Rail Projects Face Further Delays, MTA Board Told

The acting chief of the chronically troubled Metropolitan Transportation Authority told board members Thursday that meeting Washington’s latest demands for greater fiscal responsibility almost certainly will delay completion of the Eastside, Pasadena and Mid-City rail lines for at least three years, and postpone starts on long-promised lines through the San Fernando Valley and Crenshaw district indefinitely.

But before the board members could absorb the implications of such further delay, they received an additional dose of bad financial news when MTA Inspector General Arthur Sinai assailed the agency’s senior managers for approving more than $1 million in new merit raises, which he says violate “basic business ethics.”

At Sinai’s urging, the agency immediately established a task force to review the raises and to determine whether the employees who received them should be asked to return the money.

The federal government, which is paying for about half of the massive Los Angeles subway construction program--the West’s largest public works project--has told the MTA to get its fiscal house in order before expecting additional money from Washington. To satisfy that demand, the agency drafted a so-called “recovery plan,” which federal transportation officials recently rejected as unrealistic.

Acting MTA chief Linda Bohlinger told board members that meeting Washington’s demands will almost inevitably require delaying completion not only of the Pasadena light rail line, but also of the Eastside and Mid-City subway extensions, which already are two and seven years behind schedule, respectively. Work has yet to begin on the cross-Valley and Crenshaw lines, but Bohlinger said even studies on those projects probably must stop.

Bohlinger said the additional delays seem to be necessary if the MTA is to respond to federal criticism that its plans are based on overly optimistic financial assumptions.

MTA has based its budget on a 7% increase in sales tax receipts--far above the projections by the city of 3% and the county of 4.5%. The MTA receives one cent of every dollar spent on taxable goods in Los Angeles County.

But delaying the lines could set off political wrangling in Los Angeles, Sacramento and Washington among lawmakers who have fought hard for new rail projects in their districts. Some Eastside congressmen have sought to require that a portion of the federal funds allocated to the MTA for the coming year be spent on the Eastside subway extension.

“The budgets and forecasts for any major public works project will change,” said Arthur Sohikian, former MTA lobbyist. “But what is troubling about the MTA is the frequency in which they change. The unintended consequence is it serves to erode confidence in Sacramento and in D.C. and makes the projects harder to sell.”

Some officials also expressed concern that any delays in rail lines could upset the delicate agreement between the MTA and the city of Los Angeles under which the City Council agreed not to withhold $200 million in city funds to help pay for subway construction if the agency agreed to proceed with a cross-Valley project.

“We need to seriously look at delays,” said county Supervisor and MTA board member Yvonne Brathwaite Burke.

Moments later, Sinai upbraided MTA managers who had signed off on the raises for “providing the board with incomplete and misleading information and proceeding without board approval, circumventing existing internal controls and procedures and basic business ethics.”

*

One employee was awarded $33,000 after his salary was boosted to $90,000 a year.

The inspector general questioned the criteria used to award the merit raises, noting that a contract analyst received $24,605 even though his personnel file included two reprimands, and an information systems analyst received $18,862 based on a self-appraisal of “outstanding.”

“It is, in our opinion, improper to award an employee a higher-than-average increase based upon the employee’s self-appraisal,” the report said.

The increases are in addition to lump-sum payments of up to $4,125 recently awarded to six top agency executives, who earn more than $120,000 a year.

They do not include a $33,000 check issued to MTA Police Chief Sharon Papa after she complained that she was paid less than others in comparable positions, including the MTA’s construction security manager, and her salary was increased from $99,264 a year to $114,000, retroactive to 1995.

Even as the inspector general was criticizing the merit raises, acting MTA chief executive Bohlinger proposed a 3% increase this year for nonunion workers.

But the MTA’s Executive Management Committee, chaired by Mayor Richard Riordan, said that any decision on new raises should be left to the next CEO. New York City transit executive Michael C. Ascher was offered the job this week. He declined to comment Thursday on MTA’s latest crises.

Officials said the merit raises were promised to about 100 employees when they worked for the Los Angeles County Transportation Commission, but were not processed before the commission was merged into the MTA and a salary freeze was imposed in early 1993.

Some of the raises were retroactive to 1991. Vera Walsh, MTA assistant director of human resources-administration, who received an $8,875 check with a 3% pay raise retroactive to 1992, said employees “counted on that increase, and it was held in abeyance, through no fault of their own.”

All of this has created new internal divisions in an already fractious agency.

“I have never seen morale this bad anywhere, and you’re talking to a Vietnam vet,” said Tom Rubin, former controller-treasurer of the Southern California Rapid Transit District, the other agency merged into the MTA.

Inspector General Sinai said in a report to the MTA board that former transit chief Joseph E. Drew exceeded his authority in approving the retroactive merit raises in one of his last acts before leaving office in January.

“In our opinion, this authorization was particularly inappropriate in that the CEO had already announced his resignation, and he terminated his employment three days later,” the inspector general said.

“I felt my action was appropriate,” Drew said in an interview, adding that he believes he “fully informed the board.”

(Separately, Drew, just before he left, received a $2,466 check for a retroactive 3% pay raise granted nonunion workers in July 1996, according to an MTA spokesman.)

One MTA board member said he was troubled by the raises awarded to 124 employees because he said the board was told the increases would involve only 62 employees and cost the agency about $350,000.

Drew extended the raises to another 62 former commission staffers who were hired before the February 1993 salary freeze took effect, according to officials.

*

The raises took nearly four years to approve, according to one official, because of internal debate over how many employees should be granted the increases. Officials also blamed the delay on indecision by the prior administration.

But some officials within the agency said they believe that if increases were granted to former commission staffers after July 1992, then prorated increases were due former RTD workers.

The inspector general noted that merit raises for commission employees were staggered to fall throughout the year on the anniversary date of employment. Thus, at the time of the February 1993 salary freeze, about two-thirds of the employees had received their merit raise for the year but the other third had not.

By contrast, the RTD merit raises were all given at the beginning of the fiscal year, and so they were uniformly affected by the freeze.