Ex-Transit Chief Peterson Will Get $240,000 in Contract Buyout : Transportation: The MTA board OKs sum for final year of five-year pact. The former commission chairman’s record was blemished by expense scandal.

Neil Peterson, once a top Los Angeles County transit official, will receive $240,000 in salary and benefits to buy out the year remaining on his contract, officials said Wednesday.

Peterson, the former executive director of the Los Angeles County Transportation Commission, had one year left on his five-year contract when the commission merged April 1, forming the Metropolitan Transportation Authority. Peterson, who earned $148,300 a year, was passed over in his bid to head the MTA.

The buyout agreement, presented at Wednesday’s board meeting, is the epilogue to Peterson’s four years of accomplishments and controversy. During Peterson’s tenure, the city opened its first modern subway, the Red Line, Metrolink commuter trains that travel to the suburbs, and the Blue Line trolley running between Long Beach and downtown Los Angeles.

But these accomplishments were tarnished by disclosures last spring that Peterson and other agency officials spent more than $2.9 million on such items as catered lunches, lavish dinners at the city’s best restaurants and a three-day retreat at a Palm Springs resort. Peterson repaid the personal charges, such as golf lessons in Arizona, that he had billed on a transit agency credit card.

Under the terms of the agreement reached this week, Peterson was officially removed from the agency’s payroll as of this week. He will receive his salary and almost $100,000 in benefits, including a car allowance, an additional year to pay back a $350,000 interest-free home loan and health insurance.

“The way this deal is structured, Neil is getting less than he bargained for,” said Burt Pines, Peterson’s lawyer and a former city attorney. “I believe the community got more than it bargained for when you look at Neil’s service to the community--he gave his heart and soul to this job, he worked 16-hour days. He built the subway on time and on budget. He was responsible for the success of the Long Beach trolley, commuter rail, the freeway patrol, and many other accomplishments.”

Critics, however, say that the county is spending too much to buy out the 49-year-old executive’s contract.

“If MTA prioritized the needs of transit-dependent bus riders the way it is prioritizing the needs of Neil Peterson, people in the inner city wouldn’t be smashed like sardines on overcrowded buses,” said Lisa Hoyos Tweten, a transit specialist with the nonprofit Labor/Community Strategy Center.

The county’s two transit agencies--the Transportation Commission and Southern California Rapid Transit District--officially dissolved when they merged April 1. Since Peterson left his office March 26, he has been paid as an agency employee, using vacation time and leave while he negotiated the buyout of his contract.

During early talks, Peterson Requested more than $300,000 in salary and benefits--an amount that included a controversial demand for money to pay the taxes that he would owe on the benefits. That sum--about $50,000--was denied in the final agreement, said Dave Kelsey, an assistant county counsel for the MTA.

The MTA also refused to grant Peterson’s request for retroactive pay raises. During his administration, Peterson declined to take raises, saying he did so because of the tight budgets. He did, however, accept a raise in March after he had missed out on the MTA job. On March 1, his annual salary increased from $139,000 to $148,300. Because of the strongly worded contract originally negotiated with Peterson, MTA officials said they had little room to maneuver.

“It’s exactly what Peterson bargained for--when he entered the agreement four years ago; he entered a five-year agreement with the expectation it would continue, so he has a termination provision,” Kelsey said. “Under contract, he’s entitled to a year of salary and benefits.”

Peterson is expected to sign the agreement this week, Kelsey said.