Tuesday, May 30, 2017 | No comments

Quasi-Government Entities Need Increased Oversight

By Michael Melendez

Interlocal agencies, independent entities, special service districts, Associations of Governments (AOG), and conservancy districts—each of these is a type of government-sponsored or -created organization given control of some aspect of administration, localized policy making, or government service. In short, they have control over a portion of your tax dollars and/or your life.

Who are these mysterious organizations that, up until recently, have hidden their operations in the shadows? To be clear, they hold some public meetings, report to the Utah Legislature periodically, and probably even have up-to-date websites. However, they probably would rather you not know about the size of their budgets, nor their too frequent misappropriation of funds.

The average Utahn might recognize these government organizations from the media attention they have received over the past few years:

Utah League of Cities and Towns (ULCT)
Type: Interlocal Agency
Funding: City/Town Membership Fees
Funds in question: Over $1.3 million in improper trust fund

Utah Communication Authority (UCA)
Type: Independent State Entity
Funding: Local & State Taxes
Funds in question: Over $1 million embezzled

Utah Telecommunication Open Infrastructure Agency (UTOPIA)
Type: Interlocal Agency
Funding: City Bonding
Funds in question: $185 million in poorly used infrastructure, and embezzlement.

Washington County Water District
Type: Conservancy District
Funding: Water Fees and Property Taxes
Funds in question: $1.3-2.8 billion over 50 years for Lake Powell Pipeline

Utah Dairy Commission
Type: Independent State Entity
Funding: Tax on Milk and Cream
Funds in question: About $10,000 in questionable expenses

Governor’s Office of Economic Development (GOED)
Type: Branch of Governor’s Office
Funding: Sales Taxes (General Fund) and Tax Credits
Funds in question: Post-performance tax deals to board member businesses. In 2009, for example, they totalled over $2 million.

Utah Capital Investment (formerly Utah Fund of Funds)
Type: Public-Private Partnership
Funding: Contingent Tax Credits
Funds in question: Over $100 million invested every year with questionable returns

Utah Science and Technology Research initiative (USTAR)
Type: Independent State Entity
Funding: Sales Taxes (General Fund)
Funds in question: $334 million over 8 years justified with inflated job creation statistics

Utah Transit Authority (UTA)
Type: Special Service District
Funding: Gas Taxes and User Fees
Funds in question: Bonuses totaling $870K to $1.74 million per year since 2012

Collectively, these types of public entities control over $1 billion in annual taxpayer funding every year–and whenever any amount of taxpayer funding is entrusted to an organization, strict accountability should follow. Better training is needed for government officials and employees accompanied by more oversight. Regular audits are essential–without them, none of this malfeasance would have been discovered. Just today, an audit of the Department of Alcoholic Beverage Control was released showing huge accounting discrepancies totaling more than $300 million as well as lacking performance measures for state liquor stores.

Some of these organizations are admitting mistakes and are starting to take steps to correct them; but, others still require additional prodding. One basic reform that must be implemented is better adherence to the Open Meetings Act.

UTA is a prime example. With a poor track record, they are in need of closer oversight. Just this month, the Transportation Governance and Funding Task Force, an oversight body of the Utah Legislature, began meeting. Hopefully, their added scrutiny will help reduce significant waste that has become a hallmark for headlines about the agency.

Utah should also consider reducing or ending the ability for government entities to conceal their lobbying efforts through layers of additional public organizations like the Utah League of Cities and Towns (UCLT) or other interlocal entities. Government officials and employees should not be actively attempting to influence policy and should instead serve a more advisory role to legislators when asked to testify in committees. If they do choose to lobby it should be directly and transparently instead of through layers of additional pseudo-government entities.

Publicizing the past mistakes of these entities has sparked some improvements in transparency and oversight. However, without continued public pressure for significant reform, the taxpayer will will continue to suffer abuses of public stewardship and headlines will continue to highlight public scandals.

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About the Author

Michael is Director of Policy for Libertas Institute, overseeing our legislative and advocacy efforts. Prior to Libertas, Michael managed and worked on dozens of campaigns for liberty-minded candidates all over the country, served as a staffer to a state senator and the government affairs manager for Waterford Institute, a digital education non-profit.


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