Get breaking news alerts via email

Click here to manage your alerts
(Francisco Kjolseth | The Salt Lake Tribune) UTA General Manager Michael Allegra answers to questions and concerns posed by legislators during the legislative audit of UTA on Wednesday, February 8, 2012.
UTA finances cause heartburn on Capitol Hill
Transit » Audit questioned debt, revenue projections.
First Published Feb 08 2012 11:34 am • Last Updated Feb 08 2012 10:39 pm

Legislators aired worries Wednesday whether the Utah Transit Authority can continue walking a financial tightrope without needing an eventual taxpayer bailout, while UTA officials swore that the agency is fine.

"We’re all extremely anxious," said Sen. Aaron Osmond, R-South Jordan. "This could become a financial problem that the state’s going to have to deal with if the forecasts as articulated [by UTA] don’t take place. And it’s enormous in the potential impact to the public."

Join the Discussion
Post a Comment

Meanwhile, UTA General Counsel Bruce Jones said, "We are very confident that we can complete and operate our present projects. And we will not take on new projects except as funding sources are available."

That came as the Infrastructure and General Government Appropriations Subcommittee reviewed a Legislative Auditor General’s report that was released two weeks ago.

The audit says UTA has taken on dangerously high levels of debt to add new rail lines, and may be using faulty figures and projections as it walks a shaky financial tightrope. It said that UTA’s revenue projection are optimistic, while expenses are understated. It says that "may force UTA to reduce transit service and/or delay future transit projects."

Osmond asked if UTA has worked out plans in case its rosy projections do not pan out. UTA General Manager Michael Allegra said the agency has worked on many scenarios, and said resulting spreadsheets are complicated. Osmond responded, "We can handle complex spreadsheets," and asked that the data be shared. Allegra said it is public and reviewed by UTA’s board regularly.

Sen. Mark Madsen, R-Eagle Mountain, worried about a part of the audit that said UTA ridership remained flat between 2006 and 2010, even after the FrontRunner commuter rail began operations in 2008. He was also concerned about audit warnings that UTA is only counting "boardings" — not complete passenger trips — so an increase in transfers can falsely make it appear that more people are riding trains and buses.

Allegra assured him that ridership was up in 2011 after two new TRAX lines began operation. Madsen asked if that was based on boardings or trips, and Allegra said it was boardings — and said that is the standard measure used by the industry.

Allegra also said UTA figures that overall ridership increased, in part, because farebox revenues increased — now covering 22 percent of operating costs instead of 20 percent in 2010. However, UTA also raised its fares in 2011.

Osmond noted that auditors in 2008 called for UTA to measure trips and not just boardings, among other recommendations not followed. "Why should we have confidence that the recommendations that they have now are going to be implemented?" he asked. Allegra promised to implement recommendations of the current audit.

story continues below
story continues below

UTA officials also said several times on Wednesday, to reassure legislators, that most of its outstanding bonds "are AAA rated." However, the bonds that it has most recently issued were given much lower ratings.

Its heavy debt and lower sales tax revenue in recent years led rating companies to downgrade UTA’s bond rating last year to A+, down from AA-.

Rep. Janice Fisher, D-West Valley City, said the state may need to keep a closer eye on UTA, since findings from the audit raise questions about whether its part-time board is doing that well enough. "Who is minding the hen house?" she asked.

Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment

About Reader Comments

Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.