TriMet provides bus, light rail and commuter rail transit services in the Portland, Oregon, metro area. We connect people with their community, while easing traffic congestion and reducing air pollution—making the Portland area a better place to live. More
TriMet's Fiscal Year 2014 Budget
Includes investments in new buses, service and system improvements; no service cuts or fare increases
Our $489 million operating budget for Fiscal Year 2014 (July 2013-July 2014) has good news for riders and furthers our mission to “fix what we have and pay what we owe.”
This budget assumes that the arbitration award for the just-expired contract with the Amalgamated Transit Union is upheld and TriMet’s offer stands.
This provides some breathing room and the ability to invest in critical infrastructure. However, TriMet still faces future service cuts and/or fare increases if we don't win the arbitration challenge and prevail in making reforms in the upcoming contract.
Despite this uncertainty, the agency’s priority is to provide stability for our riders, which is why our proposed FY14 budget includes buying new buses, and no service cuts or fare increases.
Here’s a look at our top priorities for FY2014 and the costs:
- Accelerate new bus purchases, retiring all older high-floor buses four years earlier than originally planned and reducing the average age of the fleet to eight years (industry standard): $8.8 million annually for three years
- Increase bus service to address schedule reliability and rush-hour overcrowding: $2.1 million annually
- Continue the Access Transit Fare Programs (previously called "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, currently funded at 52 percent: $4 million in FY14 and $2 million in FY15
- Increase light rail vehicle and track maintenance, and make lighting and other station improvements on the MAX system: $9.5 million
- No fare increase: ($2 million in lost revenue)
Increasing reliability for riders
Among our priorities is reducing the average age of our bus fleet. Starting with FY14, we want to accelerate our new bus purchases from 40 to 60 new buses a year so we can eliminate all older high-floor buses four years faster than originally planned. This will reduce the average age of our buses to eight years, which is the industry standard. Learn more about TriMet's new buses
On the MAX system, we want to increase the maintenance on our vehicles and on the trackway itself. This will improve the reliability of the system and provide a better ride.
“TriMet’s Path to Financial Stability”
Our Budget Task Force (a 12-member panel made up of business and community members) recently put together a report called “Back to Basics: TriMet’s Path to Financial Stability,” which we used to help identify our priorities, not just for FY14, but also for the years ahead. The report outlines what the task force finds crucial to the financial future of our transit service. In the report, the task force acknowledges that “…no real progress for restoring or growing service can be achieved without changes to the labor contract as it relates to health care benefits and work rules.”
The panel found TriMet’s financial assumptions regarding federal funds, payroll tax receipts and even the impact of inflation sound and appropriate. The panel concurred with our assessment that our ability to reach financial stability and restore and expand service is contingent on reforming the health care benefits for active employees and retirees.
Budget Task Force recommendations
The task force identified a number of recommendations for a healthy transit system:
- Do not place the financial burden on the backs of riders by increasing fares.
- Restoring service at this time would be “irresponsible” because of limited resources. Take a "back to basics" approach: Make service adjustments for overcrowding, invest in service reliability and new technologies, pay off long-term obligations, address unsustainable labor costs, and balance future needs within budget limitations.
- Prioritize connecting people with jobs.
- Create a long-term strategic plan and supporting financial plan to guide decisions. Clearly articulate TriMet’s financial challenges and create transparency.
- “Fix what we have”: Invest in infrastructure by increasing funding for maintenance.
- Bring LIFT Paratransit service closer to Americans with Disabilities Act (ADA) standards, rather than exceeding the requirements on fares and service delivery, as TriMet currently does.
- Binding arbitration does not result in a constructive outcome, but changing the law may be difficult.
- Engage regional stakeholders to build advocacy and support.
TriMet still faces a future of service cuts and fare increases if the agency does not win the arbitration award and make reforms in the upcoming contract. Current contract negotiations are at a standstill as the ATU has refused to come to the bargaining table. Without a sustainable contract and bringing health care benefit costs under control, the future of the transit system is uncertain.
What’s not contributing to TriMet's financial crisis
- Debt: The portion of debt service (payment of loans) funded with revenues that could be spent on operations remains low. At this time, our payroll tax funded debt service costs are approximately 5 percent of continuing revenue, which is comfortably below the TriMet Board's policy of 7.5 percent maximum.
- Portland-Milwaukie Light Rail: TriMet’s share of the Portland-Milwaukie Light Rail Transit Project (PMLR) construction is less than 5 percent of total project budget of $1.49 billion. Both our capital contribution to the project and the cost to operate PMLR are funded by a portion of the payroll tax rate increase implemented in 2005 that is dedicated to new transit service. PMLR preserves resources for our bus and rail operations, resulting in a highly efficient system. Carrying more customers for less helps stretch resources. The cost per ride for PMLR will be $1.94 compared to $3.54 per ride on our current bus system.
- Columbia River Crossing: TriMet has no financial role in funding construction of the Columbia River Crossing, and only has a relatively minor role in funding light rail operations once it opens. TriMet’s operating share consists of about $0.7-$1.0 million (in 2012 dollars) for 2019 service levels and $1.3-$1.6 million (2012 dollars) for 2030 service levels. These funding requirements represent about two-tenths of 1 percent (0.2%) of TriMet’s continuing revenues in these years.
- Administrative/management salaries: After 3.5 years of a salary freeze and having non-union employees pay more for their health care with less generous coverage, TriMet made small strategic pay increases to help retain talented staff. Administrative overhead costs are 7% of overall budget and the number of non-union employees is at 2006 levels. The merit increase averaged 3 percent and was also warranted due to the additional workload that employees had undertaken due to layoffs. Also, some salaries had fallen below the market and we risked losing talented staff. This one-time increase of an average of 3 percent for non-union employees compares to the union workforce receiving 3 percent wage increases every year for the past 3 years. The raise for our non-union workforce amounted to $910,000 and is less than 1% of our $473 million budget.
We want to hear from you
Do you have comments about our budget and priorities? Please weigh in. This transit system belongs to all of us.