Kristin Murphy, Deseret News
FILE — Rep. Steve Eliason at the State Capitol in Salt Lake City on Wednesday, Sept. 21, 2016.

This story is updated to correct the description of the amendment to the bill on Thursday.

SALT LAKE CITY — In a flurry of undebated legislative action Thursday, a bill that would authorize the state auditor to take temporary custody of public funds in certain circumstances sailed through both the House and Senate chambers.

The unusual action was surrounded in secrecy and appears to be targeting a mysterious fund tied to Utah League of Cities and Towns. The bill was passed by both houses, signed by leadership and forwarded to the governor's desk within hours of its presentation.

Most bills take weeks to receive such approval.

The bill, SB137, would allow the state auditor, with the permission of a court, to freeze funds if he determines it necessary in order to protect those funds from being properly used.

An amendment made on the House floor Thursday gave it an immediate effective date as soon as it's signed by the governor.

The bill's Senate sponsor, Sen. Curt Bramble, R-Provo, said the amendment was made at the request of Utah State Auditor John Dougall for use in a case currently underway.

"The timing of this is very important," the bill's House sponsor, Rep. Steve Eliason, told lawmakers. "It regards pending legal action this week that the state auditor has been heavily focused on."

Eliason called the issue "very time sensitive and in the public's best interest to expedite."

The bill, which still awaited the governor's consideration Thursday night, comes amid an investigation into a mysterious trust fund first reported in the Deseret News last month that is connected to the Utah League of Cities and Towns and its embattled former leaders.

The league's former director Ken Bullock and former chief financial officer Michelle Reilly — who both stepped down from their positions before a state audit was released accusing them of misusing league funds — help manage the fund called the Utah Municipal Cooperative II.

After learning of the fund during his audit of the league, Dougall began an investigation into the trust to determine whether its funds are public money and should belong to the league, under control of its board.

Eliason and Bramble deferred questions about the case propelling Thursday's amendment to the auditor, but they said they supported the auditor's request in order to give him the tools he needs.

"In terms of policy, I think it's solid," Eliason said. "If the auditor determines (he) needs to freeze a taxpayer fund because there's an issue with it until they can work through the issue, I think our statewide-elected auditor should have every right to do that."

In response to questions about whether the amendment had anything to do with investigations into the Utah Municipal Cooperative II, Dougall said he was unable to comment.

The auditor has previously declined to answer questions about the case involving the trust fund, citing ongoing investigations.

However, the bill's amendment came the same day the fund's trustees, joined by Reilly and Bullock, met to discuss the future of the fund, which has created concern among current league leaders because of uncertainty of its past use.

League board president Steve Hiatt, who is also the mayor of Kaysville, has said he and other league leaders will begin reviewing options to claim the funds, per recommendations of the state auditor.

In a report published Wednesday, the Deseret News shed light on new details about the fund from documents obtained through a public records request, including that it contained at least $700,000 in 2012 and that according to its trust agreement, should have been dissolved no later than Dec. 31 2012.

That's a requirement that two of the fund's trustees — Midvale Mayor JoAnn Seghini and former Salt Lake City Councilman Tom Godfrey — say they weren't aware of until recently.

Asked about the results of the trustee meeting Thursday, Godfrey said nothing was decided.

"Our attorneys said to say, 'We're working on a solution,'" Godfrey said, declining to elaborate.

Financial reports obtained by the Deseret News also show checks ranging from $250 to $40,000 were made out to Reilly, Bullock, trustees and other parties, but little to no expense or reimbursement explanations were included in the documentation.

Reilly and Bullock each received checks from the fund totaling more than $40,000 between 2012 and 2016.

Godfrey has said he's confident all the funds were being used for the sole benefit of the league — including appropriate compensation for trustees, Bullock and Reilly, and expense and travel reimbursements.

However, Godfrey acknowledged the trustees weren't providing full accounting of the trust's disbursements to the league board, which was required according to the trust's operating agreement.

While Hiatt said "it's too early to cast judgment to say anything is concerning," he hopes questions about whether the fund was used appropriately will be answered by the state auditor.

The News first learned about the trust after its sister company, Deseret Digital Media, began receiving payments from the trust as part of an advertising buy with the Utah League of Cities and Towns, a one-year $120,000 contract for sponsored content published on

The content features advertisements such as, "Can you spot the services offered in Utah's cities and towns," "Recycling in Utah: How it works," "Cities team up to curb underage drinking" among others.

Though the contract was with the league, Bullock wrote checks to Deseret Digital Media from the Utah Municipal Cooperative II, though Bullock had previously told the league's board the contract would be funded through an "anonymous donation."