Bailout may brighten UTOPIA future

Requests from the Deseret Morning News for information from the Rural Utilities Service about the loan received no response by Friday evening.

Lewis said RUS funded $21 million and approved future contracts but refused to provide the money, saying that UTOPIA wasn't meeting its projections.

In a cause-and-effect circus, UTOPIA wasn't meeting projections because RUS took a year and a half to complete its funding, she said.

"I've worked with federal agencies," Lewis said. "I've never seen anything as deplorable as this. They're going to be the death of UTOPIA."

The new plan

So UTOPIA's new and restructured bonds are designed to cut RUS loose. That means that UTOPIA needs to pay the federal agency $21 million, plus the $11 million to vendors RUS was expected to pay. After various other expenses are finalized, UTOPIA will be left with $10 million in operating capital, Lewis said.

UTOPIA spokeswoman Maura Carabello said UTOPIA's board of directors voted earlier this month to issue $189 million in new bonds. Some of that money would retire $135 million of the initial bonds issued by the project.

That should help nicely with cash flow and construction costs, Reams said.

For the first two years of the restructured bonds, bond investors can't call, or redeem, the bonds. That means UTOPIA has two years to breathe easily.

The business models tell them the plan should work.

"Hopefully, it makes us breathe easier forever," Reams says.

In the mean time, city councils are scheduling public hearings on the restructured bonds throughout April and May.

Residents can check their city Web sites for public hearing information.

UTOPIA is also in the process of hiring a new executive director and chief operating officer. Decisions from among a crop of candidates is expected in April.

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E-mail: jdougherty@desnews.com; twalch@desnews.com