State’s Advice to MTA on Unspent Rail Funds: ‘Use It or Lose It’

State transportation officials Wednesday told the MTA to decide by December whether it will proceed with building rail lines to the Eastside, Mid-City and Pasadena or shift $388 million to other transportation projects.

Local officials had feared that the state might take the money back as early as June, so the action Wednesday was welcome news. It allows proponents of the underfunded rail lines more time to try to figure out how to make the projects affordable, including possibly bringing a portion of the Eastside subway extension aboveground and cutting out some of its stations.

“We’re giving the MTA more time to get its act together,” said David Fleming, a San Fernando Valley attorney who sits on the California Transportation Commission.

The commission action came during a meeting at which Metropolitan Transportation Authority interim chief executive officer, Julian Burke, reported on his efforts to turn the agency around.

“The problems are massive,” Burke, a corporate turnaround specialist, told the commission. “I’m making progress [but] the real work is yet to be done.”

Burke received a friendly reception from the commission, whose support he needs for his plan to spend another $207 million in state funds to complete subway construction to North Hollywood.

MTA officials want to complete the project on time and within budget in order to win back Washington’s confidence. In a step toward ensuring that, an MTA panel in Los Angeles voted Wednesday to drop plans to build track crossovers between the subway tunnels under the Santa Monica Mountains.

The MTA board in January suspended for at least six months work on the Blue Line between downtown Los Angeles and Pasadena and extensions of the Red Line subway to the Eastside and Mid-City.

Under a plan worked out shortly before the commission meeting under the leadership of Assemblyman Jack Scott (D-Altadena), a supporter of the Pasadena line, the MTA has until Dec. 2 to show how it will fund one or more of the rail projects, using “honest costs and realistic schedules,” Fleming said.

If the MTA fails to do so, the panel can take the money away from the stalled rail projects and direct the MTA to spend it on other transit projects in Los Angeles County.

“Use it or lose it” was how Fleming described the message sent by the commission. “We just cannot continue to inventory hundreds of millions of dollars for projects that won’t happen for years.”

After the meeting, Burke said, “This is entirely consistent with what I was trying to get done.”

MTA officials said they hope that if they are close in December to finding a way to fund one or more of the lines, the commission will give them another extension.

State Sen. Tom Hayden (D-Los Angeles) said the commission gave the MTA a “reprieve from reality.” The MTA needs to “realize that its obsession with rail comes at the expense of other projects to better reduce traffic and pollution,” such as busways and carpool lanes, he said.

Meanwhile, Stephen J. Polechronis, MTA deputy director of construction who oversaw the Hollywood leg of the Metro Rail project, said Wednesday he was leaving the agency to take a job with Frederick R. Harris, a private construction management firm. “There’s no career path at MTA for a builder,” Polechronis said.

In a further management shake-up, deputy Chief Executive Officer Allan Lipsky said Burke last Friday “replaced” the MTA’s director of audit services, Anthony Padilla, and the agency’s risk-management director, Steven Mauch. Both have left the agency.