The State of TriMetContract Reform Needed

to Fund Service

“Save Our Service”

February 13, 2013

Presented by:

Neil McFarlaneTriMet General Manager

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Important to the Region*• Record ridership: 102 million demand

growing • 24th - population, 9th per capita ridership• Leveraging partnerships: new

investments (East Portland, Washington County)

• Building efficient service - PMLR

*But unable to meet the growing needs of our region

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Approaching TriMet’s Service CrisisProjected Post Arbitration Revenue Expenditure Imbalance

Revenue-expenditure imbalance:• ($19) million 2017• ($48) million 2020• ($142) million 2025 • ($200) million 2030

An Imbalance Ahead: Our expenditures are greater than our revenues.

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Service Crisis

FY2017

Comparing Medical Benefits

This graph assumes Public Employees Benefit Board (PEBB) PPO rates would apply to TriMet’s union employees*TriMet's 2013 PPO Rates 90%10% co-insurance, $150/$450 deductible plan design ** Mercer - TriMet 2014 Plan Options - Regence less 10% to determine 2013 Rates *** Public Employees Benefit Board (PEBB) 2013 Rates applied to TriMet

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Contract Reform Proposedtrimet.org/newcontract

• ATU – same health care plan as non-union• Reduce retiree medical: new hires & not vested • 2% wage increase • Work rule changes:

• Attendance• Direct Hires

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Current TriMet Contract Offer:Delays TriMet’s Service Crisis

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Service Crisis

FY2023

2015 weekday system: all of today’s lines & Portland Milwaukie Light Rail

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2015 (FY)•1.750M bus service hours•79 bus lines•5 light rail lines•1 commuter rail line

TriMet’s Service Crisis

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TriMet’s Service Crisis

2020 (FY)•Cut 34%* (compared to today)•49 weekday lines cancelled (or equivalent)

*of bus service or the equivalent

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TriMet’s Service Crisis

2025 (FY)•Cut 70%* (compared to today)•63 weekday lines cancelled (or equivalent)

*of bus service or the equivalent

What We’ve Already Done• Huge budget cuts (Since FY09 $43M)

• Increased fares • Cut Service by 14%• Employee Cuts

• Cut over 200 positions• 3½ yr wage freeze (non-union)

• Non-union employees & retirees: pay more for healthcare

• Put off capital investments

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• ATU appeals arbiter’s award (decision forthcoming)• TriMet prevails: time to make progress on financial stability• TriMet doesn’t prevail: service cuts and an even larger imbalance to solve

• Federal operating funds (uncertainties in D.C.)

• Payroll tax receipts (uncertain economy)• 1st two quarters of FY13 grew 6.6% over same period last year. Forecasting

7.5% to 8% average payroll tax growth next 3 years• Includes growth due to rate increase dedicated to Portland Milwaukie

operations

• Ridership/fare revenue (uncertainty remains)• Ridership down 2%, due mainly to the end of the Free Rail Zone• Revenue up but still $1M below forecast and $2M below budget for FY13*results as of December 2012

Current Financial Uncertainties

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FY14 Financial Goals“Fix what we have. Pay what we owe.” • Reform our labor contact• Keeping the service we have

• Make investments that reduce cost • Decrease unfunded liabilities

• Fixing the service we have (Schedules, Overloads)

• No fare increases for fixed-route• No service cuts

• Fair to riders • Fair to employees • Fair to taxpayers

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FY13 Agency Achievements

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Making Transit Better,Becoming More Efficient

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• Putting into service 70 new buses• Standardizing transfers• Launching mobile ticketing• Developing e-fare program• Portland-Milwaukie Light Rail

• TriMet share: less than 5%• Efficient: $1.94/ride – saves operating dollars

Key Dates GM’s Budget Task Force began – Dec 6 FY14 Budget Internal Kickoff – Jan 3 State of TriMet, public outreach begins – Feb 13• Launch Proposed FY14 Budget publicly – March 13• Resolution to approve budget for TSCC – March 27• TSCC Hearing – April 24 • Resolution to adopt FY14 Budget – May 22• FY14 Budget Begins – July 1

Budget Process

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Questions

The State of TriMet

Contract Reform Needed to

Fund Service

“Save Our Service”