PORTLAND, Ore. - You may have heard the radio ads calling out TriMet, which spends as much as $1,900 per employee, per month, just for health insurance benefits.

Radio Ad: "Free breast enhancement, fitness centers, eyeglasses, no co-pay -- and taxpayers are paying for all of it!"

That's enough to win the so called 'Golden Fleece Award' for wasting taxpayer money but you will be floored when you see the millions more TriMet is spending every year on people who don't even work there.

Over the last month, KATU investigated TriMet's union benefits package and we learned the same kind of deal that drove GM into bankruptcy is happening right here, even as the transit agency faces a $31 million budget deficit.

TriMet's drivers can opt into a plan to pay nothing for health insurance and it turns out the agency is the most generous transit agency in the country, picking up the entire tab for union employees, their families and all retirees.

"I'll tell you what, that is an awful good thing," said MAX rider Stan Welsh.  "Maybe I'll move out here and drive one of these.  Get benefits for the rest of my life - right?"

"I wish my employer would do that," said MAX rider Allan Ravitch.  "Why not?"

"The cost of fringe benefits is cannibalizing the general fund, so this cannot continue," said John Charles (pictured at right), president of Cascade Policy Institute.  He says TriMet's union benefits are destroying the agency's financial viability.

"You have a growing number of retirees who are drawing the life out of the current organization," he said.

TriMet said it paid out $108.1 million in fringe benefits last year but an outside audit that accounts for long-term liability shows TriMet is actually responsible for more in fringe benefits than wages.  That audit found that between 2001 and 2008, benefits rose from 61 percent of wages to 118 percent - a total of $151.8 million.  An easy way to look at it - for every dollar paid, TriMet is reponsible for $1.18 in benefits.

"When the cost of benefits exceeds the cost of payroll, that's ludicrous," Charles said.

Particularly when more than half of TriMet's revenues come not from fares but taxes imposed on workers in Multnomah, Washington and Clackamas counties.

"Every time they need more money, they go to the state legislature and get an increase in the payroll tax rate, which is the cash cow that subsidizes TriMet," Charles said.

When we asked Cynthia Chilton (pictured at right), who is on the Citizens Advisory Committee tasked with evaluating TriMet's budget (which showed retiree medical costs increasing 18 percent each year) whether that type of benefit structure is sustainable she said no.

"I don't think there's any question that it's not sustainable," she said.

• Read the budget report from the Citizens Advisory Committee

Granted, the numbers are high due to rising medical premiums and new rules that require more detailed reporting but it's also because of baby boomers.  TriMet's retirement age has dropped to 58 and 40 percent of employees plan to take advantage of that within the next 10 years.

And those benefits for life?  In 2001, TriMet paid out $3.2 million for 515 union retirees and dependents.  Eight years later, it's 905 people and nearly $10 million.  That's almost $11,000 per person and again, for people who do not work there.

"That's just not doable," said Chilton.  "You can't run a transit agency or most business enterprises with that kind of a burden."

The logical person to talk to about these benefits would be someone from the union.  We had an interview arranged with the Vice President of the Amalgamated Transit Union last week.  He cancelled, so we came by the office hoping to meet him.  We shook hands and agreed on a time for an interview.  But the interview never happened and instead, I was referred to this statement from the union president saying - "It would be inappropriate to bargain in the press at this time."

"The administrative employees have taken salary freezes, had layoffs, cut budgets, had furloughs," said TriMet spokesperson Mary Fetsch (pictured at right).  "We pay more for our coverage and our benefits."

And Fetsch said a little more than 20 percent of employees choose the comprehensive health care plan that costs more than $1,900 month. Many choose less expensive options.

And while TriMet values good health benefits for a job she says can be physically demanding, with the union contract about to expire during a more complex economy, the other two-thirds of employees should expect to make sacrifices as well.

"Some of our benefits are out of alignment," she said.

"Unfortunately for employees, the name of the game with benefits is always a question of how much are we going to have to give up this year?" said Chilton.

"You can either renegotiate your compensation and have an actual job or you can cling to some utopian version of benefits for a company that's bankrupt," said Charles.

Charles said all of this should come as no surprise.  In 1994, then TriMet board president Loren Wyss resigned in outrage over the union deal and sent a scathing letter to the editor calling it the "greatest coup in the history of public employment in our city."

More Related Documents

• Union Medical Enrollment & Premiums 2001-2009 (pdf)
• TriMet Annual Report w/ Auditor Notes (pdf)