When Ted and Willa Lutz decided to move to Arlington County from Southwest Washington two years ago, their new home had to meet two requirements. It had to be close to the church they had been active in for several years and it had to be close to a bus stop.

"I just figured if I was going to do this job, riding the bus is the way I would get to work," Lutz said.

It was a typical decision for Theodore C. Lutz, who will complete his second year as Metro general manager today. He was being hired to take over an agency that had an enormous and growing image problem and one small way to reverse that would be to ride the bus himself.

Lutz has been working on that image ever since, bringing to the task a combination of energy and skills in management, finance, politics and legislation that have served him well since he hit Washington fresh out of graduate school in 1968.

"The kid absolutely amazes me," said one of his lieutenants at Metro. "I don't know how long he can keep it up."

The kid is 33. His career in his city can only be described as meteoric. He was first hired in Washington at the old Bureau of the Budget by William Boleyn, a man who works for Lutz now. Lutz was assigned to the office that worried about the District of Columbia and Metro budgets among other things.

He moved to the White House, under Egil (Bud) Krogh, where he concentrated again on D.C. affairs. When Krogh was buried in Watergate, Lutz was unscarred.

Lutz joined the Department of Transportation as the deputy under-secretary in 1972 at the age of 27. He was widely assumed to be one of those Nixon plants who was to ferret out disloyalty in the civil service and make the executive branch safe. He was so easy to get along with, so well informed and ultimately so valuable because of his budgetary and congressional lobbying skills, that those fears disappeared.

When the shawed up at Metro headquarters as only the second big boss in the agency's history he wasresented for being young, for being an outsider and for not being the man most of the Metro staff had wanted to get the job.

"I told him he was crazy when he told me he was going to take the job," said William T. Coleman Jr., former U.S. transportation secretary and Lutz boss in the federal government. "I was afraid he would get chopped to pieces. But Tedsaid he had never managed anything and he wanted to manage something."

Lutz told Willa the same thing. "We had some tough discussions," he said. "She was not very enthusiastic about this."

Willa Lutz modified that version. "I was afraid it would take so much time - that he would spend his Sundays riding through the tunnels like Jackson Graham did - that he'd never be home." Jackson Graham, Metro's first general manager and master builder, was a construction buff and a seven-day-a-week workaholic.

Lutz keeps it to five weekdays, a few evenings, and as many League of Women Voters meetings and downtown business groups as he can manage. "But we can't get away from Metro," said Willa Lutz. "It's always in that briefcase." Christopher Compton Lutz, 3 months old and the first child, is applying additional pressure to reduce those night meetings.

Two years is the minimum amount of time Lutz promised the Metro board of directors he would stay when he took the position. "I've got to sit down and think how much more I can take," he said last week. "Lucky I'm young and have some energy."

Ted Lutz does not drink, does not smoke, does not swear and keeps his own counsel. He is an active, God-fearing member of the Trinity Presbyterian Church in Arlington, where he has been a deacon and taught Sunday School. Willa Lutz is a deacon now.

There is only one car in the Lutz family, a new Fairmont that replaced an ancient Pinto. The North Arlington home is in a pleasant established neighborhood off Lee Highway, but is by no means ostentatious. Lutz is paid $58,000 a year, which is $2,000 less than he was offered when he took the job. He turned down the most recent salary increase the Metro board tried to give him.

"I just didn't think it was the right thing - not good for (Metro) - to have the salary for the top job out of whack with other salaries for similar jobs around here," Lutz said.

He is absolutely nutty about sports and plays softball and basketball with his friends. When he was a senior at Carleton College in Northfield, Minn., 11 years ago, he played shortstop, led off and hit 343 on a term that beat crosstown rival St. Olaf College not once but twice. He sometimes fiddles, around with the radio dial late on summer nights to see if a faltering signal will bring news of his beloved Minnesota Twins.

Ted Lutz was recruited for the Metro job by D.C. Council Chairman Sterling Tucker, who was also chairman of the Metro board in 1976. "We had a crisis in financing," Tucker said. "Some members of Congress had lost confidence with our ability to make cost projections and the integrity of our cost projections. Local governments were nervous and the federal government seemed to be reneging on its commitments to Metro.

"We had to have somebody who understood local relationships and who could also work with the federal establishment - the White House, the Office of Management and Budget and the Congress . . . so I went to Ted, personally and on my own . . ."

Lutz said he wasn't interested, but permitted his name to be interviewed by the entire Metro board. Then he permitted himself to be talked into taking the job.

The day he arrived, he discovered that Metro was on the verge of tecnical bankruptcy. An interest payment was due on the revenue bonds sold to build the Metro system and there was no money. He cut a deal with Congress and fixed it temporarily. The permanent solution to the $1 billion Metro owes in revenue bonds is still under negotiation.

Lutz is "enormously effective on Capitol Hill because he understands both politics and legislation," according to a longtime Hill staffer who has worked with Lutz.

The American Public Transit Association - the mass transit lobby - tapped Lutz to head its legislative committee this past year when important new mass transit and highway legislation was under consideration.

When the bill finally got to conference committee in the closing days of the session, Lutz stood in one corner of the Senate Caucus Room. In the course of 30 minutes, he spoke with highway interests, transit interests, several members of the conference or their staffers. Most of them seemed to be seeking out Lutz for advice.

"Ted is a no-nonsense kind of individual; he tells you what you want to know," said Sen. Birch Bayh (D-Ind.), chairman of the Senate Transportation Appropriations subcommittee, one of the key stops for both Metro and national transportation money bills.

Lutz has also briefed legislative and executive bodies from Fairfax City to Annapolis on the proposed financial plan for completing Metro which is now circulating through local, state and federal governments.

"There is just no question that having Ted around has softened people up, even in the Virginia statehouse," said Marie Travesky, a Fairfax County supervisor. "The reason is that people are confident Ted is shooting straight when he gives them answers."

Lutz' tenure coincides with the opening of Metro's Blue Line and the extension of the Red Line to Silver Spring. The subway, an enormous success in terms of popularity with riders, averages about 205,000 riders daily. Lutz lobbied hard to get night-time and Saturday service and is pushing to add Sunday subway service next year.

Almost immediately after taking the job he ordered new signs hung on the walls of the subway stations so people could tell where they were without cricking their necks. He has pushed a staff accustomed to working for itself into being more responsive to requests from local governments, particularly on cost control and other financial matters. He has not always succeeded there, but the effort is obvious.

For the first year he had to run the bus and subway system without a chief operations officer because the board was trying to decide whether to hire an outside consulting firm to run the buses. The board adopted Lutz's recommendation to stay in house.

Lutz has stressed a strong minority hiring program already in place at Metro, but has made it meaningful at the top ranks. Both his chief of administration and his new labor relations director are black. One is a woman.

After the seven-day transit strike in Julyduring which Lutz learned just how had Metro's labor relations had gotten, he began dropping in on bus garages and maintenance facilities just to talk to the troops.

He has pushed the board to move forward on serving the elderly and the handicapped through specially equipped buses, and a long-running lawsuit with handicapped groups was settled.

The biggest problem at Metro, and the one that will drive any sane person out of the place after some period of time, is the financial structure, which requires that the operating deficit be paid by property taxes from local jurisdictions. Fights between jurisdictions are fierce. Lutz developed most of the projections and rationale behind the various proposals for regional taxes that would be used to take the Metro deficit off the property tax.

"The thing I like least about dealing with Metro on a day-to-day basis," Lutz said recently, "is the continual harangue over divying up the operating costs. One week one jurisdiction will come in with a new formula, perfectly fair, that just happens to result in the cheapest billfor that jurisdiction.

"Then the next week another jurisdiction will come in with another formula, perfectly fair, that will do the same thing for it.

"I'm just tired of that."