Metro CEO Art Leahy Talks Budget, Operations, Capital Projects

Measure R is Metro's big-ticket item-a promise of $30 billion over 30 years. What might the Westside reasonably expect in congestion relief from Measure R investments?

It's a wonderful opportunity for Los Angeles. I worked in Orange County the last eight years, and I had a great time there. We had great projects going; we had consensus and alignment. The reason I came to MTA is because of the wonderful opportunity to contribute to one of the biggest, most important urban areas on the planet. Measure R is part of that. It delivers large sums of money for a big raft if projects: the 405, the subway, and other projects. There's a lot that we're doing now to mobilize the MTA and the private sector toward those projects. At the same time, the situation is complicated by the recession, by significant reductions in the sales tax, by the state influence on transit operations, and by uncertainty. As always, there are opportunities and challenges, but right now we are moving forward in the initial stages on all the projects that the measure covers.

Talk a little bit about the projects included in Measure R that affect the people in this Westside Forum room.

The base that we're building on is the Red Line and the Purple Line subway. That will be extended out to Westwood. We have the Gold Line up into Pasadena. The Expo Line is under construction right now. We just opened up the Eastside extension. Expo will be extended out to Culver City in the future. We just got the board to approve a light rail option for Crenshaw... There are really some wonderful opportunities.

The dialogue in Los Angeles is very different than even in the mid-'80s. I grew up in the city of L.A. On the Westside it's been kind of a big village for a long time. My father was from New York and in the 50s he would say we should move from to L.A. if it ever gets like New York. Well it's not. But in the national consciousness it is. It's a big city on a worldwide scale. That's now recognized. People are now competing for transit dollars for projects, that's a very different scenario than we had in the mid-'80s.

You have said that what's missing in Measure R is psychological counseling to deal with regions' and sub-regions' competitive spirit over this money. Elaborate a little bit about the difficulty of scarcely allocated tax dollars in a county with 4,000 square miles.

There is a well-developed sense of victimhood all over the place-for people in the San Gabriel Valley, southeast L.A., West L.A., and the San Fernando Valley. Everybody feels like Measure R shorts them. That leads to contentiousness and rivalry. I understand that everybody wants their project first. Where it becomes destructive is if we have contests and rivalries in Washington, D.C., and Sacramento. That really compounds problems. Success in Washington can lead to projects all over the county. To the degree that we hurt each other and then it ends up in Washington, we increase competition for Measure R dollars...

If we can create a coalition of business and all the sub-regions in Los Angeles County, we would have a very powerful voice in Washington, D.C. Now is a really good time: We have a couple of very supportive senators, the speaker of the House, and important members from Los Angeles County. If we don't work together to back there and get grants for Los Angeles, we are really making a serious mistake. We should learn to be much more collaborative and cooperative-San Gabriel Valley, San Fernando, the Westside, the harbor, the southeast L.A. County area. If we can do that, we can really have a powerful impact.

There's been an effort at play here to try using financial wisdom in our ranks to get the 30 years of revenue and forward it 10 years so we can put things into the ground and fund them. Talk a little bit about that plan and where it stands.

It's initially from the Mayor of Los Angeles, Mayor Villaraigosa. The underlying emotion is that we should treat Measure R as an economic stimulus package. Moreover, we should tell Washington that there is no national recovery without a California recovery and there is no California recovery without a Los Angeles recovery. So the idea is if we can get low or no interest loans of some kind from Washington, D.C., we could then accelerate Measure R projects, trying to get them done in 10 years-the idea being that we achieve the benefits of greenhouse gas reductions, congestion reduction, all the associated health benefits, and we create jobs in a shorter period of time.

The MTA Board has not endorsed that; I expect them to discuss it in the next month or so. But it's kind of exciting; it really is big thinking like New York would do. We need to go back there and talk about big projects and big concepts. We need to tell the delegation on behalf of Southern California to do these types of things. The MTA is preparing for the potential that this might be successful. Right now we have a number of projects in early project development, environmental clearances and the like, and we are assuming that there might be an acceleration. If not, that's okay, the work is important anyhow.

The message is about a lot more than rail. What are the other things you're doing related to congestion on the Westside?

There's the 405 widening that's just started. We started that project somewhat at risk because of the state budget situation; it's a very serious problem. We had about $180 million of stimulus money on that project so we wanted to start the project so we wouldn't lose those federal dollars. We're well underway, by the end of this year we need to try to make sure the state is up on their obligation to funding the remainder project. We're also working on a project that's not quite so immediately on the Westside, which is introducing congestion pricing in HOV lanes on the Harbor Freeway and out on the San Bernardino Freeway.

The rap on the work on the 405 is that nobody will be able to get from the North Valley to the Westside for about 20 years now? What is the challenge, why is there gridlock?

West L.A. is extraordinarily busy; there are a lot of cars on the 405, as we all know. It's tough out there. It's going to be very difficult-we will probably never build another freeway in Los Angeles. This widening on the 405 may be the last project on the 405. We will not be able to stay mobile if we rely exclusively on freeways and cars, as you all know.

We're talking about the promise and hope for each of the new projects. The nitty gritty is operations. Talk a little bit about the challenge of operations in light of the projects being discussed that will create new burdens of operations. How do you find the operating ability to actually deliver?

We may be through with the consent decree and the lawsuit from ten years ago by the bus riders union. Their basic thesis is that our bus service is inadequate because of a conclusion by faulty analysis, which excludes from the discussion about transit the rail service that we now offer, none of which existed 20 years ago. They exclude all the lines that we're building in the future; they exclude Metrolink. So the analysis is defective.

In addition to that, over the past 20 years the municipal carriers, such as LADOT, have increased their service by more than four times. When you add those to the stock of services you get a very different picture. Actually ridership on MTA buses is down a third from what it was 20 years ago. That's not because they did something wrong, it's because LADOT grew, Foothill grew, and overall the rail systems grew. So we have a very different situation. At the same time we are running more bus service than 20 years ago.

The real negative impact of the consent decree is we have an operations staff that thinks in terms of moral service; they think in terms of quantity not quality. I am trying to refocus on the basics-an on-time bus that is clean with a courteous operator. We need to do a better job of that. We can find some deficiencies in the bus system that will help us deal with some of the budget problems. We can do so while consistently offering better service.

Metro's budget is a roadmap to the challenges you and the board have. As you grapple with Metro's budget, what are the underfunded project operation costs at Metro to which Westsiders must pay careful attention?

Measure R is a good thing. The bad thing is that sales tax is down and the state's funding for transit operations largely goes down because of job loss, and therefore revenue is down. Those are all serious problems. In the context of SB 375, which links project approvals with regional transit services, the state has added policy while they defunded transit operations. That really tightens the problem that we have in the coming year. We are talking with the board about how we deal rationally with a very serious budget problem that is going to be millions of dollars-very large sums of money.

What's the nexus between land use, transportation, and this new state effort to link them-SB 375? The Westside has always been interested in the relationship between land use and transportation, but what is expected on the ground?

We're kind of into new territory here, so I'm not sure anybody know exactly how it's going to work. The state requires sub-regions, there's about nine of them in Los Angeles County, and there are 14 in the SCAG region, to come up with a series of plans for how they are going to achieve greenhouse gas emission reductions and how they are going to link transit services with development. The MTA doesn't have a statutory role in that process. But what we've done is offer to meet with SCAG, the AQMD, and all the subregions, so we can sit down and go through what are each of them doing, the specific plans: Are they aware of what MTA is doing? Are we sufficiently integrating SCAG and the subdivisions and the MTA and the AQMD? That process is just starting now. A few years from now, if we haven't made some progress, I'm worried that in fact there might be some penalties, so I think it's very important for us to try to figure out what it means. No one will argue that we should reduce greenhouse gases, but how we do it, how we measure it, and what steps we take, especially given the difficult budget situation, are going to be important questions.

There seems to be a new budget crisis in the state of California. I don't know what the source of the problem is or how big the problem is, but they want to take your money. Talk a little bit about that.

There was lawsuit a few months ago that resulted in a decision that that money is dedicated to transportation. The governor has a proposal that would change the way things work so that he could nullify that lawsuit. At the same time the state is delaying the Prop 1B bonds that were approved in 2006, which includes money for the 405, Expo, and a lot of other projects. We don't know when they're going to sell those bonds. So we are stalling on many major capital projects. We're losing out on $75-100 million dollars next year in operating funds. That means that we will have a serious problem keeping the transit system operating at its current level even with Measure R.

What does it mean to operation to lose that amount of funding?

It means we are going to have a hard time paying for the current system. We are going to be facing some tough choices between how fast we deliver capital projects, how much bus service we offer, and how we manage the bus system. I don't mean, at all, to offer a picture of gloom and doom. What I am saying is that if we manage better and manage our resources better, we can do a better job and at the same time confront some of the financial challenges.

Lastly, the MTA just adopted a long-range plan. What does it mean for these people here?

That means we have a board-approved long-range transportation plan, which creates a multi-decade roadmap, for which projects are approved, planned, and sequenced. So, for example, the Gold Line with assistance from Measure R is the first project. The deal for that will be the Expo Line and the subway extension.

The Long Range Transportation Plan creates a business plan for Metro to establish what projects are approved, in what order, and on what order of magnitude. The Long Range Transportation Plan becomes the fundamental basis for SCAG to approve their regional plans and it becomes the basis for our outreach in Washington D.C. It allows us to go back to Washington and say that we have a board-approved plan that includes the subway, for example, and the Downtown Connector. The first thing they are gong to ask in Washnigton, D.C., is, "Do you have consensus?" We now have that. For the first time in six or seven years we have a basis for making the case for funding.