Report 98107 Summary - July 1998

Los Angeles Metropolitan Transportation Authority


Creating a Separate San Fernando Valley Authority Would Take a Split of Assets, Revenue, and Debt

Results in Brief

The Los Angeles Metropolitan Transportation Authority (MTA) is responsible for all aspects of ground transportation in Los Angeles County, which includes the San Fernando Valley. A legislative proposal would call for a separate San Fernando Valley Transportation Authority (VTA) with authority similar to the MTA.

Under such a proposal, the MTA would hand over a portion of the northern extension of the Metro Red Line, three rail corridors (rights-of-way), and bus operations to the proposed VTA. When completed, the MTA will have spent $1.1 billion to purchase or construct these assets, with $560.3 million in principal and interest still remaining. This represents about 10 percent of the debt MTA secured with sales tax revenues from Proposition A and Proposition C.

In addition to certain local, state, and federal revenues, we estimated that 20 percent of the MTA's sales tax revenue would also transfer to the VTA. We concluded that shifting 20 percent of the existing debt to the VTA to match the 20 percent of total MTA sales tax revenue it will receive would keep both entities viable and support their ability to issue additional bonds as needed. Our analysis found the VTA would have net revenues in fiscal year 1998-99 of $38.6 million over what it needs for operating expenses and payments of principal and interest on the existing debt.