During the 2010 General Session, legislators passed HB94 which amends Utah Code Section 10-6-135 to clarify public hearing and notice requirements for when a municipality or county that allocates or transfers money "from a utility enterprise fund to another fund that are not reasonable allocations of cost between the funds."
The bill took effect May 11, 2010. Under the bill http://le.utah.gov/~2010/bills/hbillenr/hb0094.htm notices must be posted in a newspaper of general circulation and on the UtahLegals.com Web site. A notice must also be posted on ratepayers’ bills.
During the June 2010 Government Operations and Political Subdivisions Interim Committee, Austin Johnson, with the State Auditor’s Office, explained that there had a problem in the state when local governments raised utility rates and then transferred funds into a general budget.
“ It was easier to raise the utility rate than raise taxes,” Johnson said.
Gordon Miner, a Lehi resident, spoke in favor of more penalties for “Sunshine laws” and specifically violation of notice requirements for utility fund transfers. He said voluntary compliance is not working. Before the law was enacted, he noted how the Lehi City Council took $1 million of utility funds and transferred it to the city’s budget, without notice, to cover a budget shortfall. He said that Utah should impose fines, such as in place in the state of Missouri, if notice requirements are not followed.
“We should not see slush funds being used to plug holes in a city budget,” Miner said. Some local governments said they have been unclear about what notice was required and wondered about enforcement and penalties for not complying with the law. Johnson said there are currently penalties if a budget is not submitted. The State Auditors Office can stop sales tax revenue if local governments don’t meet notice and transparency requirements. However, Johnson asked lawmakers if there should be a penalty for lack of or improper notice.
Rep. Fred Hunsaker, R-Logan, that the only current penalty for not complying with the notice requirement is that “any action that is taken action not authorized is null and void.”
Lincoln Shurtz, with the Utah League of Cities and Towns, said his group supported the legislation. In the past, Shurtz said there had been ambiguity in this part of the law. He said his group would not support penalties for not following the law. He said the idea of renoticing the meeting and redoing the notice and meeting is sufficient.
Salt Lake County officials said they were concerned about the notice requirements for transferring golf fees because it was difficult to find golfers to send a notice to. Otherwise, the law has little effect on counties, a Utah Association of Counties representative said.
UPA members should be on the lookout for this issue in their cities and towns and make sure such fund balance transfers include the proper notice in the newspaper.
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