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

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

"I'm hoping that we'll actually be out of that operational expenditure gap faster than we had planned on," he said.

Sen. John Valentine, R-Orem, cited UTOPIA's use of bond proceeds to fund operations as one of the reasons he is sponsoring SB172. The bill, which received unanimous support last week from the Senate Government Operations and Political Subdivisions Committee, would prevent municipalities and quasi-government agencies such as UTOPIA from using bond money for operations and maintenance for more than one year after being issued.

"The problem is some of our instrumentalities of government will often start projects that are not really well-thought out and have an open-ended time period in which they can borrow money to operate," Valentine told the committee.

"We saw that, for example, with UTOPIA. In my area, the city of Orem, we've gone almost 10 years now borrowing money for operations with bond proceeds," he said.

Jason Russell, UTOPIA communications manager, said the cities making up the Utah Infrastructure Agency, which includes Murray, bonded the company another $65 million, and $29.5 million of that was allotted to pay for operation costs between May 2011 and June 2012.

"We were able to operate beyond that point through prudent management and cost-monitoring," Russell said. "Now we are awaiting final go-ahead on the next (installment) of the bond. I believe we were aiming for $12 million, so in terms of Murray's vote, as we wait for the next bond amount to come through, we were looking for some additional ways to manage the costs."

The Murray City Council meeting was packed, with attendees even standing in the halls, and all 14 residents who spoke on the issue voiced their opposition to funding UTOPIA, Nicponski said, adding that no one from the agency attended the meeting.

"I don't wish ill on UTOPIA," he said. "I want them to succeed. It's an excellent service that they provide. I would recommend it. For high-speed Internet, they are second to none. But we can't continue to fund, underwrite and bail out a system that isn't paying its way."

Nicponski said the city has too many other needs and demands that must be addressed, from city employees who haven't received a pay raise in five years to the repaving of 5900 South.  

"The dollars have to go in a lot of different places, and it's just irresponsible to continue to take the taxpayers' dollars for something where apparently the business model isn't working," he said. "I feel like we made the right decision."

It's Pyle's belief, however, that each member city's UTOPIA costs are a city responsibility just like any other. Coordinating, meeting, discussing and coming to a consensus on the project and its future with elected officials in the 11 member cities, though, is no easy task.

"It's enough to do that in one city," Pyle said. "When you've got 60 to 70 elected officials who have all been around various amount of times, some like the idea and some don't. Some people like the Internet and use it all the time, and others never touch a computer. It's just hard to get everybody on the same page."

Van Tassell doesn't believe the cities should have become involved in UTOPIA in the first place and said that while UTOPIA cities are on the hook for the money they originally bonded, its member cities should seek to find an exit strategy.

"I think it's incumbent upon Utah and UTOPIA to figure out how to untangle this as best as possible," he said. "I just don't see an appetite among elected officials or the public to continue to subsidize UTOPIA beyond the hundreds of millions they've already committed."

Pyle disagrees and said West Valley City and its City Council are committed to the project.

"It's not so much that we're satisfied that UTOPIA is in great shape and where it needs to be, but we recognize the importance of the infrastructure to our city," he said. "I would generally say that we're supportive. We want to move onward, and we have a good plan."

Layton City Councilman Barry Flitton, another UTOPIA board member, said 80 percent of the phone calls he has received from constituents about UTOPIA are those wanting the service. He said the Legislature-requested audit has cast the agency in a negative light, but those in Layton who have the service are "amazed" by it.

"I get a lot more calls saying, 'When do we get it?' rather than, 'We don't want it,'" Flitton said. "I have to represent the public, and the public in Layton seems to be in favor of UTOPIA."

Russell said UTOPIA will only approach member cities that are part of the Utah Infrastructure Agency about helping fund operating costs because those cities have already pledged future funding.

While those at the agency are "disappointed" in the Murray City Council vote, he said there are ongoing discussions with all UTOPIA cities about how to cover operational expenses.

"I can say that no one here is walking around and waiting for the sky to fall in," Russell said.

E-mail: emorgan@desnews.com

Twitter: DNewsCrimeTeam

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