County Transit Panel Seeks Compromise on Metro Rail

Rather than wresting control of the Metro Rail project from the Southern California Rapid Transit District, the Los Angeles County Transportation Commission on Wednesday offered RTD a 30-day grace period to see if a compromise can be worked out.

After two weeks of threatening to move against RTD, the commission voted 6 to 5 to give 30-day notice that it was canceling the RTD’s $19.7-million contract to design and engineer the second phase of the $3.7-billion subway project. Then the commission offered the RTD an olive branch.

Cancellation of the design and engineering contract would have effectively ended the RTD’s role in building Metro Rail, most agree. However, if the RTD and the commission can work out some kind of shared authority over the project, the commission will rescind the order canceling the multimillion-dollar contract.

The compromise offer came after RTD Board President Gordana Swanson and General Manager Alan Pegg made an unusual appearance before the commission Wednesday, urging that any commission action terminating the RTD’s role in Metro Rail be put off while an attempt is made to work out a compromise.

The commission and the RTD have been at loggerheads over who is to control the subway that is being tunneled under the city. Metro Rail will one day link downtown Los Angeles with Hollywood and the San Fernando Valley and is to be part of a 150-mile, $5-billion rail network that will extend from Union Station into the suburbs.

The RTD--which is building the $1.3-billion, 4.4-mile first phase of the project--claims that it has a valid agreement with the commission authorizing the RTD to design and construct the remaining 13 miles of the project.

The commission--which controls the project purse strings--says the RTD has not done a good job on the first phase, so it must give up its construction role on the second phase.

The battle for control of Metro Rail is simply a power struggle between the top bureaucrats and appointed board members of the two transit agencies, according to local and state officials.

Assemblyman Richard Katz (D-Sylmar), chairman of the Assembly Transportation Committee, said he believes that the fight is caused by “individual egos and power politics and people who aren’t willing to give it up.”

RTD board member Nick Patsaouras, who attempted to fashion a compromise, said the issue has come down to “personal dislike between RTD board members and commission members.” The animosity mentioned by Patsaouras was quite evident Wednesday as Swanson and Pegg verbally sparred with their counterparts on the commission.

The basic disagreement between the county’s two large transit agencies has to do with how well the RTD is managing construction on the first phase of the project. An audit ordered by the commission found that the $1.3-billion first phase was 10% over budget and two years behind schedule. RTD officials say that cost overruns are to be expected on such big projects and contend that they are building a good system.

The cost overruns have become the key issue because the commission and the city of Los Angeles, which is putting $90 million into the next phase of the project, are responsible for any cost overruns. Neither the RTD nor the federal government will have to pay for project costs that run over budget, said Neal Peterson, commission executive director.

“Because of this . . . it is imperative that the commission have greater and more direct control of scope, budget and schedule for Phase II,” Peterson said.

Earlier, the commission moved to force the RTD to take cost-cutting steps on the first phase of the project by creating the Rail Construction Corp., a nonprofit agency that will assume control of project construction. The new corporation’s Board of Directors would report to the commission. The commission offered the RTD three of the six seats on the corporation’s board.

The district refused to help form the new rail construction firm or to name three directors. RTD officials contend that the new firm is nothing more than a front for the commission and would leave the district powerless.

Last week, the RTD board, also on a split vote, proposed that some form of Joint Powers Agreement be forged by the two agencies. Such an agreement would create a third, independent transit authority to build the rail projects in Los Angeles County, according to Swanson.

The commission staff recommended that idea be rejected and that the commission take swift, clear action to terminate the RTD’s $19.7-million contract and take over the work itself. The staff also recommended that the offer to let the RTD name three Rail Construction Corp. board members be extended indefinitely.

Like it or not, RTD officials have acknowledged that the commission can legally cancel the $19.7-million contract and take over the design and engineering work. They conceded that if a compromise is not worked out within the next month, Wednesday’s actions appear to leave the big transit district out in the cold on a project that it helped promote from the start.

“It would be a crazy thing for them to do,” said Marvin L. Holen, chairman of the RTD Board of Director’s transit committee. He was critical of the cancellation notice, saying that if it is carried out “it would substantially delay further federal funding.”

The federal government is paying half of the Metro Rail costs. The commission, as the designated federal grantee, handles the purse strings. The other Metro Rail funding partners are the RTD and the city of Los Angeles.

By kicking the RTD off the job, the commission would have to go back to federal authorities and prove they have the expertise to complete the project, a process that Holen said would take at least a year. Such a delay would add millions of dollars to the project cost, he said.

Peterson denied that the transition would take more than a few weeks and said the commission would continue to fund the project in the interim, so that no time was lost.

Throughout the dispute, federal Urban Mass Transit Administration officials have refused to take sides. UMTA, which funds the federal share of the project, does recognize that the commission is the “legal successor” to the RTD as the grantee taking federal money. UMTA officials also recognize that the commission previously had agreed that the RTD would design and build the project. UMTA officials said it is up to the local officials to determine if that agreement is still binding and workable.

Times staff writer Richard Simon contributed to this story