As a Utah Transit Authority board member, I recently cast the lone no vote on the UTA’s proposed $600 million budget for 2018. My decision merits an explanation. In a nutshell, I voted no because UTA’s current business model is unsustainable, and I could not vote to add $88.5 million more to UTA’s existing $2 billion in debt.
Please understand that my intent is not to discredit UTA employees, whom I know to be hardworking and dedicated. Nor am I attacking my fellow board members, who are talented people. I also support UTA’s mass transit mission of reducing emissions and congestion, but I believe we can no longer ignore certain inconvenient facts about its future.
Fact: UTA operating expenses were $305 million in 2013, ballooning to $403 million in 2018 — up $98 million or 32 percent in just five years, far outpacing ridership and passenger revenues.
Fact: Passenger fares totaled $49.97 million in 2013. Projections for 2018 show fares of $50.33 million. That is only a 1 percent increase over five years, and UTA is spending $290 more for every new dollar of passenger revenue.
Fact: Passenger fares covered 16.3 percent of UTA’s total operating expenses in 2013. In 2018, fares will only cover 12.4 percent — a 24 percent decline in five years. If capital projects are also included, the total share of UTA expenses covered by passengers drops to 8.5 percent.
Fact: Ridership — despite more spending — has been declining. Meeting increased operating expenses with stagnant fare revenues means UTA will need increased tax subsidies.
Fact: Any increased tax subsidy should be used to pay down debt and to fund ongoing capital needs in order to avoid even more debt.
Fact: The 2018 budget calls for additional tax subsidies to be used for daily operations— even though ridership is not increasing — while adding $88.5 million in new debt to pay capital and asset replacement costs.
Fact: None of the above is sustainable.
I am the mayor of a small city with an $18 million budget. Our city council spends two full days in budget workshops and then many hours in subsequent meetings, as they meticulously review each individual line item and make modifications. In contrast, the full UTA Board spent only two total hours on this massive $600 million budget, did not review line item details, and basically rubber-stamped management’s proposals.
This is why UTA needs dramatic changes in governance. The board is made up of very busy people who meet once or twice per month to basically ratify whatever UTA executives request. This fosters an environment of inadequate oversight, and I strongly support Rep. Mike Schultz and Sen. Wayne Harper’s effort to disband the current UTA Board in favor of a new governance structure.
If, as I hope, UTA governance is reformed legislatively, the agency will be able to focus on several key adjustments to improve performance:
1) Tie new capital projects and operational funding directly to ridership and/or fare increases.
2) Increase investment in lower-capital-cost service expansions like buses.
3) Budget operations properly so that money is available to replace assets as scheduled, rather than incurring new debt.
4) Complete a full analysis and discussion of fare strategy; should we increase fares to meet higher costs, or should we reduce/eliminate fares to incentivize more utilization?
5) Put more emphasis on programs like VanPool that we know are successful.
6) Involve all stakeholders in a candid, open and thorough process to determine UTA’s future, including integrating successfully into an autonomous vehicle, rideshare economy.
As we revamp the UTA governance structure and tackle these hard topics, I am convinced that we can meet UTA’s transit mission while better justifying the investment to the Utah taxpayers who pay for most of it.
Brent Taylor
Brent Taylor is a member of the Utah Transit Authority Board of Trustees and the mayor of North Ogden City. The opinions expressed are Mr. Taylor’s alone and do not represent the UTA.