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New UTA documents detail $50 million price tag for name change, project losses

SALT LAKE CITY — A detailed cost estimate that put a $50 million price tag on changing the name of the UTA also warns that a new law overhauling the transit agency could lead to drastic service cuts and the loss of up to nearly $61 million in federal funding.

Documents the Utah Transit Authority submitted to lawmakers in the final days of the 2018 Legislature also says the transit agency's new governance structure, which includes a three-member management team, will cost at least $1.2 million a year.

The bill signed into law by Gov. Gary Herbert last week does not address the funding issues raised in documents provided to the Deseret News by UTA in response to a public records request.

"Some of the things in there I thought were quite questionable and were not what we had discussed previously," said Sen. Wayne Harper, R-Taylorsville, the sponsor of SB136. "I couldn't understand the reasoning for some of the costs."

Harper said there's been too much attention paid to renaming UTA the Transit District of Utah, something the bill spells out will be done over time as resources allow to keep costs down.

"Everyone's focusing on about eight words, one line out of about 6,000 lines. And that's not the focus of the bill. The focus is to move us forward," he said, calling a new name "a chance for a new day and that's why it was included in the bill."

But the governor has already made it clear he doesn't like the idea, urging lawmakers to "push the pause button" on a new name for UTA while a new legislative transportation task force takes a look at whether it's needed.

Harper, who served as co-chairman of the Legislature's Transportation Governance and Funding Task Force that came up with the bill, said there's already plenty on the agenda for the new task force, such as the state's new role in transit funding.

"There's a whole bunch of things we'll be talking about," the senator said. "I'm sure there are a lot of things I don't anticipate that people will bring up and say, 'How about this?'"

Asked whether the task force will revisit the name change for UTA, Harper said, "anything's possible. I think it will be discussed and I can't tell you what the actions of a further Legislature may or may not be."

UTA spokesman Carl Arky initially said Thursday that no one would be available to comment on the documents until Friday morning. He later said he had "put calls out to the appropriate people" but could not guarantee they would respond.

In a Feb. 23 document, UTA listed costs totaling $12,250,000 to change signs at rail and bus stops, not including labor, and more than $8 million to re-wrap the exteriors of buses, TRAX and FrontRunner trains, and other vehicles.

Just updating the name on 556 fixed-route buses will take more than $3.3 million, or $6,000 each, according to the estimate, while FrontRunner locomotives and passenger cars will need $840,000, or $12,000 each.

Replacing uniforms at $500 each for the 1,800 UTA operations employees added up to $900,000, while other expenses, including "creative costs to design new name, logo and re-market agency" was listed only as in the "millions."

A year of brand development is estimated at between $900,000 and $1.2 million — not including public relations, advertising and marketing, signage and other customer information.

The estimate notes it is "difficult to predict what the cost of the name change will be" without more time, but then states it is "reasonable to assume that a name change will cost tens of millions of dollars."

In a separate document, the anticipated cost of the name change to Transit District of Utah is listed in bold as in excess of $50 million and refers to the attachment for more details.

Noting FrontRunner's 2018 budget is $27.4 million, the document states, "UTA has neither the budget nor financial bandwidth to comply with this unfunded mandate without drastically cutting service, possibly cancelling contracts or selling assets."

The concern about the possible loss of $60.8 million in federal preventative maintenance funding expected in the 2018 budget year stems from a provision in the bill giving the Utah Department of Transportation oversight of state-funded transit projects.

The document says that if the Federal Transit Administration "does not believe independence is sufficient, it could result in a loss of formula funding and competitive grants."

It also takes aim at the new governance structure that will be put in place by November. Three full-time trustees appointed by the governor will run UTA and replace the 16-member board of trustees.

There will also be a new, nine-member advisory board.

What are called "conservative assumptions" about the negative fiscal impact show the need for five new support staff positions for the full-time trustees and advisory board, earning between $159,504 and $98,172 with benefits.

The salaries of a full-time trustee is capped at $150,000 in the legislation, but UTA estimated the value of his or her benefits would amount to $58,000 annually. Total salary and benefit costs for the eight new positions is more than $1.2 million.

UTA has historically spent about $50,000 annually for the 16-member board, the document states, but the additional expenses estimated are equal to the cost of two buses or an entire bus route for a year.

Another provision of the new law eliminating UTA's legal department and instead bringing in lawyers from the Utah Attorney General's office was also deemed problematic by the agency.

Harper questioned why additional staff would be needed under the new governance structure, especially for the citizens advisory board, since the existing board of trustees is going away.

UTA may be "throwing things in there trying to obfuscate what the real issue of the bill was," Harper said. Entities make significant changes all the time, he said, "and some of them do it successfully, others not as successfully. It depends on attitude."

As for UTA, Harper said the changes made by the Legislature, including the new name, are necessary to "have people start building confidence and trust in that organization."

Last year, UTA signed a non-prosecution agreement with the U.S. Attorney's office in exchange for agreeing to cooperate in an ongoing federal investigation into transit development deals and submitting to up to three years of federal monitoring.

"The Department of Justice has said there's a change that needs to be made," Harper said. "This is just one small element in the process of changing and improving transit and transportation in Utah."