RTD Shortfall Increases to $60 Million

Contrary to officials’ hopes, the Southern California Rapid Transit District budget crunch has become worse since a recession-driven sales-tax shortfall was announced last fall, and accountants are scrambling to find ways to cut costs rather than slash service.

RTD Board President Marvin L. Holen said the budget shortfall is at least $60 million. The district already has cut costs by $25 million--in part by “thinning” service and laying off 32 part-time drivers--but must make up the rest by the end of the fiscal year on June 30.

Holen blamed the Los Angeles County Transportation Commission for the remaining shortfall, saying the commission has reduced its subsidy to the RTD by $35 million--about $5 million more than the reduction announced last November. He wants the commission to restore the funds.

But commission officials, under fire for wasteful spending and lax cost controls, said their own shortfall in sales taxes has soaked up all available cash and they cannot spare any more money for the RTD.

“The bottom line is, we’ve surveyed every account we can find,” LACTC Executive Director Neil Peterson said. “There is no money available.”

RTD Controller Tom Rubin said buses will not stop running if the transit district ends the fiscal year with a deficit because the RTD will still have cash on hand. But a budget deficit would make it harder and costlier for the RTD to borrow short-term operating funds, he said.

And because the transit district’s problems are expected to mushroom in 1993--a $100-million budget shortfall has been mentioned--a budget deficit this year would make it harder to resist significant service cuts and possibly a fare increase later in the year, Rubin said.

The problem also could impair the RTD’s plan to build a $430-million headquarters tower, garden and bus transfer lot atop a Metro Red Line subway stop at Union Station. Construction on the first phase of that multiyear project, which is being developed with Catellus Corp., is scheduled to start later this year.

In an effort to cut costs, the RTD already has cut service by 2.8%--jamming more riders onto the county’s most crowded buses--and laid off 32 part-time drivers last week. Forty buses were removed from service on 39 lines in the most recent set of service cuts, which were phased in Jan. 20 and Feb. 24. Sixty-five buses have been cut by the RTD in the last nine months.

Such cuts upset some LACTC board members who are suspicious of RTD inefficiency.

“That’s directly opposite to what was promised in Proposition A,” said commission board member Ray Grabinski, referring to the landmark 1980 referendum with which voters increased the local sales tax to improve public transportation. “It’s costing us more to deliver less. It’s time for a gut check.”

The cuts also have produced a minor rider backlash. Passengers on Line 497, an express line from Pomona to downtown Los Angeles, have circulated handbills urging others to complain about the two buses shaved off their route and to demand that the service be restored.

“They admit that in the case of all the routes affected, they will probably follow the old saying ‘the squeakiest wheel will get the grease,’ which means that if you don’t complain, the bus service on Line 497 will not only not get better, but may deteriorate further,” reads the handbill. “Don’t sit quietly and let them decide your commuting schedule for you. Get on the telephone and start ‘squeaking’ as loud as you can!”

Despite the longer waits and fewer seats on that route, other lines have been hit harder.

Even before recent cuts, for example, buses serving Line 204 along Vermont Avenue carried an average of 55 passengers at the peak of rush hour--meaning at least 14 people had to stand in the aisles. Now the line has lost two buses in the morning and four in the afternoon.

Similar cuts have been made on other heavily traveled lines serving Wilshire, Pico, Olympic and Glenoaks boulevards, Soto Street and Los Angeles International Airport.

RTD Operations Manager Art Leahy said the district has no choice but to remove buses from its most heavily traveled lines because it already cut service to a bare minimum elsewhere. The removal of one bus from a line served by 10 buses an hour will be felt less than a cutback in runs on a suburban line that is served by only one bus an hour, he said.

“People will not ride a line if the bus comes less than once an hour,” said RTD spokesman Jim Smart. “If it comes less often than that, it’s not a schedule, it’s Greyhound.”

Leahy disputed contentions that the RTD is inefficient. He said the district spends $79.56 an hour to run each bus, which is about 10% above the average for the 20 largest bus operators in the country. But, he said, RTD buses carry so many riders that by another measure, subsidy per passenger mile, the district is the nation’s most efficient operator--44% below average.

For now, the RTD and the county transportation commission see further service cuts as politically unacceptable.

Accountants from both agencies are meeting daily to pore over budgets, looking for savings. Some ideas are proving controversial. For example, proposals to combine the agencies’ legal, planning, marketing and personnel departments are being resisted by the RTD, which sees them as an LACTC power grab. A proposal to spend some of the RTD’s self-insurance reserve is dismissed as fiscally unsound.

Privately, RTD officials said they see no way to avoid ending the year in debt and predict dire consequences if they do.

Peterson nonetheless remains optimistic--and urges the RTD to be optimistic too.

“We need to cut 5.8% of a $650-million (RTD) budget,” he said. “Is it possible to reduce that amount without affecting service or raising fares? Absolutely. But there has to be a will to do it.”