DEAD END FOR RAIL; BURKE CALLS FOR HALT OF NEW PROJECTS.

Byline: David Bloom Daily News Staff Writer

In a long-awaited report, MTA chief Julian Burke declared Friday the agency's financial troubles are so deep that all subway and rail projects except completion of the North Hollywood extension must be halted indefinitely.

The suspended rail lines - Pasadena light-rail project and Eastside and Mid-City subways - are questionable and must be reconsidered even if money eventually becomes available, Burke said in a 129-page report.

Mammoth operating and capital deficits confront the Metropolitan Transportation Authority and require hikes in bus and rail fares or service cuts, according to the report for restructuring the troubled agency.

``The contracting, design, alignment, safety and funding issues for these (subway and rail) projects must be re-thought and re-justified,'' said Burke, a corporate turnaround expert brought in last August as MTA interim chief executive officer.

Referring directly to the Eastside line, he said: ``There is no current local match for this project available in an amount sufficient to develop a feasible financial plan at this time.'' Other rail and subway projects face the same dilemma, the report said, although funding seems secure for completion of the subway to North Hollywood.

Burke's plan for restructuring the agency comes after more than a year in limbo for the MTA since the federal government froze $61.5 million in subway funds because of MTA mismanagement and leadership chaos.

Two previous versions of the report, then called a ``recovery plan,'' were rejected as overly optimistic.

The first plan put the San Fernando Valley east-west subway to the end of the line with construction delayed for a decade or longer.

Under siege

Since then the MTA has been under siege on all fronts.

Valley community leaders have organized to demand high-speed busway systems be implemented countywide while Eastside political leaders have fought intensely for continued funding of rail projects.

Meanwhile, federal investigations of MTA spending have been stepped up and then this week MTA board member Zev Yaroslavsky announced he was launching an initiative campaign to cut off local funding of subway projects.

In his report, Burke painted a gloomier picture of the MTA's finances than he did in January when the MTA board agreed to a six-month moratorium on rail and subway planning.

At that time, the board asked Burke to come back with options to restart the Eastside Red Line. But the report gives no timetable for restarting the Eastside or Mid-City of the Red Line subway or the Pasadena extension of the Blue Line light rail project.

MTA board members who now must face dealing with issues long deferred or masked by juggling books and borrowing declined immediate comment.

The report said rail projects should not be restarted until the agency finds enough local money to match federal and state contributions plus enough money to cover the cost of operating and maintaining all its existing bus and rail systems.

The agency's operating budget - what it spends to run the bus and rail lines - is short about $643 million through 2004, according to the report.

$75 million short

Next year alone, the agency's budget department forecasts a $75 million shortfall in the money it needs to run its bus and rail operations. Such shortfalls are common among transit agencies around the country, and can be fixed with enough fiscal discipline, the report said.

To deal with the array of shortfalls, the agency plans to continue to ``scrub'' funding requests clean of any expenditures that aren't absolutely necessary, the report said.

Burke pushed through $51 million in cuts and eliminated 180 jobs in November. He also named 10 ``budget workout'' teams to fix problems in such areas as overhead, maintenance and workers compensation insurance.

The report said the groups' recommendations and estimated savings will be released later this month but ``a significant deficit will probably still exist when the budget is presented to the (MTA) board for adoption in June 1998.''

A workout team member said it may be possible to balance the operating budget for next fiscal year but not for future years.

Changes needed

The report said fare increases and/or service reductions will be needed while meeting requirements of the 1996 federal consent decree to expand and improve bus service.

The consent decree freezes fare hikes through November but allows increases equivalent to inflation for the balance of its 10-year life.

The agency said it believes it can meet the consent decree's requirements, setting aside $550 million to buy 1,313 buses through 2004 to upgrade its aging fleet.

It also can finish work on time and budget on subway extensions to Hollywood and North Hollywood, though significant problems could still arise, such as federal funding cutoffs or extremely high legal claims.

The agency also believes it has enough money to provide its $294 million share on the $2 billion Alameda Corridor, a 20-mile rail line between the ports of Long Beach and Los Angeles and rail yards near downtown Los Angeles, which will dramatically increase the cargo-handling capacity of the nation's busiest harbors.

BURKE`S RECOMMENDATIONS

Here are key elements of MTA interim CEO Julian Burke's report for restructuring the transit agency:

Plans for the Pasadena light-rail project as well as the Eastside and Mid-City subway lines should be halted indefinitely.

The entire rail plan is flawed and must be ``re-thought and re-justified.''

Funding exists to complete the North Hollywood subway extension.

Fare hikes or service cuts on existing bus and rail service are necessary.

CAPTION(S):

Box

BOX: BURKE`S RECOMMENDATIONS (see text)