RTD Refuses to Release Report on Fare Losses

Times Staff Writer

Despite pressure from the Los Angeles County Board of Supervisors, Southern California Rapid Transit District officials refused Tuesday to release a confidential report that describes security problems and management failures in the transit agency’s handling of bus fares.

The standoff between the two governmental bodies, which have feuded in the past, came after the supervisors accused the transit agency of trying to suppress the report.

The report, disclosed last week in The Times, indicated that the district suffered an annual loss of $200,000 in interest through lack of timely deposits and may have suffered even higher financial losses through “casual pilferage and organized theft.”

One transit director estimated the losses at $2 million annually.


RTD Inspector General Ernest Fuentes, who commissioned the study, said copies were never given to transit directors after the report was completed in May. When the Board of Supervisors asked Tuesday to see the report, Fuentes told them that RTD General Manager Alan F. Pegg had ordered him not to release it.

“To me, that’s reprehensible and irresponsible,” said Supervisor Mike Antonovich. He charged that the RTD’s resistance was undermining public confidence in the transit agency.

Action Called Illegal

Supervisor Pete Schabarum, a frequent critic of the RTD, also demanded to view the report, which he called a public document.


“The general manager has clearly rat-holed and buried this report, which I think is clearly in violation of the public records act,” Schabarum said.

While Pegg was in San Francisco attending a meeting of transit officials, Fuentes told the board he could not release the report until “late January or early February"--or the time when new electronic fare boxes are expected to be installed in all 2,600 RTD buses.

Transit officials are hoping that the new fare boxes will streamline the district’s present system and correct many problems.

In the meantime, Fuentes said, there is also a security reason behind the district’s refusal to release the report. Fuentes warned that the report’s descriptions of how the money is collected and counted should not be made known outside the agency.


However, only Supervisor Ed Edelman, a staunch supporter of the transit agency, defended the RTD’s position.

By late Tuesday, Suzanne Gifford, the district’s top lawyer, said she will review the report to determine whether the document or part of it can be released to the public.

The study, which was conducted by the consulting firm of Peat Marwick Main & Co., covered a period from mid-January to March, 1988, and found that the RTD had a fare box collection system “over which there are virtually no financial controls or checkpoints.”

The report also concluded that there is “a general lack of accountability over such (cash) transactions” in the district’s fare box collections. In addition, the study said $200,000 in interest payments are lost each year because of delays in processing cash revenues from bus fare boxes.


High Loss Estimate

Although the report did not specify a dollar amount in losses, sources close to the situation told The Times earlier that the RTD has actually suffered “a multimillion-dollar loss” annually from theft and missing fare box revenues.

RTD Director Nikolas Patsaouras also said that district officials estimated the losses at $2 million a year. However, Patsaouras and other district officials argue that the new fare box equipment and tighter security controls will solve much of the problem.

Under the present system, drivers are asked to observe the amount of money that is placed into fare boxes and then drop the money into a “vault” at the bottom of the box with a simple lever.


The vaults or steel boxes are then removed by the use of a special key, placed on board vault carts and later taken to cash-sorting facilities, where the money is counted and processed. The Peat Marwick report concluded that the RTD should beef up controls over fare box procedures as well as security at its cash-counting locations.