Tri-Met Implosion 2: Tri-Met bad books exposed

By NW Spotlight,

Consider this, former general manager Fred Hansen told the TriMet board in June that if they were to be funding the “Other Post Employment Benefits” liability it would take $50 million per year. He also said nothing is being paid into it now. That’s only the OPEB and it was based on the 2008 liability of $ 632 Milion. The new 2009 number from the recent audit has it at $817 Million. A 29% increase in one year? According ot the auditors that $50 Million unpaid yearly bill as of Jan 1, 2010 is now $75 Million and needs to be paid.

Auditors told TriMet because of new accounting rules TriMet must place that $75 Million on their financial statements. When the Trimet accounting department finishes their new financial statement it will show the insolvency which auditors warned could be problematic for bond sales.

– Steve Duin in today’s Oregonian lays out TriMet pretty well, but Duin didn’t have the horrible audit report.
– Willamette Week has a story posted on the audit.
– Here’s the audit.

At the last TriMet board meeting independent auditors presented the this yearly audit report. Contradicting TriMet’s blaming the economy for their problems, Trimet’s all funds revenue went up 6.5 % last year. There’s a one year lag in all these numbers so they are actually worse today. OPEB unfunded liability went up from 632M to 816M and not one dime is set aside. That’s just health care for retirees.

– Management retirement is unfunded by 31 million.
– Employee retirement unfunded by 276 million
– Total unfunded $1.083 Billion
– Fringe benefits are now 152% of wages

Also hidden in the audit, for 10 years TriMet has been taking federal cash to buy light rail cars, then selling them for cash and leasing them back. Also in the board meeting when auditors told trimet that new accounting rules require them to place the unfunded liabilities on their financial statements and this could hinder bond sales.