Audit: Rail service expansion funding in question

Published: Thursday, Jan. 26 2012 8:00 a.m. MST

Passengers run to make their UTA Frontrunner train in Salt Lake City Thursday, Jan. 26, 2012.

Jeffrey D. Allred, Deseret News

SALT LAKE CITY — The Utah Transit Authority may not have enough money to operate the light rail and commuter rail extensions that are currently under construction, according to a legislative audit that examined the agency's finances.

That could leave the agency and local cities with two painful options once the tracks are completed: Cut service or ask area residents for more money to operate the trains.

The report by the Legislative Auditor General, released Thursday, states that local sales tax revenue provided most of the agency's $275 million budget in 2010, but "it remains uncertain whether UTA will have the revenue to satisfactorily operate the costly system that it is building."

The transit authority is in the midst of its FrontLines 2015 project, adding 70 miles of rail service, including the FrontRunner South commuter rail line. That line, originally slated for a 2014 completion date, is ahead of schedule and could be operational by early December.

The south extension, which would run commuter trains between Provo and Salt Lake City, would connect with the original line that runs from downtown Salt Lake City to Ogden. In addition, UTA is working to complete light rail extensions to Salt Lake City International Airport and south to Draper.

Auditors said the agency should make clear to local officials and taxpayers the full costs of continuing to expand the transit system.

Greg Hughes, UTA board chairman, said if funding falls short, the agency would not be inclined to seek a "revenue enhancement or tax," but some municipalities could decide to implement a sales tax to generate more revenue and maintain rail service.

"We are very aware that if the revenues don't arrive, then we will be forced to cut service or live within our means," Hughes said. Thus far, UTA has not had to resort to tax increases even during the recent economic downturn, according to spokesman Gerry Carpenter.

The audit report and potential of needing more money for service is not enough to dissuade some who are anxiously waiting to park their vehicles and take the train into Salt Lake City and as far north as Ogden.

"It's so worth it!" said Pleasant Grove resident Linda Peck. "Knowing that I would not have to fight the traffic, (pay) the difference in the fuel cost, and to know I'm on a train not worrying about everything around me ... I'm all for it."

She said that even a small tax hike would not dampen her enthusiasm.

Another Pleasant Grove resident, Mark Barraclough, said he would take the train whenever it was convenient rather than make the long drive into the city and search for parking.

"It's just so much easier … and not have to worry about a car," he said. As for a possible tax increase to fund any future revenue shortfalls, he said, "Within reason, I would support it."

Among the audit findings were that transit cost-effectiveness has decreased since 2006; the agency's debt service payments would consume a large portion of future sales tax revenues; and UTA's revenue projections are optimistic and expenses may be understated.

The audit also noted that fare revenues increased 47 percent between 2006 and 2010, but still remained lower than other Western states with light rail or commuter trains. Additionally, the report stated that balancing federal subsidies and ridership would be a challenge for UTA moving forward.

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