State Controller Plans Audit of MTA

State Controller Kathleen Connell announced Tuesday that her office will audit the Metropolitan Transportation Authority over concerns about how hundreds of millions of dollars in new state funds will be spent by the troubled transit agency.

Connell, a candidate for Los Angeles mayor, was accompanied by MTA Chief Executive Julian Burke at a San Fernando Valley news conference to announce the audit, the first in a series of inquiries she is planning for transit agencies in California.

Expressing concern about MTA operating deficits, Connell said the audit was prompted by what could be more than $1 billion in additional state funds flowing into the agency. That money is part of the state’s surplus, $6.8 billion of which is being spent over the next five years for transportation projects throughout California.

Given the MTA’s history, however, Connell said she wanted assurances that the money would not be wasted in Los Angeles.

“We are concerned about [the MTA’s] efficiency and its use of those dollars,” Connell said.

The news conference, held at the MTA’s Universal City station, clearly was intended to raise her visibility with city voters on transportation.

The news conference came less than 24 hours after Connell and five other mayoral candidates appeared at a forum in South-Central Los Angeles. At that event, each of the candidates said the city’s transportation problems would be one of the key issues in the spring election.

Connell said she was concerned with the MTA’s “ability to have adequate funds to operate its transportation program as it grows in future years.”

Of special concern, she said, were the recently approved three-year contract for bus and rail operators, the potential for sanctions imposed by a federal consent decree, the mandate to convert MTA buses to clean fuel, and the agency’s massive debt.

The MTA continually loses money on its bus and rail systems, which it makes up with subsidies from state and federal agencies and local tax receipts. Less than 30% of the agency’s budget comes from the fare box, and the MTA is struggling to get out from under about $7 billion in principal and interest connected to its long-term debt.

“I want to make sure that in this audit we find objective and prudent solutions to these problems,” Connell said.

Burke sent mixed signals about the audit: He expressed some annoyance at the latest in a long history of reviews of the MTA’s finances, but said he fully supports Connell and will cooperate.

Burke said it was a good time “for this agency to have an overall independent view on how our agency is running financially.”

Burke said the controller’s audit will be “healthy.”

“Maybe we’ll find some new answers that we haven’t had before,” he said.

Aides to Burke circulated summaries of two earlier audits that they said supported the MTA’s handling of its long-term debt and accounting of tax dollars arising from two half-cent county transit sales taxes.

“We clearly have had a lot of audits since I’ve been here,” said Burke. “It is somewhat annoying. It is almost like a toothache that will never go away.”