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UTA budget raises spending on trains by 27 percent

Published October 24, 2012 4:54 pm

Transit • Agency projects a 4 percent bump in ridership with expanded rail service.
This is an archived article that was published on sltrib.com in 2012, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Ogden • As the Utah Transit Authority gave preliminary approval Wednesday to a 2013 budget that will spike spending on its growing train operations by 27 percent, it also cleared the next-to-last stop toward borrowing another $180 million to help pay for constructing new TRAX and FrontRunner lines.

That came as no one from the public appeared at a hearing Wednesday about borrowing that $180 million, plus refinancing up to $140 million of earlier flexible-rate borrowing to lock in long-term interest rates. So the board scheduled a special meeting next Wednesday to finish the process of authorizing bonds to borrow that amount.

The heavy borrowing has brought some controversy, even if no one appeared at the public hearing about it on Wednesday.

Last year when UTA borrowed $100 million to keep its rail construction projects on track, Fitch Ratings downgraded UTA to an A+ rating from an AA- rating. It said UTA's "debt profile is somewhat weak" because of heavy debt where "rising debt service has been shrinking revenues available for operations" and could hurt operations unless sales taxes pick up amid a bad economy.

Also, the Utah Legislative Auditor's Office warned earlier this year that UTA was using overly optimistic revenue estimates and understated expenses in its planning and borrowing — a combination auditors feared "may threaten the agency's ability to operate the system being built."

On Wednesday, the UTA board also gave preliminary approval to a 2013 budget that includes increases to operate those new train systems being built. It set a public hearing on that $87.9 million operating budget for Nov. 7 at 2 p.m., at its headquarters, 669 W. 200 South, in Salt Lake City, before the board gives its final approval.

The new budget would increase spending on rail operations by 27 percent — from $47.15 million to $60.15 million..

That comes with scheduled openings for the new FrontRunner commuter rail extension from Salt Lake City to Provo on Dec. 10; the new TRAX extension to Salt Lake City International Airport on April 14; a blue line extension to Draper next summer; and the new Sugar House streetcar line next winter.

The new budget projects that with the changes, ridership in its system will increase by 4 percent next year.

UTA General Manager Michael Allegra said he expects much of the new ridership to come from the expanded FrontRunner, which will offer service between Ogden and Provo.

Meanwhile, funding for operating buses remains essentially flat — ticking up from $78.83 million this year to $79.17 million in 2013.

Besides the money for operations, the 2013 budget includes $188.8 million for construction and the purchase of vehicles.

That includes $90 million for FrontRunner and TRAX construction costs; $17.1 million for the Sugar House streetcar; $5.6 million for a central bus facility; $2 million for a Tooele park and ride facility; $2 million toward a Taylorsville bus rapid transit (BRT) line, sort of a TRAX on rubber wheels; and $500,000 for work on a Provo-Orem BRT line.

The 2013 budget also includes buying 24 buses for $12 million that will be powered by compressed natural gas. Allegra has said UTA hopes to start using CNG buses to reduce pollution and fuel costs. —

Free UTA rides

A promotion is offering free rides on TRAX, FrontRunner and Utah Transit Authority buses through the end of the year.

AT&T Mobility, T-Mobile USA and Verizon Wireless — through a joint venture known as Isis — began this week to offer locally a "mobile wallet" system that uses computer chips in smart phones. At participating businesses, customers may make payments by waving the phone in front of terminals.

To encourage use of the new system, UTA said Wednesday that Isis will pay the fare for people who use Isis-enabled phones to tap on to board buses and trains through at least the end of the year.