On June 14th, John Charles sent this letter to the Federal Transit Administration regarding TriMet and C-TRAN proposals for the CRC light rail project.

June 14, 2013

Richard F. Krochalis

Regional Administrator, FTA

Jackson Federal Building
915 Second Avenue, Suite 3142
Seattle, WA 98174

            Re: FTA requirements for operating funds on New Starts projects

Dear Mr. Krochalis,

I was in the audience on May 15th when you discussed the CRC light rail proposal with the C-TRAN board. I heard you say repeatedly that the application for a FFGA could not proceed until C-TRAN had a firm commitment of adequate funding to operate the new train line.

However, those statements are at variance with how FTA is handling the same issue for federally funded LRT projects in Portland. As I outlined to you in a detailed letter two years ago, TriMet has been in violation of its FFGA for the Green Line since the day it opened, and FTA has done nothing about it.

Service hours for the Green Line were reduced by 33% before it ever opened in September 2009.[1] Service has continued to decline since then. Weekly revenue hours have dropped from 692.4 in the opening year to 686.3 in the fall of 2012, a loss of 1%.[2]

TriMet is also in violation of its FFGA for the Yellow MAX line. That line opened in 2004 with 605.4 weekly revenue service hours. By the fall of 2012, service had dropped to 568.4 weekly revenue hours, a loss of 6%.[3]

Peak-hour service on the Yellow Line was supposed to operate at headways of 10 minutes in the opening year, improving to 7.5 minutes by 2020[4]. Instead, peak-hour headways are currently 15 minutes.[5]

As I pointed out to you in 2011, TriMet has a dedicated revenue source that was supposed to be used to fulfill the obligations of the respective FFGAs. That source, the regional payroll tax, was enhanced by the state legislature in both 2003 and 2009, allowing TriMet to raise the tax rate. The first tax increase was implemented effective January 2005, and has raised a cumulative total of $122.6 million in new revenue through FY 13.[6]

The combined net operating costs of the Green and Yellow lines in 2011 were $10.2 million.[7] Clearly the new revenues generated by the payroll tax rate increase were adequate to pay for all promised new service on the two new MAX lines, if such service had been a priority for TriMet – which it isn’t.

Not only has TriMet failed to provide promised service on federally-funded light rail lines, the agency’s  total fixed route service has dropped by 14% since 2005 — despite the fact that the agency’s all-funds budget has gone up by 125% over that same period, as displayed below:

TriMet Financial Resources, 2004-2013 (000s) 

 

FY 04/05

FY 08/09

FY 10/11

FY 11/12 (est)

FY 12/13 (budget)

% Change 04/05-12/13

Passenger fares

$  59,487

$  90,016

$  96,889

$  104,032

$117,166

+97%

Payroll tax revenue

$171,227

$209,089

$224,858

$232,832

244,457

+43%

Total operating resources

$308,766

397,240

$399,641

$476,364

$465,056

+51%

Total Resources

$493,722

$888,346

$920,044

$971,613

$1,111,384

+125%

 

Annual Fixed Route Service Trends, 2004-2012 

FY 04

FY 06

FY 08

FY 10

FY 12

Change

Veh. revenue hours

1,698,492

1,653,180

1,712,724

1,682,180

1,561,242

-8.1%

Veh. revenue miles

27,548,927

26,830,124

26,448,873

25,781,480

23,625,960

-14.2

In its most recent long-term financial forecast, TriMet admits that the agency’s current service problems are “not caused by TriMet’s revenue base.” According to the agency, TriMet’s operating revenues per capita “are 70% higher than its peer comparators.”[8]

Nonetheless, TriMet service is in a death spiral.

TriMet General Manager told his board in February that the forecast for TriMet service shows that by 2030, the agency will have a “revenue-expenditure imbalance” of some $200 million. Therefore, TriMet clearly does not expect to meet its light rail service obligations to FTA at any time during the life of the two relevant FFGAs.

In your response to me on June 20, 2011, you noted that many transit agencies experience temporary service declines due to various economic factors. Such conditions were “not typically viewed by FTA as a breach of contract.”  You pointed out that Section 19(a) of the FTA FFGA discusses “default” in terms of “…substantial failure of the Grantee to complete the Project in accordance with the Application” for federal funding.

It is clear that TriMet has failed and will continue to fail to meet its contractual obligations to operate federally-financed light rail lines as promised.

Given these facts, I can only conclude that either you misinformed the C-TRAN board about the importance of local operating revenues, or you will soon be requiring TriMet to begin fulfilling its FFGAs for the Green and Yellow lines. Which of these things is true?

Please advise at your earliest convenience.

Sincerely,

John A. Charles, Jr.

President & CEO

CC:       C-TRAN Board of Directors

TriMet Board of Directors

Interested parties



[1] TriMet, Fall 2010 Financial Forecast, p. 39.

[2] TriMet finance office, personal communication with the author, September 18, 2012.

[3] Ibid

[4] TriMet, Before and After Study, Yellow MAX Line, 2009, p. 2-2.

[5] TriMet website as of June 14, 2013, http://www.trimet.org/schedules/w/t1190_1.htm.

[6] TriMet, CRC August 2011 New Starts Submittal, Table 1.

[7] TriMet, FY11 Operating Statistics

[8] TriMet, Long Term Fiscal Sustainability Plan, December 2012, p. 7.

 

2 Responses to “Open Letter to Federal Transit Administration Regarding TriMet”

  1. James Pritchard June 14, 2013 at 5:44 pm #

    Given the cost of the new bridge across the Willamette, the expenditures for acquiring properties and removal of existing businesses on the new route and the route itself which does not properly serve any residential or commercial areas. It appears that Tri-Met is only concerned about building rail lines, without any thought given to impact on existing properties and structures or generating sufficient revenues to cover operating expenses. The signs around Clackamas county stating “Tri-Met is a bully” are absolutely correct.

    JP

  2. Jack R Titus June 15, 2013 at 10:59 am #

    John, thanx for the great article! Will anybody listen?? (I know they do eventually)

    Since I’ve moved up here to Orcas Isl. Washington, I’ve learned that Both the municipalities (Seattle, for example) and the State of Washington could benefit with your guidance in the field of economics. Want to open a ne branch?? Thanx Jack

Leave a Reply

 

Other Publications by John

Report Shows No Return on Public Investment for Oregon Wave Energy Trust

John Charles | December 19, 2014
PORTLAND, Ore. – A new report released by Cascade Policy Institute concludes that the public-private partnership Oregon Wave Energy Trust has failed to achieve a ...  read more

Press Release: Report Shows No Return on Investment for Portland Seed Fund

John Charles | December 3, 2014
December 3, 2014 FOR IMMEDIATE RELEASE Media Contact: John A. Charles, Jr. 503-242-0900 john@cascadepolicy.org   PORTLAND, Ore. – A new report released by Cascade Policy ...  read more

Press Release: New Report Proposes Better Outcomes, Lower Costs for State and Local Governments Through User Fees

John Charles | December 1, 2014
PORTLAND, Ore. – A new report released by Cascade Policy Institute suggests numerous ways state and local governments can lower the costs of public services ...  read more

More On These Topics

Portland’s Streetcar Audit: What Went Wrong?

Cascade Policy Institute | December 17, 2014
Last Thursday, auditors released a report questioning the Portland Streetcar’s performance. Ridership counts were inflated by 19%. Several additional metrics, including hourly vehicle operating costs ...  read more

Why Do City Leaders Keep Portland in the “Transportation Dark Ages?”

Steve Buckstein | December 9, 2014
In November, Beaverton, Gresham, Hillsboro, and Tigard joined Vancouver, Washington in welcoming ridesharing juggernaut Uber to operate legally in their cities. Last weekend, Uber began ...  read more

Portland Should Join the “Free World” of Ridesharing

Steve Buckstein | December 9, 2014
In November, Beaverton, Gresham, Hillsboro, and Tigard, Oregon joined Vancouver, Washington in welcoming ridesharing juggernaut Uber to operate legally in their cities. Conspicuously absent from ...  read more