Late Filing for Local, U.S. Funds Costs RTD $3.6 Million

The Southern California Rapid Transit District has lost $3.6 million this fiscal year--more than half of its budget deficit--simply because it was late in filing paper work required to receive local and federal funds, according to a new report.

The $3.6 million loss was in interest income the financially troubled district had counted on earning from investments. However, because the RTD was six months late in submitting state-mandated financial reports, funds were held up and thus were unavailable to the RTD to invest, according to the Los Angeles County Transportation Commission.

“Every other (bus system in the county) can get it in on time,” Transportation Commission member Jacki Bacharach said. “The RTD needs to get in there and figure out how to cross the Ts and dot the I’s. They don’t seem to be doing the administrative and managerial work.

“It would be nice if it was just some administrative thing, but when you’re talking about cutting service and raising fares, it affects thousands and thousands of people.”

The new analysis also concludes that the $12-million budget deficit projected by RTD General Manager John Dyer is significantly overstated. It is actually closer to $6 million, the commission report says. It states that the higher figure is based on a series of inaccurate assumptions about losses in state and federal aid.

The true amount of the deficit is important because it will influence a decision in the next several weeks about how soon to impose fare hikes and service cutbacks. A fare hike hearing is set for Feb. 20, and the board has reserved the option of increasing the 85-cent base fare to $1 as early as April 1.

RTD executives declined to comment on the commission report Friday. Through a spokesman, the RTD’s newly selected interim General Manager Alan Pegg said he is in the process of reevaluating the budget deficit, which will be a major topic at Thursday’s board meeting.

RTD officials in an earlier report to board members acknowledged losing $3.6 million in investment income in the fiscal year ending next June 30. But they blamed their delays in filing required paper work on increasing commission requirements for data.

Also, some RTD managers have said privately, the delays were partially caused by foot-dragging early last year by the RTD board in deciding how to balance this year’s budget.

But Sharon Neely, a Transportation Commission manager, said the RTD was granted more than $200,000 in additional funds specifically to help it get the report in last January, when it was due.

Said Bacharach: “We don’t ask of the RTD anything that we don’t ask of any other (bus) operator. What’s even more preposterous about all of this is we sat down with them (last year) and simplified the forms at their request.”

RTD board Vice President Carmen Estrada, who has opposed raising fares to balance the budget, welcomed the commission report and said she will ask for formal response by RTD executives.

“If (the deficit) really is only $6 million, that makes it easier to deal with,” she said.

As for the $3.6 million loss of revenue because of late paper work, Estrada said she did not realize so much money was involved.

“Anyway you look at it . . . there really can’t be any excuses for submitting it late,” she said.