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Insolvency, One Step at a Time

The Oregonian on Sunday examined TriMet’s deteriorating finances and called attention to high-cost union contracts, first approved in 1994, as the starting point of the decline. Due to the compounding effect of these contracts, TriMet now spends $1.63 in benefits for every $1.00 spent on wages, and the agency has more than $1.2 billion in unfunded actuarially accrued liabilities for promised retirement benefits.

 

As a result, transit service has been cut by 14% in the past four years, and more cuts are due beginning September.

 

What was revealing in the Oregonian feature was how no one was willing to accept responsibility. At any point during an 18-year period, dozens of people served on the TriMet Board or in top management positions, and they could have demanded change. But they didn’t.

 

Of course, leadership starts at the top, and it’s the governor who appoints the TriMet Board. In August 1994, then-Governor Barbara Roberts met with the TriMet board chair, Loren Wyss, who strongly objected to the draft contract. Instead of supporting him, she forced him off the board.

 

The legacy of that decision is a terminally dysfunctional business model at TriMet. Someone on the TriMet board needs to have the courage to say that. But who will do so when it’s so much easier to remain silent?

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