August 8, 2017
Plans for the $500 million network started in 2002. The 16 original cities received a $66 million loan from the federal government, but after the first tranche of funding was released, the federal government shut off the spigot until UTOPIA “improved its financial condition and developed a new business plan.” The network found financing elsewhere and then received $16.2 million from the 2009 federal stimulus.
UTOPIA is still alive—though, according to the Orem, Utah mayor has not gotten its spending under control—and now the Utah Infrastructure Agency is apparently about to vote on a $13 million bond to expand the network.
In a recent Deseret News column, Utah Taxpayers Association Vice President Billy Hesterman says the bond, an effort to make UTOPIA profitable, likely will be approved. He believes that’s foolish.
First, citing a University of Pennsylvania study, Hesterman notes “that if UTOPIA continues in its current state, that the project will likely never turn a profit.” It has only 11,000 subscribers and generates just $30 per subscriber (far below what other muni networks generate). With that low subscription rate, it will take many years for the network to pay off its debt (and that’s before it takes on even more). Hesterman concludes, “The risks and consequences [of UTOPIA] are too much for taxpayers to shoulder.”
Hesterman also opposes the bond because “the private sector is already providing the same service that can be obtained through UTOPIA …” (Utah is the 11th-most connected state in the country.) The Utah Taxpayers Association believes, “[I]f a service can be found in the yellow pages, then government shouldn’t be providing it.”
We could not agree more, especially since, as some local Utah leaders have noted, the money these 11 cities spend on UTOPIA could be going toward “roads, infrastructure and other city needs.”
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