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Gov. Gary Herbert says UTA has fixed most problems in audit

First Published Aug 28 2014 02:13PM      Last Updated Aug 29 2014 10:51 am

(Chris Detrick | The Salt Lake Tribune) UTA Board Chair Greg Hughes UTA, center left, and General Manager Mike Allegra, left, listen during a Audit Subcommittee of the Legislative Management Committee Tuesday August 26, 2014.

Most of the problems uncovered in a scathing audit of the Utah Transit Authority this week have been rectified, according to Gov. Gary Herbert, who said he has confidence with the direction the agency is headed.

"With a cursory view, it appears a lot of these issues are old issues going back to 2009 and maybe even before that," Herbert said during his monthly KUED news conference. "I believe the new leadership that is there has taken steps to correct those problems."

But state Sen. Todd Weiler believes more accountability is needed. He plans to meet with Attorney General Sean Reyes next week and ask his office to open a criminal investigation into whether taxpayer money was misappropriated.



The report by the legislative auditor general found that UTA made a $10 million "prepayment" to developer Jeff Vitek to build a parking garage at the Draper FrontRunner station. When UTA terminated the agreement, Vitek did not have the funds to repay the full amount, and still owes $1.7 million to UTA.

Despite the outstanding debt, Vitek’s firm was still awarded at least one subsequent UTA contract.

UTA says Vitek put the funds in escrow to build the parking structure and provided property and other upgrades at the site totalling $10.8 million. The $1.7 million owing was interest on the original amount and will be repaid in 2015, the agency said.The audit also once again criticized UTA for the lucrative salaries and benefits packages — some of the highest in the nation — paid to its top executives.

It was the latest in a series of damning audits of the agency, including one in 2010 that found potential criminal behavior.

Last year, the Utah attorney general’s office forwarded the investigation to the FBI due to a potential conflict of interest involving former Attorney General Mark Shurtleff.

UTA critics showed up at an agency board meeting Wednesday to demand that heads roll and changes be made. But UTA Chairman Greg Hughes, a state lawmaker, and Sen. John Valentine, who had initiated the audit, expressed confidence in UTA leaders.

Weiler said that, while the problems identified in the audit may have happened years ago, there are issues outstanding — including what UTA is doing to recover the $1.7 million in taxpayer money it is still owed.

"How many years has it been and at what point does that become theft or conversion? It looks a lot like it to me and I don’t think that issue has been addressed by UTA," Weiler said. "I guess we’re just hoping someday he’ll find it in his heart to give it back."

Second, he said, it was someone in the current management team who auditors said provided misleading information that appeared intended to conceal the $10 million prepayment and that should be rooted out.

"The public has a right to know who at UTA was providing false information to our legislative auditors, because to me, that is a terminable offense," he said. "Cutting through all the bullcrap, [the audit] says they were lied to."

But Herbert said that, while he has been concerned about this and past audits, he is "appreciative of the fact that it appears they’ve taken some corrective action to address those issues."

"There have been changes made. If you go back from 2009 and what was taking place there and what is taking place today, there’s a world of difference," Herbert said. "People have had forced resignations because of [the previous audits].… It’s clearly been moved in a better direction."

Former UTA board member Terry Diehl, a developer who previous audits had said may have used insider information to acquire development rights around the Draper train station, was pressured to resign in 2011. He previously had sold those development rights to Vitek for an undisclosed amount in the millions of dollars.

John Inglish, former longtime UTA general manager, stopped overseeing daily operations in 2010 and was replaced by Mike Allegra, who had been assistant general manager. Inglish, however, was moved into the newly created and mostly honorary position of CEO at that time, where he received full salary and benefits for two years. After his retirement in 2012, he began collecting a lifetime pension of $200,000 annually.

Herbert noted that UTA is not a state agency — instead it is a special service district created by a number of local governments with an appointed board. Herbert makes one of those appointments and picked H. David Burton, a retired LDS Church general authority, who serves as vice chairman of the board.

 

 

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