MTA chief White recommends killing off rail-construction contracting subsidiary.

Metropolitan Transportation Authority Chief Executive Franklin White last week recommended that the MTA dissolve the Rail Construction Corp., a subsidiary organization that makes recommendations on awarding subway construction contracts.

White proposed, in a memo presented to the MTA board of directors at its May 25 meeting, that the RCC board be replaced by an MTA board construction committee, and that the RCC staff be reassigned to an MTA Construction Division, to be supervised by White's office and the MTA board.

The RCC has long been alleged by community activists to be a center of corruption, mismanagement and misinformation, and RCC foes applauded the recommendation. The MTA board referred the matter to its executive management committee for 30 days to be studied.

White's recommendation was similar to one proposed at the board's March meeting by MTA board alternate Marvin Holen.

Last March, the RCC board had recommended that it be renamed the Metropolitan Construction Corp. and that it be given expanded authority.

For example, under the RCC proposal, the MCC would have authority to purchase property and use eminent domain authority to acquire property on its own for up to $5 million and approve contracts for up to $1 million.

RCC Board Chairman Robert Kruse had explained at the March meeting that the spending authority was allowed under legislation approved last year, and he said giving more power to the MCC would "take some of the burden off the MTA."

But White pointed out in his May 25 memo that the RCC was established in its current form in 1990, as an advisory board to the MTA's predecessor agencies -- the Los Angeles County Transportation Commission and the Southern California Rapid Transit District -- as "an interim step in the overall consolidation of the area's transit planning, construction and operation."

"This consolidation was finalized with the statutory creation of the MTA," White wrote. "Since the functions of the predecessor agencies were consolidated into the MTA, the original justification for a corporate construction subsidiary has ceased to exist."

White also noted that dissolving the RCC would save the MTA money, by reducing administrative and board support staff duplicative positions.

"So far as we can determine, no other city has found it necessary to utilize a similarly structured construction subsidiary for the construction of its transit system," White added.

Referring to the legislation Kruse cited in March, White said that structuring a transit construction unit as a separate subsidiary actually "counteracts" the goal of the bill, which was to consolidate responsibility.

In other business at the May 25 meeting, hundreds of people who ride MTA buses showed up to protest a proposal to cut bus service and/or increase fares. Hearings on the proposal and other aspects of the MTA budget will begin in June.

The huge group that attended last week's meeting, angry that the board had gone into a private meeting to discuss legal matters, turned the room into a rally of sorts, shouting: "We are the MTA" and "The board must come out."

Community activist John Walsh challenged L.A. Mayor Richard Riordan to ride MTA buses to work and around town for one week, to experience the fear of crime, long waits and crowded conditions the bus-riding public endures. Riordan declined the challenge but offered to ride his bicycle instead.