MTA Panel Pushes Valley Line Ahead to Get City Funds

A Metropolitan Transportation Authority panel approved a plan Monday that calls for construction of a San Fernando Valley rail line to begin by 2007, but it left unanswered the question of how the project will be funded.

The project could have been delayed until 2011 under a so-called recovery plan drafted by MTA at the behest of federal authorities, concerned that the agency’s rail construction program is underfunded and too ambitious. However, pushing back work on the Valley line angered the area’s lawmakers and provoked a standoff with the city of Los Angeles that could itself jeopardize federal funding for regional transit projects if it remains unresolved.

The proposed agreement, if approved by the City Council today, will clear the way for the MTA to receive $200 million in city funds required to satisfy federal concerns about whether the agency has put its financial house in order. The council voted to withhold the money after the MTA adopted the recovery plan. The $200 million is earmarked for subway construction.

But the proposed agreement also creates a new risk for the county transit agency because it allows the city to demand $50 million back if the MTA fails to meet the construction deadline.

“That’s a better risk than not having the $200 million at all,” said acting MTA chief Linda Bohlinger. She said she hoped federal officials would approve the agreement’s alteration in the recovery plan, which is critical to winning back Washington’s confidence.

Federal Transit Administration officials who demanded the recovery plan could not be reached for comment.

The proposed agreement with the city comes after a private 2 1/2-hour meeting called over the weekend by Mayor Richard Riordan at his Brentwood estate and attended, according to a City Hall source, by Councilmen Nate Holden and Mike Feuer, Supervisor Yvonne Brathwaite Burke and Larry Zarian, chairman of the MTA board.

The proposed agreement also commits the MTA to complete subway extensions to the Eastside by 2004 and to Mid-City by 2008. Although the dates are not new, the agreement commits the MTA to meet them--notwithstanding any reduction in federal funding--or risk having to return $50 million to the city.

Under the proposed agreement, the MTA can only be held to the Valley construction deadline as long as the city works with it to fund the line and to help find ways to reduce its overall costs. The line’s route would follow Burbank and Chandler boulevards from the subway terminus in North Hollywood to Woodland Hills.

But although the plan meets the city’s demand to start construction of a Valley line by 2007, MTA board member and Supervisor Zev Yaroslavsky said he is worried about giving the MTA too many loopholes to get out of its commitment.

“If the city accepts what went on in the ad hoc meeting today, then it’s not a deal,” he said. “It’s a deal that gives the MTA total control over whether these milestones can be met.”

But John Fasana, a Duarte councilman on the MTA board, said, “I think this is fair. I don’t see a need for the city and the MTA to continue bickering over this situation.”

Some key city officials expressed optimism over the plan, saying it might lay the groundwork for settling the dispute.

“There is progress here,” said Feuer, who led the successful effort to freeze the city’s $200-million contribution.

The council vote to withhold the payments came in response to complaints from Valley lawmakers and homeowners who argued that their area has paid millions in transit taxes over the years and has yet to get a long-promised rail line. A prominent Valley business group has even proposed creating an independent transit authority to manage and build mass-transit projects in the Valley, arguing that the MTA has ignored the region for too long.

MTA officials have repeatedly argued that they do not have the funding to begin construction of the Valley line by 2007 without delaying other projects. But other officials worried that the dispute would send a message to Washington that the troubled agency cannot manage its affairs at the very time when Congress is scheduled to consider MTA’s request for $100 million for subway construction.

To help the MTA build the Valley line sooner, Bohlinger included a clause in the settlement proposal that requires the city to help lower the cost of the Valley rail line.

Under the plan, Riordan and other city officials will have to form an oversight committee made up of city officials and residents to examine cost-cutting measures for the Valley project.

One solution might be to form a partnership with a private firm to help build the line in exchange for future profits, she said.

In addition, Bohlinger said that if the MTA cannot meet the deadline for the Valley line because of circumstances beyond its control--such as drastic cuts in federal transit funding--the agency can attempt to renegotiate a deadline with the city.

Steve Sugerman, Riordan communications deputy, said the plan appears to set the stage for a settlement because it forces the MTA to commit to beginning construction of a Valley rail line in 2007.

Ron Deaton, the city’s chief legislative analyst, who is leading the negotiations for the city, said he has not seen all the conditions of the agreement but that he believes the two sides are close to settling the dispute.

Bohlinger said the $50-million risk a decade from now is better than not getting city funds that the MTA has been counting on in next year’s budget. “This is the lesser of two evils,” she said.

The acting MTA chief said she believes the MTA can prepare for a potential $50-million payback to the city from the reserve funds that federal officials have demanded that the agency set aside.