October 27, 2008


Dear Fellow Employee,

You likely are facing budget constraints just like other people across the state because of the nation’s financial crisis and state’s budget deficit. The state’s budget has left the Orange County Transportation Authority (OCTA) with an unanticipated $9 million shortfall – a significant cut to our transit operating budget. By next fiscal year, the shortfall could grow to more than $30 million because of additional state cuts and declining sales tax revenues.

I would like to share with you the impact on OCTA and our action plan to directly address these financial realities. OCTA will conduct cost-cutting measures to balance our budget with minimal impacts to the thousands of people who rely on the transit system in our community. I have directed OCTA’s executive management team to implement hiring limits.

I also have asked for an elimination of various services and supplies, a review of capital expenditures that are not required by state and federal mandates and a modest reduction on several bus routes. We also are proposing a fare increase of approximately 25 percent to help offset the higher costs of operating OCTA’s buses.

OCTA also anticipates decreased sales tax revenues to support the Renewed Measure M (M2) Early Action Plan. It is premature to know with precision the overall impact to the 30-year time horizon of M2. However, we will continue to monitor the financial situation and make appropriate changes when necessary.

At this time, we will continue to move forward with our commitment to accelerate these OCTA Board of Directors-approved M2 projects: I-405, I-5, SR-91, SR-57, West County Connectors for SR-22, I-605 and I-405, traffic light synchronization, safety enhancements for Metrolink expansion and quiet zones, Metrolink transit extensions, environmental cleanup and water quality program.

As an organization responsible for taxpayer dollars, I want to assure you that OCTA will navigate through these troubling times because of the tough-but-thoughtful decisions that we need to make immediately to avoid jeopardizing our ability to deliver critical transit services that our customers need.

I appreciate your support as we immediately take the necessary actions to continue our ability to provide outstanding bus service. I will continue to provide updates as we work swiftly to balance OCTA’s budget and continue to make progress on delivering transportation solutions for Orange County.

Sincerely,

Arthur T. Leahy
Chief Executive Officer