To the uninitiated, item six on last Tuesday's Sandy City Council meeting seemed a simple matter: a public hearing to consider a petition requesting that several Sandy homes be withdrawn from the White City Water Improvement District.
Think again.Use Sandy city, White City and water in the same sentence, and things immediately become complicated.
Tuesday's public hearing was replete with discussion - from a citizen's committee advising the council to move cautiously on change to a former state lawmaker suggesting White City Water be investigated for allegedly manipulating public funds.
The council made no decision, opting to continue the public hearing on Sept. 29.
At issue is a petition drive signed by Sandy residents currently being served by White City who want to be served by Sandy.
A new state law provides that municipal residents living within a county service district can pull out if their cities offer equivalent or better service and if a majority of the city users vote for withdrawal.
Sandy resident John Kirkham, chairman of the citizen's review committee, warned council members to move cautiously.
"We are not here, in any way, to give you a recommendation," said Kirk-ham, noting the proposed integration of the two water entities is far from simple.
A key concern is the issue of water rights.
White City Water Improvement District, Kirkham said, does not own any water rights, only a contract to buy water from White City Water Co.
The improvement district purchased the White City water system from the privately owned water company several years ago, but the company apparently retained its valuable water rights.
Several improvement district trustees simultaneously serve as officers of the water company, Kirkham said.
Kirkham questioned the legality of a public entity like the improvement district so closely associated with a private, for-profit company.
"These are questions we need to ask and understand," he said.
Former Utah House Speaker Craig Moody, who championed the petition drive, wondered if public funds gleaned by the improvement district were paying for assets in a private company.
Moody said the relationship between the two White City entities should be investigated by the state auditor and Attorney General's Office and encouraged the council to put the withdrawal matter to a public vote.
After the meeting, the improvement district's attorney, Paul Ashton, dismissed suggestions that his client was using White City Water Co. to manipulate assets.
"Give me a break," he said.
Ashton said when the improvement district bought out the water system, the company opted not to sell the water rights to avoid a heavy capital gains tax.
The White City Water Co. is a wholly owned subsidiary of the district. While district trustees serve simultaneously as company board of directors, they earn no money or compensation from their company duties, Ashton said.
By law, district trustees cannot make more than $2,500 a year.
Company stock is owned entirely by the water district. If a profit is realized, the extra money is used to improve system infrastructure or lower water rates, Ashton said.
The district buys water from the company, while the company pays the district for transportation and maintenance of storage facilities, Ashton said.
"It's a straightforward relationship," he added.
Now Sandy is sore because it won't be getting the water rights, he added.
Ashton said the trustees have asked him to draft a letter for Sandy leaders explaining the relationship between White City Improvement District and White City Water Co.
Several council members expressed concern over the water rights matter but said approving a public vote to withdraw is paramount.
The complexity of the proposed withdrawal "doesn't cloud the fact that residents should have the right to vote," said Councilman Michael Edmonds.