SALT LAKE CITY -- The Utah Transit Authority might not have the money to build future projects or even properly operate and maintain projects that are currently under construction.
Those are the findings of a performance audit conducted by the Office of the Utah Legislative Auditor General.
The audit says the agency's revenue projections are overly optimistic, expense projections are understated and debt service will consume a great portion of UTA's future sales tax revenues.
The combined impact could affect streetcar projects in Ogden and southern Davis County, the audit says.
"It's essential that UTA ensure that it has adequate levels of revenue for future transit projects' capital and operating and maintenance expenses before construction is initiated," the audit reads. "Otherwise, UTA may find itself unable to satisfactorily operate the costly systems that it has built."
As UTA continues work on the $2.3 billion FrontLines 2015 project, which includes four new TRAX lines and an extension of FrontRunner from Salt Lake City to Provo, auditors figure federal funds likely will pay for about 24 percent of the project.
Rail projects built by UTA between 1999 and 2008 totaled only $1.1 billion and were funded 78 percent by the federal government.
Because the agency will likely have to borrow more money, UTA's debt will increase from $70.7 million in 2010 to $166 million in 2020. The agency will have $4 billion in debt payments over the next 30 years, according to the audit.
While debt increases, the economic downturn has also significantly reduced UTA's sales tax revenues. The audit notes that in 2010, UTA's sales tax revenue collections were $67 million lower than the amount that was projected in 2007.
By 2020, the audit says, the sales tax revenue is expected to be $1.2 billion lower than 2007 projections.
Those numbers are even more alarming, the report says, when considering the fact that UTA accelerated construction of several rail projects based on the 2007 projections.
The audit also notes that UTA's farebox revenue projections are overly optimistic.
The agency figures it will have more than 28.5 million boardings by 2016, but the audit says that number will be about 24 million, meaning UTA has overestimated its farebox revenue for that time period by $5.3 million.
The increasing debt, decreasing sales tax revenue and stagnant ridership will create financial limitations that may affect future service levels and transit projects.
The audit mentions 10 UTA projects that may be in jeopardy. Both the South Davis streetcar and Ogden streetcar are on that list.
UTA board Chairman Greg Hughes and General Manager Mike Allegra addressed the Legislative Audit Subcommittee on Thursday morning, saying while they have been impacted by the economic downturn, the agency has made cuts across the board to compensate for dwindling revenues and will continue to be fiscally prudent in the future.
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