MTA Holds Transit Funds; : City Must Repay $2.4 Million

The Metropolitan Transportation Authority is withholding nearly 85% of transit-related funds from the city of Hawthorne because past transportation funds were used to meet the city’s payroll.

Between July, 1993, and July, 1994, the city used $2.4 million meant for transit programs to meet its payroll. The diversion of funds was discovered last summer during an audit by county transportation officials.

The money diverted to pay city employees is another sign of the lax bookkeeping of the past that is in part responsible for the city’s current financial crisis, a city official said. Normally, the city would receive $185,000 each month in Proposition A, Proposition C and state Transportation Development Act funds. Since February, MTA has provided only $30,000 a month to pay for current transit programs such as bus subsidies and the Dial-A-Ride program for elderly and disabled residents.

“We recognize that the city of Hawthorne is going through some hard times and we want to make it as easy on the citizens as we can,” said Bill Heard, MTA spokesman. But county transportation officials will not continue to hand out funds that are not directed toward specific projects, Heard said.

The money being withheld could have been used for street repairs, bus stop improvements or expanding transportation systems.

The county will consider funding eligible transportation proposals only if the city details how the money will be spent, Heard said.

The city must restore the $2.4 million before MTA will release the rest of the funds. The money being withheld--$155,000 each month--will be applied toward that amount, Heard said.

But the transportation funds will be taken away if not used by a specific date.

“We’re hoping we’ll put the money back and we won’t lose any entitlements,” said city spokesman Tom Quintana. “We’re looking at the overall financial plan of the city to get out of debt, and this is part of that. The transportation obligation will be factored in.”

Proposition C revenue, which totals $126,000 each month, will expire June 30.

City officials plan to ask the county for an extension of that deadline.

The city has another one to two years to use the other transit-related funds.