2012 2016 Working & Wage Agreement Ratification Discussion f - PowerPoint PPT Presentation

2012 ‐ 2016 Working & Wage Agreement Ratification Discussion f TriMet Board Meeting Presentation October 22, 2014 1

Tentative Agreement vs. Status Quo Term: 4 ‐ year agreement ending 11 ‐ 30 ‐ 2016 (SQ: 3 ‐ year agreement). • Wages: 0% on 12/1/12, 0% on 12/1/13, 3% on 12/1/14, 3% on 12/1/15 (SQ: 3% ‐ 5% COLA; retroactive effective date). • Journey Worker Increase: $1/hr. pay increase upon ratification (approximately 345 journey workers.) • Active Employee Healthcare: Plans Expanded: 80%/20% Regence PPO plan; 90%/10% Regence PPO plan, Regence HPHP w/HSA and a $10 co ‐ pay • Kaiser plan; Moda dental ($2,000 v. $1,000 benefit); Kaiser dental (new; replaces Willamette) (SQ: Regence PPO 90/10 plan, Kaiser HMO $5 co ‐ pay). Premium Contribution: 5% premium contribution by employees to all plans except the Regence 90/10 PPO Premium Contribution: 5% premium contribution by employees to all plans except the Regence 90/10 PPO • (employee pays the difference between TriMet’s 95% contribution to the 80/20 plan contribution and the total 90/10 premium) and the Regence HPHP w/HSA (TriMet makes HSA contribution for the difference between TriMet’s 95% 80/20 plan contribution and the total HDHP premium) (SQ: 0% employee contribution). Part ‐ Time Operators: Same healthcare benefits as Full ‐ Time Operators at the same cost (SQ: Premium • contribution: 0% single/25% dependents). contribution: 0% single/25% dependents) Lump Sum Distribution: $425,000 one ‐ time distribution to ATU members from the $5,550,021 in healthcare costs • passed on to employees during 2013 and 2014 pursuant to ORS 243.756. Retiree Healthcare: Medicare Eligible Retirees: Lower cost PPO supplemental plan in 2016, providing substantially similar benefits as g pp p , p g y • active employees receive (when combined with Medicare/Medicare Part B). Option: Stipend ‐ $417.36 (Single); $828.47 (Single + 1) New Hire Retiree Benefits: Pre ‐ 65: Employees hired after the ratification date receive an $800/mo stipend to • purchase healthcare, increased annually by Portland CPI ‐ W. Post ‐ 65: no TriMet healthcare benefits (SQ: same benefits as active employees until death + 16 years for surviving spouse) benefits as active employees until death + 16 years for surviving spouse). Kaiser Health Care Side Letter: Elimination of the side letter that retained the pre ‐ 2003 $5 plan design when Kaiser • made unilateral changes. 2

Tentative Agreement vs. Status Quo g Q Direct Hires: Direct Hires ‐ Apprentices: Discretion to hire ½ of all apprentices annually in each program from the outside. • Direct Hires ‐ Journey Workers: Discretion to hire 5 journey workers annually from the outside. • Tentative Agreement – Notable Miscellaneous Changes: T i A N bl Mi ll Ch EAP Program: $55,000 annual payment until the contract ends, then employees move to the TriMet non ‐ union • plan; no payment during hiatus period (SQ: $55,000). Recreation Trust Fund: $55,000 annual payment until the contract ends, then the expense will be budgeted in the • District General Fund; no payment during hiatus period (SQ: $55,000). ; p y g p ( Q $ , ) Child Care/Elder Assistance Program: $55,000 annually, but only if fund balance is less than $100,000 as of due • date (SQ: $55,000). Grievance Process: Elimination of pre ‐ filing and Step 3 grievance panel; 14 ‐ month rotation of arbitration panels. • Labor ‐ Managements Meetings: Ad hoc meetings replace the Joint Labor Relations Committee; agreement to • study a private exchange health care model for 2016. Funeral/Memorial Leave: 4 days within 120 days (SQ: 3 days; no time limit). • Hours of Service (Bus): 10 hours rest between service days (9 hours for Extra Board). • Fare Inspector Training: Those performing fare inspections are provided up to 8 hours of annual training in • defusing and responding to hostile confrontations (New) defusing and responding to hostile confrontations (New) . Allowances: Uniform allowance: $315 (SQ: $215). Winter coat furnished to all Road, Rail and Training • Supervisors (New) . Settlement of Outstanding Litigation: ERB : TriMet withdraws UP 026 ‐ 14 and UP 021 ‐ 14; ATU withdraws UP 018 ‐ 14 and UP 031 ‐ 14 ERB : TriMet withdraws UP 026 14 and UP 021 14; ATU withdraws UP 018 14 and UP 031 14. • Court of Appeals: Settlement of UP 042 ‐ 12, UP 050 ‐ 12; UP 039 ‐ 10; (TriMet reimburses $3.6 million in premiums • and pays $500,000 for switching costs claim). 3

Health Care Premiums (Sample) M di Medical/Vision l/Vi i 2014 2014 2015 2015 Regence (Actives/Pre-65 Retirees) 90/10 Plan 90/10 Plan 80/20 Plan HDHP/HSA HSA Contribution Single $834.65 $791.40 $745.85 $599.95 $108.61 Employee + Spouse $1,752.80 $1,662.00 $1,566.30 $1,259.90 $228.09 Employee + Child(ren) $1,460.70 $1,385.05 $1,305.30 $1,049.95 $190.09 Family $2,337.05 $2,216.05 $2,088.50 $1,679.85 $304.23 Kaiser (Actives/Pre-65 Retirees) $5 Co-Pay $5 Co-Pay $10 Co-Pay Single Single $660 75 $660.75 N/A N/A $670 87 $670.87 Retiree + Spouse $1,321.50 N/A $1,341.75 Retiree + Child(ren) $1,189.35 N/A $1,207.57 Family $1,982.24 N/A $2,012.62 Dental 2014 2015 Moda * Single $45.59 $62.05 Employee + Spouse $86.17 $117.29 Employee + Child(ren) $86.64 $117.93 Family $129.95 $176.88 Kaiser ** Single N/A $36.05 Employee + Spouse p oyee Spouse N/ N/A $65.75 $65.75 Employee + Child(ren) N/A $72.10 Family N/A $103.03 * The annual benefit is doubled to $2,000 from $1,000. 4 ** New offering in 2015 (replaces Willamette Dental).

Tentative Agreement Results in a Sustainable Forecast Tentative Agreement: Revenues and Millions Millions SQ: Revenues and Expenditures Expenditures $1,100 $1,100 $1,000 $1,000 $900 $900 $800 $800 $700 $700 $600 $600 $500 $500 $400 $400 FY14 FY16 FY18 FY20 FY22 FY24 FY26 FY28 FY30 FY14 FY16 FY18 FY20 FY22 FY24 FY26 FY28 FY30 Total Revenues Total Expenditures Total Revenues Total Expenditures Both forecasts: no payroll tax rate increase & same economic, ridership, fare, service, capital, pension, OPEB trust funding assumptions 5

Tentative Agreement Achieves Long ‐ Term Structural Balance Between Revenues and Expenditures SQ: Revenues Minus Expenditures & Mos. of Operating Tentative Agreement : Revenues Minus Expenditures & Millions Millions Expense in Beginning Unrestricted Fund Balance Mos. of Operating Expense in Beginning Unrestricted Fund Balance $80 $80 $60 $60 $40 $40 2.5 2.7 2.9 2.3 2.8 $20 $20 2.0 2.5 3.4 3.4 2.1 2.3 $0 $0 2.6 3.1 2.8 2.6 2.1 0.6 0.3 3.0 ($20) ($20) 2.4 0.1 1.5 1.0 (2.3) 2.2 ($40) ($40) 3.9 (0.2)(0.9) (4.1) (1.6) ($60) ($60) (2.6)(3.4) 3.7 (4.6) ($80) ($80) ($80) FY14 FY16 FY18 FY20 FY22 FY24 FY26 FY28 FY30 FY14 FY16 FY18 FY20 FY22 FY24 FY26 FY28 FY30 6

Tentative Agreement Bends the Cost Curve Favorably, Although Costs Increase Over Time Costs Increase Over Time Historical, SQ & Tentative Agreement Active & Retiree Medical Expense Paid by TriMet Millions $200 Average annual growth rate per Average annual growth rate per active $175 active & retired employees 1999 – 2012: 8.1% & retired employees 2012 ‐ 2030: * SQ: 4.8% * TA: 3 7% TA: 3.7% $150 $150 Upward slope reflects additional retirees in these years. $125 $100 $75 $50 $25 $0 FY00 FY02 FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22 FY24 FY26 FY28 FY30 Current Active & Retiree Medical Tentative Agreement Active & Retiree Medical 7

OPEB PAYGO Expense for Union Retiree Medical Status Quo v. Tentative Agreement (through 2043) Status Quo v. Tentative Agreement (through 2043) Current and Tentative Agreement OPEB Plan Payouts Millions $160 $140 $120 $100 $80 $60 $40 $20 $0 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 Current OPEB Plan Payouts Proposal OPEB Plan Payouts Projections by Milliman May 2014, updated for TA changes by TriMet October 2014 8

Impact of Proposed Union Retiree Medical Benefits on the OPEB Valuation and Payouts Status Quo: Status Quo: Tentative Agreement: Tentative Agreement: Valuation impacts : Valuation impacts: PV of benefits: $ 1.024 billion (closed PV of benefits: $1.392 billion (closed • • group) group) group) group) Actuarial Accrued Liability: $641 • Actuarial Accrued Liability: $869 • million, reduced 26% million Normal cost: $35 million • Normal Cost: $48 million Normal Cost: $48 million • • UAAL Amortization: $29.5 million • UAAL Amortization: $40 million • Benefit Payments : Benefit Payments : 30 year payouts (open group): $2 095 30 year payouts (open group): $2.095 30 30 year payouts (open group): $1.313 t ( ) $1 313 • • • billion billion, reduced 37% Benefit payments affordable Benefit payments not affordable • • Avoids $375 million in costs not Avoids $375 million in costs not • included in actuarial valuation by Note: Total agency OPEB liability is $950 million as of reducing benefit for new hires 1/1/14. Only the union portion is shown here. 9

Recommendation for Ratification Pursuant to the September 30, 2014, Tentative Agreement, your negotiating team recommends ratification, as agreed by the parties. Randy Stedman , Executive Director Labor Relations & Human Resources (Chief Negotiator) Shelly Lomax , Executive Director Transportation y p Claire Potter , Director Budget Financial Analysis & Grants Dan Caufield , Director Operations Planning & Development Evelyn Minor Lawrence , Director Labor Relations Heidi Vass , Benefits Manager Cynthia Wegesend , Labor Analyst (Note taker) 10