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UTA defends high pay, sweetheart deals while pledging reform

Utah Transit Authority officials told lawmakers Wednesday that the sweetheart deals and high pay criticized in a recent, scathing legislative audit actually benefitted taxpayers — but they also vowed to enact related reforms to build public trust.

Members of the Legislature's Transportation Interim Committee said they will be watching to ensure those changes come.

"We need UTA to be an entity that people can trust and that people are in favor of, and right now that just isn't the case," said Rep. Johnny Anderson, R-Taylorsville, co-chairman of the committee.

Earlier this year, Anderson unsuccessfully pushed legislation to allow local votes on raising sales taxes to expand transit service. But he said Wednesday that problems outlined in the audit — high pay, questionable land deals, fares that hurt the poor, and shaky finances — "are in the way of us being able to move forward with transit."

The other committee co-chairman, Sen. Kevin Van Tassell, R-Vernal, said he will request another legislative audit of UTA next year to ensure it keeps promises to enact all the recommendations auditors made in the recent one. "Audits are good. They keep us honest."

As UTA officials defended some of the deals and practices criticized by auditors, they still made clear they will enact reforms.

Pay cut? • UTA President and CEO Michael Allegra even indicated amid questioning that he would take a pay cut if an upcoming study — using reforms requested by auditors to look at all compensation and not just base pay — shows he is paid more than leaders of comparable transit agencies.

"I am willing to be compensated according to what the data shows," said Allegra, who last year had total compensation of $402,187, including a $30,000 bonus.

He also repeated that UTA will cut bonuses by 75 percent — so the top bonus available to executives will be cut from $30,000 to a possible $7,500.

UTA Board Chairman Greg Hughes, who also is a legislator and is running for House speaker, said the agency paid high wages to retain people, including Allegra, who were offered lucrative jobs elsewhere.

He said retaining that expertise paid off, and incentives helped UTA to complete 70 miles of rail projects two years early and $300 million under budget — so he said the pay and bonuses actually helped the agency save money.

Several other legislators were also complimentary of UTA at the hearing.

One was Rep. Kay Christofferson, R-Lehi, who said he has worked with UTA, among others, as a contractor for 20 years. "They have always been very professional. I've seen the work being done under budget and on time. We've gotten bang for our buck."

But Sen. Wayne Harper, R-Taylorsville, said he has seen agencies and companies overestimate costs and schedules "so they can do chest-thumping" when they exceed false expectations.

"I am hoping the culture and mentality changes there [at UTA] so that we no longer as the Legislature have to run bills or request audits to remind UTA what they need to do," he said.

Sweet deal • UTA officials also defended a deal where they prepaid developer Jeff Vitek $10 million to build a parking garage at a FrontRunner station in Draper. Vitek never built it, but another contractor later did. Auditors say he has not repaid all the money, and UTA is still owed $1.7 million.

Hughes said the deal helped attract eBay by showing firmly that a FrontRunner station would be built there.

Allegra said, "We paid $10 million for land and a parking structure, and got land and a parking structure" and $12.5 million in value over time.

The audit said that "while the agreement with UTA mentions land as part of the deal, UTA officials have been clear that the prepaid funds were only for the parking structure."

"At the end of the day," Allegra said, "we got a good value, but we certainly needed to improve processes."

Legislative Auditor General John Schaff said it was not wise to give "$10 million for a parking lot before they had any idea what the parking lot was going to cost." Kade Minchey, audit supervisor, said other avenues were available to help attract eBay, and UTA acted more like a bank for the developer than a partner transit agency.

Sweet deal II • Lawmakers questioned another deal involving Vitek where $26 million in local and federal funds were spent to build two large garages and other facilities at a TRAX station in West Jordan in part to help a development that Vitek plans. It included two 598-stall parking structures, which sit largely unused two years after completion.

Hughes said the garages were funded 80 percent by federal money, and had to be built at the same time as the TRAX station — but will be a benefit to UTA riders over time and help the development bring riders.

Anderson said the public needs something more than future projections to validate the value of such projects.

"We need to see some return on the investment. The public needs to see some sign that TODs [transit-oriented developments] are doing what they are intended to do."

Allegra noted UTA is implementing recommendations to change its system of overseeing such developments, and hiring a new director over them. Previously, Bruce Jones, the agency's general counsel, was in charge of that work.

Allegra also said in an open letter posted on UTA's website that UTA is now "creating an Office of Ethics to ensure compliance and the highest standards of transparency" in its operations.

He added in that open letter, "UTA understands its role in the community, values the public's trust, and is committed to taking steps necessary to increase that trust."

Some activists were unhappy that the committee did not allow public comment at its hearing Wednesday.

Claire Geddes, an activist who has long been critical of UTA, was one of those.

"This audit had the worst findings ever, and they didn't allow the public to comment. They just let UTA pontificate about how great they are. And committee members were mostly complimentary to UTA," she said. "That's why UTA gets away with what they do, they know nothing will happen."

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