Audit finds questionable RAP tax uses but suggests no penalties

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SALT LAKE CITY -- A state audit released Tuesday discovered several municipalities inappropriately used sales tax revenue on the wrong types of projects, but the Legislative Auditor General does not recommend any penalties.

The audit examined the use and accountability of RAP tax money statewide. That's the Recreation, Arts and Parks tax. It's known as the ZAP tax in Salt Lake County, and other counties and municipalities it goes by other acronyms -- for example RAP, PAR and RAPZ.

What is a RAP Tax?
Utah Code permits counties and municipalities option funding for recreation, art and parks projects through a slight increase (1/10 of 1 percent)in sales and use tax.

Under Utah code, municipalities and counties can raise a one-tenth of one-percent sales tax for recreation and arts projects. But a few municipalities are misusing the money by not following Utah code.

Auditors found that "unclear statutory guidelines" have raised questions about compliance. It cited Salina and Brian Head for using RAP money for operating expenses, activity that appears questionable according to the report. Tooele, Woods Cross and the Murray City Arts Council used RAP cultural funds to directly benefit public schools, which are specifically excluded from receiving RAP cultural funding.

Still, many communities are using RAP funds the way they were intended. In Centerville, the tax is used appropriately to help pay for construction of a cultural centerpiece.

The Davis Center for the Performing Arts is taking shape one year after construction started. Over the next eight years, Centerville will raise about $2.5 million with its RAP tax to help pay for the $14 million facility. Bountiful will raise an equal amount.

Counties and Municipalities collecting a RAP Tax

CountiesRAP Tax collection FY09MunicipalitiesRAP Tax Collected in FY09
Salt Lake$17,462,945Orem$1,633,592
Weber$2,793,541Cedar City$438,635
West Bountiful$13,925
Brian Head$13,718
Wood Cross$12,444
Cedar Hills$2,742
Legislative Auditor General

Blaine Lutz, Centerville's Assistant City Manager and Finance Director, says the RAP tax was the final piece of the funding puzzle on a project in the planning stages for years.

"We hope this gives a chance that arts now have a home to be in for many, many years to come," he says.

Centerville voters approved the RAP tax in 2008.

"We were very specific, and said we will build a cultural facility, an arts facility, and that kind of gave us reassurance that this was something the community wanted to have," says Lutz.

In fiscal year 2009, five counties and 16 municipalities collected a RAP tax. Salt Lake County raised the greatest amount of money, by far, at more than $17 million. Centerville raised more than $270,000 for the arts center.

The audit discovered "some RAP-funded programs and projects appeared to be inconsistent with current statutory requirements; however, the majority seemed reasonable."

It also called some RAP recipients and projects "questionable" -- 14 percent of recreational projects and 17 percent of the cultural recipients did not comply with the rules.

The auditor, however, recommends the Legislature tighten up the code and municipalities consult the code to improve compliance. RAP funds are restricted in how they can be spent, but the auditors do not make any specific recommendations for the municipalities misusing the money.

In Centerville, they expect curtains up at the Davis Center for the Performing Arts in December.

"The community will be very pleased with what it receives for that investment," Lutz says.



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Jed Boal


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