This is an archived article that was published on in 2015, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

In Piute County this year, the town of Circleville received $835,250 from Utah's Permanent Community Impact Fund to build a medical center to serve its roughly 500 residents.

For Kanab in Kane County, the fund provided a $680,000 grant and a similar loan to mitigate the risk of floods in Tom's Canyon.

Castle Dale in Emery County received $3,585,000 in grants and loans from the fund to build a new city hall.

All across Utah, projects supported by the state's Community Impact Fund have enhanced the safety, security and quality of life in communities affected by mineral extraction.

The fund, which was created by state and federal law to distribute royalties from fossil fuels mined from federal lands, has the express mission of providing grants and loans — generally limited to a maximum of $5 million — to "subdivisions of the state" for construction or maintenance of "public facilities."

So the decision by the Community Impact Board last spring to approve a $53 million loan to Carbon, Emery, Sevier and Sanpete counties to invest in a deep-water export terminal in the Port of Oakland, Calif., is disturbing.

Even more troubling is the process the board used to fast-track the decision. The board approved the loan April 2 under a "request for special consideration" without holding a single public hearing. A presentation to the board on the Oakland terminal project was made March 7 in a closed-door meeting, but no effort was made to engage the public in what was a dramatic departure from the guidelines and intent of the Community Impact Fund program.

The formal application for the loan from Carbon County wasn't even submitted until April 28, nearly four weeks after the board approved the loan, and it included almost none of the usual financial information required.

Further, Jeff Holt, an investment banker with BMO Capital Markets who is also chair of the Utah Transportation Commission and until late 2014 was a member of the Community Impact Board, was a key player in developing the deal. BMO Capital Markets is actively involved in financing construction of rail lines across Utah to deliver goods — primarily coal — to a West Coast port, and that bank is likely to reap profits, perhaps in the millions, from the railroad project.

The appearance of a conflict of interest is obvious, and heightened by the hurried, unorthodox decision-making process employed by the board.

And given the volatility in the energy market and the rapid rise in alternative energy around the world, a project to subsidize coal exports demands a thorough investigation. The board should have carefully assessed the financial risks associated with a $53 million loan to be repaid over 30 years using anticipated, and perhaps imaginary, revenues from coal shipments.

Instead, public engagement was stifled and questions remain.

Even members of the Community Impact Board worried aloud about what they were doing. According to the minutes of the April 2 meeting, "The board expressed concern about the legalities of the project."

Then members voted to approve the loan.

The Community Impact Board contradicted the letter and spirit of a law meant to benefit Utahns with community-based projects when it fast-tracked the process to approve an oversized loan for a risky venture in California.

The people of Utah deserve better.

The $53 million loan appears to have been contingent on getting a green light from Utah Attorney General Sean Reyes. Reyes should announce loud and clear that using taxpayers' money to fund this kind of project violates the law, but even without such an announcement, the Community Impact Board should reverse its decision to approve the loan.

The Community Impact Fund needs to be protected from exploitation by private investors gambling on ill-advised, shortsighted projects.

David Irvine is a Salt Lake attorney and a board member of the Alliance for a Better Utah.