Audit Slams UTA, Citizens Ask Board to take #7dayUTA Challenge

uta-largeIn the wake of a scathing legislative audit, the Utah Transit Authority was hit by a left hook Wednesday when citizens demanded that the embattled agency expand service to pre-recession levels.

The 130 page audit released Tuesday found several examples of questionable spending on the part of the semi-public UTA.

In its opening page, the audit noted that UTA signed a $10 million deal with Draper Holdings to construct a parking garage at the Draper FrontRunner stop, despite the fact that no plans were available and that such an upfront payment is against UTA policy. Though the project was mothballed for nearly two years, and handed off to a different contractor, UTA lacked even basic legal documentation to recover its initial upfront payment, and there are “no clear explanations as to why UTA did not seek return” of the remaining $1.7 million after Draper Holdings was unable to return the payment in full. Auditors would conclude that such actions put taxpayer dollars at unnecessary risk.

UTA’s response was that it actually made money off of the investment and that it complied with state law and spurred local economic development in the process, further adding that all internal rules and regulations were followed.

Some UTA employees also expressed concern over what was called “overly favorable” deals to contractors working on transit oriented development (TOD) in South Jordan. The independent law firm Snell and Wilmer found that “some provisions of the [TOD] contract are “far outside of market.” Furthermore, this yet-to-be-constructed project has already cost the state and federal government $26 million with the contractor’s nearly $3.9 million buy-in yet to be received.

Despite lacking required financial paperwork by the contractor, Boulder Ventures, some UTA Board Members still green-lit the Jordan TOD project. Even UTA legal council cautioned that such documents are “necessary for [UTA] to determine that Boulder was a responsible proposer.” UTA’s answer to this was that management had worked with Boulder in the past and that they wished to work with them again.

UTA also came under fire for failing to report total compensation for its executives, and for taking bonuses despite only reaching two of six designated goals in 2013. Though the bonuses were highly publicised, the audit found that the agency failed to accurately report employee compensation to the state.

The audit would note that UTA’s top three executives, General Manager Michael Allegra, General Counsel Bruce Jones, and Chief Operating Officer Jerry Benson, received many cushy perks (along with several senior members in many cases). The report noted that all executives receive the maximum allowed compensation for retirement, that all executives have a car allowance, that the General Counsel and General Manager have special life insurance plans, and that the General Counsel has a special retirement plan.

In all, Allegra received $402,000 in compensation while Jones received just under $384,500. Benson received $309,500 in total compensation including benefits.  Similar positions at the Utah Department of Transportation were  $221,500, $210,000, and $209,500 respectively, while the Executive Director for the Salt Lake City International Airport received $351,000, the Director of Operations received $182,000, and Salt Lake City’s attorney received $198,000.

UTA would counter that their executive base salaries were actually lower than national averages and that such compensation packages existed for roughly 40 percent of all national transportation executives. Furthermore, the agency pushed back at the suggestion that the current bonus awarding system be reevaluated, noting that it wishes to attract and keep “high-performing individuals.”

Making matters worse, UTA infrastructure appears to be crumbling even though executives and contractors are exacting financial windfalls from the agency that is largely funded through taxpayer dollars. The audit noted that operations and maintenance costs will surpass revenues in 2020 and that rail upkeep is “significantly” underfunded to the tune of $2.9 billion. Furthermore, bus service has suffered under current management and future projects are wholly dependant on tax increases and funding from state and federal sources – no internal money exists to expand.

UTA, in its response, would claim that it has sufficient resources to keep the system running.

The audit would note that there were “heightened opportunity for errors or fraud” and that the “UTA internal auditor should take a more active role”

And the complaints and concerns didn’t end for UTA’s Board during Wednesday’s monthly meeting.

Alex Cragun presented 3,317 signatures to UTA demanding that service hours be expanded to bring back later nighttime service.

In his remarks, Cragun noted that, in 2007, UTA had a pilot program that involved late night service, however funding dried up and ridership dried up with it. Pointing to expanded reach in the form of Rapid Transit Bus Lines, TRAX, the S-Line, and Frontrunner, the system could work better than before if they give people the option to access at least some lines later in the evening.

Cragun would also challenge the board to the #7dayUTA pledge, wherein board members would exclusively use the UTA system for a full week and report their progress on Twitter.

“Talk to your users, hear their stories about why they need late night services,” Cragun asked. In all four took the pledge, including Chairman of the Board and lawmaker Greg Hughes (Republican – Draper). In all, several dozen who supported the petition filled the UTA board room in order to air their grievances to the board.

*Editor’s Note: Alex Cragun is a writer for Utah Political Capitol, however his actions have been independent of any UPC responsibilities. UPC has no formal position on the petition, late night service, or UTA.

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