Bailout Plan for RTD Put Together : Transit: Transportation commission scrapes up funds to cover most of $65-million budget shortfall.

County transit officials Wednesday hammered out a four-point plan to make up some, but not all, of the Southern California Rapid Transit District’s $65-million budget shortfall, easing immediate pressure for service cuts or fare increases.

RTD officials welcomed the Los Angeles County Transportation Commission’s help, but said significant parts of the plan may be unfeasible. And, they added, the transit district still faces a projected deficit of more than $100 million next year.

Meanwhile, the LACTC board affirmed its controversial decision to divert the Orange Line subway a mile south of Wilshire Boulevard in the Mid-City district.

However, LACTC board members also promised to try to persuade federal officials to let the subway eventually swoop back up to Wilshire to serve the Miracle Mile district and the Los Angeles County Museum of Art. Federal law, based on a 1985 study of methane pockets in the soil, forbids a subway under Wilshire

The RTD rescue package was worked out with the help of a neutral third-party accountant in a series of sometimes contentious public and private meetings over the last month.

The shortfall appeared soon after the fiscal year began last July, when expenses soared and fare revenue fell. It worsened when the LACTC cut its subsidy to the district by $35 million because of recession-battered sales-tax receipts. Later, the agencies argued over the RTD’s eligibility for $15.3 million in state operating subsidies controlled by the LACTC.

The $53.9-million rescue package attacks the $65-million shortfall in several ways:

* About $21 million in surplus funds is believed to rest in a state-financed fund designed to help in the purchase of buses and other capital expenditures.

* The disputed $15.3 million in state operating subsidies could be restored, but only if the RTD makes some effort to hire private bus operators to take over its least profitable routes.

* Another $10 million can be cobbled together by diverting about $3.3 million from an LACTC rail-construction fund and borrowing about $6.7 million from the RTD’s self-insurance fund.

* The RTD could spend $7.6 million in “retained earnings” listed in its balance sheet.

LACTC officials acknowledged that the proposals may raise auditors’ eyebrows, but they are necessary to keep the RTD from slipping into a deficit before attacking the larger shortfall looming in next year’s budget.

“You may have a budget at home, but if the roof starts leaking you’re going to have to do something to find the money to fix it,” said LACTC board member James Tolbert of Van Nuys. “Well, the roof is leaking at the RTD.”

RTD Controller Tom Rubin, however, warned that the rescue package may, in fact, be empty.

He said the $21 million in surplus capital funds is a surprise that no one can explain. Conditions attached to the $15 million in operating subsidies, he added, may be rejected by RTD unions. The $6.7-million loan from self-insurance funds, he said, may not pass muster with the district’s outside auditor.

“We’ve taken a big step today,” Rubin said. “It gets us partway there, but there is still a large gap to close.”

The Orange Line decision was a compromise between federal officials worried about methane gas under Wilshire Boulevard and local officials who complained that the new route will cost more and serve fewer people.

The Orange Line originally was designed to run westward under Wilshire from downtown toward Westwood. But federal officials barred that plan in 1985 after methane gas from abandoned oil fields seeped into a Fairfax District clothing store, leading to an explosion and fire.

Officials responded by diverting the subway south from Wilshire and Western Avenue, where a station is now being built, to the intersection of Pico and San Vicente boulevards, which was south of a city-designated “methane danger zone.”

Since then, however, museum officials and others have produced evidence that methane levels are the same on this southerly route--but that either route could safely accommodate a subway. Given this, they said, a route under busy Wilshire makes more sense.

Others argued for the southerly route, saying it would better serve Koreatown, the largely Latino Mid-City district and South-Central Los Angeles. Meanwhile, LACTC officials warned that bucking the federal prohibition against a Wilshire subway could scuttle the whole project.