The Brief

Orange County Supervisor Andrew Do, the central figure in an unfolding corruption scandal that saw his home searched by FBI and IRS agents last week, has for months declined to comment to English-language news outlets.

Last week, he spoke out on Vietnamese-language radio, according to a recording of the remarks that LAist had translated. The broadcast took place a few hours after LAist broke the news on Aug. 15 that county officials filed a fraud lawsuit against his daughter, Rhiannon Do, and others involved in a nonprofit she helped lead, according to two people who said they spoke with others who heard the broadcast live.

Supervisor Do directed more than $10 million in public funds to the nonprofit, Viet America Society (VAS), that have gone unaccounted for, despite O.C. officials’ repeated demands for answers about what happened to the money since February.

LAist reached out to Supervisor Do on Friday and Saturday and did not get a response. A county spokesperson declined to comment on the broadcast.

Supervisor Do has declined or not responded to dozens of LAist’s requests for comment since LAist first reported on millions in public funds he’d directed Viet America Society outside of public view.

The Aug. 15 broadcast on VietLink Radio is Supervisor Do’s first — and so far only — known public response to the controversy since the county filed suit alleging that millions of taxpayer dollars were misspent. It is being reported here in English for the first time.

VietLink Radio is owned by Supervisor Do’s former deputy chief of staff Nick Lecong, and broadcasts a few hours per week on 1480 AM from a transmitter in Santa Ana.

Supervisor Do calls recent allegations ‘a slander’

Supervisor Do spoke for 17 minutes on the VietLink Radio segment. He criticized fellow O.C. Republican Janet Nguyen, a state senator currently running for Do's seat, the media and others for what he called slander against his “whole family.” Supervisor Do also defended the Viet America Society, and Peter Pham, the nonprofit group’s founder, from allegations they misused millions of dollars meant to feed vulnerable seniors. He spoke on his own and was not interviewed.

State Sen. Janet Nguyen, a Huntington Beach Republican, votes during session at the state Capitol in Sacramento on Aug. 30, 2022.

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Rahul Lal

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CalMatters

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During his broadcast, Supervisor Do pointed to a financial review that he described as showing Viet America Society “is complying with the law,” according to the translation. He appeared to be referring to a financial review released last week by VAS’ new attorney, Mark Rosen.

Allegations that laws were broken are “just a wrongful accusation, a slander,” Supervisor Do added.

The number of people who have received meals from the group “is very high,” he said, adding that 400,000 meals have been served. Supervisor Do said that number was provided by Rosen.

Rosen first emerged publicly as VAS’ lawyer in an Aug. 12 letter to the county. VAS’ previous attorney, Sterling Scott Winchell, told the Orange County Register he no longer represented the group as of Aug. 13.

County officials recently issued findings that Viet America Society's meal numbers were “questionable” and that the nonprofit failed to prove it served the number of meals required in county contracts. It filed a lawsuit in Orange County Superior Court on Aug. 15 — a few hours before Supervisor Do’s radio segment that night — based in large part on those findings. The case has been transferred to San Diego County Superior Court.

In his broadcast, Supervisor Do said that many people were helped by VAS.

“People came to Phước Lộc Thọ to eat every day, to be helped by Peter Pham's Society,” Supervisor Do said about VAS. Phước Lộc Thọ is the Vietnamese name for the Asian Garden Mall, where Pham’s restaurant Perfume River is located.

An LAist review of VAS’ internal financial ledgers provided to the county and obtained by a public records request, found that VAS paid $1.7 million to Perfume River, the majority of money it received from the county to provide meals to needy seniors in 2021 and 2022.

The payments to Perfume River are labeled as “Food Supplies,” with no further information.

In early April, LAist sent questions to the county and to Viet America Society leaders about those large-scale transfers of funds from the nonprofit to the restaurant. Neither entity has provided answers. A county spokesperson told LAist that the county has not received any details or invoices it has requested from VAS about the restaurant payments.

County officials now say it’s unclear what happened to the taxpayer money that was forwarded to the restaurant. They issued findings, cited in their lawsuit against VAS, that the nonprofit has refused to provide the county with an explanation or documentation about what the funds were used for.

The FBI searched the restaurant Thursday, as well as other locations tied to VAS.

More from VietLink segment

In his Aug. 15 broadcast on VietLink Radio, Supervisor Do said he and his family are victims of a smear campaign by the media and Janet Nguyen, the state senator and a former longtime ally turned political foe. Nguyen, a Republican, had mentored Supervisor Do, a fellow Republican. He served as her chief of staff when she was a county supervisor before they had a bitter falling out. She is currently a candidate to replace him as supervisor in the Nov. 5 election. (Do was termed out of office.)

Supervisor Do also said during the broadcast that slander from the media and “factions that follow” Nguyen are why his wife Cheri Pham — the number two judge in Orange County Superior Court — recently decided not to seek the top judgeship.

“They kept insinuating that there is something dark, something that discredits us and our families, not only is related to us but even with my wife. It slanders our whole family and therefore my wife no longer wants to be the…chief justice of Orange County,” Supervisor Do said on the broadcast.

“Our community has lost an opportunity [for] the first time in the history of the United States since the Vietnamese were refugees, a Chief Justice of such ability, prestige and dignity as my wife has to turn down that position because of a completely unacceptable manner of conduct in our community.”

O.C. Supervisor Andrew Do (center left) in December 2023 with his daughter Rhiannon Do (right) and wife Cheri Pham (between them). Pham is the assistant presiding judge of Orange County Superior Court.

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Screenshot of a public video posted by Do’s official YouTube channel

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Through a court spokesperson, Cheri Pham declined to comment on her husband’s description of why she decided not to seek the presiding judge position.

She is currently the assistant presiding judge for a two-year period ending in December. Typically, people in that position run for presiding judge for the next term and win the election among the court’s judges, according to an LAist review of court announcements for the last 14 years.

But Cheri Pham announced to the other judges last month that she had decided not to seek the top seat. She did not give a reason in her announcement, but said it was “not an easy decision” and came “after careful consideration.”

Supervisor Do alleges defamation

In the Aug. 15 radio broadcast, Supervisor Do also said he believes there are people who want to make sure he doesn’t try for elective office again.

“They want to make sure that they have to defame Andrew Do so that he can’t become a candidate who they must fear in the future,” Do said in his broadcast.

Asked for her response, Nguyen, the state senator, said Do has only himself to blame for his troubles. She also reiterated calls she has made for him to resign.

“This is classic Andrew Do, lying to the Vietnamese community in their own language to create divide. Meanwhile, he has been completely silent to the rest of our community,” Nguyen wrote in a statement.

“The reality is that Andrew is solely responsible for ruining his wife’s, Judge Cheri [Pham’s], career. Andrew is solely responsible for his daughter’s [alleged] fraudulent activities. Most importantly, he single-handedly stripped resources for our most vulnerable communities to benefit himself,” she added.

“It’s time he looks in the mirror and takes accountability for his actions.”

Nguyen is running against Frances Marquez, a city council member in Cypress and Democrat for Orange County’s first supervisorial district.

Marquez called for Supervisor Do to resign in a statement to LAist on Saturday.

“Anyone who violates the principles of ethics and betrays the public trust is not fit for holding office,” she wrote. “He had a duty to be honest and transparent with the residents of District 1 and failed us.”

Earlier this year, Supervisor Do endorsed his then co-chief of staff, Van Tran, for his seat, but Tran placed third in the March primary and did not make it to the runoff.

As a two-term supervisor, Do, himself, cannot run for supervisor again.

About the county’s lawsuit

The county’s lawsuit, which followed months of investigative articles from LAist on Supervisor Do’s funding of VAS, alleges his daughter and other leaders of the nonprofit “brazenly plundered” up to $10.4 million Supervisor Do had given them between early 2021 and fall 2023 to build a Vietnam War memorial and feed seniors and people with disabilities during the pandemic.

The lawsuit claims Rhiannon Do and her associates at the nonprofit refused to show how they spent those millions of dollars in public funds, which the county received from the federal government to help respond to the public’s needs during the coronavirus pandemic.

The county’s lawsuit accuses them of spending part of the money to buy million-dollar properties for themselves — but does not cite proof. Three of the six properties cited in the county’s lawsuit were among those that federal agents searched this week.

Rosen, the lawyer for VAS, has disputed the county’s allegations, saying the lawsuit is riddled with errors, “a disgrace” and a “hatchet job.”

FBI officers and Craig Wilke, who identified as O.C. Supervisor Andrew Do's lawyer, at Supervisor Do's house in Orange County the day it was searched.

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On Thursday, a little less than a week after the radio broadcast, Supervisor Do and Cheri Pham’s house was searched by the FBI. Federal officials also searched a house purchased by Rhiannon Do; another purchased by Peter Pham, who is often listed in public records as the chief executive of VAS; other properties owned by people connected to VAS; and the Perfume River restaurant.

Rhiannon Do and Peter Pham deny wrongdoing

Rhiannon Do and Peter Pham have denied doing anything wrong.

In an April email replying to LAist’s inquiries about the county’s payments to VAS, Rhiannon Do said there was nothing improper about how Viet America Society’s funding was used.

Rhiannon Do in a YouTube video posted in August 2021 by the Steinberg Institute where she was an intern.

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Screenshot via YouTube

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The “insinuation that there was something untoward with the use of VAS funds is fabricated” and a “false narrative,” she wrote. A lawyer who said he’s representing Rhiannon Do told LAist on Friday that she’s a "very honest, law-abiding, hardworking young woman."

Following the federal search on his house, Peter Pham told the Los Angeles Times that the situation was a "misunderstanding" and that he "didn't do anything wrong."

About VietLink Radio

Nick Lecong, VietLink Radio’s owner, worked for Supervisor Do as his deputy chief of staff from February 2015 to September 2017.

He was then hired as a translation contractor for Do’s county office through his company T&T Consulting, and was paid $72,000 per year for several years through contracts that did not go through a competitive bidding process.

According to county records, VietLink Radio directly received $89,000 in county funds for public service announcements during the pandemic, plus an unknown portion of $150,000 the county paid vendors that have close ties to VAS leaders.

That money made its way to ads on VietLink through private firms associated with VAS leaders Peter Pham, Le Dan Hua, Dinh Mai, and a woman who has lived at the same address as Peter Pham — Thu Thao Thi Vu — according to county invoice records obtained by LAist.

In the second half of 2020, the county paid $75,000 each to Aloha Financial Investment and Hua Development — two companies that have shared leaders with VAS — to fund COVID-19 public service ads on broadcast outlets that included “Vietlink Radio and Vietlink Television,” according to the invoices.

Aloha Financial Investment described itself as an “investments” business in a state filing last year. Hua Development is Peter Pham and Hua’s building contractor business.

The ad payments were in addition to $60,000 the county directly paid VietLink Radio during the same period — also for pandemic public service ads, according to a county contract obtained by LAist. Those ads were supposed to run in newspapers, according to the contract.

County spokesperson Molly Nichelson, who is listed in county records as requesting the Aloha Financial Investment and Hua Development purchase orders, said Friday she was looking into LAist’s questions about the ad payments.

Lecong's ties to earlier investigation of Supervisor Do

Lecong was mentioned in a previous investigation of Supervisor Do by the state Fair Political Practices Commission. That investigation found that Supervisor Do and Lecong used a different nonprofit as a “holding company” to pay for construction of statues of war heroes and former President Ronald Reagan at Mile Square Regional Park in Fountain Valley in 2015 and 2016.

A statue of General Tran Hung Dao in Mile Square Regional Park in Fountain Valley. The statue was cited in an investigation by the California Fair Political Practices Commission.

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State investigators concluded that he and Lecong controlled that foundation even though they were not its named leaders.

They issued findings that Supervisor Do had falsely told them under penalty of perjury that he had not asked anyone to donate to the foundation, when he had.

The foundation used donated funds, raised by Supervisor Do, to pay two men who would later become involved with VAS. The two men — VAS founder Peter Pham and Hua, his partner in a general contracting business — were described by the Orange County Register at the time as project managers for the statues’ construction, and were paid $20,800.

Peter Pham went on to found VAS in June 2020, days after Supervisor Do and other county supervisors voted to create the pandemic meals program. Hua — Peter Pham’s business partner — has served as VAS’ president on and off since its founding, according to tax filings and other government documents. Rhiannon Do also has appeared on contracts and other government filings, variously as the group’s president, vice president, executive director, officer and director.

She told LAist, via email in April, that she never served in those roles. Rhiannon Do never responded to follow-up questions about why her name appears in at least nine public titles in top leadership roles at the nonprofit.

Catch up on LAist's investigation

In November 2023, LAist began investigating how millions in public taxpayer dollars were spent. In total, LAist has uncovered over $13 million in public money was approved to a little-known nonprofit that records state was led on and off by Rhiannon Do, the now 23-year-old daughter of Supervisor Do. Most of that money was directed to the group by Supervisor Do outside of the public’s view and never appeared on public meeting agendas. He did not publicly disclose his family ties.

Much of the known funding came from federal coronavirus relief money.

• Read the story that launched the investigation here.
• Since we started reporting, we’ve also uncovered the group was two years overdue in completing a required audit into whether the meal funds were spent appropriately.
• And we found the amount of taxpayer money directed to the nonprofit was much larger than initially known. It totals at least $13.5 million in county funding — tallied from government records obtained and published by LAist. 
• After our reporting, O.C. officials wrote demand letters to the nonprofit saying millions in funding were unaccounted for. They warned it could be forced to repay the funds.
• And, we found the nonprofit missed a deadline set by county officials to provide proof about how funding for meals were spent.
• On Aug. 2, LAist reported O.C. officials were demanding the refund of more than $3 million in public funds awarded by Do to VAS and another nonprofit, Hand to Hand.
• Six days later, LAist reported Orange County officials had expanded demands for refunds of millions in tax dollars from the nonprofits and threatened legal action.
• On Aug. 15, LAist reported O.C. officials sued VAS and its key officers and associated businesses, including Rhiannon Do. The lawsuit alleges that county money was illegally used to purchase five homes and was converted into cash through ATM transactions. 
• Then, on Aug. 19, LAist reported O.C. officials had announced a second lawsuit against Hand to Hand and its CEO to recover millions of taxpayer dollars that were directed by Supervisor Do.
• LAist broke the news on Aug. 22 that federal agents were searching Rhiannon Do's home in Tustin. Later that day, Supervisor Do's home, and other properties, were also raided.

How to watchdog local government

One of the best things you can do to hold officials accountable is pay attention.

Your city council, board of supervisors, school board and more all hold public meetings that anybody can attend. These are times you can talk to your elected officials directly and hear about the policies they’re voting on that affect your community.

• Read tips on how to get involved.
• The next regular meeting of the board is Tuesday, Aug. 27. You can check out the O.C. Board of Supervisors full calendar here.
• Learn how to submit a public comment to the O.C. Board of Supervisors.

The nonprofits that run the Los Angeles region's federally funded homeless shelters, outreach teams and housing services will soon be overseen by a different government agency, under a deal a federal judge says he plans to approve next week.

If approved, the shift will mark the biggest change in the control of federal homeless dollars in L.A. in decades.

The proposed settlement would shift federal grants and duties from the troubled L.A. Homeless Services Authority (LAHSA) to the county government in stages, starting next month. LAHSA’s management of federal dollars for homeless services would end in June. The deal between LAHSA and the Trump administration keeps the region's request for roughly $240 million in new annual federal funding on track and adds tighter checks on how that money is spent.

U.S. District Judge David O. Carter said at a Friday hearing he would likely sign it Monday, ending LAHSA's lawsuit over the Trump administration’s June suspension of the agency.

“This has been an absolute past dereliction of duty by the federal government” and local governments, Carter said, referring to what he called decades of failure to properly oversee homelessness dollars.

“I choose now to turn this back to the proper governing bodies,” Carter said. "But please, this can never happen again."

Citing past audits and reports, Carter said “HUD’s been on notice since 2007” of LAHSA’s oversight failures and “abandoned” its own oversight role.

“I termed it a partnership in failure,” he added. “Local government turned an absolute blind eye to the distribution of these funds and transparency and accountability for these funds.”

“And what is so sad and disappointing is, these funds were meant to serve the absolute most vulnerable in our society,” the judge added.

U.S. District Judge David O. Carter, left, shown in West L.A. on Wednesday, Aug. 21, 2024.

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Brian van der Brug/Los Angeles Times via Getty Images

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Los Angeles Times

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LAHSA has faced major problems in recent years. Last year, an LAist investigation found the signature of LAHSA’s then-CEO, Va Lecia Adams Kellum, finalized a $2.1 million contract with the nonprofit where her husband was working in senior leadership, despite previously telling LAist she was “completely recused.”

LAist also found the agency kept awarding millions in contract renewals to another nonprofit even after LAHSA’s own compliance team labeled it “high-risk” for, among other things, billing for services while reporting no enrolled participants. That group’s leader, Alex Soofer, recently pleaded guilty to diverting $2 million. Another nonprofit operator contracted with LAHSA, Michael Young, was arrested and charged by federal prosecutors with misappropriating millions of tax dollars, including allegedly siphoning $1 million into a high-end nightclub.

Additionally, a 2024 L.A. County audit found LAHSA had mismanaged hundreds of millions in contracts for homeless services, often paying service providers late and failing to track whether services were provided.

Under the deal, Carter would receive quarterly reports on progress and could intervene if one of the parties asks him to resolve a dispute.

When control would shift

The deal, on its own, does not change which nonprofits provide shelter, outreach and housing. It instead changes which government agency pays them and ensures they’re serving people as required.

Here’s what the timeline will be if Carter follows through on approving the deal:

• Within two weeks of this year's federal awards: Most new grants awarded to LAHSA will instead be managed by the county, not LAHSA.
• Starting Dec. 1: Grants for programs that begin on or after that date move to the county before they start.
• January 2027: LAHSA, which has overseen the homeless counts since 2005, runs the annual homeless count one last time. The county runs it after that.
• By March 1, 2027: The county is approved to take over as the agency that applies for federal homelessness money for the whole region going forward, instead of LAHSA.
• By April 1, 2027: The county takes over management from LAHSA of many federal grants for programs already underway that continue past June 2027.
• By June 30, 2027: LAHSA finishes administering federal grants that end by this date.
• By Dec. 31, 2027: The county takes over the region’s federally required database, known as HMIS, that tracks which homeless services each person receives. The county also takes over another system, known as CES, that matches people with taxpayer-funded housing. With that, LAHSA's last remaining federal roles end.
• January 2028: The county conducts the annual homeless count, taking over that role from LAHSA.

What the deal would mean for services

The federal government’s attorneys said the goal is to have stronger oversight over homelessness spending, after many years of documented failures by LAHSA. Attorneys who struck the proposed settlement said in court Friday that the timeline was structured to ensure a smooth transition that doesn’t disrupt homeless services.

The HMIS database and matching system, which caseworkers use to track clients and place them in homes, will switch over last to avoid disrupting services, said Shayla Myers, the lead attorney for the L.A. Continuum of Care, the body that coordinates federal homelessness funding and joined LAHSA in the lawsuit.

For taxpayers, the deal adds safeguards on spending Carter has demanded for years. LAHSA must send invoices and spending records to the U.S. Department of Housing and Urban Development (HUD) before drawing grant money, and submit receipts afterward. A HUD contractor, Guidehouse, will review its books, and the county must follow the same rules for older grants it inherits. The parties will report to Carter every three months, until LAHSA no longer has any federal roles overseen by HUD.

Bill Essayli is the first assistant United States attorney for the Central District of California.

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Allen J. Schaben

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Los Angeles Times via Getty Images

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First Assistant U.S. Attorney Bill Essayli, whose office represents HUD, told LAist after the hearing that the county is probably the best equipped to take over, and scrutiny will be crucial.

“Do I have amazing confidence in the county? No,” he said, noting that LAHSA is a joint city-county agency.

“But we're going to verify that they are going to be good stewards of the tax money.” With LAHSA gone, he added, “The buck's going to stop at the county.”

Under the proposed deal, LAHSA agrees to cooperate fully with HUD's investigations. A LAHSA attorney told the judge on Friday the agency is cooperating fully with criminal investigations, adding that it was critical that HUD agreed not to reinstate LAHSA’s suspension, so that it can continue to manage federal dollars until they’re handed off.

Judge wanted more 'teeth' for the court

Carter spent much of the hearing asking attorneys for the parties what power he would have to enforce the deal after signing. The proposed settlement lets him settle disputes and receive reports, but he said that left him looking over shoulders without the authority to actually enforce it.

“I have no jurisdiction. I have no teeth,” he said.

He read aloud from 2024 hearings in a related lawsuit, known as L.A. Alliance, where he warned that bills without supporting documents should not be paid. Essayli said that the proposed settlement would be binding “and we'll vigorously enforce it.”

Myers said the deal gives the court oversight to ensure that the problems federal authorities flagged “don’t exist.”

Carter asked to have the ability to hire an expert, at about $150 an hour paid by HUD, to help him understand the quarterly reports on implementing the deal that transfers federal roles from LAHSA to the county. Essayli agreed.

How the case got here

HUD suspended LAHSA from federal funds on June 11, citing alleged failures in the agency’s financial management and conflict-of-interest safeguards. The move put roughly $240 million in expected federal homelessness funding for the region in limbo and held up federal funding HUD had already awarded.

LAHSA, which is overseen by the city and county’s elected officials, sued.

In August, Carter blocked the suspension, writing that LAHSA and HUD had been in “a joint partnership in failure,” and ordering a competition for LAHSA's federal roles. He deferred the selection to the continuum of care — the body designated by federal law to make that choice.

In October, the continuum chose the county for all four, over objections from L.A. Mayor Karen Bass and several City Council members who wanted the city to share control. The city then reached a tentative side deal giving it access to data on unhoused residents and a role placing people in city-funded housing.

What happens next

Carter said he expects to sign the proposed settlement on Monday.

Myers said the deal lets the region “build a peaceful transition of power.”

Left-leaning candidates running in three school board contests flagged by EdSource as races to watch are each leading comfortably in unofficial election results more than a week after a so-called “blue tsunami” swept the country.

Unofficial results also show progressive candidates ahead in some races in the Inland Empire, a conservative stronghold where several far-right school board candidates ran on issues such as gender identity and parents’ rights. Counties have until Dec. 3 to certify election results.

In the Orange Unified School District, four moderate incumbents are far ahead of conservative challengers in separate races. One of them, board President Stephen Glass, defeated challenger Jack Chang, and has declared victory. The conservative candidates ran largely on parents’ rights and fiscal responsibility.

“We won,” Glass said on social media. “We’ll keep putting students first and supporting every teacher, every classified professional and every family.”

All four incumbents are up by double-digit percentage points, Orange County election results show. The election follows last year’s recall of two conservative school board members.

In a race for the Davis Unified school board, an anti-transgender candidate who once stripped down to a bikini at a school board meeting, lost decisively, according to unofficial election results. Beth Bourne, president of the Yolo County chapter of Moms For Liberty, trails incumbent Elizabeth Moon by 89 percentage points, results show.

In Palo Alto — where issues over academics dominated the race — newcomers Avery Wang and Linda Henigin are ahead in unofficial results for two seats. John Craig, who ran in tandem with Wang, conceded on election night. Wang ran primarily on retaining academic rigor, especially in math. “It’s the beginning of a movement,” Wang told Palo Alto Online.

Henigin ran on a platform of improving student well-being following a recent spate of student suicides.

Elsewhere in the state, school board candidates in conservative strongholds such as Chino Valley and Temecula fared poorly in local school board races.

In Temecula, school board President Joseph Komrosky trails challenger David Sola by 10 percentage points, results show. Sola has declared victory. Komrosky had voted to ban critical race theory in district schools and attempted to ban teaching materials that mentioned slain gay rights icon Harvey Milk, drawing a sharp rebuke from Gov. Gavin Newsom.

Komrosky’s apparent defeat was part of what The Press-Enterprise reported as “a seismic shift in local governance given recent elections that gave power to the Christian right.”

In Chino Valley Unified in San Bernardino County, two conservative school board candidates are trailing far behind, results show. Chris Shaw, the husband of State Superintendent of Public Instruction candidate Sonja Shaw, trails Frank Gerdine by nearly 17 percentage points, while Meagan Lichthart is ahead of Shaun Smith, backed by Shaw, by 15 percentage points.

This story was originally published by EdSource.

Major service cuts to Metrolink are on hold for now thanks to a $20 million grant from California’s State Transportation Agency. The Metrolink board of directors approved the agency’s $420 million budget on Friday.

The previous budget proposal included slashing a third of weekday trains and 40% of weekend trains.

“Thankfully, our customers were spared the disappointment and frustration of losing the service they rely on to travel the region for business and pleasure,” Tom Schamber, chief financial officer at Metrolink, said at the board meeting.

How did we get here? 

The Metrolink budget had been approved quarterly since June as staff worked out the annual budget.

Metrolink staff have worked on this year’s budget since last September. The agency has pointed to slowing fare revenue, rising costs due to inflation and low ridership numbers for its budget troubles.

“Fare box revenue ended the year $14 million under budget. This was sobering, and we realized that not only was fiscal [20]26 off, but our ridership expectations for fiscal year [20]27 would need to be recalibrated to this new baseline,” Schamber said.

A majority of Metrolink’s budget is funded by Orange, Los Angeles, Riverside, San Bernardino and Ventura counties’ transportation agencies. For more than a year, Metrolink officials have been building a budget that member agencies, like the Orange County Transportation Authority and L.A. Metro, would approve.

L.A. Metro and OCTA cut their subsidies to Metrolink by 3% and 10%, respectively.

“The challenges ahead of us were becoming more evident,” Schamber said at Friday’s board meeting. “In addition to disappointing fare revenue and funding limitations, we must absorb inevitable cost increases in several of our largest contracts.”

What we know about the grant

The $20 million grant from the state comes with the expectation that Metrolink will retain the same service levels provided today, Schamber added.

Metrolink CEO Darren M. Kettle said another expectation is that the agency must plan to maintain its services for the upcoming year.

“We don't have a plan. We're working on a plan to make sure we have the funding to deliver the same level of service at a minimum,” Kettle said. “With respect to these conditions, based on what we know now, as of last evening, our staff is confident that Metrolink will be able to meet these conditions.”

What’s next? 

Kettle said staff got a head start on next fiscal year’s budget through the state grant application. Officials said the rail agency is also gearing up for the 2028 Olympic Games.

The Federal Aviation Administration grounded all flights nationwide Friday afternoon because of communications problems at regional air traffic control centers.

The FAA notice said the ground stop was being imposed “due to extraordinary circumstances and for reasons of safety.”

Transportation Secretary Sean Duffy said there is a communications issue affecting the 22 regional air traffic control centers that direct planes en route between airports nationwide. He said FAA technicians are investigating. This is the first nationwide ground stop since January 2023, when a key FAA computer system malfunctioned. Before that the last time had been after the Sept. 11, 2001, attacks.

Secretary of Homeland Security Markwayne Mullin said there was no indication yet that “this was a nefarious attack against us. It’s just a telecommunications outage.”

“Everybody’s safe. There’s no reason to be concerned about your loved ones if they’re flying,” Mullin said.

There is no timeline for restarting flights. Mullin said investigators will look at whether there is any link to the FAA’s nationwide rollout of a new artificial intelligence system to help identify problems and reroute planes. But that system operates out of one location near Washington, D.C., and just sends recommendations to the air traffic control centers.

The government has been working to overhaul the outdated technology that air traffic controllers rely on since Congress approved $12.5 billion for the project last year. Miles of old copper wires have been replaced with fiber optic lines and old radio systems are gradually being replaced at airports across the country.

But much work remains. Duffy has said that another $30 billion will be needed to complete the work, and the White House has begun lobbying Congress to approve it.

The problem appeared similar to a regional air traffic control communication outage in September that snarled hundreds of flights across the Northeast, aviation safety expert Steve Arroyo said, except this time on a nationwide scale. It may be linked to the outdated technology used by air traffic controllers.

“If you don’t have that ability, whether it’s because the old wires that they have are just run down or for whatever reason, you’ve got to stop airplanes on the ground,” said Arroyo, who is a former United Airlines pilot. “And not put them in the air where you’re going to risk not being able to communicate with them.”

Friday’s ground stop was different than the one after Sept. 11 because planes were not being told to land immediately and pilots likely were able to communicate with ground controllers at airports, Arroyo said.

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AP writer Mead Gruver contributed to this report from Fort Collins, Colorado.

This is a developing story and will be updated.