TriMet Faces Challenging Times
FY12 budget will be based on long term fiscal sustainability
In the last ten years we have experienced two recessions. The result has been a payroll tax growth that has been half its long-term historical average-a difference in lost revenue of approximately $60 million.
As we begin preparation of next year's budget, I wish I could paint a picture of restoration of service and growth, but I cannot. When you look at the projections, it appears now that it will be another four - five years before we reach pre-recession levels of employment in our region. That's news none of us wants to hear.
Although the FY12 budget plan does not currently include any major service cuts or across-the-board cuts, we will keep a close eye on economic trends and must be prepared to make adjustments if necessary. The budget also assumes a sustainable health care benefit structure as reflected in TriMet's union contract proposal. If these benefit changes are not made, we are looking at another $10 million in cuts in the coming fiscal year.
This "status quo" budget means any proposed new expenditures or areas where services may need to be restored must come from reallocation of existing funds. When making these final budget decisions, I will keep four priorities in mind:
* Implementing the Safety and Service Excellence Task Force and K&J Assessment
Recommendations. Work is already under way to begin implementation of a bus operator recertification program this year and suggestions for additional safety investments are at the top of my list.
* Purchasing new buses to reduce the age of the bus fleet. Even though the ballot measure failed, we still need to replace part of our seriously out-of-date fleet. In the coming fiscal year, we will receive 55 grant-funded buses and then plan to purchase 40 buses per year with payroll tax backed bonds.
* Advancing work on the Portland Milwaukie Light Rail Line (PMLR). Although no TriMet dollars will be allocated to PMLR until 2013, the federally funded work needs to continue to ensure a 2015 completion.
* Providing a sustainable healthcare benefit structure. Health care reform is both a national and local issue. With TriMet's health care costs increasing eight percent per year, it is essential we find a way to provide high quality coverage that aligns with other public agencies and strikes the appropriate levels of cost-sharing between TriMet and employees, and our retirees.
Although I continue to see this as a challenging time, I want you to know that we will get through it. History tells us that. In 1999, TriMet recognized a flattening of the payroll tax and took actions to bring revenues and expenditures in balance, preserve cash flow and most importantly maintain service as long as possible. In the last ten years, these efforts have saved us a total of $70 million.
I am also encouraged by our strong ridership numbers. Green Line performance is near ridership projections and WES is showing healthy increases. Productivity is also increasing as we are able to provide more service at a lower cost per ride. These are all good signs.
As I come upon my 20 year anniversary at TriMet I realize being in it for the long haul is a part of our agency culture. We take the long term view and stay the course. Even knowing that every day it costs a little more to do what we did the day before, I am hopeful the new budget year will remain as forecasted allowing us to deliver high quality service today and in the future.
I thank all of you for your commitment to the important work we do and continued willingness to find ways to deliver high quality service even in these challenging times.