Ex-Transit Chief Seeks $300,000 Buyout : Contracts: Neil Peterson is asking for a year’s salary and benefits, plus raises that he declined in previous years.

Neil Peterson, who headed the now-defunct Los Angeles County Transportation Commission, has asked for more than $300,000 in salary and benefits to buy out the one year remaining on his contract, according to several high-level transit officials.

Peterson, who earned $148,300 a year as executive director, had one year remaining on his five-year contract when the commission merged into the newly formed Metropolitan Transportation Authority. Peterson, 49, was passed over in his bid to head the MTA.

Citing the contract he negotiated when he took the post in 1989, Peterson has demanded one year of salary--$148,300--and more than $150,000 in benefits. They include an automobile allowance, retroactive pay increases for raises that he declined to take, performance bonuses, an additional year on a $350,000 interest-free home loan, health insurance, and payments for the taxes that he would owe on these benefits.

The MTA has authorized a panel to offer Peterson as much as $240,000, according to sources familiar with the negotiations, who said their hand is being forced by a contract that in some instances heavily favors Peterson.

“This is just a lingering sore. It gets back to the atrocious nature of the original contract,” said one transit official, who like others interviewed for this story requested anonymity.

Peterson did not return repeated calls seeking comment. His lawyer, Burt Pines, former Los Angeles city attorney, declined to comment.

But the request has drawn fire from some critics who say the agency should hold the line on costly buyouts.

“This is grotesque,” said Eric Mann, director of the Labor Community Strategy Center, a nonprofit labor group that specializes in transportation issues. “In a city where we have half a million people who work a full year for less than $10,000 a year, and many of those people cannot afford to ride the buses, I think it’s criminal for Neil Peterson to be essentially competing for funds that should be placed directly on ridership needs.”

Nick Patsaouras, a member of the three-member negotiating panel, said he did not believe that Peterson would get all that he is seeking. In particular, Patsaouras objected to Peterson asking for retroactive raises and bonuses. When Peterson was in charge of the agency, he frequently vowed not to take raises during lean times caused by budget shortfalls.

“If he, as a leader, told employees: ‘You are not going to get raises and I’m not going to either,’ then he cannot go back and change it,” Patsaouras said. “He sets the rules and he has to play by them.”

Peterson accepted a raise in March after he had missed out on the top job. On March 1, his annual salary increased from $139,000 to $148,300. As of April 1, the Transportation Commission was officially dissolved.

Among the most controversial requests is Peterson’s demand for money to pay the taxes that he would owe on these benefits. Officials estimate that this alone would cost about $50,000.

“I’d offer him the (salary) and the cost of medical insurance and that would be it,” one transit official said. “Let him pay his taxes like everyone else.”

As an alternative, MTA officials discussed keeping Peterson on staff and paying him as a regular staff member--circumventing what would otherwise be a major tax bill for Peterson. This was, however, an option that appealed to few MTA board members.

“The majority of the board do not want to do that,” Patsaouras said.

The three-member panel negotiating the deal behind closed doors with Peterson includes Supervisor Ed Edelman, Ray Remy, who is acting for Mayor Tom Bradley, and Patsaouras, an alternate member on the MTA board.

“We have to live up to the terms of the contract,” Edelman said. “The point is that if we don’t, then we can be faced with litigation which we could lose. . . . We are trying to do this in a fair fashion . . . trying to be fair to him and to taxpayers.”

Under the terms of Peterson’s contract, he was paid a salary and benefits that included membership and expenses at the Los Angeles Athletic Club; $30,000 in moving expenses; several life insurance policies, including a $450,000 policy, and a $350,000 interest-free home loan. His contract also calls for a supplemental retirement plan, which will pay about $1,000 a month for 20 years when Peterson reaches age 60.

Such benefits, said Terry Matsumoto, controller of the former Transportation Commission, “are very standard types of things” for top-level executives.