Orem OKs new bonds to finance UTOPIA

OREM — Acknowledging that technology will dramatically change life for their children and grandchildren, the Orem City Council voted unanimously and strongly Friday morning to approve refinancing sales tax bonds for the UTOPIA project.

"As we look at the world economy and look at the pressures, we're going to have a new way of life, a new way of doing things, a new way of employment," said Mayor Jerry Washburn after a two-hour question-and-answer session between council members and UTOPIA representatives. "Our children are going to be commuting by electronics."

UTOPIA, or Utah Telecommunication Open Infrastructure Agency, is a group of 16 Utah cities that banded together to support bringing conduit and fiber optics to bring residents high-speed Internet, HD TV and Internet-based phone services.

"This is a vital, important element for our business community, for our residents to have this type of technology," said council member Mark Seastrand. "I think it's this technology that's going to allow Orem to have a more vibrant, communicative environment for its residents."

This meeting followed a nearly four-hour public hearing on April 22, during which Orem council members declined to make a decision.

The UTOPIA project was initially funded by bonds backed by sales-tax pledges from each city, but the project was slow going and suffered a setback when the Rural Utility Services (RUS) of the U.S. Department of Agriculture pulled out with its approximately $66 million pledged funding.

"The debacle with RUS ... (is) probably one of the most sad instances of the federal government backpedaling that I've ever seen," Washburn said. "It's deplorable."

To keep the project alive, UTOPIA cut ties with RUS, developed a new marketing attack and recently went back to the cities to request refinancing, hoping for more money to get fiber to some customers where the infrastructure is already in place and increase its customer base.

Orem's refinancing means its pledge increased from $2,189,704 to $2,538,695, with a 2 percent increase each year, bumping the total amount from $31.8 million to $54 million in present-value dollars.

The entire refinancing project would mean trading 20-year bonds worth $121 million for 33-year bonds worth $189 million, giving UTOPIA nearly $11 million in new capital — or about $10 million if Murray declines next week. Payson is the only city thus far that has declined.

The bonds are structured so the cities are not prevented from issuing other bonds in the future for new roads or parks, for example.