MTA AT CRITICAL JUNCTURE; AGENCY RISKS ENTERING RECEIVERSHIP, STATE LAWMAKERS WARN.

Byline: David Bloom Daily News Staff Writer

State legislators said Wednesday the MTA may have to go into receivership if the agency's board can't make difficult decisions in the next several weeks to cut politically prized rail projects it can't afford.

The warning came at a state Assembly hearing into the troubled agency's problems, which MTA head Julian Burke acknowledged were so serious that there was little money left to sustain the massive rail program.

The Daily News reported last week that the agency is heavily in debt and on track to go bankrupt within a decade if it goes forward with new rail projects after completion of the subway extension to North Hollywood.

``I'm looking at whether this board will have the political will to do what's necessary,'' said Assemblyman Kevin Murray, D-Culver City. ``All of us are looking at this board to see whether it can make the tough decisions we know need to be made.''

Murray, chairman of the Assembly Transportation Committee, held hearings at Metropolitan Transportation Agency headquarters in downtown Los Angeles on the agency's finances, governing structure and priorities.

Given the agency's financial problems and probable board unwillingness to kill projects, Murray said the state may have to order a receivership, where outside managers with wide-ranging powers would take over operation.

In fact, said state Sen. Tom Hayden, D-Los Angeles, the MTA board might even welcome such a move.

``At some point, it may be in the political interest of the agency to turn itself over to receivership because they don't want to take the heat for the decisions that have to be made,'' Hayden said.

Burke, interim MTA chief executive officer, told Murray and other legislators that the agency has little money left over for its expensive, $1 billion-a-year, rail-building program.

Burke will make his recommendations on balancing the capital budget Dec. 11. But cobbling together a board majority to kill projects and make other tough decisions will be difficult, Burke acknowledged.

``It's not going to be an easy or quick task to get the political will collected so we can know what part of the rail recovery plan can be recovered,'' Burke said.

Burke, a corporate turnaround artist hired in late August, already has cut a $51 million shortfall in the MTA operations budget with layoffs, wide-ranging spending cuts and other tactics.

Using the same painstaking budgeting process now on the capital side, Burke is widely expected to recommend killing at least some rail projects. Burke said given the likely political fallout of his next set of recommendations, he doesn't know what to expect.

To improve service in the San Fernando Valley, county Supervisor Michael D. Antonovich and Los Angeles Councilman Richard Alatorre asked Murray and others to back the creation of a separate transportation zone.

But Murray said he was concerned too much decentralization into such zones would make it hard to coordinate transit service across the county.