(17)(a) The state auditor shall exercise the authority and comply with the duties established in
Subsection (7)(b) if, upon investigation of a special service district, as defined in Section 17D-1-102,
whose revenue sources are limited to assessed fees and rates, the state auditor establishes a finding of
well-founded concern that the special service district has engaged in a pattern and practice of:
(i) improper use of public funds for private purposes;
(ii) extraordinary financial impropriety involving an amount equal to or more than $1 million in
public funds;
(iii) causing irreparable harm to individuals or to the public trust;
(iv) defaulting on public bonds;
(v) affirmative acts to conceal the special service district's financial records from the review of the
state auditor;
(vi) documented threats of coercion of private parties; and
(vii) failure to deal in good faith with the state auditor's requests for reliable information.
(b) If the state auditor establishes a finding described in Subsection (17)(a), the state auditor shall:
(i) suspend the special service district's authority to:
(A) expend or transfer special service district funds; and
(B) operate under the control and supervision of the existing special service district management
and, as defined in Section 17D-1-102, governing body;
(ii) take custody of the special service's public records and assets; and
(iii) in coordination with the state treasurer and municipalities and counties contiguous to the
special service district, appoint a receiver for the special service district.
(c) The receiver appointed under Subsection (17)(b) shall:
(i) manage the special service district's assets;
(ii) deliver special service district services;
(iii) resolve, including through litigation if necessary, claims against and by the special service
district;
(iv) develop a viable long-term plan to resolve financial improprieties, if any, of the special service
district; and
(v) select a responsible local government to manage the special service district for a minimum of
three years.
(d) A local government selected under Subsection (17)(c)(v) has the powers granted in, and is
subject to, the provisions of Title 17D, Chapter 1, Special Service District Act.