Letter calling for a full audit of the Inland Port

House Speaker Mike Schultz
State Capitol Building
350 North State Street, Suite #350
Salt Lake City, UT 84114

Senate President Stuart Adams
State Capitol Building
350 North State Street, Suite #320
Salt Lake City, UT 84114

Join the call for an audit here!

January 10, 2023

Dear Speaker Schultz and President Adams:

A comprehensive Legislative Audit, including a performance audit, of the Utah Inland Port Authority is needed urgently and until it is conducted a moratorium should be placed on UIPA development activity.

In September 2022, the Utah Legislative Auditor General released A Limited Review of the Utah Inland Port Authority. The initial request for the audit focused on three primary areas: 1) organizational structure, 2) contracts and use of consultants, and 3) its process for issuing a $150 million bond.

The Office of the Legislative Auditor General made five recommendations, including that the Legislative Audit Subcommittee direct the Auditor General to “conduct additional audit work on the Utah Inland Port Authority or the board should ensure that a contract and risk management review takes place.” Assurances of compliance from a prominent board member prevented the requested deeper dive. 

Now, without adequate auditor oversight, UIPA is accelerating its plans for development all over the state.

After selling $150 million in publicly-backed bonds without public input, UIPA announced plans to build a transloading facility in Salt Lake City to distribute freight arriving from West Coast seaports to the rest of the country and to form a Public Infrastructure District (PID) to manage infrastructure projects. 

In 2022, the Stop the Polluting Ports Coalition commissioned a study by a nationally renowned logistics expert that showed there was no business case for a new transloading facility. In pursuit of that ill-considered project, UIPA entered into a lease contract for the land. Unable to break that lease, UIPA has paid millions for a lease they can’t use but must continue to honor.

Then, in another attempt to justify its existence, UIPA negotiated the purchase of the Trust Lands Administration (TLA) owned North Temple Landfill in order to take over remediation of the 770-acre site. TLA has already entered into a partnership with a firm that has remediation experience, and received approval for its Voluntary CleanUp Program. UIPA’s plan to use state resources would usurp progress that was being made by another state agency with the expertise to take on the task. 

With no accomplishments to point to in Salt Lake City, UIPA has shifted its focus to developing “Inland Port Project Areas” around the state. Eight UIPA Project Areas have now been approved. With three more proposed. We are alarmed by the prospect of additional bonding to accommodate additional PID’s. 

So far, specific community concerns, such as loss of fertile farmland in Utah County, limited water resources in Tooele County, impacts to the Bear River Migratory Bird Refuge in Box Elder County, and destruction of Native American graves and wetlands in Weber County, are ignored or are brushed aside. After nearly six years of operation, there is still no stormwater management plan for the existing port in Salt Lake City. This is a serious pollution concern for the Great Salt Lake and the adjacent wetlands.

Utah Code 11-58-602(1)(b) requires UIPA to “consult with” the county and municipality hosting its projects to “establish minimum . . .  environmental standards that a landowner is required to meet to qualify for the use of property tax differential . . . including a requirement that a development consume no more than 200,000 gallons of potable water per year.” Outside of the Salt Lake City location, the required standards have not been established. Many developments already announced would not qualify. A performance audit of UIPA that includes its compliance with this statutory duty is essential.

Every UIPA Project Area Plan states that:

A Project Area Plan shall contain (among other things) the board’s findings and determination that: (i) there is a need to effectuate a public purpose; (ii) there is a public benefit to the proposed development project; (iii) it is economically sound and feasible to carry out the project area plan.

But how are these determinations being made?

● No studies have been undertaken to establish a business case or need for these developments.

● Communities in project areas lose 75% of future tax revenue for the next 25 to 40 years. These are funds for schools and other important local services that benefit the entire community.

● The impacts on the environment and the health of local residents are not studied or considered. Increased traffic alone would overwhelm some of these communities. A traffic study undertaken for the Lakeview Business Park predicted an additional 50,000 vehicle trips per day.

● Five of the approved, and two of the proposed project areas, together, will threaten 50,000 acres of the Great Salt Lake Basin and its wetlands, even as state agencies and the Utah legislature are spending millions to save the lake. UIPAs new Wetlands Policy is to spend a pitifully small amount (less than $2 per threatened acre) that’s inadequate to address wetland impacts.

● Lack of transparency has been an ongoing problem for UIPA. Project areas are introduced and approved before local residents are even aware of them. Residents have little opportunity to oppose development that could actually harm them. 

Per phase 2 of the auditor-recommended UIPA Master Development Plan, UIPA entered into a binding contract (Interlocal Agreement) with Salt Lake City. UIPA agreed to “mutually engage” with the city to hire a vendor(s) to conduct a Community Impact Assessment, Health Impact Study and Traffic Assessment, prior to the end of the year and before further NWQ development could occur. None of these have been done. Salt Lake City fulfilled its obligation to hire a dedicated city planner to expedite UIPA permits. They have introduced a reasonable and fair Draft Amendment to the Interlocal agreement that has been dismissed by UIPA. If UIPA hasn’t fulfilled their contractual obligations to Salt Lake City, how can they be trusted to fulfill their contractual obligations in other areas?

We propose additional items for audit review:

● In the last few years, preservation of the Great Salt Lake has become our highest priority. UIPA development is the single greatest government-sponsored threat to Great Salt Lake wetlands. An environmental audit is needed for all Project Areas in the Great Salt Lake Basin, of the kind agreed to, but not honored, under UIPA’s contract with Salt Lake City.

● UIPA’s budget is still opaque. It is nearly impossible to tell how much UIPA has spent over the last six years, and for what purpose.

● Greater board oversight was a focus of the limited audit. Four out of five current board members are employed by the state of Utah and represent development interests. The board would benefit from the inclusion of environmental and health expertise. The skewed makeup of the Board has biased its selection of Project Areas and projects to subsidize. 

● UIPA has not been transparent in communications with the public and has severely limited opportunities for public comment.

● Loans from UIPA, in contrast to those loans granted by banks and private lending institutions, are granted without first performing meaningful “due diligence.” This opens the door and greatly increases the chances for speculative, risky, or corrupt development, and greatly increases the need for thorough auditing of project approvals, loans, and business incentive payments.

Multiple communities are facing the prospect of radical changes because of UIPA projects. The list of negative impacts to human health and the environment is lengthy, including further aggravating the climate crisis, water shortages and the ecological collapse of Great Salt Lake. Only a small handful of politically well-connected developers stand to benefit. A comprehensive Legislative Audit, including a performance audit, of the Utah Inland Port Authority is needed urgently and until it is conducted a moratorium should be placed on UIPA development activity.