TriMet managers quietly gave themselves raises just before fare hike, agency says

General Manager Neil McFarlane, left, with board president Bruce Warner and spokeswoman Mary FetschFive months before hiking fares by $8.7 million and cutting bus frequencies for the fifth time in four years, TriMet managers decided, last spring, to quietly end their own pay freeze.

The $900,000 decision was buried in a $20 million budget line labeled "contingency" and never discussed during TriMet’s extensive public hearings about its finances.

Nor did most of the raises show up as line items in TriMet’s official budget, which shows no change for positions that received merit raises.

The management raises were only made public Feb. 23 in a pair of anonymous Twitter posts listing recent pay raises at the agency. TriMet spokeswoman Mary Fetsch confirmed their accuracy in an email Monday.

Managers decided "sometime in April" of 2012 to use money from the one-time contingency fund to allow both merit raises and market adjustments for most TriMet managers for the first time in 3.5 years, Fetsch said. The raises, which averaged 3 percent, arrived July 1, 2012; historic fare hikes took effect Sept. 1.

TriMet's biggest salary hikes of 2012Last spring, riders’ advocates had noticed that TriMet’s $20 million contingency fund was unusually large, and called on TriMet to use some of it to restore service and extend transfer times.

But TriMet managers said spending some of that so-called "rainy day fund" on bus service would be irresponsible.

"The use of a one-time resource to fund continuing expenditures violates a core principle of responsible budgeting," TriMet wrote at the end of a May 4 response to transit riders’ advocacy group OPAL.

TriMet: ‘concerns about retaining’ managers without raises

fare hike gameManagement raises were not mentioned in TriMet’s high-profile "help balance our budget" game that asked the public to weigh options such as fare hikes, frequency cuts and park-and-ride fees.

Nor did TriMet allude to the possibility of management raises in February or March, when TriMet’s top executive used the administrative pay freeze ("now in its fourth year") as part of his high-profile case that TriMet should cut its excellent medical benefits for union workers and retirees – something TriMet succeeded in doing after a July legal victory against the union, approved two weeks after the management raises took effect.

Fetsch said Monday that until April, there were "no discussions" about giving managers a raise.

"There is no good time to provide a wage increase in tight budget years," Fetsch wrote. "It was deemed necessary as we were on the verge of losing talented people."

Union workers, meanwhile, have continued to receive annual 3 percent wage hikes under the terms of their negotiated contracts, and their medical coverage remains superior to that received by TriMet’s administrative workers. Since 2004, TriMet’s spending on union workers’ wages and benefits has risen 7 percent after inflation, while its spending on non-union wages and benefits has fallen 12 percent.

salaryhikes2Indeed, TriMet’s top ranks have seen rapid turnover since 2007. Over the last six years, every C-level "executive director" at TriMet has either been promoted, retired or resigned. (Most of these top-level directors did not receive merit hikes July 1 – though General Manager Neil McFarlane, who earns $221,450, did.)

Including wages and benefits for current workers and retirees, TriMet says it spends $100,417.84 for each current union position, and $103,803.89 for each non-union position. The average annual union wage is $66,842.09; the average non-union salary is $77,416.10.

Fetsch said the agency felt it had to reverse management’s wage slowdown.

"It was decided that a small increase, matching the minimum due to union workforce, was warranted due to the additional work load employees had undertaken due to layoffs and because salaries had fallen below the market," Fetsch wrote.

Fetsch wrote Monday that TriMet had mentioned its decision to include management raises in its "contingency" fund during a private communication with OPAL. The line item appears, undiscussed, on page 2 of this letter.

TriMet riders, too, are bearing the costs of the agency’s budget problems. Though fare structures vary widely, no major U.S. transit agency now charges more than TriMet for a basic fare. A 2011 Brookings report found that only 40 percent of jobs in the Portland area are accessible to the average transit rider within 90 minutes.

Last month, TriMet managers said they will be forced to cut transit service 70 percent by 2025 unless they cut union workers’ medical benefits to the same level as management.

Riders’ group says TriMet is ‘losing the public trust’

IMG_3936OPAL, the riders’ advocacy group, said it hadn’t noticed TriMet’s private mention of its administrative pay raises, but would have raised concerns about them if it had caught them.

"We didn’t catch it during the process, I think, because of how complicated the budget analysis got," OPAL director Jon Ostar said Monday. "We were one of few if any advocates to catch that the contingency fund was being doubled and used as a slush fund to begin with, but we were so focused on fighting fare increases and service cuts that we simply ran out of time."

Fetsch said Monday that TriMet didn’t itemize the salary hikes as budget line items because they were not "planned in advance." (Managers had settled on the raises only two months before the budget was formally approved, rather than earlier in the process.)

"Historically, items are not listed individually under ‘contingency’ in the budget," Fetsch wrote.

Ostar said the notion that good managers might quit without pay hikes "has some rational basis in theory."

"But when you’re putting it into practice, you have to engage in an open, honest dialogue with your constituents," Ostar said. "If in fact it was a truthful, honest investment, then they shouldn’t fear sunshine."

Ostar said he perceives TriMet as concealing its intentions even from its constituents and natural allies.

"They’re losing the public trust and they’re not going to have the benefit of the doubt for much longer, if they even still enjoy that," he said.

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