U.S. Orders Third MTA Fiscal Plan

Improbably, things got worse for the Metropolitan Transportation Authority on Friday as federal officials stunned the agency by ordering it go back a third time and produce a “recovery plan that is financially and technically responsible.”

In response to federal demands that the MTA get its house in order before receiving additional money from Washington, the agency drafted its first recovery plan in January. But it was rejected. The agency then sent a new document back to Washington in June.

But Federal Transit Administration officials issued a scathing criticism Friday, saying the latest is based on “optimistic . . . and questionable” financial assumptions and the agency still appears to be promising more than it can deliver. They called financial projections for new bus purchases “unrealistic and subject to considerable risk.”

Federal Transit Administration officials said in a letter to acting MTA chief Linda Bohlinger that until an acceptable plan is received, no federal funds will be provided for a subway extension to the Eastside.

County Supervisor Zev Yaroslavsky, an MTA board member who voted against the plan, said: “We have to go back to the drawing board. The MTA board has got to recognize that they can’t do everything they want to do. This is what happens when you can’t say no.”

Bohlinger said she was disappointed. She said the agency would work to resolve the concerns of the federal government, which is paying for about half of the $6.1-billion Los Angeles subway project.

While acknowledging that progress had been made in addressing some concerns, federal officials raised questions about the MTA’s ability to meet its schedule for making court-ordered bus improvements and building the subway.

If the agency must shift money to satisfy federal concerns, it could hold up transit projects, most notably the already-delayed Eastside subway extension, Bohlinger said.

“If the Eastside is delayed significantly, it could have a ripple effect to the Mid-City and Valley projects, but we hope that we can fatten reserves without having to rely on project delays,” she said.

The critical federal assessment came on a day when the MTA’s leadership came under attack from the office of Mayor Richard Riordan, the MTA board chairman, for recently making lump-sum awards of up to $4,125 apiece to six top executives already earning more than $120,000 a year.

Jaime de la Vega, Riordan’s transportation aide, said the bonuses were awarded without the knowledge or approval of the board. “I don’t think anybody has seen any justification for these bonuses,” added Riordan press deputy Noelia Rodriguez. An MTA spokesman said the merit payments were awarded in lieu of a 3% pay raise given nonunion workers a year earlier.

One of the federal government’s consultants, whose report was attached to the letter to MTA officials, indicated that financial miscalculations are not the agency’s only remaining problems.

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The consultant noted that a “code of conduct” was adopted by the MTA board at the federal government’s behest and has “succeeded in curbing somewhat the board’s more blatant expressions of disrespect to the staff.”

“Although staff actions and level of performance have been, in some cases, deserving of criticism, the board would be well advised to follow the intent of the code of conduct,” the consultant added.

Federal officials were critical of an agreement reached between the MTA and the city of Los Angeles, saying it appears to be held together by “aggressive revenue forecasts, optimistic cost assumptions and several contingencies based on federal funding and eligibility decisions which have yet to be made. . . .”

“We continue to be concerned that the MTA is making greater commitments in the city of Los Angeles agreement . . . than it can realistically fulfill,” said an analysis by a financial consultant to the Federal Transit Administration.