According to a UTA report to the City Council, the service is worth $194,000 a year.
The free-fare zone is between North Temple and 500 South, and between 200 East and 600 West.
But resident George Chapman told the council that the service was worth more like a million dollars a year. And he urged the council not to eliminate the service before UTA agreed to a replacement service.
"If the City Council doesn't get UTA to agree to something up-front, it will end up like the Sugar Hole," he said referring to a stalled development in Sugar House.
According to City Attorney Ed Rutan, the council cannot relinquish the service without getting something of equal value in return. What that might be remains to be defined.
But resident Laine Gardinier told the council that eliminating free bus service in the free-fare zone and charging those riders at UTA's standard fare of $2.35 would be a hardship on low-income workers.
"There are people out here who make $6.50 an hour," she said. "How are they going to get around?"
Disabled veteran Jesse Riddle told the council that he and other veterans depend on the free bus for transportation.
"I need the bus to access services for disabled veterans," he said. "It would be a detriment to the veteran community."
Downtown resident Bob Burns said he is retired and living on Social Security and depends on the bus and TRAX light rail to get around.
"Eliminating the free fare on buses is a slippery slope," he said. "I'm afraid they'll eliminate TRAX [in the free-fare zone] next."
Steve Erickson urged the council not to act until it had conducted a public-benefits study that would more accurately reflect the value of the service and what the city should seek if it agreed to eliminate it.
"We believe the city should take a go-slow approach on this," he said. "We anticipate there would be a severe impact on low-income folks downtown."
UTA's offer of $194,000 a year to give up the free-fare bus service is a "nonstarter," said Councilman Kyle LaMalfa. "To give up 85 years of service for this tiny amount of money is unacceptable."
Councilman Luke Garrott chided UTA for its lack of vision attracting ridership. Citing air pollution and traffic congestion, he said the transit authority should "get serious" about attracting riders.
"I think UTA is going the wrong direction on this. Only 11 percent of their revenue comes from the fare box," he said. "A free transit system will go a long way toward attracting ridership."
The council determined it would seek a public-benefits study before acting on UTA's request. The publication of such a finding would require another public hearing.