OREM -- City officials are not going to pay an operational payment to UTOPIA until they get more of a voice in the consortium's future.
Mayor Richard Brunst gave a passionate report to the Orem City Council during Tuesday's work session on how he sees things proceeding, or not, with UTOPIA.
The city has joined five other partner cities that are in a stalemate with UTOPIA over operational concerns. Because of what it perceives as a lack of action, Orem has withheld its 2014 fourth-quarter payment of $110,000. Other cities have done the same.
"We witheld the operational payment out of frustration because as a city we feel we haven't had a voice in the future of UTOPIA," City Manager Jamie Davidson said. "We are still very interested in moving UTOPIA forward."
Davidson said the city has sought consent from the UTOPIA board on some ideas, with no response.
"We feel like we're not getting attention," Davidson said. "The only lever we have to pull is the operational expenditures to get full attention of the UTOPIA board."
The Utah Telecommunication Open Infrastructure Agency is made up of a coalition of 11 cities: West Valley City, Layton, Midvale, Brigham City, Perry, Tremonton, Centerville, Lindon, Murray, Orem and Payson. It is a community-owned fiber-optic network. Fiber optics utilizes light to transfer information, making it the fastest communication and data transfer technology in use today.
The UTOPIA board is made up of members representing each city, however, the greater the city population the more votes on the board.
Orem wants its fiber hooked up, and Brunst says he has made suggestions for a long time on how to make that happen, with no success.
What makes it worse is there is no real opt out of UTOPIA until the bond debt is paid off -- something that isn't scheduled to happen until 2040. Also, Orem leaders don't intend to try to opt out, as they have said frequently they want UTOPIA to succeed.
Brunst is personally frustrated and said sometimes he wishes there was an opt out. He does not like the way the agency runs, or is legally established with poorly written agreements.
Orem has 22 percent of the votes, the largest number behind West Valley City. However, when West Valley City (30 percent), Layton (15 percent) and Midvale (6 percent) form a team that is 51 percent of the vote, and the other cities are left to do their bidding.
That is what Brunst believes is happening.
According to the mayor, the Utah Legislature isn't a viable recourse. While lawmakers audited the agency in 2012 for mismanagement of bond funds and bad business practices, the Legislature doesn't want to get involved with the ongoing sparring.
Calls placed to UTOPIA leadership Wednesday were not returned by press time.
Brunst said what makes things worse is there is no CEO in place at UTOPIA, and hasn't been since Todd Marriott left a year ago.
Marriott resigned at about the same time Macqaurie Capital Group offered to do a feasibility study on what it would take to operate the fiber-optic network, and nearly all cities, including Orem, opted in on the first milestone of the study.
After Macquarie's presentation and proposed fee schedule for residents, Orem and five other cities opted to not continue on to the second milestone. Monthly fees to all residents, users or not, would have been approximately $20 for Macquarie's services.
The acceptance of the feasibility study was intended to lead to a contract between UTOPIA and Macquarie to take over the network, build it out within 30 months and operate it for at least the next two decades. But since last fall Macquarrie has been quiet. The company was expected to come in with the second milestone of information in August, but didn't do so until earlier this week.
Orem has yet to see those numbers.
"Orem has the greatest amount of subscribers and the greatest amount of non-hookups," Brunst said. "We have a stranded investment of fiber in the ground that UTOPIA won't hook up."
Orem has thousands of customers with UTOPIA running to their homes that is not hooked up. Many cities in the UTOPIA group are dealing with the same.
Brunst contends if UTOPIA tried harder to get a take of 25 to 30 percent of those homes, the agency would double its revenues instantly.
The mayor admits he is frustrated that bigger cities like West Valley City, Layton and Midvale aren't as willing to push for residential hookups.
Their competing plan, which was determined by the entire UTOPIA board years ago, is to market to businesses where UTOPIA can get a higher price for its product.
Brunst said Orem residents continue to wait and that UTOPIA could hook them up, which would mean more money, quicker.
"They can't forget residents are paying the bond money," Brunst said. "They should be able to hook up.
"We can do it, but eight mayors feel they are not being listened to."
Brunst continues to float a couple of ideas that still aren't receiving traction.
The first is to have an Internet Service Provider come in and pay for the hookups from the UTOPIA fiber to local homes, but households must contract for two years for the ISP to recoup the money.
The second is to have qualified sub-contractors work with residents independent from UTOPIA and pay the contractors for the hookups and have the customers own the lines. Brunst contends this would offer more competition.
Murray has also offered a plan, one that Brunst would like to try in Orem. Murray has asked residents who have UTOPIA fiber running in front of their homes to come to a special meeting later this month where a number of ISP companies will be on hand to market directly to the residents.
For now it appears that while UTOPIA has not met its residential subscriber goals, the board is going to carry through with its mission to target large businesses and focus on revenue streams that have met requirements laid out in the 2012 audit.