Good news travels fast: freeway overload is a fact of life that Neil Peterson, executive director of the Los Angeles County Transportation Commission, is determined to change with his newly approved $5 billion construction budget.

Good news travels fast

Freeway overload is a fact of life that Neil Peterson, executive director of the Los Angeles County Transportation Commission, is determined to change with his newly approved $5 billion construction budget.

Last December, when George Bush and Mikhail Gorbachev were summiting off the coast of Malta, Southern California's two biggest transit agencies were holding their own power meeting on a yacht cruising around Marina del Rey. At stake was control of the $3.7 billion Metro Rail system.

But nine hours of talks and political arm twisting couldn't keep the transit summit from failing. For Neil Peterson, executive director of the Los Angeles County Transportation Commission, it was a vivid reminder of how hot the Southland's transit Cold War had become.

"Most people in the business thought the transportation situation down here was `Mission Impossible,'" says Peterson, who left a successful career in the Northwest to come to Los Angeles. "They warned me not to get into it, but part of me loves the challenge."

He went head to head against Alan Pegg, general manager of the Southern California Rapid Transit District, and neither of the transit superpowers budged.

But Peterson, 46, who's paid $125,000 a year for his efforts, ultimately won. The Long Beach resident transformed the commission from a low-profile agency to Southern California's most important vehicle for solving the transportation mess, and gained control of the planning, design and the awarding of contracts for Metro Rail. Peterson also got a $12,500 bonus, largely for wresting control of the huge subway system.

When the LACTC was created by the legislature in 1976, it had a budget of $100,000 and a staff of 10. This year the commission's proposed budget of $958 million rivals most cities.

Yet the 389-employee agency Peterson manages doesn't repair a single road or lay an inch of track. Instead, it holds the purse strings for freeways, highways, bus services and a planned 150-mile rail network. That means approving projects and doling out funds to the transportation departments of 86 cities, Caltrans and 16 public and private bus agencies, including RTD.

"We have a Balkanized system of transit in this country," grouses Peterson. "But the traveling public doesn't care who's carrying them. They just want to go where they want."

Fortunately for Peterson and a county with 10 million cars, the LACTC's kitty is about to swell again. California voters June 5 approved three landmark transportation propositions, including the so-called gas tax measure. Their passage will send $5 billion to Southern California's ailing transit system during the next 10 years.

The appropriations, all funded by the LACTC, will guarantee funds for a 150-mile rail network, the biggest public works program in North America. It will subsidize backlogged projects to widen the Ventura (134) Freeway, upgrade the Vincent Thomas Bridge, and purchase railroad rights-of-way.

It will also fuel a massive construction-industry boom in a local economy hit by defense cuts and a slumping real estate market. And, perhaps most importantly, it will be a sign to industry -- losing an estimated $3 billion a year in wasted employee time and rising shipping costs -- that the Southland has gotten serious about its decaying infrastructure.

"Before those measures passed, California had gone from first to last in per-capita investment in transportation. That's got to change because it's not just a quality of life question; it's a vital economic issue."

Dapper and wearing his hair like Pat Riley, Peterson dashes from meeting to meeting with the energy of a teenager and a 6 a.m.-to-8 p.m., coffee-free regimen. Aides say Peterson has brought the LACTC an enthusiasm and sense of mission it never had, although his frenetic style forces them to scamper after him like minions chasing a king.

A Connecticut native and father of four, Peterson says he is more a manager and delegator than a numbers-cruncher. Like the Jesse Jackson of transportation, hope is what Peterson peddles.

"The most difficult thing I deal with is the lack of hope, the specter that gridlock is here to stay," he says, pausing to form his next sentence. "The trick is convincing people we have a game plan."

Indeed, two commuter rail systems connecting Los Angeles with Ventura and San Bernardino counties are in the works, planning for the $600 million Pasadena-to-Union Station light rail has been advanced and extensions of Metro Rail into Hollywood and the San Fernando Valley will soon be formally approved.

The 4.4 mile, $1.4 billion Metro Rail Phase One, set to run from Union Station to MacArthur Park by 1993, has also made dramatic progress and construction on the Norwalk-to-El Segundo light rail will be finished soon after.

That rail network alone -- funded by the LACTC with $10 billion of Proposition A money and federal subsidies -- is not a panacea for a region burdened by population growth and an obsession with the automobile, Peterson cautions.

He wants to wage an "all-out frontal attack" on the 700 miles of snarled traffic that appears daily by: expanding bus services, creating a regional "smart corridor" system telling drivers when to get off the freeway, experimenting with a specialized radio channel for commuters and unleashing bands of roving tow trucks to clear away accidents.

Peterson, in some ways suave and congenial, in others tough and no-nonsense, won't admit it, but it's a bumpy road for the LACTC. The commission's long-running feud with RTD has taken no prisoners. It was only late last year, after months of acrimony and warring press releases, that RTD agreed to give up its vaunted role as lead planner and builder of the Metro Rail to the Rail Construction Corp., an LACTC subsidiary.

The feud continued into 1990, with the RTD accusing the commission of a hostile takeover, and the LACTC charging that the district would bring Metro Rail Phase One $135 million over budget and six months late. When news leaked that Peterson was getting a $12,500 bonus, in part for completing the takeover, tensions rose like rush-hour traffic.

Finally last April, Mayor Tom Bradley and Assemblyman Richard Katz stepped in with an agreement consolidating the two agencies' boards and ordering them to draw up long-term plans to merge.

It was none too soon. The turf battle almost cost Los Angeles $667 million in federal funding for Metro Rail Phase Two. Says Peterson, "That historical animosity can play no part in the future. There's no room for it."

Ironically, one of Peterson's biggest supporters is RTD board member Nick Patsaouras. "Neil has done a terrific job in leading the commission to new ground. He's accessible and built up the LACTC with good people."

RTD board President Gordana Swanson thinks otherwise.

"Peterson comes across extremely well, but behind his smiling face is a person who presents things he wants as a fait accompli. In some ways he is a public relations person who learns the details when it's expedient."

If Peterson brings a political and capitalistic approach to his job, it's in his roots. After graduating from Williams College in Massachusetts with a degree in political science and Princeton University with a master's in public affairs, Peterson became city administrator for New Brunswick, N.J. during the racially tense times of the late 1960s. Next, a three-year stint with the state of Washington's Department of Social and Health Services segued into a job as head of Seattle's public transportation and water quality system.

During the mid 1980s he ventured into the private sector, founding a Seattle-based executive search firm and helping start a Health Maintenance Organization.

Before being recruited for the LACTC post, Peterson worked for six months as general manager of Alameda County-Contra Costa County's Transit District. His role in eliminating a $7 million deficit for a transit agency where several district commissioners were under indictment earned him a reputation as a successful trouble-shooter.

A self-described sports fanatic and outdoorsman, Peterson is also an art buff who wants each Metro Rail station to convey the history and culture of Los Angeles.

Speaking in his downtown Los Angeles office, currently encircled by Metro Rail construction, Peterson says the hectic pace of events has eased recently, though "substantive disagreements" with the RTD exist.

One of those disagreements was on security for the 22-mile Los Angeles-to-Long Beach Blue Line, the first trolley system Los Angeles has had since the Red Cars were junked 30 years ago.

The commission wanted the Los Angeles County's Sheriff Department to provide security because the line runs through gang-inhabited turf. But the RTD, protecting its own turf, unsuccessfully pushed to use its own security force.

"We know safety on the Blue Line is going to greatly affect the perception of other rail lines," Peterson says.

His next challenge will be containing costs and maintaining schedules for the bevy of rail and highway improvement projects; he learned that firsthand when Los Angeles City Councilman Nate Holden grilled him about a projected cost overrun on Metro Rail Phase Two of $120 million.

But he isn't sweating it. Peterson says millions will be saved by employing clever, cost-cutting construction techniques on the hundreds of contracts the commission expects to approve in the next few years.

"Time is money," he says. "Every hour costs taxpayers $100,000."

Like the Southland's transportation system and the commission, Peterson's personal life is undergoing rearrangement. He commutes every other week to Seattle to see his four children while his divorce is being finalized.

"No normal person would do it. But the flight is only a little over two hours," he says. "That's as long as it takes some people in this city to get to work."