SALT LAKE CITY — Utah Transit Authority trustees adopted a tentative 2018 budget Wednesday that includes $88.5 million in new bonding for a variety of expenditures despite some $2 billion in debt.
The board voted 13-1 to spend nearly $403 million for operating costs and another $191 million for capital costs, including nearly $23 million toward relocating the TRAX station at the rebuilt Salt Lake City International Airport.
"This is something that if you didn't have to do it, you wouldn't. But we think it's a prudent measure on our part," UTA President and CEO Jerry Benson said of the proposed bonding. "We take a long-term view."
He said the new bond has been part of UTA's plans since 2010 and is needed to keep up with maintenance as well as build projects. None of the bonding would be used for operating costs, Benson said.
The size of UTA's debt has raised concerns among members of the Legislature's Transportation Governance and Funding Task Force that is looking at options for exerting more state control over the agency.
Earlier this week, the task force rejected options including an outright or partial takeover of UTA that would require the state to assume the $2 billion debt, but agreed changes are needed.
"As you know, we have a significant amount of debt," Benson told the board Wednesday. He said that, too, was planned as part of the 2015 program to expand light and commuter rail with a voter-approved sales tax increase.
"They passed themselves a sales tax increase and that was used to bond against," Benson said. "What we have is the benefit of those services," he said, some 17 years sooner than otherwise would have been possible.
"It's important with all the attention on debt, we remember why we incurred that debt," Benson said. The budget includes just over $120 million for debt service and early debt retirement.
The lone trustee voting against the budget, North Ogden Mayor Brent Taylor, said he had concerns about the "sustainability" of the budget given that overall ridership has decreased as revenues and costs have gone up.
"Something's not going on all cylinders here," Taylor said.
Over the past five years, Taylor said, UTA has more to spend largely because of the passage in some counties of the most recent sales tax increase for transit and other transportation projects, known as Prop 1.
But during the same period, Taylor said, the money made from transit users went up just 0.8 percent. He said in 2013, passenger revenue made up 16 percent of revenues, but account for just 12.5 percent of revenues in the proposed budget.
"My concern is passenger revenues are stagnant," Taylor said. "I wonder, do we have the right services?"7 comments on this story
The bonding in the budget and its use for maintenance was also questioned by Taylor, who said the amount of debt service is expected to increase every year through 2032, even without the additional bond.
Benson agreed UTA needs to look at improving ridership and said there are only a few future bonding needs, including repaying Utah County for the Provo-Orem bus rapid transit project intended to provide quick bus service along a 10.5-mile route.
A public hearing on the budget is scheduled for 1 p.m. on Nov. 15 at UTA headquarters, 669 W. 200 South in Salt Lake City and comments will be accepted through November.
A final vote on the budget is expected in mid-December.