Utah Lake official steps down after he’s asked about letters in support of dredging, gets hired by Vineyard

In two secret letters, Eric Ellis said he would provide tens of millions of dollars in support of a project that would have built artificial islands.

(Francisco Kjolseth | The Salt Lake Tribune) Utah Lake is pictured on Wednesday, Oct. 18, 2023.

The executive director of the Utah Lake Authority, which formerly operated as the Utah Lake Commission, abruptly resigned Wednesday, taking a job as the Vineyard city manager.

Eric Ellis announced his departure in an email to board members, sent less than an hour after The Salt Lake Tribune asked him questions about his support for Lake Restorations Solutions, a company that spearheaded an effort to dredge Utah Lake and turn it into a city of half a million people. Later that night, the Vineyard City Council unanimously appointed him their new manager following an hour of deliberation behind closed doors.

Ellis had come under scrutiny after two letters, copies of which were obtained by The Tribune, showed he declared the Utah Lake Commission would provide millions of dollars to help Lake Restorations Solutions, or LRS, secure a federal loan for their project.

But the funds were not under Ellis’s or the commission’s control. And the state agency that managed them had no idea they had been committed to LRS’s proposal. Neither did members of the Utah Lake Commission’s board.

“The hiring process the city went through was extensive,” Vineyard Mayor Julie Fullmer said in a statement ahead of the City Council’s vote Wednesday night. “... Out of the candidates we vetted, who were excellent, we found Eric to be the best qualified for this position. We did our due diligence, we understood about the letters, and the information that was shared tonight was incomplete. We feel comfortable about moving forward.”

During a public comment period ahead of the vote, residents asked the council to “be careful” about hiring Ellis. Others called the decision “scandalous” and “dirty.”

The mayor called on Vineyard residents to reserve judgment until they “see the quality of his work.”

Fullmer, the current chair of the Utah Lake Authority, also sent a letter of support for LRS’s federal loan in September 2020, offering $5 million from Vineyard City to the project. The letter was not explicitly approved by the City Council but the mayor said her letter was appropriate. The funds had been approved by the City Council through the RDA to restore and improve Vineyard’s shoreline area, she told The Tribune in response to a list of emailed questions.

LRS never received any federal funding. The company announced it had dissolved and filed for bankruptcy earlier this year.

Letters of support

LRS scrambled in the fall of 2020 to put together an interest letter and supporting documentation for a hefty $385 million low-interest loan from the U.S. Environmental Protection Agency’s Water Infrastructure Finance and Innovation Act program, or WIFIA. The money, LRS said, would help the company dredge a billion cubic yards out of Utah Lake. They would use the dug-up sediment to build a series of islands, resulting in what LRS claimed would be a deeper, clearer, cleaner lake with a whole bunch of new beachfront real estate in one of Utah’s fastest-growing counties.

Ellis, then the director of the Utah Lake Commission, submitted a “partnership letter” to LRS on Sept. 28, 2020, for the company to use in support of its WIFIA application. In the letter, Ellis wrote the commission would provide $45 million over 10 years to LRS’s “Utah Lake Restoration Project” for eligible costs, including “water quality,” the Walkara Way open space trail and park, “phragmites removal” and “others.” Fullmer sent her $5 million Vineyard support letter a few days later.

LRS didn’t get its WIFIA loan in 2020, so it applied again in the spring of 2021, this time seeking $893 million from EPA. On May 18, 2021, Ellis sent another partnership letter for LRS’s application, this time writing the commission would provide $63 million.

But the Utah Lake Commission only had an annual budget of around $400,000 at the time, provided by its member cities, Utah County and state agencies.

And the state agency that managed funds for projects like phragmites removal and Walkara Way — the Division of Forestry, Fire and State Lands (FFSL) — didn’t know the letters and their financial pledges existed until The Tribune provided copies last week.

“I was pretty surprised by the contents of these letters,” said Jamie Barnes, director of FFSL. “My understanding was the Utah Lake Commission never had its own funding. I don’t know how he would give his commitment for other agencies.”

And the governing board for the Utah Lake Commission apparently did not authorize Ellis to send his partnership letters or make financial commitments either.

“The ULC had no knowledge of any documents sent to the EPA,” American Fork Mayor Brad Frost, the commission’s chair in 2020 and 2021, wrote in an email. “A document of this type would have been discussed in an open and public meeting.”

Chris Condie, a Lehi City Council member who also served on the board at the time, confirmed members had no knowledge of the letters.

Had LRS’s WIFIA loan been approved, state agencies or cities could have been in a bind with Ellis’s financial commitments, especially if they had used that money to leverage other federal funds.

Barnes said her division tried to get a copy of LRS’s WIFIA file, including supporting letters, from EPA.

“We were told it was protected and we couldn’t receive it,” she said.

Emails shared with The Tribune show EPA reviewed a Freedom of Information Action request for LRS’s WIFIA applications in May 2022. When EPA reached out to Ellis about his letters, Ellis asked the federal agency to keep his documents confidential for at least a year after they made a decision about the WIFIA loan.

“There are some real problems with what’s represented in the letter,” Barnes said. “It’s not factual.”

The LRS island-building project was not “state sponsored” as Ellis claimed, she said, and it did not go through the state procurement process. It also was not a public-private partnership. And legislation passed in 2018 did not authorize FFSL to use the sovereign state land under the Utah Lake in exchange for the LRS project, Barnes said. The bill said her division may dispose of state land to help restore Utah Lake, but it wasn’t specific to the islands project and her division ultimately determined selling off the lakebed was unconstitutional anyway.

“This letter,” Barnes said, “it really concerns me that he put it on Utah Lake Commission letterhead and sent it out.”

Dredging up a non-issue, or going down with the ship?

The Utah Lake Commission became the Utah Lake Authority last year, a more powerful institution with a bigger budget of $1.5 million appropriated by the Legislature each year. Ellis remained its executive director. American Fork lost its seat on the board.

“I get that it’s an interesting story and it has lots of juicy bits,” Ellis said in an interview Wednesday before he abruptly resigned, “but the [LRS] project is not moving forward. It stirs a pot that doesn’t need to be stirred at this point.”

Ellis said the commission took a neutral position on LRS’s project and that his letters were not a “promise to hand off dollars to anyone.”

He added some board members were aware of his letters, “but maybe not all of them.” He could not recall which board members knew, but said his position as executive director empowered him to send support letters at his discretion.

“We drafted a letter to support the inclusion of EPA and their WIFIA program,” Ellis said, “as it would bring lots of additional oversight, and we would make sure that the [LRS] project, if it proceeded, would have that extra level of scrutiny.”

He acknowledged funds for Utah Lake projects were administered through FFSL at the time he sent his letters, but did not recall whether he consulted with them when drafting them. He added there was a common understanding at the time that LRS had gone through a state procurement process, but the division later clarified they had not.

Regarding Barnes’s refutation that LRS’s dredging project was a public-private partnership, Ellis contended it was a matter of semantics.

“I don’t know how to better describe it than that,” he said. “It’s public government entities working with private entities to come to a solution that ultimately was rejected, but at the time was being reviewed for potential permitting.”

Editor’s note: This article was updated Wednesday night after Vineyard hired Eric Ellis.