OCTA, TCA are Confident of Survival Past COVID-19

Monday, June 15, 2020

Main News Photo

(Orange County Register)

Orange County’s transportation agencies are in good shape, officials said, to manage the financial fallout of the coronavirus, despite expecting to receive hundreds of millions less in revenue than planned for before the pandemic hit.

With money from the CARES Act, a federal coronavirus relief bill, the Orange County Transportation Authority has enough funding to run buses at pre-coronavirus levels when it is time.

Still, a $66 million drop in revenue that is generated from a half-cent sales tax means the agency may have to slow the progress of some freeway widening and other transportation projects. Also, cities will get less money to resurface roads and run their trolley programs.

And even as businesses reopen, transportation officials aren’t sure how quickly Orange County’s economy — and sales tax revenue — will recover.

“The process this year is unlike any year we’ve faced,” OCTA CEO Darrell E. Johnson said as he presented the agency’s budget at the board’s June 8 meeting.

The OCTA is projecting it will receive $160 million less for the next fiscal year, which starts July 1, than it had forecast before the pandemic. The coronavirus and its economic fallout are affecting nearly all sources of the agency’s revenue, from tolls on the 91 Express Lanes to its Measure M halfcent sales tax and its portion of the state’s gas tax, OCTA Chief Financial Officer Andrew Oftelie said.

Oftelie said the agency’s bus service won’t be affected by the decreased revenue because the shortfall will be filled by the CARES Act, which considers bus and public transit as essential services. The OCTA plans to spread the $158 million in stimulus received over the next several years to address any drops in bus revenue, he said.

Since March, OCTA buses have run on a Sunday schedule. Starting June 15, the agency will increase its service so many routes will run on a Saturday schedule, with more trips added to some popular routes to allow for social distancing. For instance, Route 38 from Lakewood to Anaheim Hills will run every 25 minutes at peak hours, compared to 45 minutes under the Sunday schedule.

The agency can add more trips if there’s a greater demand, Oftelie said. The agency is also still committed to replacing 299 buses that are reaching their end of life, although it is budgeting to buy only 165 replacements for the next fiscal year, just in case.

And because of the money the agency has on hand, the OCTA will move forward with projects under construction, including the OC Streetcar and the 405 Freeway widening project. 

Still, some projects that don’t yet have shovels in the ground may be delayed, Oftelie said. It will be months and years before the economic fallout from the pandemic becomes clearer, he said.

“I still feel we’ll be able to meet all the commitment to the voters,” Oftelie said. “I’m not as confident as I was six months ago, and I’m not sure about the timing. But we’re still committed to delivering all the promises.”

However, cities will likely soon have to make some tough choices. With less sales tax revenue, that means millions of dollars cut from how much cities will receive for funding street improvements and public transit programs, such as trolleys. Cities will also get less money to fund taxi vouchers or door-to-door shuttles for seniors.

As for the Transportation Corridor Agencies, which oversees the county’s toll roads, it is expecting to receive about $120 million less for the next fiscal year than what it received this fiscal year – largely because of an $80 million drop in toll revenue. The agency is also deferring a 2% toll rate increase that would have kicked in July.

Agency officials plan to continue the regular payments toward debt by delaying some projects. Projects such as widening the 241 between the State Route 133 and State Route 261 are on hold while the pandemic’s impacts on the agency are evaluated.

The agency will move forward with a project to build a bridge feeding the 241 Toll Road directly into the 91 Express Lanes.

The TCA is saving some money by reclassifying some of its staff and not having merit increases.

Even as they finalize their budgets, transportation officials said it will take months and years to fully account for the pandemic’s impact on local systems and projects. After all, the pandemic is far from over, they said.

“We’re sort of planning for the worst, hoping for the best,” Oftelie said. “We don’t know when the economy will come back.”

(Photo by Paul Bersebach, Orange County Register/SCNG)

Category: COVID-19, Economic Development