Audit: Rail service expansion funding in question

In a joint letter responding to the audit findings, Hughes and general manager Mike Allegra said the economy continued to be a concern, but the agency's management "is doing an exceptional job considering the challenging economic environment of the past few years." The letter also stated that UTA has adjusted expenses to compensate for lower revenue and is still able to continue with its rail construction plans and meet its debt obligations.

UTA is currently building the most expensive rail project in the agency's history. Previous rail lines totaled $1.1 billion with 78 percent of funding coming from federal subsidies. However, the current project, which adds four light rail lines and extends the commuter rail to Provo, is estimated to cost $2.3 billion, with just 24 percent covered by federal dollars.

Auditors found that light rail is more cost-effective than buses, but commuter rail is less cost-effective than both bus and light rail.

While auditors concluded that UTA's funding is uncertain, the agency responded that its ability to meet its commitments demonstrates "UTA's ability to monitor and adjust to changes in the external financial environment while at the same time moving ahead with the projects."

Agency officials have said that pulling together local funding sources has allowed UTA to work toward completion of all of its rail projects, while other comparable transit systems have been forced to alter or abandon their plans due to a reduction in federal support.

"I think our economy is going to rebound and … that is going to solve a myriad of challenges that governments and (agencies) have," Hughes said.

The audit was conducted at the request of the Legislative Audit Subcommittee as a follow-up to a similar audit completed in 2008.

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