UTA gets rainy-day fund for lean times

The Utah Transit Authority Board of Trustees approved the creation of a $10 million rainy day fund Wednesday to guarantee that service will not be cut to riders during lean budget years.

The new Service Stabilization Enterprise Fund also authorizes the UTA general manager to use the money to continue bus, rail and carpool services if a natural disaster strikes, without having to take time to get approvals from the trustees. However, the general manager would have to report to trustees after the fund is tapped.

The money for the fund was taken from UTA's capital reserve fund during a time when the agency is constructing 70 miles of rail in seven years, a project called FrontLines 2015. Hours before the trustees

approved the creation of the fund, UTA broke ground for a section of FrontLines: a 5 1/2-mile stretch of TRAX from downtown to Salt Lake City International Airport.

UTA trustee Terry Diehl said the current economic slowdown is an example of why a rainy day fund is necessary. UTA receives the bulk of its funding from sales taxes, but with consumer confidence down in 2008, it is facing a possible $14 million budget shortfall.

"The last thing we want to do right now as we are expanding is to cut service," Diehl said. "The intention of this is to establish initially a $10 million fund."

The UTA trustees can put additional money in the fund, but its size cannot exceed 5 percent of UTA's budget. By the end of 2008, UTA is expected to have received $280.3 million in revenue and have $174 million in expenses, with the difference between revenue and expenses going to its capital budget.

In addition to creating the rainy-day fund Wednesday, UTA trustees discussed a tentative budget for 2009, with revenues of about $298.6 million and expenses of $200.9 million.

Stan DeLong, UTA's corporate financial strategist, said those numbers could change by the time the trustees vote for final budget approval in December, because number-crunchers in the Legislative Fiscal Analyst office and the Governor's Office of Planning and Budget couldn't give him definitive sales tax estimates for next year, due to the unpredictable economy.

In the tentative budget, UTA is estimating that diesel, which powers buses and FrontRunner commuter rail, will cost $4.25 a gallon. If fuel prices remain steadily lower than $4.25, UTA will reduce one or both surcharges next year, said Andrea Packer, UTA chief communications officer.