MTA Chief to Urge Hold on Rail Projects

Julian Burke, the corporate turnaround specialist recruited by Mayor Richard Riordan to straighten out the Metropolitan Transportation Authority’s worse-than-dismal finances, today will urge the MTA board to finish subway construction to North Hollywood and then indefinitely suspend work on other rail projects.

Burke believes that the long-promised Eastside and Mid-City subway extensions and downtown-to-Pasadena light rail line ought to be put on hold until the agency, whose problems have made it nationally notorious, has overcome the disarray in its finances and the costly disorganization in its construction program.

The MTA’s position is so precarious, however, that even the sort of organizational breather Burke advocates may create fiscal peril. If the MTA suspends the projects, it may risk losing millions of dollars in state and federal funds committed to them, officials acknowledged.

But the MTA’s chief executive officer, projecting a $727-million shortfall over the next six years in the county’s rail construction program--one of the nation’s biggest public works projects--said Wednesday that the transit agency simply needs time to convince Sacramento and Washington that it “knows what it is doing.”

Burke arrived at his conclusion after reexamining the costs of completing the subway from its current terminus on Wilshire Boulevard to Lankershim Boulevard in North Hollywood. Finishing that stretch will cost an additional $148 million, the agency now projects.

Even so, the proposed halt in construction is expected to face resistance not only within the gleaming corridors of the MTA’s posh downtown headquarters, but also in the halls of Congress, where members of Los Angeles County’s delegation have supported continued federal funding for the rail program in the belief that their districts would receive a rail line soon.

“If he is serious about suspending spending on the rail projects, then I think for the first time, you have a responsible recommendation which begins to address the fiscal morass that the MTA is in,” said County Supervisor and MTA board member Zev Yaroslavsky. “The question is, will the board go along?”

Burke is likely to find a powerful supporter in Riordan, who chairs the MTA board.

The mayor, who was personally briefed on the moratorium proposal by Burke on Wednesday, said he has not decided how to proceed. But he expressed “complete confidence” in the MTA chief.

“The MTA has to get its house in order,” Riordan said. “It has to restore credibility with the taxpayers and regain the confidence of its state and federal funding partners.

“It is my hope that the board will work together with the MTA’s top management to focus the agency on living within its means, improving bus service and completing the North Hollywood extension on time and on budget,” the mayor said.

However, another board member and important mayoral ally is unlikely to approve suspension of a project in which he has invested so much political capital. A spokesman for Los Angeles City Councilman Richard Alatorre, who has pushed hard for the Eastside subway project, expressed concern about losing $500 million in federal funds committed for the billion-dollar Eastside line.

“We’d hate to see that money go to other parts of the country,” said Alatorre’s transportation deputy, Dan Farkas. “This has been something that has been promised to the community since 1990, and we’re probably just months away from starting construction.”

He said the board should explore alternatives to suspending work.

Eastside members of Congress recently warned local transit officials that efforts by the MTA to win federal approval for its so-called recovery plan “will be made more difficult should a funding plan for the Eastside extension not be included.” Through their influence, a portion of this year’s federal assistance to the MTA was earmarked for the Eastside project.

Pasadena Mayor Chris Holden also expressed disappointment over Burke’s proposal. “The public transit riders out this way are entitled to more than being put on hold indefinitely,” he said, noting that Pasadena area residents voted for the 1980 and 1990 half-cent sales tax increases to fund transit projects.

Other board members were cautiously supportive of the MTA chief.

MTA board member Larry Zarian said Burke’s recommendation is a “signal to the rest of us that we are in deep trouble.”

“I’m not happy,” said MTA board member James Cragin, “but I have to face reality. Fiscally, it’s the best thing we can do.”

County Supervisor Yvonne Brathwaite Burke, also an MTA board member, joined Cragin and Zarian in voicing support for the chief executive’s recommendation.

Several MTA board members favor ending subway construction forever at the North Hollywood terminal, fearing that under the current financial circumstances the agency faces the potential embarrassment of beginning projects that it has no money to finish. Those members would like to see the agency examine other mass transit options, such as a network of express bus-only lanes, especially along the planned subway route across the San Fernando Valley.

Burke did not specify how long he wants to suspend work on the rail projects, but other officials said the work stoppage could last six to 18 months. Burke said he was not recommending abandoning the projects, but rather suspending work. He added that he will be reassessing the projects, including looking for ways to build the lines at a reduced cost. He noted that the fate of the projects ultimately rests with the board.

Burke’s recommendation is a departure from positions taken by previous MTA officials, who have sought money from other transportation projects in order to fund the rail program. They have warned that delays will increase the rail construction tab in the long run.

Burke said that he has talked with state and federal transportation officials, who have offered “some encouragement,” but said that by early next year he expects to be able to better assess the risks of suspending work.

He said the MTA needs to devote its resources to finishing the subway extension to North Hollywood, complying with a court order mandating costly improvements to the nation’s most crowded bus system, and getting the agency’s fiscal house in order.

The MTA has spent more than $200 million on the Pasadena line and $100 million on the Eastside subway extension. The MTA also has spent millions of dollars designing the lines, buying up property and relocating businesses and residents and even beginning some construction.

The federal government, which is paying for about half of the subway project, has told the MTA to get its fiscal house in order before expecting additional money from Washington. To satisfy that demand, the agency has drafted “recovery plans,” which have been rejected twice as unrealistic.

County Supervisor and MTA board member Don Knabe said Burke’s action may be necessary for the MTA to win back the confidence of the Federal Transit Administration. “If that’s what it takes to reestablish our credibility, we need to give it a very serious look,” he said. “Some of our congressional representatives may not like that, but hopefully they’ll understand the gun we’re under.”

Burke’s recommendation does not deal with an already long-delayed proposed rail line across the San Fernando Valley. He said his recommendation deals only with projects scheduled for the next six years.