From Deseret News archives:
Billings, Stewart at odds over paying iProvo's debts
Mayor wants $1M line of credit to help cover payments
The built-in conflict is bristling this budget season as Stewart challenges Billings in a showdown over paying iProvo's debts.
The city's fiber-optic telecommunications network has 9,723 subscribers to phone, Internet and cable TV services offered over the network by private companies Veracity and MStar.
The city makes more than enough revenue from its leases with those companies to cover the city's operations. But it doesn't generate enough revenue to make payments on the debt the city incurred when it issued $40 million in bonds to construct the network.
"I think this is the most critical financial issue facing Provo this year and in coming years," Stewart said.
Billings is asking for a $1 million line of credit in next year's budget to help iProvo cover its bond payments next year.
The City Council previously approved two earlier requests for lines of credit totaling $3.08 million from the energy department to iProvo.
Stewart is refusing to support the new budget request. Instead, he wants the city to start to pay as it goes, using the general fund.
The city owes $3.2 million a year in iProvo bond payments. Paying back the two previous lines of credit will add an additional $624,000 a year in debt payments to seven city budgets beginning in 2009-10.
"My argument is, let's not add to the debt," said Stewart, who said he is committed to iProvo's success.
Originally, the city projected it would break even with 10,000 subcribers. Those projections anticipated more residents signing up for triple-play services phone, Internet and cable TV and more business subscribers. Instead, 54 percent of subscribers are apartment complexes, and half of those only take one service.
Now iProvo needs 13,000 or 14,000 subscribers to break even, project manager Kevin Garlick said.
Stewart is wary of Billings' budget proposal because he found it too rosy, projecting 60 new subscribers a week next year. Veracity and MStar met that threshold from July to December last year, but sales slowed the next three months and stalled recently.
From April 26 to Tuesday, a period of almost two weeks, the total of subscribers rose by 18. The slowdown is attributed to seasonal selling by the companies, which are hiring new sales staff for an annual summer push.
Billings and Garlick defended the projection of 60 new subscribers a week next year as an important target for Veracity and MStar. They also said the city is recruiting new companies to compete on the network.
Garlick said Veracity and MStar don't like the decision, but the city hopes to find a company that will specialize in recruiting small-business subscribers.
The City Council asked Billings, and he agreed, to provide an alternative iProvo budget that projects 40 new subscribers per week before the iProvo staff makes its budget presentation to the council next week.
E-mail: twalch@desnews.com
Comments
- Rescuers reach stranded hikers 10:49 a.m.
- Blind woman follows the Son 10:41 a.m.
- Madoff's yacht on auction block 10:23 a.m.
- Report: OSHA needs to improve 10:21 a.m.
- GM reports $1.2B loss 10:20 a.m.
- Bacall, 2 others receive early Oscars 10:16 a.m.
- '2012' has box-office bang of $225M 10:13 a.m.
- Cox ready to shriek in 'Scream 4' 10:11 a.m.
- 'Hair' opens London with B'way cast 10:10 a.m.
- 'Twilight' part of heartthrob history 10:08 a.m.
- MWC expand? Get rid of deadweight
- Apostle's wife felt comfort in attack
- TCU stays 4th in AP; Y. 19th, U. 23rd
- Relieved Cougs prep for Falcons
- Win in New Mexico good for Y?
- Wounded Utes limp home
- Bennett at center of GOP storm
- Jazz rookies had to grow up quickly
- BYU happy to escape with victory
- TCU creams U.
- TCU creams U.
231 - BYU happy to escape with victory
231 - Editorial: Mormons and gay rights
208 - Will state consider gay rights law?
151 - Can BYU root for (ick) Utah Utes?
131 - RSL heads to MLS title game
130 - Utes remain silent about BCS
120 - TCU stays 4th in AP; Y. 19th, U. 23rd
105 - Celtics crush Jazz
104 - 5A: Bingham rolls to title game
89
Sears is holding a special VIP night Sunday, Nov. 15, in stores and online.
How do you handle kids and contests? Our oldest daughter, 7, is of the...
Do any of you BYU winers realize that it is extremely difficult to go...
I'm happy that this is finally almost a reality; however it has taken way too...
How can you suggest that Fesenko start over Okur? Okur is one of the best...
BREAKING NEWS, this just in, the astronauts are now strapped into their seats...
Believe it or not, Miles is still younger than Matthews. I have been...
Well the troll's are out eartly today... I wonder if this is a job for...
The Reason the basketball first round was moved to home sites was because the...
It is undisputed that Joseph Smith translated the Book of Mormon with a...
This is not the biggest act of domestic terrorism, not even close. That...
TJIS IS SAD HOW CAN A MOM AND "FATHER" THAT TO THEIR OWN CHILD THIS IS SO...

You can be the first to comment on this story.