Transparency, trust, and TriMet

We’re sorry we didn’t outright tell the public that as we were cutting service and raising fares, we were going to give ourselves raises.

But we’re not at all sorry that we now make more money.

I think OPAL gets original credit for spotting this one first in April of last year. In a readthrough of the proposed 2013 budget, they noticed that TriMet doubled the contingency budget, from $10 million up to $20 million. No apparent reason was given, though there seemed to be some suggestion that it was needed in the event TriMet lost the arbitration with the union. OPAL members testified at board meetings, questioning the contingency and stating that both doubling that and raising fares was a too-conservative approach to the budget at the expense of bus riders, and suggested if it were to be increased at all, it should at most go from $10 million to $15 million.

Now we find out that at least part of the purpose of increasing the contingency was to give raises to the top execs at TriMet. As the PortlandAfoot story points out, the raises didn’t show up in the budget as raises given for merit. There’s no mention of these raises in TriMet’s anti-union webpages, which still state that there’s been a non-union pay freeze for four years. Okay, fine, maybe there was a freeze for four years, but if my pay didn’t change for four years and then you gave me a $7000 raise on top of my $130k salary? (an actual “merit increase” from the list) You know, I don’t think my feelings would be hurt too much.

General manager Neil McFarlane is now issuing the non-apology of “We’re sorry we weren’t more transparent.” Actually Neil, I believe when you falsify the budget with a salary that is out of date, and the board knowingly passes that even though it intentionally had incorrect information, and salary raises are hidden in a contingency fund and not listed for what they are, that’s what we call “outright lying”, not just “not being transparent enough.”

The story was also covered by the Oregonian, which includes other gems, such as “We had to give Shelly Lomax a $14,000 raise because as the only woman on staff, we were paying her a lot less than the men” and that union president Bruce Hansen actually took a pay cut when he became president of the union. And of course, general manager Neil McFarlane defending the move, saying it was done to retain these executives and managers (worked out real well for ya with former Director of Finance Beth Dehamel, a $20,000 raise and then she left a few months later.)

But Why bother retaining talent when we outsource work that could be done in-house anyway?

Back during Neil’s Twitter town hall chat, a lot of folks (myself included) questioned some of TriMet’s spending decisions, such as marketing. Now I’m not opposed to a marketing department, I realize that theoretically they fulfill an important role in keeping riders informed. But what I don’t understand is why TriMet has a marketing department, yet we outsource marketing work. Quoting myself from an older post:

But for the last ten years, the now-defunct external company ID Branding has been doing TriMet’s marketing and design work rather than TriMet’s own internal Marketing department.

That means the 5 Dirty Words poems on buses and trains, the Green Means Go campaign surrounding the opening of the Green Line, the recent What Makes This Place Great? promotion (which, conveniently has been used to cover up the aforementioned failed #1 Transit ads on the trains – I suppose the fact that ID Branding is now out of business explains why the WMTPG website remains un-updated with several sections still “coming soon.” Hope we didn’t pay for that!), the Rider’s Voice book aimed at helping people switch from paratransit to fixed route – all of these were outsourced to ID Branding.

This really makes me wonder what our Marketing department is doing if we’re outsourcing marketing work to another company. Are these all things we can’t do in-house? How much money was spent on the ID Branding contract, and were we planning on spending more with any other marketing firms now that they’re gone? Can we maybe pick one or the other, either outsource all marketing or do everything in-house, but not both?

EDIT: Numbers acquired. ID Branding contract was $1,862,437.00 budgeted, $1,497,547.95 billed, contract numbers ra020310ktx and rc070408dgx. Assuming we don’t outsource more marketing at the conclusion of the ID Branding contract, that’d be nearly $2 million saved.

The ID Branding thing was a while ago, but you might have noticed TriMet hosting a bunch of contests lately – “Be Seen Be Safe“, “Drive Less Save More“, and a current one for teens to make a safety video, just to name a few. But here’s the interesting part of the fine print at the bottom of these contests:

offerpopPowered by Offerpop you say?

Turns out Offerpop is an online marketing promotional tool. Pricing is based on how many Facebook and Twitter followers you have. So let’s see, TriMet’s Facebook has about 8400 followers, and TriMet’s Twitter has about 9100. So that’s about 17,500 followers, and depending on whether or not this is pay-by-month or an annual subscription, TriMet is paying $360-$400 a month for contests. And because someone is bound to say it, yes I know that that’s just a drop in the budget bucket. BUT once again, why is this being outsourced at all? Is there seriously no one in the marketing department who could organize contests like this  as part of their regular job duties?

But okay, let’s aim a little bit higher. We know that TriMet’s got a handsomely compensated legal team, several of whom were on the stealth payraise list. And we know that TriMet has recently filed suit against Clackamas county. Here’s the part I don’t understand – take a look at the lawsuit file itself. Specifically, the footnote:

ater wynne

Now I’m no legal expert, but maybe there’s a reader here who is and can provide a logical explanation why TriMet hired an external lawfirm for this lawsuit and didn’t make use of the lawyers on staff. Because I’m really perplexed by this.

Edit: And in the comments, Engineer Scotty delivers – this is apparently standard procedure.

Once again, I find myself wondering – why bother making a big deal about retaining these highly paid managers & lawyers & executives if you pay other companies to do work that could be done by them?

Fix the ship? Blow it up? Whatever.

A while back, a friend of mine did a guest post on the contract negotiations and the union’s health care costs, and that post includes what is probably my favorite quote summing up the situation:

another perspective

Well. That pretty much accurately describes what ended up happening. Before the news about the executive raises, Joseph Rose at the Oregonian was the only one covering this story of Neil’s decision to expand the executive ranks, which I think is a shame because, like the executive raises, it’s something the public has the right to be aware of, and protest if necessary.

So former director of operations Bob Nelson (currently receiving a pension of about $48k/year from TriMet; had left the agency in 2007 making just shy of $160k/year) is coming back as “Interim Deputy General Manager” and I’m sorry, all I can think of when I hear that is this:

jr crimefighter

But wait, it gets better. The purpose of his job will be to assess the position of Deputy General Manager and determine if it should be permanent. Man, I wish someone would give me a 6-figure salary, and then at the end of a year ask me if they should keep paying me that (on top of the pension I’m getting that’s already more than many people make in a year). Do we really think he’s going to say, “No, this isn’t the best use of TriMet’s resources”? Anyone who would say that, well, here’s your sign.

Next up is Barbara Ramirez Spencer who will be hired as a consultant, and I had posted this in response on Twitter but I know I’ve got blog readers who don’t follow me there so here it is again. From the Oregonian article, this a quote from Mary Fetsch on why Ramirez Spencer is being sought out:

Ok, that’s a lot of syllables to tell us… what, exactly? Strip out the buzzwords and management lingo and what value is she going to add to TriMet? How is this going to help riders? What is this going to do for the benefit of the general public? Was there seriously not a better use for the oodles of money TriMet apparently has laying around?

Bonus: she serves on the super-secret budget task force (I believe the same one that greenlighted the executive raises) which has meetings that the public is not allowed to attend. Clearly no conflict of interests there…

Oh, that Rascally Union..

But as far as TriMet is concerned, there’s no problem paying out raises to executives while slashing service, and threatening to cut 70% of service. No, the expenses are all the union’s fault because of the cost of union health care benefits. (By the way, that 70% service cut is the projection for 2025. I find it doubtful that the powers that be will choose to forgo their raises during that time, so why is the union the only side expected to concede?)

You might’ve seen in the news that a bus driver was punched in the face the other day. And a supervisor was assaulted at Rose Quarter last week (neither the supervisor nor the operator who stepped in to assist were injured. This didn’t make the news, and neither do countless instances of drivers being spit on or threatened). But come on now, Neil keeps repeating that the union benefits need to be brought in line with non-union benefits, and asking “Are we a healthcare provider or a transit agency“?

Well, when was the last time Neil had an angry customer punch him in the face or spit on him? When was the last time he had to step in to assist Mary Fetsch because an angry drunk was shoving her around? Heck, when’s the last time Neil got a kidney or bladder infection from driving a 100+degree bus for 9 hours with inadequate breaks? Tell you what Neil, when your health risks on the job are the same as the front line union workers’, then we can talk all you want about how the health compensation should be the same. When non-union employees and retirees pass away as frequently as union workers, then we can have this discussion about the same health care for everyone. Remember that the reason why the union health plan is different is that because of the detrimental health aspects of the jobs (especially when compared to office workers), the union has historically negotiated compensation in the form of benefits rather than pay raises, and now TriMet wants the union to yield both.

Look, I really do understand the perspective of the general public in this fight. A friend of mine and his wife (neither of them are TriMet employees) together pay about $700 a month in healthcare premiums, just for the two of them. Yeah, that sucks, and absolutely, the union health insurance premium costs are much more palatable in comparison:

union rates

But to be fair and in the interest of transparency (for real, not TriMet’s definition of transparency), here are the non-union employee premiums – in other words, what Neil and his merry band of executives pay. Again in fairness, I will note that the part-time non-union employees are really getting wrung over…

non union rates

So you figure Neil is probably paying about $75/month to insure himself and his wife, while TriMet picks up $1170 of the tab? Not too shabby for a guy pulling in almost a quarter million per year. Funny how we don’t hear the word “Cadillac” applied to this side of things. And no one mentions the non-union retirement trust (maybe because info on it is so hard to find), worth over $80 million and into which TriMet pays $4.5 million annually. The source document for that has been removed from TriMet’s webpage, but I saved  a copy for you guys so you don’t have to fork out public records request fees in case you wanted to read it. Did I mention that transparency is how we roll here at MAX FAQs? But no, none of this is considered a problem or a bloated cost… that criticism is reserved for what the union is compensated.

Fun fact: Starbucks spends more on employee health benefits than coffee, yet unlike Neil, Starbucks CEO Howard Schultz does not seem confused as to what the purpose of his company is. In fact, he refused to cut benefits for part time employees.

What’s coming next

We’re still waiting to hear the result of a ruling on whether or not the contract negotiations will be open to the public. TriMet is strongly opposed to public negotiations, and the union is strongly in favor of public negotiations. From the union’s perspective, TriMet has not demonstrated that they can be trusted to be transparent (golly gee, imagine that), and TriMet’s demand that only “unaffiliated members of the press” be permitted to attend is unacceptable.

I’ve heard some rumors going around (let me repeat, unsubstantiated rumors) that money for that contingency fund will be used to pay scabs if TriMet management is able to overturn the ruling that the transit union cannot strike and disputes will be settled with binding arbitration. Pretty much every news source I found for that proposed bill talks about “allowing the union to strike” but ignores the flipside – such a bill would also allow TriMet to lock the union out. Personally I don’t know of any current employees who are interested in striking – it’s not good for the workers, it’s not good for the public, and generally speaking the operators are genuinely interested in serving the public. But would TriMet take the action of locking the union out until the contract is resolved? Hate to say it, but the hostility in the environment makes me think yes, they would.

Let me pull this one back up:

another perspective

I think there are a lot of TriMet union employees with this mindset. Yes, there’s an awareness that the health plan at TriMet is better than a lot of people get elsewhere. Yes, if EVERYONE in the company needs to pitch in and sacrifice and do their part and all to keep things moving, people will generally be agreeable to that. But as long as the union is painted as the bad guys while the executive elites give themselves raises on the sly, downplay their own pensions and benefits, and try to pit riders against workers, those executives are not going to get an ounce of compromise or cooperation. Nor should they expect any.

12 responses to “Transparency, trust, and TriMet

  1. Carmelo,

    Use of outside counsel for lawsuits (whether TriMet is doing the suing, or being sued) is commonplace in both the public sector and the private sector–the legal folks that are TriMet employees are most likely there to handle routine business, such as drafting and review of contracts, compliance with law, and so forth.

    Trial lawyers are expensive, however, so it is unusual for an organization to keep one as a full-time employee. And the rules of legal procedure pretty much demand that companies involved in lawsuits use outside counsel and not staff attorneys to handle the lawsuit.

    Lots to complain about in this case, but the use of an outside legal firm is not one of thm.

  2. Whoa!
    Powerful factual piece of investigative journalism!
    You tied everything together here!

  3. How much more obvious can it be?
    Mcfarlane is paying off all his cronies here!
    The man needs to be prosecuted,this behavior of his is criminal as far as I am concerned.
    And while you’re at it prosecute the phoney board of directors for letting all this happen on their watch!

  4. Just so ya know, I don’t buy Scotts argument.
    There are 14 lawyers on the payroll, I find that hard to believe that they all are kept busy by “routine business”.
    A Trimet lawyer did my first lawsuit not some consultant

  5. Wow, incredible. A well written article, and sums it all up for me. I’m left here just shaking my head reminded of the former Enron and it’s criminal management team. Smoke and mirrors to fool the public and it’s own employees. Shameless….

  6. Not at all surprised. As long as Trimet is in the position where it is under no obligation to answer to anyone in a position of authority, they will continue to do whatever they want just because they can … at the expense of their employees, customers, and the taxpayers.

    It’s been my experience that the only way for people this high up on the managerial food chain to get any kind of perspective is to somehow put them in a position where they are subjected to the more deleterious elements of thier own ill-conceived policies. I recall seeing a proposal a while back mandating compulsory military service for all eligible children of the members of Congress, in hopes that a great deal more deliberation would occur before sending *other* people’s children off to die. I’d bet good money that if the residents of the Ivory Type 4 had a significant proportion of their family or lifelong friends as part of the unionized workforce, their tune would be a good deal more conciliatory.

  7. I support all the union workers in the fight for fairness. You guys get me to and from, and at the end of the day, Niel ain’t driving the busses. If they fired all that management the fiscal issue would be 75% solved.
    Does anyone know what they really do?

    • There ARE good, hard-working managers, typically at the lower levels in the management chain and more directly working with front-line service. The problem is when executive-level management ranks are overly swollen – e.g. the creation of the Deputy GM position. Did we need this position a few years ago when we had a snow emergency and most of the folks at that level stayed home? No? Then we don’t need it now. Service comes first; sweetheart jobs shouldn’t even be on the table.

  8. Maybe you can make a logical connection for me. About that open door between Hollywood and Lloyd Center..TriMet came out today and blamed it on a “bridgeplate problem.” I’m not buying it. B-plates are at doors 3, 4, 5, and 6. The video was of either door 2 or door 7 of the respective car. Is there any connection between the b-plates and doors 1, 2, 7, and 8 as well?

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