Budget bails out iProvo for 3rd time

PROVO — Over the objection of a single resident, the Provo City Council voted Tuesday night to use $1.2 million in tax money to cover iProvo's debts for the next year.

The council also adopted a $141.5 million budget for the fiscal year that begins July 1.

Mayor Lewis Billings had proposed that the City Council help iProvo by lending it money for a third time from the energy department's reserve fund.

The fiber-optic telecommunications network has nearly 10,000 subscribers and covers its operating costs. It can't fully finance the annual payments on its construction bonds and previously benefited from loans of $980,000 in 2006 and $2.1 million this year.

The City Council signaled its intent to reject the mayor's loan proposal and instead use a windfall in surplus sales tax revenue with a preliminary vote two weeks ago.

But city leaders expressed surprise that only one resident commented during the public hearing before Tuesday night's vote.

Dave Roberts said he stood to "protest as strongly as possible." He suggested four alternate uses for the surplus money:

• Acquire new books for the city library.

• Create cleaner, smoother, safer and longer bike paths in the city, starting with University Avenue.

• Improve landscaping at the city library to reduce the concrete and hide the ventilation systems.

• Increase police presence at the library to end late-night skateboarding on the concrete.

City Council chairman George Stewart said the decision to use the surplus sales tax dollars for iProvo was sound because it will help iProvo make its payments on its construction bond. Defaulting on the bond would damage the city's credit rating.

He previously said he wanted to take advantage of the windfall to help iProvo avoid new debt. The network owes more than $60 million, including all of the interest due for the bond and the two earlier loans.

Councilman Steve Turley cast the lone vote against what some consider a subsidy for iProvo, which provides the backbone for telecommunications companies MStar and Nuvont to bring Internet, television and phone services to Provo homes.

Billings told the council two weeks ago he had heard a telecommunications company like Qwest or Comcast might sue over the subsidy, contending that using tax dollars to fund a public venture they say competes with their private companies is illegal.