State Must Rein In MTA, Official Says

Assembly Speaker Antonio Villaraigosa said Monday he believes the state must set some priorities for how the Metropolitan Transportation Authority spends its money in the wake of disclosures that the transit agency has amassed $7 billion in debt.

Reacting to stories in The Times that described the agency’s borrowing--nearly all of it for rail construction--the Los Angeles Democrat said the MTA must find ways to improve the bus service used by more than 90% of its riders.

Also Monday, the leader of Bus Riders Union, which won a federal consent decree in October 1996, to reduce overcrowding and improve bus service, called on a federal judge to place the agency in receivership.

Eric Mann said the court needs to order the agency to buy more new buses than the MTA has ordered. He also said the agency should declare an immediate moratorium on construction of rail lines, including completion of the subway to North Hollywood.

That position is directly counter to efforts by Mayor Richard Riordan and the MTA board to press Congress for federal funds needed to finish the subway from downtown Los Angeles through Hollywood to the San Fernando Valley.

MTA Chief Executive Julian Burke, who was unavailable for comment, issued a statement expressing confidence that the agency can balance the county’s competing transportation needs.

“The MTA can manage its existing debt and service its obligations,” Burke said.

Burke, a corporate turnaround expert brought in by the mayor last summer to get MTA’s troubled finances in order, said he is working to carefully manage and spend the agency’s funds. “It is no longer business as usual at the MTA,” he said.

Riordan, who chairs the MTA board, said “we have done a significantly better job” since he sent a team of budget experts to dissect the MTA’s spending and debt practices last summer. “We know where we are at,” the mayor said. “We’re in control of the expenditures.”

The Times reported Sunday that the agency has borrowed $3.4 billion to build the subway and two light-rail lines, pay contractors’ cost overruns, plan other rail projects and erect its extravagant Gateway Center headquarters. When interest and fees are included, the total reaches $7 billion.

To issue bonds that raised most of the money, the agency has pledged a significant share of its receipts from the county’s penny-on-the-dollar transit sales tax for the next 30 years.

The MTA will devote nearly $360 million or more than 30% of its annual operating budget to debt service in the next year, more than salaries for its employees.

“To have the No. 1 expense be debt service is unacceptable,” said County Supervisor Zev Yaroslavsky, an MTA board member. “This level of debt is too high and it can’t be sustained. It undermines the very mission of the agency to provide public transportation to the transit dependent, currently bus riders.”

Yaroslavsky has qualified an initiative for the county’s November ballot to prohibit the use of any more transit sales tax money for subway construction beyond North Hollywood. A subway supporter for most of his political career, Yaroslavsky now argues the $300-million-a-mile project is far too costly and that light-rail lines are a better alternative.

Villaraigosa said the reports in The Times renew his sense that there needs to be a fundamental change in the composition of the MTA board.