Lawmakers may seek partial takeover of Utah Transit Authority

Degree of state control largely depends on damage that may result to its credit rating. <br>

(File | The Salt Lake Tribune) A legislative task force is considering possible state takeover of the Utah Transit Agency. Steve Griffin | The Salt Lake Tribune A UTA TRAX train climbs out of downtown Salt Lake City as it heads to the University of Utah in Salt Lake City, Utah Monday June 24, 2013. The Salt Lake Chamber and its Utah Transportation Coalition has released a study on the impact of investing in UtahÕs transportation system.

A task force created by the Legislature is pushing for the state to take significant control of the scandal-plagued, now-independent Utah Transit Authority.

But to what degree that occurs depends largely on the damage such a move might do to the state’s now-perfect credit rating. After all, UTA has amassed $2 billion in debt as it recently built new rail lines — and plans more borrowing soon.

“This is a huge change,” Sen. Wayne Harper, R-Taylorsville, co-chairman of the Transportation Governance and Funding Task Force, said about the proposals.

He told members Thursday that a subcommittee studying how UTA and overall transportation should be governed has narrowed choices to two main options, and both would significantly increase state involvement in the now-independent UTA.

He added the subcommittee found “zero support” for a third option of complete takeover of UTA that would make it a division in the Utah Department of Transportation. Still, the subcommittee also forwarded that for review by the full task force.

Harper said one of the two main options would have the state take over ownership of UTA facilities. New construction would be overseen by UDOT, not UTA — and prioritization of state spending would be up to the Utah Transportation Commission (not the UTA Board).

Transit and highways would compete together for the same big pot of state funding to ensure unified state transportation goals are met. The state would contract for transit operations — probably, but not necessarily, with UTA.

A disadvantage is the state would assume UTA’s current $2 billion in debt. Also, Harper said UTA is planning to borrow by issuing bonds three more times in the next few years to cover needed maintenance of tracks and trains — and the state would have to fund such work itself, possibly by raising sales taxes.

Harper said the state is studying what all that might do to its bond rating, and hopes to have answers soon.

A second option developed to avoid bond-rating problems would allow UTA to maintain ownership of its current facilities. But UDOT would build and own future projects. Future transit and highway projects would still compete for funding.

UTA would exist as a separate entity and operate transit — but the option might lead to changes in the structure of its board.

There are “pluses and minuses” for both options “and a lot of unanswered questions,” Harper said. “We’re probably going to be somewhere in between” them in a final recommendation.

Several task force members urged moving slowly and carefully.

“I think it makes sense to spend a significant amount of time exploring options so you know what we’re buying,” said Gary Gygi, the mayor of Cedar Hills.

Brent Taylor, the North Ogden mayor and a maverick UTA Board member who has often criticized its decisions, praised the task force for looking at changes. The board rarely votes down any management proposal and he said a different structure might bring more critical review.

Just last week, Taylor was the only board member to oppose changes in benefits for executives that were billed as a last cut needed to bring compensation in line with the industry — but Taylor pointed out the benefits are still much more generous than in any other local government in Utah.

The Legislature created the task force after years of controversy over high UTA executive salaries and bonuses, extensive international travel, sweetheart deals with developers and abandoned attempts to close transit board committee meetings to the public. Also, the review comes during a federal investigation into current and former UTA officials and real-estate deals.

UTA officials attended the task force meeting, but did not offer input.

Afterward, UTA President and CEO Jerry Benson sought to put a positive spin on proposals for at least partial state takeover of his agency.

“What I heard is an appreciation for the work [by UTA] that has been accomplished up to this point, and a recognition that we need to invest in transit along with highways for the growth of the state,” he said.

He added, “I think’s its way too early in the process to lock in on one structural solution,” so he declined to say if he would support any of the options on the table.

Meanwhile, the task force also is looking at several options on how to fund future transportation. The possibilities include:

• Raising registration fees on electric and alternative-fuel vehicles, which don’t pay gasoline tax but use the roads.

• Charging a per-mile fee instead of gas tax for electric and/or gasoline-fueled vehicles.

• Giving cities greater power to add road fees to city utility bills to pay for local roads.