A public threat to withhold state funding from Wasatch County has given way to talks between county and state officials, but tensions over local control remain.

Utah officials need to do more to understand local concerns before reacting and forcing local governments to play “heavy defense,” said Wasatch County Manager Dustin Grabau.

The county’s opposition to a proposed development and a state law allowing the formation of cities and towns without the immediate need for voter approval provoked the state’s ire. Steve Waldrip, Gov. Spencer Cox’s senior adviser for housing strategy, warned officials in mid-August that resisting growth could risk the county’s access to state funding.

The Salt Lake Tribune received multiple emails from concerned residents expressing frustration and demanding answers about the threat.

It took weeks to get a response from the state, which finally came in the form of an emailed statement from the Division of Housing and Community Development, which Waldrip heads. The state provided the same statement to Utah News Dispatch.

Things cooled off during that time as county officials met with the state to discuss both issues.

“Meeting Utah’s housing needs isn’t always easy, and there will be disagreements along the way,” Waldrip said in the statement. “But I’m grateful we’re moving forward in partnership with Wasatch County to find the right solution for the [development].”

Wasatch County still wants lawmakers to repeal a preliminary municipality law, arguing it undermines local control.

The county isn’t opposed to growth, Grabau said, but officials “need to be able to say no to things that don’t make sense.”

What’s the disagreement about?

The dispute centers on two connected issues:

• A proposed development on state trust land near Heber City.

• A state law that Wasatch County officials say gives developers too much power to shape their own communities.

In August, Wasatch County rejected an agreement that would have let a proposal for dozens of housing units move forward on land managed by the Utah Trust Lands Administration (formally known as the School and Institutional Trust Lands Administration, or SITLA). The county said the project did not fit its plans for growth.

The disagreement unfolded alongside a separate fight over SB258, a 2024 law that created a process for qualifying developments to pursue preliminary municipality status.

The law lets qualifying landowners seek preliminary municipality status through a process overseen by the lieutenant governor’s office. It sets requirements for the proposed community and outlines how it can appoint local officials and eventually become a permanent town.

It has become a flash point for local officials and candidates who are concerned that the process could allow developments to advance with less local control.

Wasatch has joined other counties in opposing the law and seeking its repeal.

What did Waldrip say?

Cox read stories about the vote on the proposal for Utah Trust Land Administration (TLA) property and the counties’ concerns about SB258 and took them as the county declaring “war on the state over these growth issues” and working to thwart state law, Waldrip told the Heber City Council after a presentation on housing.

Waldrip warned that the county could face serious consequences. He acknowledged that the City Council wasn’t the intended audience for his message but said it would reach the right people.

“Your funding, as a county, is now at risk. Meaning, none. Anything within my power, I will stop,” Waldrip said on behalf of the governor, specifically mentioning road funding.

The rhetoric calmed during the meeting, with both sides acknowledging there had been some miscommunication.

“We get into these battles that shouldn’t be the discussions,” Waldrip said not long before he left the meeting.

What’s happened since?

State officials have since expressed they “at least regretted some of their approach,” Grabau said.

He and Wasatch County Council Chair Erik Rowland met with Waldrip and other members of the governor’s team in late August.

They explained their reasons for opposing SB258 and crafting a resolution against it, he said. Grabau said those reasons included encouragement from state Sen Keven Stratton, an Orem Republican whose district includes part of western Wasatch County. Grabau said Stratton asked for formal resolutions opposing the law to help with efforts to change it.

The two sides also discussed options for the TLA property, including ways to create affordable housing, Grabau said. County officials have separately met with TLA staff about the land.

Waldrip’s statement emphasized that cooperation by saying he appreciates “our partners in Wasatch County and across the state who are working with us” to build more housing and make homeownership more affordable and attainable.

The improved tone, however, has not translated into an agreement on SB258.

Grabau said the county intends to continue advocating for repeal. Although he said he considers proposed revisions to the law an improvement, he noted officials don’t think they go far enough.

What do the county and state hope comes next?

Waldrip has argued that Utah needs to change how it talks about growth, with more attention to whether children and grandchildren can afford to stay in the state.

The current framing, he told the Heber City Council, is “selfish” and focused on how it might create traffic, attract crime or otherwise harm individuals.

“We’ve changed sort of the framework around growth to we can’t have any, or there’s too much risk,” he said. “That framework and discussion have to shift to what are we doing to provide for the future.”

For Grabau, the dispute illustrates a bigger problem with how state officials respond to local concerns.

It’s a “common story,” he said, that state lawmakers hear a complaint from a few people or one constituent and try to pass a bill based on it without trying to get context. People want “really simple solutions” to intricate problems, he said, even as local governments are trying to navigate through those complex issues.

“I hope one of the big takeaways is for the state to not be so overly reactive to anecdotal complaints,” Grabau said, “and really come back to cities and counties and get a bigger sense of the picture.”