07/18/2025
On July 3, 2025, Levan Town filed a lawsuit against Levan Irrigation Company and former mayor Robert Shepherd to (1) clarify the water rights and water management between the parties and (2) end the Townspeopleâs subsidy of the Companyâs power use. The entirety of the complaint is publicly available, but the following is a summary of the allegations.
This lawsuit stems from hydropower and water infrastructure projects dating back to the 1980âs, when Golden Mangelson was mayor of the Town and Shepherd was president of the Company. Over objections of townspeople, the projects were approved and completed at a cost of over $1.2 million, which amounts to $3,529,350 in 2025. As part of these infrastructure projects, in 1985, the Town and the Company entered into the Power Agreement and the Water Agreement, which disproportionately benefitted the Company. Mangelson signed for the Town, and Shepherd signed for the Company.
The infrastructure projects, Power Agreement, and Water Agreement were unpopular and the Townâs new representatives pushed back. A dispute also arose regarding the Townâs right to Rosebush Spring and Cobblerock Spring.
With these issues looming, Shepherd ran for mayor and won the election on November 6, 2001. That same day, while Shepherd was still president of the Company, the Company sued the Town over Townâs claim to Rosebush Spring. As soon as Shepherd became mayor, Mangelson became president of the Company. After assuming office as mayor, and while still a Company board member, Shepherd accepted service of the lawsuit for the Town.
In 2004, to resolve the lawsuit, Mangelson offered a compromise, which was met with skepticism because the terms heavily favored Company. Not only did the Settlement result in the Town giving up its diligence claim to Rosebush, but it declared that the Water Agreement and Power Agreement remained in full force and effect. The Settlement was approved by a vote of 3-2, with Shepherd being the tie-breaking vote. Mangelson signed the Settlement for the Company, and Shepherd signed for the Town.
In 2022, the Town commissioned a study that found the Town had been subsidizing the Company by about $28,000/year based on rates charged under the Power Agreement.
The current lawsuit seeks to invalidate the Water Agreement, Power Agreement, and Settlement because they violate the Utah Constitution and other laws.
Under Article XIII, Section 8, of the Utah Constitution, a municipality may not directly or indirectly lease, sell, alienate, or dispose of any of its water rights and shall preserve and maintain its water rights and sources of water supply. The Settlement violates this provision of the Constitution because the Town gave up certain water rights to the Company.
The Utah Public Officersâ and Employeesâ Ethics Act prohibits a public officer from participating in a transaction between a state agency and a business entity of which he is an officer, director, or owner of a substantial interest. The Water Agreement, Power Agreement, and Stipulated Judgment violate this law because Shepherd and Mangelson were some of the largest shareholders in the Company and should have recused themselves. Additionally, Shepherd and Mangelson sat on directly opposite sides of each of these transactions, with Shepherd representing the Company as its president in 1985 and then representing the Town as mayor in 2004. Mangelson just switched places, representing the Town as mayor in 1985 and then representing the Company as its president in 2004.
Utah law also requires utility charges to be just and reasonable and prohibits a public utility from granting any preference or advantage as to rates, charges, service, facilities or in any other respect. The agreements violate these laws by granting the Company preferential reduced rates for power that unjustly and unreasonably subsidizes the Company, at the Townspeopleâs expense.
The Water Agreement also required Company to participate in cost-sharing of certain projects and to transfer certain water rights to Town. It has not done so. The lawsuit seeks to remedy this.
These are just a few of the reasons for invalidating the agreements. In sum, this lawsuit seeks to solidify the Townâs right to its water sources and end the wrongful subsidies to the Company. For further information, please review the Complaint and exhibits.