SALT LAKE CITY — A Utah legislator is calling for a formal investigation into a Utah Transit Authority development deal in which the agency paid $10 million to a developer, later chose another contractor for the project, and thus far has failed to recoup the prepaid money.
Sen. Todd Weiler, R-Woods Cross, said the circumstances under which the funds were given to developer Draper Holdings should be thoroughly reviewed to determine whether any laws were broken. If public money was used for any purpose other than for the development of the project, it could rise to the level of a criminal violation, Weiler said.
“If these were taxpayers' funds given to Draper Holdings for a specific purpose, and (the company) spent the money on a different purpose, that’s a crime,” he said. “It’s misappropriation of funds.”
Weiler said he isn’t alleging any wrongdoing, just that the public’s best interest may be best served if the Utah Attorney General’s Office conducted a complete investigation into the matter to ensure the integrity of the agency and its business practices.
“I don’t have all the facts,” he said. “All I know is what the audit said. And what the audit said is that (the developer) was prepaid $10 million, and when (UTA) asked for the money back, they were told (the developer) didn’t have it.”
Questions remain about where the money went and what it was spent on, Weiler said. Thus far, no one has offered any concrete answers, he said.
“Hopefully, it wasn’t a crime,” said Weiler, who plans to meet with the attorney general’s office next week to discuss the issue.
If these were taxpayers' funds given to Draper Holdings for a specific purpose, and (the company) spent the money on a different purpose, that's a crime. It's misappropriation of funds.
–Sen. Todd Weiler, R-Woods Cross
Missy Larsen, spokeswoman for the attorney general's office, confirmed the meeting but declined to comment further, noting that it would be premature to speculate as to whether a full investigation is warranted.
Weiler’s reaction comes in the wake of a performance audit conducted by the Utah Legislative Auditor General that was heavily critical of UTA’s business practices and policies. Besides the questionable $10 million development deal, the audit also critiqued UTA executives' high pay and bonuses, concerns over massive debt, and almost $3 billion in expected maintenance costs for new rail projects.
The report, released Tuesday, found that UTA paying developer Draper Holdings for the Draper FrontRunner parking structure in advance was against the agency’s internal policy and practices. Not surprisingly, an independent law firm concluded that agreements with the developer appear to be overly favorable to the developer.
“The money paid to the developer for the property and parking structure was, in fact, applied to the Draper garage," UTA spokesman Remi Barron said in a statement Friday. "Additional taxpayer money was not required for construction. UTA is still owed $1.7 million and intends to collect that by 2015. The outstanding funds are secured through collateral, and the developer has a schedule of repayment.
“As stated earlier and confirmed by the audit, no violation of law has been asserted, and UTA has already implemented or incorporated all of the recommendations of the audit. We continue to work to provide the best possible transit service to people up and down the Wasatch Front,” Barron said.
Christopher Stout, president and co-founder of the Utah Transit Riders Union, said he fully supports Weiler’s effort to delve further into UTA’s policies and practices.
“If Sen. Weiler sticks to his guns on this, it is much-needed,” Stout said. “I do believe an investigation is warranted.“
A probe would be beneficial, he said, even if no criminal activity is found because the agency probably needs to modify its polices to improve the way it operates and provide more transparency.
Stout said he would like to see more UTA board members actually use mass transit on a regular basis “so they can see the problems and challenges that everyday riders have.”
The audit also pointed out that the agency really has no reliable way to judge rider satisfaction, he said, adding that the agency should become more “customer focused.”
“The board needs to take an active role in making sure they figure out how to gauge customer satisfaction,” Stout said. “While I hope that we can get an investigation going, I just hope it doesn’t detract from the fact that UTA needs to focus on the customer more.”