CENTERVILLE — Davis County lawmakers are defending UTOPIA after a scathing legislative audit about the agency criticized its use of $186 million in public debt to pay for building a fiber-optic network.
Some UTOPIA board members are also saying that cities that are part of the organization have no choice but to continue because taxpayers are on the hook whether or not the project succeeds.
The audit, which took 18 months to complete, discussed how UTOPIA has not met its ambitious goals, has used its bond proceeds problematically and may not be following state law regarding public meetings and financial controls. Defenders of UTOPIA and its sister organization UIA say the audit unfairly looked at all of UTOPIA’s history with no distinction between past mistakes by its first leaders and successes under its new management, which came on board in 2008.
“There were a lot of misfires and a lot of bad judgment that went on, but in my opinion that’s been remedied,” said Barry Flitton, Layton City councilmember and UTOPIA board member. “I think the audit was tainted, in general.”
The 78-page audit does discuss old problems, but it also discusses ongoing problems. The agency has used most of the $186 million it got from three rounds of bonding to finance operations and to pay debt, and has done so recently, the audit states.
Longtime UTOPIA critic Royce Van Tassell, vice-president of the Utah Taxpayer’s Association (UTA), thinks UTOPIA cities should sell their fiber infrastructure.
Van Tassell said that UTOPIA could probably only get 10 or 15 cents on the dollar in a sale.
UTA has worked closely with UTOPIA competitors including Qwest, which successfully sued UTOPIA and with which the agency has had multiple delaying disputes over phone pole access.
Van Tassell called the audit sad and disappointing.
“This really does highlight the pain that taxpayers are going to be in for almost another 30 years, and we’re just very disappointed that there wasn’t some brighter story to tell, he said.” From Flitton’s point of view, selling might be a good option if taxpayers could recover the revenue and repay the bonds with the proceeds, but no buyers have shown interest in the project.They might be even more hesitant now.
Lutz said selling the fiber-optic infrastructure wouldn’t solve anything.
“The fact of the matter is that the cities now do have a legal obligation,” he said. “What’s our alternative? To pull the plug and stop on it? Then for sure you have the legal obligation to pay off.”
That could put the cities in a position of repaying bond debt and getting nothing in return, he said. “That doesn’t seem like a good alternate.”
Flitton, who took office after the bonding took place, said that many people don’t seem to understand the position the cities are in.
“Each of the participating cities has an obligation, and I don’t think there’s anybody that can really get out of it,” he said. “That obligation is there and they don’t have that freedom to just walk away.”
Read more about the audit in the August 9 edition of the Clipper or click here to download it.