UTA Expands Service as Questions Loom Over Revenue, Executive Pay

uta-largeOn Sunday, the Utah Transit Authority will officially open the six mile, $350 million, extension of its Green Line light rail system – expanding rail service from downtown Salt Lake to the Salt Lake City International Airport. This expansion is expected to add 10,000 new riders to the system by 2015 and rejuvenate Salt Lake’s west side.

This much touted and needed growth of the system comes two weeks after a 15 cent per-trip fare increase and a realignment of various routes to coincide with the TRAX expansion – and renewed scrutiny over poor service and high executive pay have once again become an issue for the taxpayer funded organization.

In a January 2012 performance audit conducted by the Office of the Legislative Auditor General, it was revealed that UTA’s  “revenue projections are optimistic [and that its] expense projections may be understated.” This same report also showed that 85 percent of its total revenues come from local, state, and federal tax dollars that are directly tied to the strength of the economy and that the majority of its future expenses will be in the form of debt repayment, not expansion or even maintenance. Indeed, UTA officials stated in the state funded report that they have no plans to ask for additional tax dollars to fund current system – meaning that any tax revenue shortfalls (such as those we have seen during the recent recession) will “force UTA to reduce transit service and/or delay future transit projects.”

And shortfalls are expected. 2010 sales tax revenues (the primary funding mechanism of UTA) were $67 million lower than what was predicted three years prior and $1.2 billion lower over the three year span. Despite this, UTA remains optimistic that its sales tax revenues will rebound, covering these costs – however the State Tax Commission disagrees…to the tune of $111 million over the next ten years. Conversely, UTA claims that its passenger income (which currently accounts for 13 percent of its income) will more than double over the next ten years, jumping from $35 million in 2010 to $80 million by 2020.

Finally, the report noted that bus ridership has largely been stable from 2000 – 2010, with overall system ridership increasing thanks to the opening of the TRAX system. The report makes clear that it is unlikely that fare increases will do anything to improve overall ridership, and it is uncertain that any loss in income due to reduced ridership will be offset by higher revenue from those who still use the system.

In short, over the next few years, the state feels that UTA may suffer from stunted growth, be burdened by debt, see drops in ridership, and has an volatile source of revenue. Unsurprisingly, this runs counter to UTA’s stated goals to improve transit quality, retain riders, maintain fiscal responsibility, and improve current operations.

Those in charge of the day-to-day operations at UTA are paid a handsome sum despite this. According to Utah’s Right to Know – an online database of public employee salaries, UTA’s CEO, John Inglish, received a salary of nearly $365,500 in 2011. Not far behind was UTA’s General Manager, Michael Allegra, earning almost $319,400 and UTA’s General Council, Bruce Jones, who pulled in over $297,750 in 2011. In all, Utah’s Right to Know reports that 74 UTA employees earn over $100,000 a year and that the salary of the top 100 wage earners cost UTA more than $13 million. This means that nearly 40 percent of fares (which were just increased) go directly into the pockets of 4 percent of UTA’s employees.

Salary.com reports that the average salary for a bus driver in Salt Lake City was just over $18,500 a year.

These same fares are also some of the highest in the nation. According to the American Public Transportation Association the average bus fare was$1.50 (UTA’s fare – $2.50), Light Rail $1.87 (UTA’s fare – $2.50), and Commuter Rail $6.66 (UTA’s fare – $2.50 base plus $.60 per station, maximum trip cost being $10.30). According to the Salt Lake Tribune, only five agencies have higher rates than UTA for bus fares – New York City, $2.75; Eden Prairie, Minnesota, $3; Sugar Land, Texas, $3.50; and both San Francisco and Nashville at $4 per bus ride. Likewise, the Tribune reports that UTA shares the honor of having the highest light rail fares, tied with Sacramento, San Diego, Pittsburgh, and Dallas.

UTA does plan to switch to a system wide, distance based, fare system to provide more accurate costs to riders – ensuring that riders pay a more equitable share for their use. But, the top heavy organization appears to be on shaky grounds when it comes to finding solutions to a looming budget crisis.

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