ATU Local 757, Portland, OR

TriMet GM Neil McFarlane
Setting the record straight. Oh, really?
By Jonathan Hunt, President

TriMet employees recently received information from General Manager Neil McFarlane on TriMet’s website entitled “Bringing LIFT In-House” in which McFarlane informs employees that he wanted to set the record straight. Once again, from an administration that is well known for its “spin doctor” approach to presenting the facts, McFarlane misrepresents the results of the paratransit audit performed in 2008.

Remember that TriMet agreed to do the audit in 1998, but the audit did not get completed until 2008. Why? Because TriMet refused to honor its agreement (sound familiar?) and the Union had to pursue years of legal action to compel TriMet to do it. In his website article, McFarlane claims that the report understates the cost if LIFT operations were brought in-house because it did not account for supervisory, dispatch and maintenance positions.

McFarlane didn’t become General Manager of TriMet until July 2010. The TriMet General Manager and his leadership staff in 2008 had to agree to and sign off on the parameters of the audit. In fact, their chief CFO personally participated in directing and approving the audit procedure. At that time Dispatch, Lift and Maintenance were operated by different subcontractors. For that reason, neither TriMet nor the Union wanted those positions included in the audit. Instead, they were focusing on contracts associated with providing transportation.

Additionally, TriMet did not want to include supervisors, which is the only other thing McFarlane claims was omitted. This is likely because TriMet knew including them would have shown even greater savings if paratransit was brought in-house. Remember, TriMet had an in-house department overseeing Lift at the same time it was paying its subcontractors for management to oversee Lift. So you had a duplication of costs that bringing the Lift in-house would have eliminated.

McFarlane complains that the report was based on 2004 budget numbers. That choice was TriMet's as TriMet claimed those were the only finalized numbers they possessed at that time.

McFarlane further claims that the costs would be higher today because of higher wage and benefit costs since 2004. McFarlane’s assertion is correct, but his conclusion produces exactly the opposite of what he claims. The costs of the paratransit contracts have increased, which means the savings in bringing paratransit in-house have increased since 2004. And, by simply adjusting the savings increase by the amount TriMet has paid in increased costs to the private, for-profit contractors, that savings today to taxpayers would easily exceed 7 million dollars, since the Union offered to bring Lift in-house with status quo wages and benefits over what Lift employees are currently receiving.

But here is the simple solution. Remember the old phrase… "put up or shut up?” This is TriMet’s opportunity to shine and for once, be honest with the taxpayers. The audit model is already set up. It is simply a matter of inserting new budget year numbers. Give the independent auditor the budget numbers for 2005 through 2011 and let him update the report. The results will speak for themselves. If TriMet is telling the truth, they have nothing to be afraid of. Be truthful to the taxpayers footing the bill. What does TriMet have to hide?

Look at the excerpt below from the 2008 LIFT Audit prepared by Lauka & Associates, Certified Public Accountants. The 16.1 million dollar number McFarlane cites in his website article is misleading. Based on the 2004 budget numbers, that represents the cost to bring paratransit in-house and pay them the same wages, pension and benefits as TriMet employees. Look at the number he did not cite. The audit report showed that if TriMet brought paratransit operations in-house and paratransit wage/benefits remained status quo, the cost for TriMet to operate the service was 9.9 million dollars compared to the 13.8 million dollars TriMet was paying contractors in 2004.

# of operators231    
 If Paratransit Wage/Benefits Remained Status Quo-2004
Schedule 9
 If Paratransit Wage/Benefits Were at Fixed Route Level- 2004
Schedule 10
 Actual Subcontractor Cost-2004
Schedule 1
Base Rate$14.50 $21.03  
Operator Wages$6,965,807 $10,102,092  
FICA$532,8847.7%$772,8107.7% 
FUTA$13,9780.2%$20,2720.2% 
SUI$104,4871.5%$151,5311.5% 
TriMet$43,0200.6%$62,3890.6% 
Wkrs Comp.$334,3604.8%$67,3810.7% 
Sick & Vac 0.0%$27,9510.3% 
Disb & Life 0.0%$97,4821.0% 
Health Insurance$426,8226.6%$2,649,80126.2% 
Pension Cost$140,4072.0%$2,149,45521.3% 
Incentives$7,4290.1% 0.0% 
TOTAL$8,569,19423.5%$16,101,16459.4%$14,705,124
Indirect Cost$1,318,207 $1,293,260  
     ($1,128,029) less Liability Insurance
Combined Labor Cost$9,887,401 $17,394,424 $13,577,095 Comparable Cost

In simple terms, the audit found that if TriMet was performing paratransit operations in-house in 2004, using the same collective bargaining agreement wages, benefits and working conditions of the private contractors (not TriMet wages and benefits), TriMet could have performed the service for 3.6 million dollars less than what they paid private contractors. That was in 2004! No one is suggesting that paratransit be brought in house and be performed by current TriMet employees. Any changes to wages and benefits are subject to collective bargaining, just like is done now with the private, for-profit contractors that the union negotiates with.

McFarlane is trying to fool taxpayers into believing that it would be an additional cost to bring paratransit operations in-house. That’s the con! Bring paratransit operations in-house today, at their current rates of pay, benefits and working conditions and save taxpayers over 7 million dollars. Doing this now will lower TriMet’s projected 2013 budget shortfall to 5 million dollars. And if TriMet reduces manager positions to 2006 levels, staying in line with the number of union employees they oversee, that is another 5 million dollars in savings, and TriMet’s 2013 projected budget shortfall is completely erased. That’s right, completely erased. Gone.

But if TriMet did that, they could not use the hard-fought Union employee wages and benefits as an excuse to take back gains made over many years of collective bargaining. Instead, this administration's union-busting agenda would be exposed for what it is.

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