State and county attorneys are probing a series of allegations against the mayor of Highland, brought by a Highland city council member and a former city employee.

Mayor Jay Franson is accused of using his position as mayor to reward American Fork, the city that hired his engineering firm to work on its pressurized irrigation project.

Franson, however, claims that Highland benefitted as much, if not more, than American Fork in the transactions.

In an interview late last week, Franson said that those making allegations should be aware that the truth is easily proved with city documents. Those allegations, Franson said, are "absolutely wrong" and based on a "misunderstanding." Or perhaps they are politically motivated, he said, timed to influence his bid for re-election on Nov. 3.

Sheila Page, assistant state attorney general, confirmed that an investigation is under way. The state has asked county attorneys to take the lead.

"That does not mean we have made a decision there is a violation," Page said. "This case is still under review; we are still looking at it."

In June, Highland Councilwoman Kathryn Schramm and former long-time city employee Jay Haws filed a request with the Civil Review Committee of the State Attorney General's office seeking an investigation of the mayor. That complaint listed 11 paragraphs of allegations regarding work done by the mayor's engineering firm, Franson Civil Engineers, for an American Fork water project crossing through Highland.

In the letter, they allege that Franson's conflict of interest -- which involved his company's contract with American Fork -- hurt Highland residents. They wrote that Franson manifested the conflict by circumventing Highland city ordinances that prohibit installation of utilities that do not serve Highland residents, and by dedicating a permanent easement through Highland city worth several million dollars without financial reimbursement.

In addition, they allege that the mayor "attempts to require Highland residents to pay for road building" to benefit American Fork's project and to purchase a Utah County debris basin to accommodate that project.

Schramm and Haws wrote that they believe Franson was acting in American Fork's interest rather than Highland's, and that he has violated state statues regarding conflicts of interest. They initially contacted the state by phone and were directed to request that the allegations be given priority status.

Their first letter was followed by a second that added five more paragraphs of allegations and more detail about earlier allegations. That letter alleges that Franson had become aware of the complaint and was acting to cover up or mitigate his previous actions by instructing the Planning Commission not to make things easy for American Fork.

The complaint also alleges that Franson asked the Highland City Council to be a "good neighbor" to American Fork by moving its boundary -- allowing an American Fork utility line to run through the city -- and to approve conditional use permits for American Fork.

Franson denies all the allegations, and says that anyone who's researched the situation would know he hasn't done anything wrong.

There are some elements that all parties agree on. The mayor's engineering firm has been hired as a subcontractor under Horrocks Engineers, Inc., on a $6.5 million American Fork pressurized irrigation project that pipes water through Highland. Contracts obtained by the Herald list the mayor's son, Eric Franson, as "lead engineer" for some subcontract work, with the mayor himself taking on a "larger supporting role" after another employee left the project.

Mayor Franson admits that some of his decisions in Highland did financially benefit American Fork, but he denies any quid pro quo. His actions also benefited Highland to the tune of millions of dollars, he said.

To deliver pressurized irrigation water to its residents, American Fork must bring water from the mouth of American Fork Canyon through Highland. Cities commonly allow such easements. The American Fork water company, for example, has an existing easement through Highland.

Franson says that in 2008, American Fork wanted to pipe an open ditch in its existing right of way and asked Highland to pay $1 million toward the project. Franson declined. About the same time, Highland was working to realign Knight Avenue and lay a new culinary water line under the road. Franson said that the Knight Avenue project was open for bids before American Fork approached with its pressurized irrigation water project.

Franson said he realized that American Fork could potentially install its water pipe under the same road at a cheaper price.

In exchange for allowing American Fork a new utility easement free of charge, American Fork agreed to give Highland 500 acre-feet of water, valued at $5,000 per acre foot, or about $2 million, Franson said. City documents indicate that the price was a good deal for Highland, with its value estimated at near $7,000 per acre foot on the open market.

That water was a "huge" win for Highland, Franson said. "It's over $2 million of benefit. That is why that accusation makes me twitch. To say American Fork was benefitted is absolutely wrong. Everything we have done here benefits Highland. This actually saved American Fork money, but we were not going to exact a pound of flesh. That is not a good neighbor."

The new water was delivered to Highland for the first time this spring, greatly boosting the city's irrigation supply for the cost of allowing American Fork to use an easement, Franson said.

There was some additional cost in adding American Fork to the Knight Avenue project -- some $950,000 -- an amount Franson says American Fork repaid in three checks.

As for the allegation involving the debris basin at the mouth of the canyon, Highland has never been sole owner, he said. Rather, it is co-owned by Highland, American Fork and Cedar Hills.

"We each put in a third of the price and bought it from the county for flood control purposes," he said. "To imply that was done for the benefit of American Fork is not true, very simply."

Franson's firm did not design the water system, he said. The project was divided into 15 segments specifically so that Franson Civil Engineers would not be working on any section within Highland's boundaries.

"The work was consciously divided up so that all work in Highland was done by Horrocks," Franson said.

Franson also said that he declared his conflict of interest, in two ways. First, by sending a letter from his firm to the city at the time he was elected terminating "all contractual relationships with the city, clearing the slate," he said; and second, by signing a conflict of interest form and filing it with the city.

That form has been unaccountably lost somewhere between the city getting a new recorder and moving into a new office, but that is not his fault, Franson said.

"I know I signed it," he said. "What bothers me is that no one ever talked to me. No one ever took the time to really ask me and understand."

In addition, he never voted on any aspect of Highland's role in the American Fork project because as mayor he is only allowed to vote to break a tie, which was never required. Had it been necessary, he would not have voted but would have recused himself, he said.

Franson said no one from either the state or county attorney's office has contacted him for an interview or requested any city documents to his knowledge.

"I am prepared to document my case should the Attorney General request such of me," he said.