January 28, 2009


Dear Fellow Employee,

I made a promise in meetings at the bases and in Orange to share with you any update on the budget crisis and our response in these extremely difficult times. Unfortunately, the financial situation in our nation and state is worsening each day. Last year, employers in Orange County cut 41,400 jobs — the worst employment condition since 1991. California's unemployment rate jumped to 9.3 percent, the highest level in 15 years.

The state's budget crisis continues to significantly dim our financial outlook for OCTA. As you know, we continue to conduct cost-cutting measures to help balance the budget by reducing bus service, eliminating capital expenditures, implementing hiring limits, and cutting other services and supplies. The recently implemented bus fare increase of 25 percent also will help.

In addition, we are planning on allocating federal economic stimulus and recovery funds to help offset reductions in state funding as well as using current OCTA reserves to help fund transit operations.

However, these actions are not enough. We are evaluating your many suggestions on other cost-saving measures and continue to look at all options to deliver a balanced budget while trying to avoid layoffs.

Because the budget situation continues to grow even more bleak, we are asking leaders of our two labor unions to discuss the possibility of deferring wage increases during the third year of our current agreement. This is consistent with my budget recommendation to freeze salaries for administrative employees next fiscal year. Together, we must confront these troubling times.

I will continue to provide further updates on these important issues. I also appreciate your suggestions and support as we take these necessary actions to help protect your future in providing bus services our customers need.

Sincerely,

Arthur T. Leahy
Chief Executive Officer