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AUDIT OF WATER DISTRICT MAKES LEGISLATOR SEE RED

SHARE AUDIT OF WATER DISTRICT MAKES LEGISLATOR SEE RED

As a member of the state's Legislative Audit Subcommittee, Rep. Craig H. Moody, R-Salt Lake, says he has seen a lot of waste and mismanagement of taxpayers' money.

For the past two years, probes into various state and quasi-governmental agencies at the request of the subcommittee have revealed a disturbing disregard for accounting for public money, he said."After three or four of these (audits) you get a little cynical. But dang it, there is a point in time where you have to get control of these things," Moody growled Thursday after reviewing an audit of the Central Utah Water Conservancy District.

Lack of financial planning and careless accounting by the district left legislative auditors wondering if taxpayers are paying too much to the water agency that oversees the massive Central Utah Water project, the audit said.

Legislative Auditor General Wayne L. Welsh disclosed the results of a seven-month performance audit of the district, detailing examples of uncontrolled spending of taxpayers' money. Auditors also criticized mismanagement of unspent tax revenues, more than $22 million poorly invested in low-interest-bearing reserve accounts.

Most of the district's revenues come from taxes. In 1989, each residential property owner in Salt Lake County paid the district about 2 cents for every $1,000 of his property's value. That ratio may vary slightly in each of the district's 12 counties.

"The board has taxed at its maximum rate, and our concern is that there isn't justification to support that," Deputy Auditor General Douglas West told the subcommittee.

The audit said poor financial planning by the district has resulted in it not knowing precisely how much to tax. The board also indicated it was easier to tax the maximum rate rather than lower it, then possibly raise it again in the future.

But auditors saw it as only shirking public responsibility. "We believe that the district board has the responsibility to determine the tax rate necessary to cover all anticipated district costs without overtaxing," the audit said.

Responding to the charge that the district may be overtaxing, general manager Don Christiansen told news media: "No. Quote me on that, no." He told the committee that all tax money, spent and unspent, has been used with one purpose in mind: Completing the $2 billion CUP water system.

The district was created about 25 years ago to oversee delivery of Utah's allotment of Colorado River water to 12 counties in eastern and central Utah and the Wasatch Front. That delivery comes through a system of dams, reservoirs, aqueducts and treatment plants known as the Central Utah Project. The system, which includes the Jordanelle Dam and reservoir now under construction near Heber, is being built by the federal Bureau of Reclamation under contract with the district.

Welsh told the committee that the district has been so consumed in completing the CUP that it has overlooked its own mismanagement and lack of public accountability.

"As the Bonneville Unit (one of three units making up the CUP) nears completion, we think the board and management should spend more time putting in place the management practices and controls found in most other public agencies," Welsh said.

Other areas of the 59-page audit that drew considerable fire from committee members were:

_ Travel policies allowing first class travel, expenses of board members' spouses and unlimited lodging, entertainment and alcohol.

Entertainment and drinking expenses included $263 in rodeo tickets, a $284 bar charge, $720 in lunches and $2,400 for a river rafting outing. The audit noted that the state doesn't allow these expenses.

_ Lobbying expenses for two part-time lobbyists in Washington, D.C., amounting to $604,735 over 31/2 years. The lobbyists were hired without advertising or soliciting proposals, and in one case a state lobbyist was retained without knowledge of the board.

_ Salary increases and bonuses awarded without any specific criteria complying with state standards, although district employees receive benefits from the state retirement fund.

This upset committee members, particularly Moody, who made a motion, which was unanimously passed, that legislation be drafted to make special districts that reap benefits from the state retirement fund subject to the same salary and benefit restrictions as other state agencies.

Christiansen, who flatly denies any misuse of public money, said the district's accounting will be improved. He said consultants have been hired to consider tighter financial controls and rework the district's antiquated and non-existing policies and procedures. He said the board has revamped the district's travel policy _ although auditors criticized it as still being weak.

While all committee members voiced support for the CUP, they were skeptical of the district's commitment to follow through. Moody warned that he would call for board and administrative resignations if a future audit showed continued mismanagement.