Date: April 24, Board of Directors. Neil McFarlane

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1 Date: April 24, 2013 To: From: Board of Directors Neil McFarlane Subject: RESOLUTION OF THE TRI-COUNTY METROPOLITAN TRANSPORTATION DISTRICT OF OREGON (TRIMET) AUTHORIZING THE TRANSFER OF APPROPRIATED FUNDS WITHIN THE FY12-13 GENERAL FUND BUDGET 1. Issue or Purpose of Item. The purpose of this item is to request that the TriMet Board of Directors ( Board ) adopt a Resolution authorizing a transfer of funds from contingency to various appropriation units within TriMet s FY12-13 General Fund budget. 2. Reason for Board Action. Certain operating expenditures have been or will be made in FY12-13 that were not anticipated, or could not be accurately estimated when the annual budget was adopted in June ORS authorizes the governing body of a local government to transfer funds between appropriations by resolution. This resolution allows for the transfer of funds from contingency to various divisions within TriMet, reflecting changes to expenditures from the estimates made at the time the FY12-13 budget was adopted. 3. Background. On June 13, 2012, the Board approved Resolution , adopting the FY12-13 budget and appropriating funds. The budget was based on the best available information at the time, as actual revenues and expenses are not known when the budget is developed. Historically, as the end of the fiscal year approaches, TriMet transfers appropriations to match revised expenditure requirements. Oregon budget law requires a transfer resolution if expenditures in any appropriation category are higher than shown in the original budget. This year, revisions to the General Fund Operating and Capital Program appropriations are necessitated by the following reasons: Intergovernmental Transfers TriMet budgeted several intergovernmental transfers in FY11-12 that did not occur until FY Intergovernmental transfers do not occur until certain defined conditions have been met. It had been anticipated that $3,700,000 in funding exchanges would be disbursed in late FY However all conditions were not met until early FY12-13 and thus the expense was not recorded and funds were not disbursed until July and August Funds for intergovernmental transfers are in the Operating Programs Capital Project Division and will be transferred from Contingency.

2 Union Retiree Medical Premium Reimbursement Based upon the binding interest award in July 2012, TriMet will implement its revised union medical plan retroactive to December 1, 2009, the first day of the now-expired labor agreement. This results in union employee and retiree medical costs both due to and from TriMet. Settlement of these issues is now pending before the Oregon Court of Appeals and the Employment Relations Board. Accounting rules require TriMet to separately account for the receivable from employees and retirees and the payable requirement to reimburse the same groups. On the payable side, the $3,600,000 requirement to reimburse union employees and retirees was not known, and thus not included in the FY12-13 budget. This amount will be transferred from Contingency to Operating Program Operations Division. Various Lawsuits TriMet has been served with various lawsuits that were not anticipated at the time the FY12-13 budget was adopted. It is highly unlikely that these lawsuits will be settled or fully adjudicated before the end of the current fiscal year. However, current accounting rules require TriMet to estimate and record a liability in the accounting period we become aware of the potential liability. Personal injury and property damage claims are expensed in the Operating Program Operations Division. $3,000,000 is being moved from Contingency related to these items. DMAP Contracted Transportation TriMet is the regional coordinator of Medicare provided transportation through a 100% reimbursement contract with the Department of Medical Assistance Programs ( DMAP ). More trips are now projected to be provided in FY12-13 than were included in the current budget. Additional appropriation authority of $1,400,000 is now needed for DMAP even though it will be fully reimbursed. Funds will be transferred from Contingency to Operating Program Operations Division. Barbur Transit Center Improvements TriMet leases the Barbur Transit Center from ODOT. Last fiscal year TriMet contractors constructed a series of improvements at the Transit Center. A transfer from Contingency to Capital Program Operations Division of $800,000 is needed to cover change orders previously approved by the Board. TriMet is fully reimbursed for these costs by ODOT. Non-Union Wage Increase Consistent with past practice, FY12-13 non-union wage adjustments were not included in individual department budgets, or funds appropriated, because the specifics of the wage adjustment were not known at the time the budget was finalized. Funds are now needed from Contingency to cover the additional expense. The total value of the non-union wage increase is $910,000. However, additional appropriation authority is not needed for the Light Rail Program to cover the increase, as offsetting savings have been identified within that program. $674,000 is needed from Contingency to cover the additional expense in nine divisions. Electronic Fare Implementation Project Electronic fare implementation is moving ahead faster than was anticipated when the FY12-13 was developed. This is strictly a timing issue and does not reflect a change in the total project cost. A transfer of $500,000 from Contingency is needed in the Operating Program Finance & Administration Division.

3 4. Options. This transfer is a requirement of Oregon Local Budget Law. 5. Recommendation. The General Manager recommends approval of the Resolution. DA/LB/pc

4 RESOLUTION RESOLUTION OF THE TRI-COUNTY METROPOLITAN TRANSPORTATION DISTRICT OF OREGON (TRIMET) AUTHORIZING THE TRANSFER OF APPROPRIATED FUNDS WITHIN THE FY12-13 GENERAL FUND BUDGET WHEREAS, on June 13, 2012, the TriMet budget for fiscal year was adopted and funds were appropriated by the Board of Directors; and WHEREAS, this Resolution is prepared pursuant to ORS ; NOW, THEREFORE, BE IT RESOLVED: That the FY12-13 General Fund appropriations be revised as follows: FY12-13 Adopted Budget Operating Program: Appropriation Transfer In (Out) Appropriation Office of the General Manager Division $ 1,514,548 $ 22,426 $ 1,536,974 Public Affairs Division $ 8,305,783 $ 110,794 $ 8,416,577 Safety & Security Division $ 13,435,090 $ 23,631 $ 13,458,721 Information Technology Division $ 7,280,489 $ 114,813 $ 7,395,302 Finance & Administration Division $ 11,851,883 $ 569,548 $ 12,421,431 Labor Relations & Human Resources Division $ 2,952,739 $ 45,179 $ 2,997,918 Legal Services Division $ 1,617,543 $ 25,376 $ 1,642,919 Operations Division $ 314,036,182 $ 8,238,618 $ 322,274,800 Capital Projects Division $ 16,536,891 $ 3,723,615 $ 20,260,506 OPEB & UAAL Pension $ 47,758,079 $ - $ 47,758,079 Debt Service $ 48,177,780 $ - $ 48,177,780 Pass Through Requirements $ 12,641,634 $ - $ 12,641,634 Project Interim Finance $ - $ - $ - Contingency $ 20,000,000 $ (13,674,000) $ 6,326,000 Total Appropriation $ 506,108,641 $ (800,000) $ 505,308,641 Capital Program: Appropriation Transfer In (Out) Appropriation Public Affairs Division $ 487,000 $ - $ 487,000 Safety & Security Division $ 308,727 $ - $ 308,727 Information Technology Division $ 29,863,945 $ - $ 29,863,945 Finance & Administration Division $ 370,000 $ - $ 370,000 Legal Services Division $ 50,000 $ - $ 50,000 Operations Division $ 62,902,494 $ - $ 62,902,494 Capital Projects Division $ 11,401,325 $ 800,000 $ 12,201,325 Total Appropriation $ 105,383,491 $ 800,000 $ 106,183,491

5 FY12-13 Adopted Budget - continued Light Rail Program: Appropriation Transfer In (Out) Appropriation I-205/Portland Mall Light Rail Project $ 1,946,628 $ - $ 1,946,628 Milwaukie Light Rail Project $ 444,464,061 $ - $ 444,464,061 Total Appropriation $ 446,410,689 $ - $ 446,410,689 Total General Fund Appropriations $ 1,057,902,821 $ - $ 1,057,902,821 Dated: April 24, 2013 Presiding Officer Attest: Recording Secretary Approved as to Legal Sufficiency: Legal Department