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Reluctant Murray pays $141,666 UTOPIA tab, but is hardly sold

Published August 6, 2014 3:25 pm

Internet • City leaders make no secret of their dissatisfaction with high-paid network managers' work.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Murray • Mayor Ted Eyre has persuaded the City Council to buy him more time and bolster his credibility with a $141,666 payment to UTOPIA, the troubled high-speed Internet consortium that Murray backs along with 10 other Wasatch Front cities.

Unlike other cities, Murray refused for two years to chip in on UTOPIA's day-to-day operating expenses. The city has kept up with its $1.65 million yearly share of bond debt for the public fiber-optic grid, but its leaders make no secret of their dissatisfaction with high-paid UTOPIA managers' handling of the network.

"Continuing to pay them is like supplying drugs to an addict," Murray City Councilwoman Diane Turner said. "It is totally irresponsible."

Murray was also among five Utah cities to reject a proposal from Australian investment group Macquarie Capital to secure financing for UTOPIA, finish building the network and then run it for the cities for 30 years, while charging households a utility fee of up to $20 per month. The midvalley community has even talked informally about taking over aspects of its part of the UTOPIA network, including about 2,000 business and residential customers who live within Murray's boundaries.

But city leaders voted 3-2 late Tuesday to pay into UTOPIA's ongoing expenses through Dec. 31, largely on the newly elected mayor's insistence that the next few months will be key to finding a long-term solution to UTOPIA's problems.

Acknowledging it as a frustrating and emotional issue for elected officials, city staff and the public, Eyre said UTOPIA had become more transparent since January. He praised the council's June vote against participating in Macquarie's plan, saying it had saved Murray residents "millions of dollars" by sparing them from the prospect of paying its controversial monthly charge.

But new information on UTOPIA and a recent debate over Macquarie's plan, he said, had convinced him that "we've now arrived at a critical point in our decision making.''

"I feel very determined that the right answer is just around the corner," Eyre told the council. "I have faith that we can come up with the best option, but we need time.''

The chairman of UTOPIA's governing board, meanwhile, said Wednesday he appreciated the payment.

"We, as the member cities, see their action as positive in bringing the board together toward making UTOPIA work, whatever the solution is," said Wayne Pyle, who is also city manager in West Valley City.

As Murray's representative on UTOPIA's board, Eyre said he would devote as much time as possible to the issue through December, while trusting department heads to oversee city operations in the short term.

The retired commercial airline pilot said Murray needed "to be deeply involved" in the ongoing debate, including the possibility of joining forces with other UTOPIA cities that opposed the Macquarie deal: Centerville, Lindon, Orem and Payson.

"No one wants to use public funds to reward poor management, failed marketing or a flawed business plan," Eyre said. But paying $141,666 toward UTOPIA's day-to-day budget until the end of 2014, he said, "will help to give me the credibility I need in a good-faith offering and a cooperative effort toward these cities."

With great reluctance, council members Dave Nicponski, D. Blair Camp and Jim Brass backed the mayor's request. "I don't support UTOPIA," Nicponski said, "but I do support our mayor." Even Turner and fellow council member Brett Hales, in voting against it, said they backed the mayor's efforts.

"He's phenomenal," Hales said. "But it would be wrong for me to vote for this if everything is telling me not to."

The mayor warned of "serious consequences if we don't do this and the [UTOPIA] system goes dark."

Key players in Murray rely on UTOPIA's high-speed access, Eyre said, including medical workers at the Heart and Lung Institute of Utah, the city's own electric utility, other businesses, libraries and schools, and hundreds of residential users.

"They've paid for it," he said, "and I think they expect us to keep it operational."

Short for the Utah Telecommunication Open Infrastructure Agency, UTOPIA was conceived 12 years ago to connect businesses and homes in member cities with lightning-fast Internet access, primarily as a spur to economic development. Its upload and download rates have been up to 200 times faster than services available privately, although companies such as Google and CenturyLink are now active in the market for delivering gigabit speeds along the Wasatch Front.

Through the years, UTOPIA has been saddled with a mix of mismanagement, massive debt, opposition from private-sector telecommunication companies and problems with network construction that have left its grid partially finished. It has a relatively small customer base.

UTOPIA's finances have improved of late, but the consortium's member cities continue to offset its budget losses, while paying millions a year in city sales and business tax revenue to cover its huge bond obligations.

While other cities have balked temporarily at contributing to UTOPIA's operating expenses, only Murray has withheld them entirely — until now.

Taxpayers in all 11 UTOPIA cities will remain on the hook for UTOPIA's debt even if the futuristic grid shuts down or is sold.

tsemerad@sltrib.com

Twitter: @Tony_Semerad