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A former employee of the Jordanelle Special Service District has testified that she witnessed what she suspected were improper dealings by district officials and developers and that a current employee told her the agency had shredded a large number of documents.

But former officials and the district's attorney say the former employee, Janet Carson, lacks proof of her accusations, and that all records relevant to a number of lawsuits the financially embattled district is facing have been preserved as required.

And on Friday, U.S. District Judge Dale Kimball denied a motion for an injunction sought by a landowner against the district, saying it wasn't clear to him that the allegations in the landowner's lawsuit and in court testimony had merit.

Kimball also declined to dismiss Wasatch County as a defendant in the lawsuit, which alleges that district and county officials engaged in self-dealing in creating a special service district to bring water and sewer to an area that sits above the south end of Jordanelle Reservoir.

The district's manager, Dan Matthews, recently resigned without explanation, he confirmed during the hearing.

Carson, who held several positions in the district that operates in Wasatch County, testified under oath Thursday at a hearing at which a development company asked Kimball to enjoin the district from collecting annual fees used to pay back millions of dollars worth of bonds.

The district has been foreclosing on landowners who, after the real-estate bubble burst beginning in 2007, failed to pay fees that backed $40.8 million worth of bonds that went to construct sewer and water facilities. The district is in default on some of the bonds and involved in lawsuits over its failure to repay the bondholders.

VR Acquisitions, owned by a Chicago company, sued the district in federal court earlier this month, alleging that some members of the district's board, who also sit on the Wasatch County Council, engaged in self-dealing involving themselves, family members and cronies while saddling certain developers with the costs.

VR Acquisitions asked Kimball to halt the district from collecting the company's 2015 payment of about $2 million, which is due on Monday. Otherwise, the company's 6,700 acres face foreclosure, it said. And the district faces another default on bond payments, according to court testimony.

Carson was subpoenaed by VR Acquisitions to testify to bolster its allegations of malfeasance by district officers.

She told of incidents in which district workers performed work for Lake Creek Irrigation Co. that was supposed to be reimbursed.

"I generated the invoices but I was instructed not to send them," she said.

She also said Matthews would tell her not to bill certain developers for late fees or interest but she did not know why.

"I was told not to ask questions — just do it," she said.

Carson said she was removed from one position because she expressed concerns about the operation and eventually quit after repeatedly being told she and other employees could not talk about district operations and that she wasn't being a team player.

Carson also testified that a current employee had told her that a shredder truck had been parked in front of the district offices and many records were gone, such as payment histories.

But Mark Gaylord, the district's attorney, said Friday that the district maintains a "litigation hold" on all records that preserves documents relevant to the lawsuits it faces.

Matthews also testified and denied allegations of conflicts of interest.

Asked if he had received payments outside of his salary for actions on behalf of the district, Matthews said, "Absolutely not."

He also said he had resigned his post effective Dec. 17 but gave no reason.

Steve Capson, a former county council member who now works with the Jordanelle Special Services District, said Matthews had resigned voluntarily.