Board staff warn of dam-safety funding gap; FEMA grant requires county sponsorship or other government partnership

Division staff updated the board on dam-safety grant funding, projected projects, and recent developments with a FEMA grant intended to supplement state dam-safety funds.

Tom Cox and Ben Merritt outlined funding projections and an inventory of high-hazard dams. Tom said the legislature has provided ongoing dam-safety funding ($3.8 million per year) and periodic one-time appropriations; the most recent one-time appropriation was $25 million in fiscal year 2024, leaving an approximate balance of $12.9 million in the one-time pot and about $9.6 million in ongoing funds as of the briefing projection. Cox noted that a single large project can exceed the annual ongoing appropriation and that, given construction timelines, projections are inherently uncertain.

Ben Merritt gave an update on FEMA grant funding: the division was awarded about $7.3 million but discovered several dam owners are organized as 501(c)(12) nonprofits and therefore must have a government sponsor to use the federal funds. Merritt said staff intends to form a coalition including division staff, the dam-safety assistant state engineer, dam owners and design engineers to approach county governments and other government entities to request sponsorship and contractual assumptions of certain responsibilities so the projects can proceed with federal funds. Merritt listed three dams (Birch Creek No. 2 in Rich County; Rolfson in Sanpete; White Pine in Salt Lake County) where sponsorship will be required and requested board assistance identifying county contacts and outreach approach.

Board concerns and legal perspectives

Board members raised practical and legal concerns. Several members and legal counsel noted counties may resist accepting long-term liability and operational responsibility for privately owned impoundments. Counsel recommended exploring alternatives such as service agreements in which dam owners retain day-to-day operation and funding mechanisms (assessments) but a government sponsor provides the contractual vehicle required by FEMA. Board members suggested special service districts, conservancy districts or other governmental entities might accept sponsorship more readily than counties in some locations. Several board members emphasized the need for a liability analysis and clearer templates for MOUs/contracts before approaching counties.

Staff emphasized urgency: without government sponsors, some FEMA-eligible projects cannot proceed and the division risks losing available federal funds. Merritt asked for board support in outreach; board members offered to assist with local legislative contacts and with targeted county outreach where appropriate.

Ending

Staff will assemble a coalition and produce outreach materials and a legal/liability briefing for board members; division counsel and county counsel involvement will be necessary before any county signs a sponsor agreement. The briefing transcript records discussion and requests for board assistance but no final decisions recorded at the briefing meeting.