South Jordan leaves UTOPIA

Several Utah cities are beginning to feel the cold, harsh truth: Living in UTOPIA would come with a hefty price tag.

Last Tuesday, South Jordan became the first of the 18 UTOPIA cities to formally pull out of the effort, and two other UTOPIA cities are also fixing to quit. But the reasons are surprising.

"We wish UTOPIA the best," said South Jordan city manager Rick Horst, but "we will be bowing out of participation at this point forward."

Horst said when South Jordan joined UTOPIA two years ago, it was with the understanding that cities would not have to put up any tax revenue to build the $540 million fiber-optic network. But in seeking a way to get lower interest rates, around 12 percent, UTOPIA officials asked cities to set aside a "pledge" of their sales tax revenue as collateral for special bonds for the network.

That meant that if UTOPIA failed in any way, the cities stood to lose that sales tax revenue.

For South Jordan, that meant putting up $1.14 million. Although the city would not lose the funds if UTOPIA prospered, for 20 years the city wouldn't be able to spend it, either.

Given a city as small as South Jordan, which gets a modest annual sales tax revenue income of about $3 million, Horst said it was simply impossible to back UTOPIA while leaving enough money to run their city. "That would leave us with a few hundred thousand dollars," Horst said, given that the city is already paying off an existing $1 million bond for a bridge.

South Jordan leaders said Tuesday evening that although they were pulling out for financial reasons, they still stood firmly behind UTOPIA's vision and against efforts by Qwest and Comcast, through legislation, to foil UTOPIA's plans.

Mayor Kent Money said he felt the decision to build UTOPIA should be left up to city officials, not the Legislature, to decide. But last week, the Legislature passed SB66, which would require any cities that have not already joined UTOPIA to wait at least three years before joining. Any cities that do join after three years would also have to put their bonding plans to a public vote, while cities currently part of UTOPIA only have to hold public hearings before the city councils approve the bonds.

The bill's sponsor, Sen. Bill Hickman, R-St. George, said given that cities stood to risk the loss of millions in tax dollars in UTOPIA, they should be held accountable to their citizens through a public vote.