OCTA Reports Budget Shortfall of $42 Million

A recessionary plunge in both sales tax and bus ridership revenue has placed the Orange County Transportation Authority’s budget $42 million in the red, a staff report said Friday.

The report, which followed a study of the recession’s impact on sales tax revenue by Chapman University and the Ernst & Young accounting firm, recommends using several million dollars in reserves, deferring some minor projects and equipment purchases and cutting 54 staff positions, 50 of which will be left unfilled under a hiring freeze.

The OCTA’s board members are expected to approve the recommendations at their Monday meeting in Santa Ana. The agency, which oversees transportation planning and transit service, was created in June through the merger of the Orange County Transportation Commission, the Orange County Transit District and the Consolidated Transportation Services Agency.

On a positive note, the staff report recommends small raises for about 100 staffers who earn less than $10 an hour. Most of those who will benefit are telephone operators and clerks, according to OCTA Chief Executive Officer Stanley T. Oftelie.

The budget adjustments come three months after state officials warned county officials of a precipitous drop in sales tax income due to the poor economy. In October, the OCTA board adopted an interim 1991-1992 budget of $452.1 million; the amended budget is proposed at $422.5 million, a reduction of 6.5%.

“The good part is we’re going to be able to avoid cuts in bus service,” said OCTA spokeswoman Joanne Curran. The agency “is in a much better position to absorb these cuts than other public agencies because some months ago we had started streamlining operations and had some reductions in capital projects. . . .”

Three of the five operations run by OCTA are affected by sales tax receipts.

The Measure M program of highway and transit improvements, funded by a half-cent increase in the countywide sales tax, will receive $20 million less than expected and $800,000 less in interest earned on that income, officials said. The situation is worse than the $17-million drop projected by officials in October.

OCTA’s administration will receive $452,000 less than projected, and the Transit District, which operates the bus system, will lose about $14 million, according to the staff report.

What’s more, a ridership drop due to lower employment, which prompted fewer home-to-job commutes, is expected to cost another $6.7 million.

“Given the need to reduce (OCTA’s) overall spending plan by $30 million (after reserves are used), each division was instructed to propose cuts and deferrals. . . . Top priority was to be given to keeping the momentum going on major construction projects and not impacting the quality and level of current bus, para-transit and commuter rail service,” the report says.

Some proposed savings:

* $7 million from deferring purchase of replacement buses.

* $7.7 million from revised project costs and land acquisition and construction schedules.

* $1.2 million mostly from deferring computer-related purchases and lower diesel fuel costs.

The most serious staff cuts will come in the training and human resource areas, officials said. And because of salary increases, labor costs will actually increase by $621,343.