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Tighter Rules on Rail Project Spending Urged : Transportation: Guidelines intended to expedite construction give mid-level officials the authority to sign off on millions of dollars of expenditures. 'There is no accountability,' a transit board member says.


Lax restrictions on spending of taxpayer money for rail lines enable mid-level project managers with Los Angeles County's transit agency to authorize expenditures up to several millions dollars--an amount that even the agency's chief cannot spend without board approval, a Metropolitan Transportation Authority board member said Tuesday.

"There is no accountability," said Nick Patsaouras. "The agency is consistently run by staff. It's ludicrous that the executive director would have to come to the board for expenditures over $100,000 and a project manager three levels below him has unlimited authority."

Under the auspices of a cooperative agreement with a city or public agency, project managers are allowed to sign off on work orders that are intended to keep rail projects on schedule.

In one case, the project manager for the Pasadena line approved work orders totaling more than $2 million for a project in its infancy, according to MTA records. By the time the line is finished, officials estimate, the mid-level manager will have authorized the spending of $11.3 million. The manager was not required to seek approval of the MTA's appointed board before spending the money.

Officials from several transit agencies across the nation say their procedures require approval from a governing board before such large sums can be spent. Washington Metro officials, for instance, allow project managers to authorize no more than $25,000 in spending under similar jurisdictional agreements. In San Francisco, the limit is $50,000.

In Los Angeles County, mid-level managers are not affected by the $100,000 spending limit applied to Franklin White, the MTA's chief executive. That is because of large accounts established by the governing board in hopes of expediting projects.

A project manager is permitted to sign off on spending that can amount to thousands--if not millions--of dollars of work from these accounts, Patsaouras said. "People don't understand what (the) master cooperative agreement does; it's so innocuous but look at what authority you bestow on staff--it's scary. There is no oversight on the part of the board."

Patsaouras said this practice has contributed to an environment of easy spending and skyrocketing costs--such as those detailed in a recently released audit. That audit described soaring costs on a variety of transportation contracts that increased an average of 388% after they were awarded. Patsaouras said he plans to call for tightening restrictions on mid-level management's spending powers at today's MTA board meeting. .

Ed McSpedon, head of the Rail Construction Corp., the MTA's construction arm, countered: "There has to be some latitude for managers to manage the program. Managers make management decisions--that's what they are paid for."

Laurence Weldon, project manager for the Pasadena line, said that the spending he authorizes is subjected to "a series of checks and balances between myself and the project controls manager." Weldon has authorized $2.1 million in work for the Pasadena line, or 11 different work orders that include review of designs, shoring up a station and fire safety services, records show.

"I don't have carte blanche for work orders," he said.

The agreements most recently negotiated usually specify a spending cap. Today, for instance, MTA board members will vote whether to establish an agreement with the city of South Pasadena. The agreement says that expenditures are not to exceed $300,000. In many cases, however, there are no established limits on such spending, although the project is expected to stay on budget, Weldon said.

The planned 13.6-mile Pasadena line has an $841-million budget; of that, $11.3 million is allocated for work orders that do not require board approval, Weldon said. So far, of the 11 work orders approved by Weldon, the largest one was $818,000 to the city of Los Angeles for review work to be done by a variety of departments, including police, fire, transportation, building and safety, and parks.

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