State audits iProvo accounts

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Provo city's state-of-the-art communications network continues to deal with financial questions.

The city has received a request from the state Auditor's Office asking for information about possibly delinquent accounts of service providers using iProvo -- Mstar and Veracity.

The letter, received Dec. 26, states that a complaint was received alleging that the service providers are in "serious delinquent status."

State Auditor Auston Johnson said he received a few requests for the audit, including one from state Sen. Howard Stephenson, R-Draper and president of the Utah Taxpayers Association. The association has long been a critic of the city-run system.

Stephenson could not be reached Friday, but another iProvo naysayer, Provo Councilman Steve Turley, said the city's year-end financial report indicated a "serious delinquency."

When asked for more detail on the finances, Turley said he couldn't because the issue has been discussed in closed meetings. He is in favor of the audit, however.

"The public's money is the public's business, and if there's information out there that is helpful to the public, obviously they ought to have it," he said.

Mayor Lewis Billings said Friday that the city's legal department is going over the request and will make a decision next week. Part of the concern is that the city has signed non-disclosure agreements with the service providers, and the city wants to be on firm legal footing before releasing any information.

"We're not going to cast caution to the wind just because it's the state auditor," Billings said.

Billings also declined to go into the providers' financial issues, but said all new businesses start out strapped for cash and that "they've been consistently making payments for the most part."

He went on to say that no other project in the city has ever received as much scrutiny and review as iProvo, and that "some may say" Stephenson's request is politically motivated.

"This project has enemies," he said. "It always will have."

Representatives of Mstar and Veracity did not return calls Friday. The city's fiber system, often lauded as groundbreaking in scope, has been losing money from the beginning. The network cost the city an unexpected $2.5 million in 2007.

If the service providers are indeed struggling, it wouldn't be the first time. The first partner with iProvo, HomeNet Communications, went bankrupt shortly after the system was launched.

A month ago, city and network officials held a meeting to figure out ways to bring iProvo into the black. Outside consultants have been hired, with a report due later this month. There was also talk about bringing in more service providers. Utah law states that while government can build communication networks, it can't offer services. Instead, it has to lease out the lines to private companies.

The audit specifically requests Provo's accounts receivable records related to iProvo from January 2005 through December 2007, as well as the city's tape recordings of closed meetings from July 2007 through December 2007.

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