$40 Million Set Aside to Prevent Hike in Bus Fares : Transit: The bailout plan calls for the RTD to get Prop. C funds while it seeks to cut costs to deal with a $59-million budget shortfall.

In an effort to spare bus riders a hotly contested fare increase, transit officials Wednesday set aside $40 million from a county sales tax to once again bail out the Southern California Rapid Transit District board.

With the RTD now facing a $59-million budget shortfall, transit officials hammered out a compromise, agreeing to pay the agency by using Proposition C funds while asking that it develop plans to implement cost-cutting recommendations.

Politicians and passengers took sides Wednesday in what has become an increasingly heated transportation rivalry: buses versus trains. At the end of an often contentious meeting, the Los Angeles County Transportation Commission adopted a motion by Mayor Tom Bradley and Supervisor Mike Antonovich. And the bus riders claimed triumph.

“It’s a true victory for the bus rider,” said Marv Holen, president of the RTD board. “There is no fare increase and no significant service cuts.”

Holen has charged that buses, which serve 1.3 million, or 85%, of the county’s passengers, are being sacrificed as officials install a “sexier” rail system. That belief was echoed again and again as dozens of bus riders pleaded for an RTD bailout and better--not decreased--service.

“Think of the thousands of the poor and the working who depend on RTD,” said Maria Elena Durazo, president of the Hotel and Restaurant Workers Union. “Why should we get anything less because we are poor?”

Others, however, said the LACTC action will mean trouble in the months ahead because officials decided to let the Metropolitan Transportation Authority revisit the question of whether to restructure fares and services in February. The MTA--the product of a merger between the RTD and county Transportation Commission--will start Feb. 1.

“We just kissed our sister,” said Commissioner Ray Grabinski. “The MTA is going to have to deal with this again. But at least this makes us accountable.”

In Bradley’s motion, which passed on an 8-3 vote, the RTD will be asked to heed the money-saving recommendations of an independent task force. In return, the LACTC put $40 million of Proposition C funds into escrow. Proposition C, approved in 1990, is one of the county’s two transit sales tax surcharges.

RTD officials had asked that their entire $59-million budget gap be erased with Proposition C funds in a no-strings-attached agreement. Instead, under the approved plan, those officials must jump through a series of hoops to gain $40 million during the next seven months.

On a monthly basis, LACTC will ask RTD officials to present their best efforts to implement certain task force recommendations, which included a hiring freeze, cuts in non-service-related costs and paring security costs.

“We are holding the RTD’s feet to the fire,” said one official.

With this plan in place, LACTC officials hope that the cost-cutting measures will significantly reduce--if not completely eliminate--the shortfall. Any of the $40 million that is not used by the RTD for the shortfall will be used to pay for expanding bus service and relieving crowded buses.

“It’s a victory for the taxpayer and for everybody riding public transit,” LACTC Executive Director Neil Peterson said. “It sends a strong message that the first priority must be to enact belt-tightening like everyone else is doing in these tight economic times.”

The recession, rising costs and dwindling ridership have led to RTD’s shortfall, officials said. In hopes of solving those budget woes, Bradley had appointed a task force to scour the RTD and LACTC books. That task force had compiled a set of cost-cutting recommendations. But last week, the LACTC Finance and Programming Committee shuffled aside the suggestions, advocating that tax-generated funds be spent instead.

Because Proposition C funds both rail and bus transit, officials have been bickering about how much--if any--of that money should be spent on the RTD shortfall.

“Prop. C when it went to voters was designed to provide additional needed services for Los Angeles-- additional services,” Peterson said. “It was to expand the bus program countywide, expand the rail program and commuter rail, and improve our freeways and highways. The voters were not approving Prop. C as a way of funding existing operations.”

But the 1990 ballot said the funds were to be allocated for public transportation, including funding the operation and maintenance of public bus and rail programs, as well as improving streets and highways.

In a separate action, the LACTC approved the Congestion Management Plan, which coordinates road improvements, mass transit and land-use planning in an effort to ease congestion.