Our city is consistently ranked among the best in the nation for many of its attributes. One feature that sets us apart from other cities is our fiber optic network, iProvo.
It is a fully built, city-wide fiber-to-the-home network. The city sold the network two years ago to Broadweave Networks, which then merged with Veracity Communications, forming Veracity Networks. Because of the sale, Provo no longer incurs any operating expense related to the network, but continues to be obligated on the $39 million bonds that were used to build it. Veracity, in turn, makes payments to Provo. The payments were originally equivalent to the bond payments.
The public has followed the topic of iProvo closely and rightly so. It's been an important subject for me, as well. Having studied iProvo for several months now, I'd like to share some of my conclusions.
First, I believe it's time for a candid discussion about iProvo that will alleviate concerns and restore perspective so we don't overlook the overall positive trend in Provo and miss out on further opportunities.
Part of this discussion is admitting it's time to stop debating whether we should have built iProvo. It's done, and this is an unproductive debate.
Second, we must admit that the network has run, and for the foreseeable future will continue to run, at a loss. Blame it on the economy, current legislation or technology, but it's true. When the city ran it, there was a gap between revenue and expenses; when Broadweave ran it, there was a gap; and now as Veracity runs it, there is still a gap. Because of the gap, the city agreed last year to lower Veracity's payments for 18 months, allowing it to upgrade the network and make up the difference in payments later.
Third, we must identify a funding source for the gap. Since lowering Veracity's payments, the city has made up the difference in bond payments by drawing upon funds intended for other things. That's not a sustainable practice. We must come up with a way to pay for it and be up front about it.
Fourth, Veracity, a successful company that owns and operates more than iProvo, is well qualified to run the network. We are incredibly lucky to have Veracity as the operator of the system. Veracity is currently absorbing some of the gap in hopes of a long-term profitable return on its investment.
Fifth, I believe it has been a mistake to have used profitability as the benchmark for success. I'm asking Provo residents to change their paradigm. Because it has come up short of making a profit, many have considered the entire project a failure. Some in our city have called it a millstone, a ball and chain, something that could "take us down." I've seen many want to go into "hunker down" mode, which would be a mistake.
Sixth, the gap is not as bad as some think. If spread out among all households in the city, it would be between $2-4 per month. None of us want to pay more than we already are, but it's not going to "take us down."
Finally, it's time to stop letting iProvo define who we are. Provo is much more than that. Unlike the rest of the country, we are experiencing unprecedented investment into our city. Between the Utah Valley Convention Center, Freedom Plaza, Nu Skin Innovations Center and FrontRunner, more than $130 million will be invested over the next several years in our downtown. Another $65 million will be invested in student housing projects south of campus. The city is ready to sell land worth $20 million at Mountain Vista Business Park, which could bring 3,000 jobs and generate $1.4 million in annual property tax revenue. The financial benefits of these and other projects far outweigh any cost related to iProvo.
We will work over the next several months to determine what exactly is in the city's best interest regarding iProvo, but residents should know that nothing will change without further public dialogue. Those interested in more information may attend my Interim Report on Economic Development and iProvo on Sept. 30 at 7 p.m., at the Covey Center, 425 W. Center St.
• John Curtis is mayor of Provo.