PROVO — The Provo City Council voted 5-1 Tuesday night to amend the mayor's proposed budget for next year — a vote that really was about how to cover iProvo's debts for the next 12 months.

The council altered the proposed budget to use $1.2 million in surplus sales tax revenue from the fiscal year that ends this month to help pay for iProvo construction debt for the fiscal year that starts next month.

The decision isn't final. The council will hold a public hearing on June 19 and then could amend the $141.5 million budget again before it adopts the budget for fiscal 2008 at that meeting.

The council's decision was expected, but the discussions Tuesday night were testy.

Mayor Lewis Billings had proposed a budget with a loan to iProvo from the energy department of $1.1 million. The loan would have been the third in three years between the departments.

Billings termed the use of sales tax revenue to fill the gap in the annual $3.2 million bond payment a "subsidy" that could draw a lawsuit from Qwest or Comcast, who object to iProvo as a government entity entering a private market for telecommunications because iProvo, through two service providers, offers phone, Internet and cable TV services.

"I've been told there's a very good likelihood there will be litigation against the city," Billings said.

Initial projections had the iProvo project breaking even this year with 10,000 subscribers. The project is nearing 10,000 subscribers but is at least three years and possibly five years away from breaking even, according to projections produced by the city over the past two months.

"I continue to believe this will be a project that will continue to be embraced," Billings said.

He said seven or eight new service providers want to provide products over the network, which provides fiber-optic cable to every Provo home that subscribes, boosting Internet speeds.

"We are the largest subscriber city with fiber to the premises in America," Billings said.

He also said committees are working on new products that could be offered over the network in coming months.

"Maybe that's why some of us are more optimistic than others," he said. "Maybe when we're able to share those publicly, that optimism will be shared by others."

City Council Chairman George Stewart lobbied the six other council members to reject the mayor's proposed loan because he said it added too much future debt to a project that already is on the hook for $68 million through 2025.

"You don't make something more successful by adding debt," he said.

Billings said again that he is not completely satisfied with the level of customer service provided by the two companies on the iProvo network, MStar and Veracity/Nuvont.