Orem pledges more to UTOPIA

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The UTOPIA fiber-optic initiative will move forward on the strength of an Orem City Council vote Friday morning.

In a special meeting, the council voted unanimously to approve an increased sales tax pledge to keep UTOPIA moving forward in providing high speed Internet access, digital television and phone services to residents. The pledge doesn't require the city to spend any money immediately, only that it will back bonds being taken out by the UTOPIA organization to fund construction of the fiber-optic network. If revenue from the project fails to materialize, then the 11 member cities will have to pay the bonds.

Though Friday's pledge would increase Orem's potential liability by millions of dollars, council members said they are confident the system is moving in a positive direction with a new marketing plan and several cities built out and ready to start signing up customers. Orem is home to more than 3,000 of the system's 7,200 subscribers.

"We're no worse off, and we have the opportunity to be better off," said Councilwoman Margaret Black.

Because of Orem's size, the vote also meant that UTOPIA can begin construction again even without support from the city of Murray, which votes Monday.

Councilman Mark Seastrand said before his vote that the debate is no longer philosophical but financial.

"To me this is not the question now, that decision was made a few years ago," he said. "To me we are in this."

Philosophy was argued by the public on April 22 but the council delayed a vote that night until Friday morning when they questioned UTOPIA representatives for nearly two hours.

Seastrand wanted more clarification on UTOPIA's business plan and what it would take to keep the city clear of paying off bonds.

The fiber-optic project's legal council, David Shaw, said there will be a renewed marketing push and efforts made to sign up more businesses, which often spend much more than residents do because of bandwidth requirements.

UTOPIA finance planner Laura Lewis said the system is gaining subscribers and will continue to do so given the chance. The bulk of spending came at the beginning of the project in the form of construction and that's why UTOPIA is requesting more money: to finish the job. That said, there are always risks.

"Neither I nor anyone else has a perfect crystal ball to look into the future and say this will save the day for you," said Lewis, who is also paid by Orem for financial advice.

Fiber-optic proponents are also convinced that several cities are going to break through the low percentage of "take" or the number of people signing up. Orem's take rate is 28 percent but cities with fewer commercial options, like Perry and Tremonton, are ready to come online and are now fully wired.

"To go from riding your horse to 'Here's a Ferrari,' I gotta believe a significant number of people are going to come on board," Shaw said.

While Orem gave its blessing for more bonding capacity as did Lindon, Payson recently refused to go along with the plan citing not enough detail and too much risk.

Orem Councilman Carl Hernandez sees risk in not building such an infrastructure.

"This is a decision about the future of our children and grandchildren to compete in a global economy," he said.

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