June 21, 2010

The Utah Taxpayers Association continues to take aim at the pile of tax dollars being pledged to UTOPIA, a fiber optic network the association views as being in direct competition with private Internet service providers.

But UTOPIA officials, who say they are being bird-dogged by the association, which often has members appear at each public meeting they conduct, are doing some of their own finger-pointing back at the association.

“It’s no secret the Utah Taxpayer’s Association has been a longstanding opponent of the project,” said David Shaw, general counsel for the Utah Telecommunication Open Infrastructure Agency.

Shaw said the association campaigns against the project, often appearing not to understand that its effort can hurt the very taxpayers it claims to represent.

The Utah Taxpayers Association recently re-emphasized its concerns in reaction to the Layton City Council approving a 2010-11 fiscal year budget that includes more than $2 million being set aside in the general fund to help pay for the high-speed fiber optic network.

The Association is concerned with the transparency of UTOPIA and the rising public cost needed to provide the service, said Royce Van Tassel, association vice president.

“(UTOPIA) operating expenses have consistently exceeded revenues by three or four times. It is not even close,” Van Tassel said.

“We have been consistently opposed to UTOPIA, which competes with the private sector,” Van Tassel said.

The association is calling for more transparency on the part of UTOPIA officials as they call for pledges from the cities within the state that are financially committed to them, he said.

Layton city has received notice UTOPIA will be calling for a portion of the sales tax revenue pledge the city has committed to the service, City Finance Director Steve Ashby said.

Ashby said the city’s yearly pledge to the network this coming fiscal year has a monetary ceiling of just more than $2 million. A budget appropriation by the council will take place prior to the city paying its pledge amount Jan. 6, 2011, he said.

The maximum sales tax revenue pledge the city has committed to UTOPIA does increase 2 percent annually through the year 2040, Ashby said.

In addition to Layton, other UTOPIA-pledging cities in Top of Utah are Centerville, Brigham City, Tremonton and Perry.

Layton is the third-largest city in the consortium of cities involved with UTOPIA, with West Valley City and Orem being the two largest.

But while the association claims the fiber optic network is a service best provided by private enterprise, Layton leaders who have committed more than $30 million to UTOPIA over the next 30 years defend the project as part of a critical need in installing infrastructure.

Mayor Steve Curtis said UTOPIA, and the cities involved in it, have been transparent. “There isn’t anything we are doing behind closed doors,” he said.

The association has been opposed to UTOPIA from the beginning, Curtis said. “And if there is a way and means to stir the public, they go about it,” he said.

Curtis said he also disagrees with the association’s assumption that the public pledges being made available to the project are on the rise.

The difference between what Layton owes UTOPIA and any other regular bond debt, is that the money owed to UTOPIA has been pledged, and that pledge is being called for because of the mismanagement of the system early on, when it was first implemented, Curtis said.

Early challenges UTOPIA has encountered include frivolous lawsuits and the project being strung along in bad faith by an arm of the federal government, he said.

“We’re to the point now that forward has to be the direction we have to go, because we do have those pledges,” Curtis said, referring to the $30 million the city is obligated to pay whether the system is successful or not.

Should the take-rate for the system increase as it is made available to more houses and businesses, Curtis said, it will generate the revenues needed to prevent future pledged amounts from having to be called on.

“It’s critical infrastructure,” Curtis said of Layton needing the high-speed fiber optic network to be economically competitive in attracting companies offering family-sustaining jobs.