Matt Gade, Deseret News
TOOELE — One year ago, Tooele County nearly hit rock bottom during what one county commissioner called the "perfect financial storm."
Now, taxpayers are still paying back more than $4.5 million in interfund loans for a major sports complex that was bleeding money.
The interfund loans — or cash loaned from one fund to another — are subject to repayment, but county officials say there was no repayment plan in place at the time the loans were made.
Six weeks after Tooele County Commissioner Shawn Milne took office in 2013, he learned from Treasurer Jeremy Walker that the county would be completely out of cash in two weeks.
"I remember looking up at the others in the room and I said, 'We're bankrupt and we don't even know it,'" Milne said.
One of the biggest recipients of general funds was the county's $20 million sports complex, Deseret Peak, he said.
"It is one of the most diverse recreational facilities in the entire state," Milne said.
The center has the largest surface area pool in Utah. It has baseball and softball fields, a BMX track, an equestrian center, a motocross track and playgrounds. There is a soccer field and a putting green. It also houses the Oquirrh Mountain Mining Museum and the Utah Firefighters Museum.
"It's a wonderful facility," Milne said. "We have a great facility, but we haven't marketed it as such."
Parks and recreation departments are not designed to generate income. Deseret Peak was bringing in about $600,000, but Walker said the county budgeted for an annual loss of $950,000.
Walker and Tooele County Auditor Mike Jensen said the complex was actually losing about $2.5 million each year and was being subsidized through general funds.
"It was hemorrhaging," Milne said. "This wasn't just like a good cut on your forearm. This was somebody cut a main arterial, and it was bleeding out."
Walker said he began reviewing historical documents of the county's budgets, expenses and revenue when he took office in 2011.
"In 2009, that (subsidizing) practice changed and instead of transferring the money out of the general fund to subsidize the cash loss, there was then borrowing from these restricted funds," he said.
Over four years, the Desert Peak Complex incurred $6.5 million in debt.
"By the time it was all over, there were 10 separate funds that were borrowed against to fund those operating losses over those four years — 2009 to 2012," Walker said.
Some of those funds were borrowed from the roads budget, health department budget, and landfill and transient room taxes.
Instead of cash assets, departments were given "an IOU so that Deseret Peak continued to operate about a $2 million a year loss," Walker said.
Those IOUs, he said, should only be authorized by commissioners. Instead, he said, they were authorized by Jensen.
"I think it's an outrage," Walker said.
Race for treasurer
Both Jensen and Walker are in close running for the position of county treasurer, making the interfund debt a hot topic on the political battlefield.
"It's unfortunate that (Walker) had to bring that up at this point in the election cycle in the campaign," Jensen said.
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