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Tax or fee? Cities face key decisions on future of UTOPIA

Published: Saturday, June 14 2014 6:20 p.m. MDT

At the end of the 30-year agreement with Macquarie, Pyle said ownership of the then-improved network would return to the cities and the ongoing utility fee would likely be reduced to no longer account for the construction costs of linking homes and businesses to the system.

Murray City Mayor Ted Eyre said the city has received close to 700 responses on its UTOPIA survey, which will remain open until June 23, the day before the Murray City Council is scheduled to vote on the issue of moving forward with Macquarie. He declined to comment on the responses until the city council has had a chance to review the results.

He also said that he has received more emails on the subject of UTOPIA – from all sides – than any other issue during his time as mayor and has heard similar comments from members of the city council.

"People are very aware of it and people are very opinionated one way or the other on it," Eyre said.

But Van Tassell said the longer cities explore a partnership with Macquarie, the more incentive they have to move forward. He said at each milestone, or stage, of the partnership, cities incur an obligation to repay Macquarie for their services if they choose to withdraw.

"The further you go, the steeper that fee gets," he said.

Also at issue is that the estimated $18 to $20 monthly utility fee for residents is based on the expectation that all 11 municipalities will join in the public-private partnership with Macquarie.

The three cities that have already given their blessing account for roughly 50 percent of total UTOPIA homeowners, Pyle said, but it is not known how many cities can be lost before the deal has to be restructured.

The utility fee would also be tied to the Consumer Price Index, which Van Tassell said could result in residents paying as much as $35 each month at the end of the 30-year term.

"If those (cities) come out, all the sudden your math doesn’t add up," Van Tassell said.

McBride described the option of shutting down the network as "financial suicide." He said residents are already committed to the debt associated with UTOPIA and he worries about how cities would repay that debt if the network was abandoned.

"We have to pay the bonds that we put our good name and faith into paying," he said. "Paying for UTOPIA is one thing but basically defaulting is another and I don’t want to see that situation."

Lindon resident and UTOPIA customer Phil Windley, who also served in the cabinet of Gov. Mike Leavitt during early UTOPIA talks, said that an Internet infrastructure is the 21st century equivalent of public roads.

He said he not only favors a utility fee model, but also thinks UTOPIA should have operated as a utility since its creation.

"Moving to that model is probably the thing that will make it actually work and work well for people," he said.

In a prepared statement, Nick Hann, senior managing director for Macquarie Capital, said investors were happy with the progress that had been made on the proposal and were optimistic about moving forward.

"We are working hard to educate and inform through the Milestone process," Hann said. "It gives the public an opportunity to absorb the information and facts in this complex issue. We are gratified at the positive responses we have received and remain confident in our proposal and vision for UTOPIA.”

Email: benwood@deseretnews.com, Twitter: bjaminwood

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