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Arbitrators ruling offers hope for public agencies

TriMet is far from the only public agency in Oregon struggling to keep important services intact while also paying for very expensive employee health care and retirement plans.

As such, administrators and taxpayers in western Washington County’s school districts and municipalities might find a bit of hope in an arbitrator’s ruling last week that sided with the regional transit agency instead of the union representing its workers.

In reading arbitrator David Gaba’s opinion, it’s plain to see he agreed with the union on many issues contested in this protracted contract negotiation. It was the sheer cost of the health care plan enjoyed by TriMet’s retired employees that tipped the arbitrator in favor of management’s final offer instead of the union’s final offer.

Although Gaba was troubled by many of TriMet’s arguments and tactics, he acknowledged that the agency’s health care plan for its unionized employees is extraordinarily generous and that its health care benefit for retired workers is unlike any found in the Pacific Northwest.

Gaba also noted that TriMet, with its singular focus on transit, had limited options when it came to cutting costs.

"Unfortunately, transit services are all that TriMet provides and there are no libraries, parks, pools or zoos to close," he wrote. "The Union and Employer are engaged in a zero sum game in which any increase in total compensation for the bargaining unit members will inevitably result in decreased transit service to the public."

The ruling in favor of management’s final offer will save TriMet $12 million, with virtually all of that coming from reduced health care costs.

The savings are significant to TriMet’s riders because they mean the agency won’t have to make further budget cuts for the coming fiscal year. TriMet already has reduced service and increased fares to close a budget shortfall for next year.

The reprieve, however, will be short-lived. Even with the favorable contract changes, TriMet’s rising payroll and benefit costs will result in further service reductions unless even more is done to curb employee expenses.

For that reason, we hope Gaba’s decision leads to a more collaborative effort between TriMet management and union leaders to find mutually acceptable ways to reduce costs.

We also hope Gaba’s ruling serves as a reality test for other union negotiators throughout Oregon. Most public agency labor contracts aren’t subject to binding arbitration, as is TriMet’s pact. Yet, the underlying issues are universal: public employee benefits agreed to years ago are no longer sustainable at a time when health care costs have escalated, taxpayers are reluctant to provide additional operating funds and the general economy isn’t rapidly expanding.

At the same time TriMet was awaiting this decision, Oregon Health & Science University was asking employees to pay 6 percent of their wages toward the cost of the Public Employees Retirement System and some school districts were teetering on the verge of strikes to win concessions from union employees.

Oregon isn’t Wisconsin, where the fight on public sector benefits turned into a bitter, partisan brawl.

Neither do the solutions have to be draconian or overly harmful to public workers. The TriMet contract, for example, will provide new employees with a 401(k)-style retirement plan, with the transit agency kicking in 8 percent of the employee’s salary.

For most private-sector workers, that would be a great package, and for new TriMet employees, it still is.

As contracts are renegotiated throughout the state, public agencies and union employees will continue to battle — and, we hope, collaborate — on ways to curb escalating benefit costs and preserve essential to public services.




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