Grand County eyes $1M in reimbursements to resolve tourism tax dispute

Amid renewed scrutiny from the Utah State Auditor’s Office, Grand County officials are leaning toward making more than $1 million in budget corrections to ensure compliance with state rules for spending tourism tax revenue.

At a June 3 budget workshop, commissioners discussed — but did not vote on — a draft plan to reimburse disputed expenses from the county’s general fund. The proposal addresses questions about whether several past expenses — including Trail Ambassador salaries, Recreation Special Service District funding and visitor education efforts — meet legal requirements for use of the transient room tax, or TRT.

The tax, collected from overnight visitors at hotels, campgrounds and vacation rentals, is used to promote tourism, support recreation and film production, fund convention meeting rooms and museums and help manage the impacts of tourism on local communities.

A significant portion of the proposed corrections involves the Moab Trail Ambassador Program. Operated by Grand County Active Transportation and Trails (GCATT), the program stations seasonal staff at popular recreation sites to educate visitors, distribute supplies, monitor trail conditions and promote responsible trail use.

Recently, GCATT was awarded the 2025 Trail Program Award from the Utah Division of Outdoor Recreation in recognition of the Trail Ambassador Program.

In a 2024 audit, the state auditor’s office found multiple issues with Grand County’s use of tourism tax funds — including the use of TRT promotion funds to pay Trail Ambassador salaries in 2021 and 2022. The office said the ambassadors’ work, which they reduced to “providing water and encouraging tourists to stay on trails” as mitigation rather than promotion and said their salaries should have come from the mitigation category instead.

In response, Grand County reimbursed $182,000 from its general fund and reclassified the Trail Ambassador Program under the “establishing and promoting” category — one of several steps that helped resolve the audit and secure the release of over $13 million in state tourism funding at the end of 2024.

Earlier this year, Commissioner Brian Martinez requested a broader review. Clerk-Auditor Gabriel Woytek identified nearly $590,000 in Trail Ambassador salaries from 2023 through 2025 that could be subject to reimbursement if a stricter legal interpretation is applied.

Also on the draft reimbursement list: $476,000 in prior allocations to the Recreation Special Service District — which provides financial support for local parks, youth sports and facilities like the Moab Recreation and Aquatic Center — and $157,000 in visitor education and responsible recreation programming planned for 2025.

Combined, the potential reimbursements total roughly $1.07 million from the general fund, which held more than $10 million at the end of 2024. Final amounts could change depending on further analysis, including a review of Recreation District allocations to determine whether they align with the auditor’s interpretation of allowable spending.

Legal disagreement at the core

The issue centers on differing interpretations of a portion of state law that allows TRT revenue to be used for “establishing and promoting” recreation, film and conventions.

The county has historically viewed this section as more flexible than the clearly defined “promotion” category, using it to fund efforts like the Trail Ambassador Program and the Moab to Monument Valley Film Commission.

But the state auditor’s office says both categories — promotional spending and “establishing and promoting” — must serve the same goal: drawing more visitors from outside the county.

“The emphasis and intent of this portion of the code is to bring people from outside the county into the county for tourism, recreation, film and conventions,” State Auditor Tina Cannon wrote in a May 22 statement to The Times-Independent.

Citing the definition of tourism tied specifically to the “promotion” category, Cannon added: “Expenditures for the Trail Ambassador Program should be funded from the mitigation funding, except for those activities that have supporting documentation that they are to ‘solicit, advertise, or market or enhance transient guest spending in a county.’”

Woytek, who had previously acknowledged the likely need for possible corrections, took a firmer stance during the June 3 workshop. He argued the county had applied the statute in good faith and said the current dispute stems from how the state is now choosing to interpret it.

“I no longer feel like the misunderstanding has anything to do with Grand County’s compliance,” he said. “The misunderstanding has to do with the fact that we misunderstood that we would have to be applying a standard … that, in my estimation, doesn’t follow the way the code is written.”

While he maintained that the expenditures in question are legally defensible, Woytek said his office will implement whatever decision the commission makes.

County Attorney Stephen Stocks said the county recently requested a formal meeting with the auditor’s office to clarify its interpretation, but instead received a phone call from Cannon.

“They’ve indicated that they would like the county to come into compliance,” Stocks said. “And the language they utilized was that they’d like the county to be away from the line.”

Stocks said the auditor’s office made clear that if an expenditure raises questions or requires justification to defend, the county shouldn’t be in that position.

“If there’s a question of ability or not, or if one feels the need to kind of justify or argue it,” he said, “they said the county shouldn’t find themselves in that position.”

He added that the auditor’s office interprets “establish and promote” as a combined requirement — meaning eligible expenditures must both support recreation, film, or conventions and include a clear element of tourism promotion.

Responsible recreation efforts add complexity

Another item under review is $157,150 in spending tied to GCATT’s “responsible recreation” programming. This funding is described as covering three main areas: annual purchases for the Trail Ambassador Program, recurring responsible recreation media projects such as newspaper ads and specific owned-media initiatives developed with the Moab Office of Tourism — including a stewardship podcast, visitor education materials and volunteer training content.

This spending wasn’t flagged in the 2024 audit but some of it had been moved from the “tourism” category to the “establishing and promoting” one as part of the response to the audit.

In a non-public meeting June 2 that included Stocks and Woytek, a few commissioners labeled the program’s line items as green (considered promotion), red (not considered promotion) or purple (more information needed to consider promotion). There was not a quorum of commissioners at the meeting.

Green-labeled items, totaling about $75,000, included branded education incentive items, social media boosts, materials for events and a search and rescue podcast series. Red-labeled items, totaling about $73,000, include items like wag bags, electrolytes, Moab branded spill kits and exterior vehicle trash bags and employee uniforms.

Martinez, who took part in the private meeting, said in the workshop even the green-labeled costs might not be worth the risk.

“We are right up next to the line, if we’re asking, ‘is this defensible, or is it not defensible?’” Martinez said.

Woytek said only a portion of the 2025 programming budget has been spent this year.

“My assessment is that all of that the entire list is very clearly an allowable use as written in the code,” he told The Times-Independent.

Commission divided, action coming in July

Commissioners expressed a wide range of views about how to resolve the issue. Martinez said that compliance must be the top priority.

“My priority is that we get compliant and that we stay compliant without any kind of ambiguity,” he said.

Martinez added that after the state auditor made her stance clear to Stocks, “the time for arguing has passed.” He said the state made clear the county should stay “well away from the line” when spending tourism tax funds — and that complying with that expectation was nonnegotiable.

Commissioner Mary McGann disagreed, saying the county should retain any spending that could reasonably be defended on a legal basis.

“If it’s defensible, then we should keep it in,” she said.

McGann also expressed frustration that Grand County seems to face more scrutiny than other counties and said she would be extremely interested to know whether other counties would be seen as misusing TRT funds if investigated.

Commissioner Trish Hedin said the shifting guidance from the state auditor’s office had made compliance feel like “a crapshoot,” and noted the difficulty of staying away from a line “that is constantly in flux.” Commissioner Jacques Hadler echoed concerns about fairness and argued that all of these expenditures fall under allowable use.

“The goal posts keep getting moved on us,” he said.

Commissioner Mike McCurdy urged action over continued deliberation.

“Pay the bill and get under compliance as quickly as possible,” he said, warning that continued issues could jeopardize the county’s reputation and relationship with the state.

Commission Chair Bill Winfield said the county needed to stop debating and make hard budget decisions to come into compliance and move forward.

“I don’t want to be in an argument with the state auditor,” he said. “Whether the goal posts are moving or she’s frustrated with what we’re doing – it doesn’t matter. Let’s just get to the end of this.”

Woytek said he will bring forward a formal budget amendment in July for a public hearing and vote. He added that it’s likely there will be another budget workshop before the hearing.

A separate $165,248 transfer would move unspent TRT establishing and promoting funds from GCATT’s operational account to the county’s restricted-use TRT account to ensure proper tracking under state rules.

Meanwhile, new state rules under House Bill 456, effective July 1, clarify key terms such as “mitigation” and “establishing and promoting,” expand allowable uses of TRT revenue, increase the maximum tax rate counties can charge, add new reporting requirements and create a grant program to help address tourism impacts.

This story was first published by The Times-Independent.