Tri Met Increases Debt $1.6 Million Per WEEK!

September 27, 2012

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The Cascade Policy Institute has just completed a going over of the Tri Met budget and has some bad news for the taxpaying public: Tri Met’s pissing away more money than you can shake a stick at.

Ok, that’s not a direct quote. Here’s one:
The unfunded actuarial accrued liabilities for Other Post-Employment Obligations (OPEB) rose from $816 million to $900 million,

as of January 1, 2012. The OPEB liability grows by roughly $1.6 million per week; thus, the unfunded liability as of today is approximately $959 million.
As one observer of the Milwaukie Light Rail debacle put it:


Betraying the public, Clackamas County Commissioners Lehan, Damon, Lininger & Bernard borrowed and paid TriMet nearly $20 million just four days before a light rail vote to allow the public to make that decision for them.
TriMet has been cutting service & raising fares while loses $1/2 million per month and fiscal mayhem cripples their ability to run the Streetcar, Light Rail and buses
The Green Line service into Clackamas County has been cut back, the promised development never happened, crime did and unwanted $1.5 billion Portland-Milwaukie light rail is being built with no reliable way to fully fund it’s operation.
Gee, who wouldn’t want an Inter-Govermental Agreement with TriMet? Great Partner!

Read the rest of the Cascade budget report:
John Charles, 503-459-3727
john@cascadepolicy.org

Audit Shows TriMet Continues to Slide Deeper into Debt
Ever-Increasing Expenses and Unsustainable Costs for Labor and Construction Push Agency Further into Debt
 
PORTLAND, Ore.- TriMet quietly released its 2012 financial report September 26, and the audit shows the agency is continuing to get deeper into debt. Despite record-setting levels of income, TriMet expenses are rising at an even faster rate, due to unsustainable costs associated with both labor and light rail construction.

“Without a fundamental change in the agency’s business model, transit service levels will continue to decline,” stated Cascade Policy Institute President and CEO John A. Charles, Jr. “Eventually, debt service to Wall Street bondholders and payments to retirees will become TriMet’s leading obligations, making it impossible to perform its mission of serving transit-dependent riders.”

Notable features of the financial report include the following:

·         Total TriMet operating and non-operating revenues (including passenger fares and payroll tax revenue) increased by 19% over 2011. Despite this healthy gain, transit service was reduced in September.

·         The cost of fringe benefits equaled 156% of wages in 2012. This is a slight improvement from the 2011 ratio of 163%.

·         The unfunded actuarial accrued liabilities for Other Post-Employment Obligations (OPEB) rose from $816 million to $900 million, as of January 1, 2012. The OPEB liability grows by roughly $1.6 million per week; thus, the unfunded liability as of today is approximately $959 million.

·         Unfunded liabilities for both management and union pension obligations continued to rise, a trend that has been ongoing for nearly three decades (see attached).

·         TriMet had an operating loss of $404 million in 2012. Since 2006, TriMet has run cumulative operating losses of more than $2.3 billion.

·         On August 30, 2012, TriMet sold $93.3 million in Senior Lien Payroll Tax Revenue Bonds to fund the District’s share of the Milwaukie light rail project and other capital projects. Total debt service costs on these bonds will be $164.9 million, payable through 2038. These payments will add to the growing debt load that is causing TriMet to steadily reduce service throughout the region.

The key cost drivers continue to be fringe benefits for employees and unsustainable costs associated with light rail construction, including debt service on bonds. According to Charles, “The TriMet Board has consistently shown itself incapable of prudently managing public resources over the past 15 years. It is time for the state legislature to step in and gain control of the organization before it collapses.”

Longer-term financial trends are shown here.

Tell ’em where you saw it. Http://www.victoriataft.com