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Some of the largest non-union raises at TriMet in 2012 went to rail managers, including Jeffrey Lowe, Director of Commuter Rail.

(The Oregonian/File 2010)

Last year, as TriMet cut bus service for the fifth time in four hard years and saddled riders with the biggest fare increase in the agency's history, its managers discreetly gave themselves $910,000 in pay raises.

At a time when General Manager Neil McFarlane lamented the tough choices forced on the agency by a $12 million budget shortfall, he gave a member of his executive team already making $166,000 a $14,000 "market adjustment" raise.

Meanwhile, the program manager of the under-construction

line, received a 17.9 percent boost in pay to $112,005.

A list of the

obtained by The Oregonian shows that McFarlane started green-lighting raises for managers making $110,700 or more in February 2012, even as he publicly talked about how he had frozen their pay.

In an interview with the newspaper, McFarlane said he understands that many of the agency's 330,000 daily riders are having a hard time making ends meet in the sluggish economy.

"There's never a good time for these kinds of adjustments," said McFarlane, who received a 3 percent raise, or $6,450, to lift his annual salary $221,450. "It became very clear that we were losing people, and we had some embedded pay inequities."

McFarlane said a 3 1/2-year pay freeze had contributed to rapid turnover in the executive and management ranks at a time when the transit agency is fighting for its life.

However, as

held several months of public hearings on proposals to trim $12 million from its

, the pay raises didn't come up. Not once.

Indeed, the general manager praised the sacrifice of non-union workers "now in their fourth year" of a pay freeze.

Records show that McFarlane tucked the raises into a $20 million generic line item called "contingencies" in the budget. During one meeting last spring, OPAL Environmental Justice Oregon, which organizes the Bus Riders Unite rider union, asked why the proposed contingency fund had nearly doubled from the year before.

Jonathan Ostar, executive of the nonprofit

, suggested using some of the contingency to support bus service on the chopping block. With the TriMet board of directors preparing to raise an estimated $9 million from fare hikes, Ostar also submitted a plan to use the funding to help pay for extended transfers -- or no fare changes at all.

TriMet's managers responded that the contingency was a rainy-day fund that shouldn't be tapped for that purpose.

If the TriMet board of directors knew about the pay increases, none of them asked about them in public.

"TriMet's management was obviously hiding the ball," Ostar said. "They're showing they can't be trusted, especially when it comes to managing the rainy day funds."

Ostar said he was especially offended by how the McFarlane continued to hold up the non-union pay freeze as part of the justification for making cuts to programs and routes used largely by low-income riders.

McFarlane has also used the management pay freeze as a bargaining chip in his ongoing battle with Amalgamated Transit Union 757 over proposed cuts to its generous medical benefits.

The general manager accused union leaders of leaking the pay raises as "a distraction from the larger issue" of negotiating a reduction to those benefits. Without changes, he warned last month, Oregon's largest transit agency will be forced to gut 70 percent of bus service by 2025.

Besides the 3 1/2-year pay freeze, McFarlane said, most non-union employees have seen their rate of compensation decrease. That, he said, includes paying more for insurance and having pensions replaced by 401k plans.

As TriMet rolls through hard times, he said, "a dedicated and focused managament team" is essentia. Pay adjustments, McFarlane said, needed to be made, especially as market competition grows for engineers and IT professionals.

On July 1, 2012, the first day that the new budget went into effect, managers received across the board merit pay increases.

However, it was February when McFarlane gave the largest non-promotion raises to two members of his executive team in February – Shelly Lomax, director of operations; and Beth deHamel, the chief financial officer who left for another job in August.

Lomax, who has been the head of operations since 2010 and whose husband made $64,247 as a bus driver last year, received a "market adjustment" raise of $14,000 to become the agency's second highest paid employee. It was an 8.43 percent raise. She now makes $180,000 annually.

Last week, Randy Stedman, TriMet's executive director of labor relations and human resources, defended the increase, saying the agency was worried about losing Lomax to another agency. What's more, he said, Lomax's salary was "well below" that of men on the executive team and in the same job in comparably sized cities.

Some of the biggest raises went to managers on the 7.4-mile Portland-Milwaukie Light Rail line. For example, Steven Witter, a program manager who works as a liaison to the Federal Transit Authority on the $1.5 billion project, received a $17,005 annual raise, bringing his salary to $112,005. Marilyn Becklund, the project's community relations director, received an 8.24 percent raise to $118,000.

At the same time, Stedman noted that TriMet had cut the number of non-union employees making more than $100,000 from 9.1 percent of all employees in 2006 to 7.8 percent in 2011.

When wages and benefits for active and retired employees are factored, Stedman said, TriMet spends $100,417 on the average full-time union worker and $103,803 on the average non-union employees. That latter average includes McFarlane.

Stedman and McFarlane also noted that union bus drivers, mechanics and support staff have received a cost-of-living raise of 9 percent over the past three years, while also receiving what they call the most generous health-care benefits in the transit industry.

During the same period, the average raise for non-union employees was three percent. "And that wasn't until the merit raises on July 1 of last year," said TriMet spokeswoman Mary Fetsch.

Fetsch said the decision to use part of the contingency funding for non-union merit pay was made last April, when it was too late to include "something specific" in the budget proposal.

The percentage of the TriMet budget dedicated to administrative costs, while only 7 percent, hasn't budged in the past four years.

Meanwhile, Bruce Hansen, president of

, said he voluntarily took a pay cut when took over the union last summer, dropping from more than $100,000 a year for his predecessor to $88,000.

The management pay increases and the way they were made, Hansen said, "is offensive."

Union employees received cost-of-living increases because they were built into their contract, he said. Hansen promised that the union's proposal for the coming budget talks will include serious proposals for reducing health-care costs.

"But what we've got going on in the management ranks is over the top," he said. "They keep hiring and giving raises to people they don't need to make the system run. I mean, do we need 14 attorneys at TriMet?"

When it comes to market-adjustment raises, Hansen said he hadn't seen evidence that supported Lomax's increase.

"I have a problem with their explanation of that one," he said. "Are they now saying they've been discriminating against their female executives."

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