CENTERVILLE — Though state legislators have called for the end of UTOPIA, city leaders see no choice but to keep the fiber optic network alive.
The network’s troubled history and recent audit were severely criticized during legislative committee meetings last week, with several legislators suggesting it was time to pull the plug. That decision, however, ultimately rests in the hands of the governments of the member cities, who thinks that shutting down the network would only make things harder.
“If there was a way it could be done that would be beneficial to the city, we would take a look at it,” said Centerville City Assistant Manager Blaine Lutz. “But we don’t see a way it could possibly be done. We would have no chance of ever getting a way of paying off our portion of the UTOPIA debts, and there are thousands of customers out there being served by local companies who need the income. Do you cut those people off just to say ‘I told you so?’”
A consortium of Utah cities, including Centerville and Layton, pledged to take on a portion of the debt incurred by UTOPIA when it borrowed funds to begin building a high-speed fiber-optic network that would be built in all the cities. Cities made the initial agreement in 2002, then agreed to another round of debt in 2008. Though the network will pay the debt payments if it ever makes a profit, cities will be responsible for them even if the network shuts down.
“They’ve essentially been using new debts to pay off the interest on their other debts,” said Rep. Jim Nielson, R-Bountiful, who was presented with the audit at a recent committee meeting. “It’s a flawed business model.”
As the recent audit showed, years of poor financial decisions ate up millions of dollars during the network’s
ong, slow start. Though reorganization has helped the network grow again in the last few years, UTOPIA still has a negative net worth of $120 million.
For more information check out the Sept.27 edition of Davis Clipper.