UTOPIA plan moves forward, haltingly

Friday , June 20, 2014 - 5:47 PM

Standard-Examiner staff

BRIGHAM CITY — In a close vote, the Brigham City Council opted to go along with phase two of an investor’s $300 million plan to rehabilitate the UTOPIA fiber optic network.

Which makes the box score on Macquarie Capital’s plans to save UTOPIA at five cities on board, two out, and four still to vote.

But it was close in Brigham City. After an hour’s discussion Thursday night on the intricate details of Macquarie’s second phase, called ”Milestone Two” of a four-phase plan to save UTOPIA, the Brigham council split twice identically.

But not before some dueling metaphors were exchanged.

“This is like a second date with Macquarie,” said Councilman Brian Rex in describing Milestone Two. “We’re not getting married.”

A few minutes later Councilman D.J. Bott brought it up again, saying, to Rex, “.. it’s like you say, it’s not like we’re getting married yet.”

To which long-term UTOPIA critic Councilwoman Ruth Jensen responded, “But we know they want to impregnate us.”

Which drew laughter and applause from the mostly UTOPIA-resistant audience of about 40 on hand at the council chambers as the Macquarie discussion was nearing 10 p.m.

A few minutes later Jensen moved that the council reject Macquarie and in effect look at finishing the city’s fiber-optic network on its own. Councilman Mark Thompson seconded the motion.

The council voted down Jensen’s motion, with members Bott, Rex and Tom Peterson opposed. The vote broke the same, 3-2, on Peterson’s motion to stay with Macquarie, but still look at other options. Peterson was voting through a teleconference hook-up while out of town on vacation.

Much of the discussion centered on Macquarie’s demand that all city residents, whether subscribing to UTOPIA or not, be charged a $18-20 monthly fee in roughly three years upon Macquarie’s completion of the planned build-out of UTOPIA statewide.

Delayed for decades, under 20,000 subscribers are hooked up to a system projected at 153,000.

As to the possibliity of the city paying the fees without charging residents, City Finance Director Jason Roberts said for the city’s 7,000 homes and businesses, that would amount to the city coming up with $1.68 million a year.

Discussion of the idea stopped there. The city is already paying $435,000 a year on its UTOPIA bonds.

Brigham joins four other Utah cities who have signed on with Australian-based Macquarie s plan to build out and run the flailing light-speed Internet highway, with four more to vote next week.

Two of the 11 cities that own UTOPIA have voted to bail out on the project, let their connections “go dark” and go it alone to pay off their years of UTOPIA bonds with tax revenue instead of hoped-for subscriber fees.

Lindon made the news as the first to exit Tuesday, and Payson came next, announced by Brigham officials at Thursday night’s meeting.

Layton, Midvale, and West Valley City earlier this month voted to go with Macquarie’s Landmark Two. with Tremonton voting favorably Tuesday night. Murray and Centerville are scheduled to vote June 24, Orem and Perry June 26. Landmark Two comes with a June 27 deadline from Macquarie.

Tremonton‘s City Council voted unanimously, 5-0, Tuesday night to go along with Macquarie.

“Did everybody think it was the best thing to do? No,” said Mayor Roger Fridal. ”There’s some ifs to it, it’s a gamble ... we’re going to be paying on the bonds for 27 years anyway.” The city’s UTOPIA bond payments are easily half that of Brigham’s, he said.

Centerville tabled its vote on the Macquarie plan Tuesday night, to take it up again June 24. City Manager Steve Thacker said the city council wants more time to consider an advisory committee’s recommendation that the city vote yes on Milestone Two “to preserve our position at the table.” The advisory committee’s vote on the yes recommendation, he said, was not unanimous.

“We have not had the same level of negativity that Brigham has experienced,” said Perry Mayor Karen Cronin. Turnout has been small at city councils meetings where UTOPIA was on the agenda, she said.

Perry pays $107,604 a year on its UTOPIA bonds, she said. “We’re the minnow of the project. But that’s still a lot of money.”

Macquarie’s phase two revolves around developing a third entity, separate from Macquarie and UTOPIA, called simply the wholesaler so far, which would interact with Internet service providers, and develop marketing, officials explain.

The last two phases, or milestones, as Macquarie calls them, cover the final details of the contracts among all the entities involved. The long-anticipated 30-month build-out would begin after Milestone Four is surpassed, likely the spring of 2015.

Contact reporter Tim Gurrister at 801-625-4238, tgurrister@standard.net. Follow him on Twitter at @tgurrister

Contact reporter Bryon Saxton at 801-625-4244 or bsaxton@standard.net. Follow him on Twitter at @BryonSaxton.

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