COUNCIL APPROVES EAST-WEST VALLEY RAIL AGREEMENT.

Byline: Patrick McGreevy and David Bloom Daily News Staff Writers

Despite doubts that the MTA can deliver on its promises, the Los Angeles City Council unanimously approved a deal Tuesday requiring the transit agency to begin building a San Fernando Valley rail line by 2007 or risk losing future city funding.

The 11-0 vote frees up $58 million of $200 million in city transit tax funds frozen by the council June 10 when the Metropolitan Transportation Authority adopted a plan that pushed back the start of the Valley project from 2003 to 2011.

The agreement allows the city to withhold funding if construction milestones are not met for the east-west rail line and subway projects in North Hollywood, East Los Angeles and the Mid-City area.

But what worries most council members is that the agreement is built on financial projections that hold no guarantee the MTA will have enough federal and local funding to keep the county's massive $6 billion subway project on track.

In fact, just hours after the council vote, a House Appropriations subcommittee reduced the MTA's annual funding request from $100 million to $76 million - a request likely to be whittled further by the Senate before a compromise is reached.

``I'm going to support this, holding my nose,'' said Councilman Hal Bernson regarding the city agreement with MTA. ``I really have no confidence, to be honest with you, that the 2007 (deadline) will be met. But I think we have to at least give it a shot.''

Councilman Mike Feuer said the compromise he helped craft gives the city an important out: the ability to withhold money from the MTA in any year in which the agency does not meet that year's goal for work on the project.

``The financial assumptions that undergird the (rail) plan are extremely optimistic,'' Feuer acknowledged in endorsing the plan. ``Some have gone farther in describing it as a house of cards that is ready to fall.''

``Under those circumstances it's particularly important that we fashion an agreement today that holds the MTA accountable to specific milestones, to make sure that they are going to keep their promises,'' Feuer added.

MILESTONES SET

Linda Bohlinger, chief executive officer of the MTA, said an agency committee has endorsed the agreement. It commits the MTA to a schedule calling for federal approval of the Valley project and the completion of environmental studies next year, design of the Valley line to be completed in the 2001-2002 fiscal year and construction to begin by June 30, 2007.

Under the agreement, the MTA agrees to repay the city $50 million June 30, 2008, if the design and construction milestones are not met.

Despite some last-minute amendments that expedite the purchase of 323 new buses during the next two years, Bohlinger said she will recommend that the full MTA board approve the agreement adopted by the council.

Bohlinger also said she is confident the MTA will be able to keep to the schedule for the Valley line, in part because the agreement signals to Congress that there is consensus on the local rail plan that is worthy of federal investment.

``With the city on board we have a much better chance of accomplishing our milestones than without them,'' she said. ``Clearly there are variables beyond our control, such as federal appropriations and the local economy affecting our sales tax, but the key here is we're working together. That means a lot in Washington.''

MTA Chairman Larry Zarian said he was ``bothered'' by a provision added by the council that allows the city to withhold its money.

``Anything that's beyond the control of the MTA should not be a trigger,'' said Zarian, who nonetheless plans to support the agreement because the agency ``needs a positive message.''

Los Angeles County Supervisor Zev Yaroslavsky, who was extremely critical of the proposal approved Monday by an ad hoc MTA board committee, said the version backed by the council Tuesday was ``a far sight better.''

But he cautioned that the rail plan and the city deal rest on shaky financial foundations that still leave in question the future of a Valley rail line.

``In general, I'd say the financial picture is bleak for the San Fernando Valley because the financial projections on which it is based are as rosy as (Pasadena's) Colorado Boulevard on New Year's Day,'' Yaroslavsky said.

FUNDING THE MTA

In the face of mounting public and government criticism of its rail program, even Tuesday's decision in Washington trimming by $24 million the MTA's $100 million funding request was seen by agency officials as a ``semi-win.''

``This is something we expected,'' said Zarian. ``But we need all of that to stay somewhat on schedule.''

Included in the proposed federal funding is $24 million to begin construction of the east-side portion of the Metro Red Line subway, which could force the MTA to dip into reserves to keep construction of the Red Line's North Hollywood segment on track.

``We'd prefer not to eat into our reserves, but if we have to do that, we will,'' said Bohlinger.

Securing the city's agreement to free up transit money was critical for the MTA. The agency earlier approved a rail recovery plan that banks on the money to satisfy federal concerns about whether the agency has put its financial house in order.

But the agreement left a bad taste at City Hall.

Councilman Nate Holden, who heads the council's Transportation Committee, said he does not trust MTA officials, and added: ``This (agreement) is not worth the paper that it's written on.''

He charged that the MTA promised three years ago that work would be expedited on the Mid-City line, but that the agency still has not purchased the right-of-way.

Councilman Richard Alarcon of Sylmar voted for the plan although he was concerned that the original agreement shortchanged efforts to improve the bus system.

The council amended the agreement to require the MTA to approve purchase orders for the 232 new buses in October, and 100 other buses next year.

Bernson also is simultaneously pushing for a motion, to be considered by the council today, that would ask the MTA to study allowing Metrolink to put a light-rail system on existing rights-of-way in the Valley as an alternative to the heavy-rail system planned to start construction in 2007.

Councilwoman Laura Chick of Tarzana also voted reluctantly for the agreement, saying it is more favorable to the Valley than the MTA rail recovery plan approved a week ago that could have delayed Valley rail until 2011 with no firm deadlines.

``This is not a perfect guarantee but it's certainly much better than where we were about a week ago,'' Chick said.

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5 Photos

Photo: Reluctant support for MTA plan

(1) Richard Alarcon

(2) Laura Chick

(3) Mike Feuer

(4) Hal Bernson

(5) Marvin Braude