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Do two 'no' votes to fund UTOPIA signal trouble for agency?

Published: Saturday, Feb. 23 2013 7:00 p.m. MST

Manager Troy Thompson, left, talks with technician Josh Kester in the UTOPIA network operations center Aug. 1, 2012.

Scott G Winterton, Deseret News

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MURRAY — Recent decisions from city councils in Murray and Tremonton denying more funds for the UTOPIA fiber-optic network is leading some to question the willingness of member cities to bankroll the company's operations.

"The right decision was to reject their request for funding, because we have money that has to be spent in other places," Murray City Councilman Dave Nicponski said. "We've got road needs, public safety needs. We've got demands on parks and recreation, and the money has to go elsewhere. … I'm not going to throw good money after bad so far as UTOPIA goes."

The Murray City Council voted 4-1 this past week against allotting $168,000 to fund operating costs for UTOPIA — the Utah Telecommunication Open Infrastructure Agency. A similar vote took place in Tremonton on Feb. 5, when the City Council also opted against providing operation funding, said Shawn Warnke, city manager.

Warnke, a UTOPIA board member, said the network is built into 95 percent of Tremonton and has a 15 percent "take rate." He said those who have the service seem to be happy with it and that he doesn't see the council's vote as a shift in sentiment.

"I try not to read too much into it," Warnke said. "I just try to take things at face value."

But Royce Van Tassell, vice president of the Utah Taxpayers Association and a longtime critic of UTOPIA, disagrees. As one of 11 UTOPIA member municipalities, Murray's vote declining to provide UTOPIA with funds is particularly significant, he said.

"Murray has been a longtime, outspoken supporter of UTOPIA," Van Tassell said. "For Murray to vote the way it did … was indicative of a sea change. … I think that public sentiment, and it appears support from the elected officials, is flagging and this is just the latest indication of that."

The other nine UTOPIA member cities are Perry, Brigham City, Layton, Centerville, West Valley City, Midvale, Lindon, Orem and Payson.

Wayne Pyle, West Valley City manager and chairman of the UTOPIA board of directors, said the Murray and Tremonton votes don't signal any cause for concern for the company. Rather, he believes the decisions are indications that UTOPIA needs to sit down with the elected officials and explain why the funding is necessary.

"I don't see this as a sea change at all," Pyle said Friday. "I think that once we get to them and talk to them about the advantages and disadvantages … they will see the wisdom and make that contribution."

An audit conducted by the Office of the Utah Legislative Auditor General at the request of state lawmakers and released in August found that UTOPIA has spent nearly all of its $185 million in bond proceeds, though only 59 percent of that has gone toward building infrastructure for the municipal fiber-optics network.

The audit accused the company of poor construction planning, costly mismanagement and unwise use of bond funds. UTOPIA responded by saying that the audit focused on prior mistakes and failed to mention the steps the company had taken to address issues raised in the report.

Pyle said that while dealing with the fallout from the legislative audit has slowed its headway, UTOPIA is making "good, solid measurable progress" in West Valley City.

"The revenues are up and expenses are down," he said. "We've been able to cover the debt, and while we're not quite meeting the operational expenditures, that gap between our revenues and our expenditures is narrowing."

Pyle noted that going to the cities for additional funding is a temporary solution to sustain the network until it becomes self-sufficient, which he said is the "best way forward."

While the company is hoping to have the network sustain itself in member cities in the next few years, Pyle said the "revenue picture" is actually improving faster than predicted.

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