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John Charles to TriMet Board: Understand Obligations Before Signing FTA Grant Agreement

Testimony before the TriMet Board of Directors

Regarding Resolution 11-06-38

Application for a Full Funding Grant Agreement with FTA for the Milwaukie Light Rail Line

June 8, 2011

In your consideration of this Resolution, please focus your attention on the second “Whereas” clause: “Federal assistance will impose certain OBLIGATIONS upon the applicant.”

I suggest you review and UNDERSTAND those obligations BEFORE you approve the resolution. Your predecessors approved a similar resolution for the Green MAX Line, yet TriMet is now operating that line at service levels 33% those originally planned do to financial problems.

How, specifically, will TriMet operate this line successfully when there is not even a plan to fully restore transit service over the next decade? I’ve sent you all a copy of my letter to FTA about the Green Line. No one from TriMet has responded or even acknowledged receipt of the letter.  I’ll take that as an admission that you don’t HAVE a response.

You have a fiduciary obligation to conduct proper due diligence. Have you accounted for the following factors?

  • The $25 million promised from Clackamas County is unlikely to be available when you need it, due to an initiative petition being circulated that would require a public vote on new urban renewal districts. The only option Clackamas County has to generate the $25 million is through Urban Renewal. We know from the recent county defeat of the small, $5 motor vehicle fee for the Sellwood Bridge replacement that Clackamas County voters would likely vote against Urban Renewal by a wide margin.
  • The legislature may begin requiring all units of government to begin making annual required payments into OPEP trust funds, which would be a $60 million hit to TriMet’s general fund.
  • What is TriMet’s “Plan B” if you lose the arbitration dispute with the ATU? The boad’s only public statements have indicated that loss of arbitration would result in more service cuts.  How will you operate the Milwaukie line successfully if you are reducing service for the 5th time in less than 3 years?
  • What happens if someone on the relevant Congressional oversight Committee decides that your Milwaukie FFGA application should be held up until such time that you restore service to the Green Line? You’re going to be building this line for an entire year on SPECULATION that the FFGA will be approved. What if it isn’t? What is your back-up plan?

Conclusion

You promised the legislature in 2003 that you would increase service if they gave you a payroll tax rate increase. They approved the tax rate increase, you took in $60 million in new revenue, and you cut service. You BROKE the promise.

You promised the FTA you would operate the Green Line properly if they gave you federal grant money. You BROKE the promise.

You promised the public last year that you would begin funding OPEB obligations in FY 12 at the rate of $1 million per year. You will BREAK that promise when you adopt the budget later this month, by only putting in $435,000.

This will be a dark day in the financial history of TriMet when you approve this resolution. TriMet’s “business model” is broken, and now you plan to make things much worse. I just want the record to show that you knew all of these risks when you voted YES.

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