July 8, 2010
Five cities that are part of UTOPIA have again banded together to pay for getting municipal fiber-optic cable directly to homes and businesses.
Over the next five years, the new interlocal agreement Utah Infrastructure Agency (UIA) hopes to borrow between $60 million and $65 million, said UTOPIA and UIA attorney Dave Shaw. The funds will be borrowed incrementally, based on subscription rates, he said.
Current UIA cities are West Valley City, Lindon, Orem, Layton and Midvale. The group was organized independently of UTOPIA but is likely to share resources such as staff, expertise and infrastructure with UTOPIA.
Cities that have voted against joining the UIA include Perry and Tremonton, but other cities such as Payson are still considering the agreement, Shaw said. The interlocal agency is structured such that any Utah city can join at any time.
So far, the group is in its organizational stages, and none of the cities has decided to bond for more money, Shaw said.
UTOPIA, the Utah Telecommunications Open Infrastructure Agency, is made up of 11 Wasatch Front cities ranging from Brigham City and Tremonton to Orem and Murray. So far, that agency has received two rounds of funding backed by sales tax pledges.
In 2008, the second time cities acquired debt for fiber-optic access, UTOPIA cities were required to put aside one year’s worth of debt service payments for the $181 million municipal bond. That money has been spent, and cities are being asked to re-allocate funds to the debt service account on a monthly basis.
The hope is that once UTOPIA becomes solvent in regard to operating expenses and subscription rates, only UTOPIA will have to make bond payments. But critics point out that the 8-year-old agency has never been solvent.
According to UTOPIA spokeswoman Elizabeth Vincent, the public agency serves about 10,000 subscribers through private companies such as Xmission Internet and Veracity Networks.
On Tuesday, the Orem City Council will hold a public hearing on whether or not to join UIA. Beforehand, the Utah Taxpayers Association — a major opponent of UTOPIA — will hold a free rally and barbecue at Orem City Center Park.
“Bring your homemade signs, T-shirts (and pitchforks) to show UTOPIA that we are tired of broken promises and millions of wasted dollars,” an online invitation reads. “It is time for UTOPIA cities to cut their losses.”