report released Monday by Cascade Policy Institute recommends that cities and counties within TriMet’s service jurisdiction consider leaving the transit district.

The study shows that TriMet’s ongoing financial crisis is not just a temporary problem, but a permanent one caused by a failed business model. The agency has one of the most expensive union contracts in America, and the managerial obsession with rail transit is cannibalizing bus service. These problems go back decades, and it’s now too late to fix them.

Due to these factors, TriMet will face annual service reductions beginning fiscal year 2017. Those cuts will slowly destroy the agency. State law has long allowed jurisdictions to leave TriMet, and six communities already have: Molalla, Wilsonville, Sandy, Canby, Damascus, and Boring. Four of those cities created their own transit districts. Based on these experiences, the Cascade study recommends that more jurisdictions consider opting out and create their own transit districts.

Cascade Policy Institute’s report shows that the four cities operating their own public transit systems have lower labor costs, lower payroll tax rates, no long-term debt, virtually no unfunded liabilities for retirees, and better service than they previously had under TriMet.

Services under TriMet have continually declined since 2005, yet the TriMet payroll tax is at an all-time high of 0.72 percent.

“With major TriMet service cuts projected for FY 17 and every year thereafter, jurisdictions still paying the TriMet payroll tax should begin investigating options for leaving the district,” says the report.

According to Cascade President John A. Charles, Jr., “When TriMet was formed in 1969, the expectation among supporters was that creating a single public monopoly transit provider would create economies of scale. Unfortunately, what we really created were ‘diseconomies of scale.’ TriMet’s business model is now permanently dysfunctional, and the evidence from opt-out cities is that ‘smaller is better.’ Cities such as Sherwood, Tualatin, Lake Oswego, and West Linn should not wait for the inevitable collapse of TriMet; they should actively begin assessing the prospects for creating their own transit agencies, either as stand-alone districts or in partnership with nearby communities.”

Click here to read the report.

 

2 Responses to “Report Makes the Case for Cities and Counties to Leave TriMet”

  1. Cynthia L. Choat January 10, 2014 at 9:01 pm #

    Great article!

  2. Kevin Geraci January 11, 2014 at 9:57 am #

    John,

    It may make perfect sense for some suburban municipalities to opt out of TriMet bus service and provide it themselves–particularly if rail doeas not run through their communities, And I agree it would one way to initiate a serious look at curbing the runaway employee expense that TriMet has –that expense focused, in most part in seems, at runaway health care and retiree benefits.

    I am certainly no expert in this area, but I have negotiated with Unions on their contracts in the past while serving on a couple Boards. In fact, I believe TriMet could create a private retirement plan or heavily matched 401K and offer a very good reasonably priced self-insured health care plan and pay the same wages if the Union Workers voted to opt out of the ATU Union as a group.

    State laws would forbid such an action I believe, but the numbers seem to be there? I have calculated them in the past while negotiating Union contracts for this size organization it think it could make sense. Many medium to large organizations have self-funded health care plans that offer the same care as major national health care offerings (some much better) and are more reasonably priced (most of the time) than nationally offered health plans –and quite a bit lower cost over the last 7 years; depending of course on the actual medical expenses paid out by the organization.

    So the platinum plans that the ATU have, and many other unions have, for both current and past employees is just not sustainable.

    Further, TriMet’s NOI could also be increased in many ways:

    Parking:
    Get to the Sunset Transit Station any weekday after 7:00am, there is not a single space in their 3 story garage…not a single space.

    They could double the parking and it would probably still be full. I know many people who would take the train downtown (which takes less than 15-20 mins including wait time) if they could drive to the Sunset Station and park…but they can’t—anything beats Hwy. 26 traffic into the City (not to mention parking costs once you get there). And then, move west to the Hillsboro end and it seems TriMet is way over parked–poor pre-planning in my estimation.

    I have to drop my wife at the train every AM because she can’t drive her own car and park in the garage…hundreds of cars are pulling up to the Sunset Station everyday from 4:30-6:30 to pick up passengers? And there are other similar scenes at Eastside ‘Park and Rides’ as well–ridership could be increased dramatically if these parking ammentites were better planned or re-allocated.

    Fares:
    Voluntary Rail Fares, really!? If they collected from everyone who rides, which they do in most all major cities around the Country, they could also become more profitable.

    More and more people come to Portland from large Midwest and East Coast cities who are used to taking the train to work because driving is a complete nightmare–like it will soon be in Portland in another 10 years. In Chicago, where we are from, CEO’s ride the train in from suburbs (albeit on Express Trains…but that is another story).

    Express Buses

    These only work when there is designated express bus lanes on the highways, without them, how can you possibly make the claim that express bus service is faster–they travel the same roads as as do autos; except for possibly from an outlying area into the city, as your example of the Wilsonville Express vs. Rail. But in cities that do have these lanes (Midwest/East), they are very low cost, but still can’t seem to carry as many passengers as rail in most cases for the same fuel costs (and it is more expensive once the road repair costs are factored in—buses tear up roads–that is visually evident)

    Summary
    It take decades for any municipal rail transit metro agency to become profitable, however, once road repairs and other auto related expenses (like studded tires!) are added to the mix, it seems it has to be less expense in the long-run than putting more cars on the road…like to read a report that focused on that?

    But certainly TriMet has to be more profitable and ultimately self-sustaining and needs to better study where its ridership is coming from and provide adequate infra-structure to accommodate them. And the plan for non-rail served communities opting out might just be a catalyst to drive TriMet to finally taking a serious look at their fiscal plight and maybe the union, like the Boeing unions did recently, see that conceeding on some measures will ultimately maintain their job security.

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