Funds for Pasadena Blue Line Approved : Transit: MTA board OKs $123 million for the rail system as part of $2.9-billion budget. Meanwhile, negotiations continue to avert a strike.

In a hotly debated meeting marked by a raucous public demonstration, the Metropolitan Transportation Authority adopted a $2.9-billion budget Wednesday that includes spending $123 million for projects on the Pasadena Blue Line light rail system.

The authority’s approval of a 1994-95 fiscal budget was unanimous. But a separate action to spend additional monies for the Pasadena project provoked heated discussion and was passed despite the vigorous objections of about two dozen protesters and the authority’s chief executive officer, Franklin E. White.

Protesters argued that the agency’s action, in effect, sacrifices monies that might be spent on bus operations instead of rail systems, which they contend are primarily used by more affluent residents. Several protesters who refused to stop speaking were removed by MTA police.

White argued that the MTA should steer a more conservative spending course.

Earlier, Mayor Richard Riordan and other top officials met privately with union leaders in an attempt to avert a transit strike Monday.

“I think we made some progress,” Supervisor Ed Edelman, chairman of the MTA board, said after the nearly two-hour meeting in his office. But, he added, “I’m sure it’s going to go right down to the wire.”

Last week, the agency cut bus service and raised fares in an effort to erase a $126-million budget deficit.

In a private session Wednesday, the MTA board authorized one week of severance pay for the 61 employees who were laid off last week.

Negotiations were scheduled to resume today between the transit agency and unions representing 6,400 bus and train operators, mechanics and clerks.

However, proponents of the Pasadena rail line, which has been slowed by cutbacks, argued that a new infusion of money was needed to keep the project on track and is in line with the wishes of a majority of county residents who have voted in favor of expanding the light rail system.

“This is a commitment that had to be made or the line would have been stopped,” said Pasadena Mayor Kathryn (Katie) Nack. “Not to have approved it would have been a real slap in the face to taxpayers who voted for light rail.”

The Pasadena project had been allocated $62.2 million in the proposed 1994-95 budget. The additional monies will come from three sources:

* $32.8 million from reserves created from HOV (high occupancy vehicle) projects completed under budget.

* $18 million from a fund used for message signs, sensors and other traffic operations.

* $10 million in capital funds.

White said he had no objection to the latter two funding sources. But he strongly opposed depleting the HOV reserve and said the agency could regret its action in future years.

“The organization is broke and has been broke for the last three years,” he told MTA directors. “This is not a cash management issue. If money from the HOV fund is taken, from where will it be replaced? Last year should have taught us that we have to get back to a sensible policy, which is don’t spend money we don’t have.”

The motion to use the HOV reserves, proposed by Supervisor Mike Antonovich, passed on an 8-2 vote. One board member absented.

Antonovich said additional spending for the Pasadena line would not jeopardize MTA finances and does not come at the expense of bus riders.

“These are funds that been specifically designated for rail projects by the voters; the money could not be used on anything else,” Antonovich said. “People can try to create controversy and can try and demagogue over this issue . . . but in fact it is not an issue.”