Merging Agencies Scramble to Spend Money : Rivals: The County Transportation Commission and the RTD are incurring obligations that might burden the new Metropolitan Transportation Authority.

In the days remaining before the county’s two feuding transit boards relinquish their power, officials are spending money and incurring obligations that could tie the hands of the new agency being formed to oversee the region’s planned $183-billion rail and bus network.

The county’s Metropolitan Transportation Authority, under an interim arrangement, will begin functioning at the end of March. Until then, officials with the county’s rival, merging agencies--the Los Angeles County Transportation Commission and Southern California Rapid Transit District--have been scrambling to award contracts and reward those who have shown loyalty.

For example, the RTD board recently voted a $20,000 raise for its general manager--retroactive to Jan. 1. Meanwhile, the Transportation Commission is negotiating contracts for services that could cost several million dollars and, RTD officials contend, duplicate functions already carried out by RTD or other agencies.

Of all the recent actions, the most controversial involve closed-door negotiations between the Transportation Commission and developer Ray Watt to build a $111-million headquarters, even while a separate $137-million RTD facility is under construction at Union Station. Watt has been a longtime supporter of and contributor to Mayor Tom Bradley and transit officials.

“A lot of people are taking care of their friends or trying to reward people before (MTA chief Franklin) White comes,” said Assemblyman Richard Katz (D-Panorama City), architect of the legislation requiring the two agencies to merge. “The taxpayer is being given the illusion of reform and instead it’s business as usual, if not worse than usual.”

The merger was intended to save millions of dollars by eliminating duplicated services and departments, said Katz, a mayoral candidate. In Orange County, for instance, a similar merger between two transit agencies resulted in a $24-million saving in the first year, he said.

The new MTA will have about 9,000 employees. Officials have not said whether the merger will require layoffs.

“The idea behind the merger is greater accountability by elected officials and a savings by eliminating fat and duplication,” said Katz, who estimated that the MTA could save about $35 million by paring down administrative costs.

Instead, the two agencies have continued their bickering and have charged each other with unnecessarily spending money before the agencies officially dissolve April 1. Both agencies deny the charges.

The newly formed MTA will review recent contracts that exceed $100,000. But critics say that MTA members already are facing a full range of issues and questions have been raised over the agency’s authority to back out of obligations.

In a Feb. 18 memo to the district’s president, Marv Holen, RTD General Manager Alan Pegg described items coming for approval before the Transportation Commission that would “unduly fetter” White and the MTA board “in making their own assessments of projects and expenditures.”

In the memo, Pegg cited several examples of unnecessary spending proposed by the LACTC. According to Pegg, the contracts that would duplicate services of the RTD or other agencies include: the proposed purchase and operation of helicopters to monitor traffic, at a cost of $4.4 million; a $99,000 contract for a specifications writer; a management information system separate from the one already in use by the RTD, and an automatic vehicle location system costing up to $2 million.

Citing other agencies that deploy helicopters, such as the Los Angeles Police Department and the California Highway Patrol, commissioners declined to buy their own helicopters. The MTA is scheduled to review some of these items today.

In another instance, the commission recently solicited bids for a cash management consultant--a service that the RTD already performs for its own agency. The RTD ended up bidding along with eight other companies for the contract, which could cost more than $100,000.

“It sounds as if we are two entirely different companies. That is nuts,” the RTD’s Holen said. “It’s business as usual at the commission. There’s an effort to establish programs irrespective of whether they duplicate programs at RTD.”

Neil Peterson, the commission’s executive director, denied Holen’s allegations. “If anything, everybody is working very hard to make sure there is no duplication of services, that we integrate everything we possibly can,” Peterson said. “This is a continuation by one or two individuals trying to perpetuate bureaucratic infighting that has gone on way too long.”

But Councilman Richard Alatorre, the MTA chairman, said the new board will be careful to scrutinize all commission contracts.

“LACTC desires to reinvent the wheel all over again. There has been very little cooperation from LACTC,” Alatorre said. “The whole thing was to come up with one system. . . . It’s ludicrous.”

Some Transportation Commission members said the final days before the MTA takes charge have been trying.

“I’m sure there’s empire-building going on,” said Don Knabe, an alternate member who represents Supervisor Deane Dana. “It’s the natural extension of the turf wars that have been going on.”

Indeed, as the two agencies prepare to dismantle themselves, a free-for-all has broken out with officials from each agency trying to protect their turf. Anxious employees have lobbied some of the 13 members of the MTA board in hopes of ensuring or improving their jobs.

“Pervasive throughout both agencies is a fear about what’s going to happen to jobs as we consolidate,” said one MTA board member who requested anonymity. “I have people calling me on a regular basis. . . . They are going to all the board members. I assume they ingratiate themselves.”

Earlier this month, the RTD board voted a $20,000 raise--retroactive to Jan. 1--for Pegg, a move that increases his annual salary to $138,000. It is uncertain what job Pegg will hold once White assumes command of the MTA in several weeks.

RTD officials defend the action, saying that Pegg received his last raise in February, 1989. With his raise, Pegg earns $1,400 less than Peterson, his counterpart at the commission. Peterson has received raises every year since he started working at the commission in 1989, commission spokeswoman Stephanie Brady said.

But some questioned the timing of Pegg’s raise, saying that White should have been allowed the opportunity to decide.

“I find it unconscionable,” said mayoral hopeful Nick Patsaouras, who serves on both agency boards. “The timing was totally inappropriate vis-a-vis the merger. When local government is strapped for money to give a chief executive a raise, even if he’s had no raise since 1989, is just not right.”

Indeed, other hirings and promotions have occurred despite requests from MTA officials.

Katz and other critics have maintained that local transportation officials do not seem interested in cutting costs. Last week, the Transportation Commission voted to oppose a Senate bill that would place a $141,000 cap on salary and perks of officials at transportation agencies.

The commission’s most controversial move has been its effort to obtain a new headquarters.

Last month, transportation commissioners met behind closed doors, evaluated several proposals, and directed their staff to negotiate with developer Watt to build the headquarters.

Although the RTD had already begun work on a separate headquarters, the commission decided to go its own way in part because of a belief that the RTD building would be too small.

Peterson said he was not troubled by the fact that the two merging agencies would be housed separately. “It’s not unusual to have different offices for different sections of an agency this size,” he said.

Others, however, have questioned the logic, saying it shows the reluctance of both agencies to truly merge. And many questioned the timing of the decisions.

“If you are going to have good management, that requires both agencies to be consolidated into a single agency in a single building,” said Supervisor Michael D. Antonovich, who also serves on the Transportation Commission. “There was an attempt to railroad this through. That’s not prudent government, good government, or responsive government.”

Antonovich said he abstained from voting on the headquarters because Watt had contributed to his campaigns. Since 1984, Antonvich had accepted about $28,000 from Watt, according to records.

Under Watt’s proposal, a building would be constructed for $111 million on 7th Street, west of the Harbor Freeway. That structure was the cheapest per square foot of office space, Peterson said.

Since 1984, Watt has contributed more than $30,000 to Mayor Tom Bradley and about $70,000 to six transit officials. Bradley, however, said these donations played no role in the decision to select the developer. The mayor, who is retiring in June, also noted that Watt had made no contributions to his campaign in the last 12 months.

“Over the years,” mayoral spokeswoman Vallee Bunting said, “thousands of dollars have been contributed to his campaigns but that would never have any influence on a vote he would make.”