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Costs may rise for UTOPIA cities still moving ahead
Jul 09, 2014 | 5494 views | 0 0 comments | 46 46 recommendations | email to a friend | print

LAYTON – Now that Centerville and four other UTOPIA cities have bowed out, the road ahead might be getting more expensive for those still moving ahead.

Layton is one of the six UTOPIA cities who voted to move ahead to step two of the proposed deal, just over half of the 11 cities who first entered into talks with the Australian company. With Centerville, Murray, Lindon, Orem and Payson having chosen to opt out of the deal, however, Macquarie said that those utility costs may rise.

“They’ve said that costs could go up, but they haven’t made a commitment that they will,” said Layton City Mayor Bob J. Stevenson. “We’re learning more information.”

The mandatory utility fee was initially estimated at being $18-$20, but that cost depended on all 11 cities participating in the agreement. Now that fewer cities are involved, the costs are being redistributed.

“If you take away a certain amount of the build-out, you take away a certain amount of expense (for Macquarie),” said Layton City Attorney Gary Crane. “But you’re also taking away a certain number of connections.”

If Macquarie decides there aren’t enough connections left, the deal might fall through anyway.

“They’ll take a look at the numbers and see if the six cities meet a critical mass to warrant going forward,” said Crane. “They need to see if it’s worth going forward. Frankly, we’re looking at that as well.”

The city’s vote does not commit Layton or the other cities to saying yes to the final agreement, though if all of the cities walk away they’ll be obligated to cover up to $980,000 of the costs for this portion of the study.

Milestone 2, which is expected to extend over the next two to three months, is based on Macquarie’s proposal to take over the running of the UTOPIA fiber-optic network and complete build-out in all the participating cities.

“We’re firming up issues on construction, equipment and more,” said Crane. “The companies that are bidding on the project (for Macquarie) will spend a considerable amount of money to do their final analysis. The whole crux of Milestone 2 is to continue forward with due diligence.”

The plan requires that residents of those cities pay a monthly utility fee, which is currently mandatory for everyone whether or not they own a computer. Macquarie has not yet released new figures on those utility fees to the cities.

Despite the possibility of having costs go up, Stevenson said that residents of Layton are interested in hearing more. The city is only approximately 10 percent built out, which means that many couldn’t sign up for the network even if they wanted to.

“If you take the calls and e-mails I’ve been getting, they seem to be 10 in favor to one against,” said Stevenson. “I think the residents of Layton are very open-minded, and they want to learn and understand.”

Centerville, who voted not to move ahead with the talks late last month, cited the utility fee as a major reason that they stepped away from the deal. Residents also responded negatively to the mandatory nature of the fee, even if they supported UTOPIA.

“I’m very happy with my choice,” said Dave Pasket, a Centerville resident who uses service through the network. “But I don’t want to take that choice away from people.”

The city can’t make other arrangements for someone to take over their portion of the network without the agreement from the other UTOPIA member cities, but a possible proposal from First Digital Telecom by the end of July could offer other alternatives.

Even if that deal doesn’t go through, some of the cities that agreed to go ahead have suggested that their votes might change if the utility fee increases too much. If that happens, Centerville officials feel that Macquarie might be willing to be more flexible about their offer.

“We’re relatively inexpensive to finish up, and we’re 10 percent of revenue,” said Centerville City Council Member John Higginson. “Lindon is another 10 percent. That’s simple strength from a negotiating standpoint.”

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