March 31, 2009

To Balance Budget,

OCTA Begins Layoffs

OCTA finance staff made a grim presentation to the Board of Directors March 23 with details about the worsening economic conditions for bus transit operations.  Both state funding and sales tax revenues continue to plummet with significant losses projected over the next 20 years.

OCTA faces an unprecedented loss of $522 million from the state budget and a staggering $1.5 billion shortfall in sales tax revenues.  In the short term, the result is a five-year loss of $272 million.

Unfortunately, it’s necessary to implement additional measures to address the budget shortfall. We have notified the union that 25 coach operator, 11 service worker and six mechanic positions will be eliminated effective April 10 as part of the approved service and workforce reductions.

Even after utilizing reserves and federal stimulus funds, the Board of Directors has determined that additional reductions in bus service and corresponding positions will need to continue for approximately one year through June 2010 in order to balance OCTA’s budget. The planned reduction of 400,000 revenue hours would equate to a total reduction of approximately 367 positions. We remain hopeful that economic conditions improve so that further reductions are not necessary.

We regret having to take these measures and have worked diligently for months to avoid layoffs by implementing extensive cost-cutting measures. However, the reductions are now necessary in order for OCTA to remain solvent as a public agency and continue our role as a responsible steward of taxpayer dollars.

I want to thank OCTA employees for your dedicated service and continued commitment through these extremely difficult economic times.

Sincerely,

James S. Kenan

OCTA Interim Chief Executive Officer

"Minimizing Impact of Layoffs" By Patrick Gough 

# # #