![]() In that instance, the city issued a $3.7 million bond, with the proceeds going to Utopia so it could cover the cost of running its fiber-optic lines down residential streets and into homes. Utopia’s strategy centers around convincing the residents of its member cities to agree to participate in “special assessment areas,” similar to the one set up late last year in Brigham City. “A plan to grow to 25,000 subscribers has been designed but it needs to be funded.” With 25,000 subscribers, Winder said, Utopia no longer would have to call upon its member cities to pay its bond debt. ![]() “What should cities do? Should we borrow more money or throw our hands in the air and walk away? Well, I (West Valley City) have a $147 million (Utopia) mortgage payable over 30 years,” he said last week, indicating he is willing to see the city up its commitment if the additional funding can protect its investment.Īnd he contends Utopia will be able to pay all of its operating expenses if the number of Utahns receiving services over the network can be increased from 10,000 to 15,000. West Valley City Mayor Winder, who voted against the 2008 refinancing as a member of the City Council, today argues that the only way out of the financial dilemma is for cities to pledge more for the network on the hope that it can grow out of its problems. The network could be completely out of operating cash later this spring and is calling upon its member cities to begin covering the network’s bond payments, something the original Utopia promoters contended would never happen. The new financing was designed to give Utopia two additional years of working capital, with the network operators insisting that any additional money would come from signing up new customers.īut Utopia lost $51 million for its fiscal year ended June 30, 2009, and it is projecting that this fiscal year it will lose another $25 million. New management was brought in, and it convinced 10 of the 11 member cities to approve a major refinancing that increased their pledges to more than $500 million over 32 years. Money woes » Despite similar customer endorsements of the technology, by mid-2008 Utopia was insolvent. “It seems that every business that starts out runs into some kind of challenge, and if they can just get over that initial hump they are OK. “If Utopia were available in my neighborhood, I’d sign up in a minute.”Īlthough Waters said he has only scant information about Utopia’s financial trials, he hopes the network’s managers will be able to figure out something. Waters lives in Layton and receives Comcast service at his home. ![]() “Before we signed on for service over their network, we had a hard time getting all the work done each day.” “I’d hate to think what would happen if we no longer had the Utopia network,” said Evon Waters, director of information technology at Ensign Engineering, a survey and structural engineering firm in Midvale. What followed was years of failed projections and unkept promises, even as its fiber-optic technology attracted a strong following of technologically savvy users. ![]() Of the original 18 municipalities that joined under the Utopia banner, 11 eventually pledged $202 million in tax money over 20 years to partially back Utopia’s bonds so it could get a more reasonable interest rate on a project Wall Street viewed as junk bond risky. Short for the Utah Telecommunication Open Infrastructure Agency, Utopia was born in 2002 amid a sense of frustration by community leaders who believed the largest private telecommunications providers were unwilling to bring high-speed Internet and other services to their cities. During that time the network also has increased the number of companies that offer services over the network from three to 12, he said. Utopia has added 3,500 subscribers over the past two years, bringing the number of Utahns receiving service over the fiber-optic network to 10,000. “We’ve seen two solid years of growth, but it needs a larger (subscriber) base to break even.” “There is light at the end of the Utopia tunnel,” said Mike Winder, the newly elected mayor of West Valley City, the largest Utah community participating in the network. Two years after its last period of financial turmoil - one that saw member cities rescue the network by increasing their financial commitment to the system by several hundred million dollars - Utopia plans to go back before those same city councils to request another $60 million.Īs before, Utopia will be promising that money is all it needs to become profitable. The Utopia fiber-optic system once again will ask the leaders of its 11-member cities to commit millions more to bolster the nearly bankrupt network.
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