that management pay has been frozen for 3 1/2 years.

In fact, TriMet had revealed in a May 12, 2012, memo that it planned to increase some management salaries. It was presented to a transit rider advocacy group called OPAL Environmental Justice Oregon during negotiations on the current budget. The eight-page memo included a breakdown of $10 million in proposed contingency funds that listed $830,466 for “Non-union wage increases.” The wage increases were spread among 420 non-union employees.

Nevertheless, McFarlane apologized to the board Wednesday morning for not publicly announcing the increases when they occurred. Three of the four directors said they supported the increases, calling them long overdue.

The spat was just the latest clash between TriMet and ATU 757. The union is still refusing to negotiate its next labor contract, charging that TriMet will not conduct the talks in open meetings as required by state law. TriMet argues the law does not require its labor negotiations to be conducted in public. The question is before Multnomah County Circuit Judge Leslie Roberts, who could issue a ruling any day.

In the meantime, TriMet and ATU 757 officials have been sparring over the safety of the MAX light rail system. Last month, Hansen issued a press released accusing TriMet of endangering public and employee safety by failing to properly maintain the system. After the accusations were reported in the press, the Oregon Department of Transportation inspected portions of the track. Although inspectors found areas where routine maintenance was required, they found “no safety concerns.”

Health care costs

The $12 million reduction in TriMet’s current budget produced the most dramatic fare and service changes in years. The traditional three-zone system was replaced with a single fare, which amounted to an increase for most regular riders. In addition, the board eliminated the Free Rail Zone in downtown Portland, eliminated a number of

underperforming bus lines and reduced the frequency on some bus and MAX routes.

As painful as the cuts were, they were only the most recent round that began when the Great Recession took hold in the Portland metropolitan area. It significantly reduced payroll tax revenue, TriMet’s single largest source of funding. According to TriMet officials, since 2009, the regional transit agency has cut spending by $43 million and service by 14 percent. More than 200 positions have been eliminated and non-union employees have had their wages frozen for more than three years.

Despite the multiple causes for TriMet’s budget problems, McFarlane has continued to focus on union employee health benefits as the greatest threat facing the agency’s future. He brought them up again in a Feb. 13 State of TriMet address to the board. The contract imposed by the arbitrator required ATU 757 members and their spouses to pay a percentage of their health care costs for the first time. The budget proposed by McFarlane for the next fiscal year raises that amount from 10 to 20 percent, the same share paid by non-union TriMet employees.

Using charts and graphs, McFarlane argued that unless ATU 757 members and their spouses start paying a bigger share of their health care costs, the agency will face $19 million in additional cuts in 2017, precipitating a service crisis. If nothing more changes, McFarlane said, the additional cuts will grow to $48 million in 2020 and $142 million in 2025. By then service will have been reduced by 70 percent from today’s levels, with the equivalent of 63 weekday lines canceled.

Hansen responds that TriMet should not balance the budget on the backs of its union employees.

“Our collective bargaining agreement is a joint agreement,” Hansen told the Tribune. “Management agreed to everything they are now complaining about.”

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