Local groups whipped Oremites into an unhinged frenzy

Tuesday night, the Orem city council approved a property tax increase to plug some budget holes. A lot of the people present (some council members included) chose to pin the blame squarely on UTOPIA even though that’s less than accurate. I wasn’t there, but the recap from Twitter made it abundantly obvious that the crowd had a lot more anger than information.

Who do we blame for creating an unhinged and uninformed angry mob? Precisely the people who tried to walk away with a non-chalant whistle: The Sutherland Institute and Utah Taxpayers Association. Both groups have been painting a picture of apocalypse from the tax increases while trying to pin the entire thing on UTOPIA. Neither of them discussed the shift from sales to property taxes that dozens of cities are currently involved in, nor did they try to inform the public with alternatives to raising taxes. This purposeful attempt to leave citizens uninformed created some of the wackier and downright dangerous suggestions of the night, things that both organizations need to now own as a byproduct of whipping the citizenry into a fenzy.

And what were these suggestions of fiscal suicide? Some people suggested either that the city wasn’t directly responsible for the bond or that they should just stop paying it. Anyone with any financial know-how knows that you can’t unilaterally declare that you don’t owe money on a loan or that you’ll just stop paying bills you don’t like. If the city chose to do that, it’s credit rating would be worse than junk and it would be a true financial catastrophe for the city. More than a few people suggested that the city declare bankruptcy over it. They obviously don’t know that UTOPIA’s payment comprises a scant 3.2% of Orem’s total budget, nor do they seem to get that the consequences would be roughly the same as not paying the bond. It would be akin to burning down the house because you found a piece of rotten timber.

Another popular suggestion is to sell the network, but this, too, is divorced from financial reality. At the end of the payments, the cities (and presumably the subscribers who paid for installation) end up owning the network free and clear. The only way a sale makes sense is if the sale price would exceed the estimated value of the network at the end of the payments. Anything less would mean a wider loss, and there is no sale that will cover the price of the bond. Evidence suggests that a sale would go poorly anyway. American Fork “sold” AFCNet, but the company that “bought” it hasn’t been current on its interest-only payments and will likely not have the required $500K lump-sum payment when it comes due in a few months. Provo tried to sell iProvo twice without success. Both of those networks cover their respective cities whereas UTOPIA does not have a contiguous service area. Odds are good that any sale would result in a substantial loss of value.

The core problem is that both UTA and Sutherland (the latter of which I expected better from) presented cherry-picked facts and fabrications designed explicitly to incite anger. This was done in lieu of presenting a full slate of facts (like the trend in dozens of cities of moving from sales taxes to property taxes), their proposed solutions, and a rationale for the conclusion. When you take that approach, you create a mob mentality problem rather than seeking solutions. When you call them on it, they back off with a weak “well, we didn’t mean that” which comes off as trying to weasel out of the situation they created.

You can see an obvious common thread from the suggestions and actions. None of them actually think through the full consequences of the actions proposed, they’re “shoot from the hip”, and they’re emotional responses to try and undo a decision that’s over, done with, and now has to be owned. These folks (citizens and think tanks alike) could learn more than a few things from mayors like Mike Winder and John Curtis who, despite not supporting municipal broadband, have accepted that their job is to make the best of the situation.

(You can read more from the Daily Herald here.)

Tagged , , . Bookmark the permalink.

44 Responses to Local groups whipped Oremites into an unhinged frenzy

  1. Derek H Monson says:

    Jesse,

    Did you watch the video Sutherland produced or hear for yourself the robo-call we did? Just curious.

    Derek H Monson

    • Jesse says:

      I did watch the video, and the interview felt like it was included to provide the appearance of even-handedness. Paul’s comments on KVNU, however, made it clear that objectivity was not the goal.

      • Derek H Monson says:

        So do you think that we presented both sides of the issue in our video? It sounds like you’re suspicious of it basically because we have an opinion on the issue.

        Also, again, did you hear the robo-call?

        Derek H Monson

        • Jesse says:

          No, I don’t think you did. You focused pretty heavily on the negatives in order to support a pre-defined narrative.

          And no, I didn’t hear the robocall, but how much neutral or even-handed information can you put into a robocall that is intended to turn out opponents of a tax increase? Send me a copy and prove me wrong.

          • Derek H Monson says:

            Jesse,

            The burden of proof is on you, my friend. After all, you’re the one accusing us of malfeasance without knowing everything we did and without having attended the meeting to know everything that was said.

            You make a lot of strong statements in your blog post which you don’t provide evidence for. For instance, can you point to the specific things that we’ve put out and/or said to illustrate how we have “paint[ed] a picture of apocalypse” or have “whipp[ed] the citizenry into a frenzy,” or can you point out the particular things that are “cherry-picked facts and fabrications designed explicitly to incite anger”?

            There was a lot of anger expressed at the city council meeting, but that is a product of attempting to raise city property taxes by 50 percent. To put it differently, have you ever attended or read news coverage of a Truth-in-Taxation hearing that DIDN’T involve a lot of people angry that their taxes were going up? People get angry when you raise their property taxes, and it’s not because groups like ours produce videos airing both sides of the tax debate or do robo-calls letting residents know about their Truth-in-Taxation hearing (I included the script of our robo-call at the bottom of this comment).

            Concerning your point about us not being “neutral,” I’m not sure what your point is. Is ANYONE involved neutral on this issue? Those supporting the tax increase aren’t neutral, and you obviously aren’t either. So how is it that you can criticize others for having an opinion?

            Our opinion on UTOPIA is that it’s a failed project, and that opinion is supported by the facts. Those facts, which UTOPIA does not dispute, are that UTOPIA failed to meet its 3-year construction timeline, failed to meet its 5-year positive cash flow timeline, failed to meet its subscriber goals, and failed to meet its take-rate goals…all while accumulating a net worth of negative $120 million. Spin that however you want, but based on common sense this is a pretty clear picture of an organization that has failed.

            UTOPIA has turned over its management, and now it has a new plan, but that plan has yet to produce any concrete results or movement towards financial solvency…except convincing most of the UTOPIA cities to give them more money, which only creates more financial obligations for the cities involved.

            It’s like the postal service. Most people wouldn’t argue (except postal employees, of course) that the postal service is a success just because they manage to deliver mail each day. Especially when they run up billions in dollars in deficits each year and require taxpayers to bail them out. The postal service, at least, can argue that their services are explicitly required by the Constitution, which is more than can be said for UTOPIA.

            Derek H Monson

            Our robo-call said the following:

            “Hi, this is Paul Mero with Sutherland Institute. Your Orem City Council will be voting tomorrow evening to raise your property taxes another 50%. Even worse, that 50% increase would continue to pay for the failed UTOPIA project. I hope you’ll take a moment to call your Mayor and City Council.

            I can patch you through to City Hall right now if you press #1. Or you might call 801-229-7035. You can also watch a video about the tax hike at sutherlandinstitute.org.

            Thanks for your time.”

          • Jesse says:

            I think Ronald nailed you on the USPS comparison. A lot of people like to call it a failure without also noting the reason for failure: cumbersome legislative mandates. Go read the Municipal Cable Television and Public Telecommunications Services Act (Title 10, Chapter 18 of the Utah Code) and tell me just how many mandates you find in there. Note that some of these mandates were created after UTOPIA had formulated some of its business plans. News flash: you don’t get to club your opponent in the kneecap and then gloat that they’re having trouble finishing the race.

            Let’s take a look at that robocall script too, shall we? I can’t imagine that the phrasing of “another 50%” was anything but intentional. It implies that Orem has been raising property taxes frequently, or has at least done it once in the not too distant past. The reality, however, is that Orem hasn’t raised property taxes in three decades. The script also claims that the property tax increase is solely the responsibility of UTOPIA which is an absolute and blatant lie. Even if you buy that it has nothing to do with sales tax revenues declining (hint: it totally does), $500K of the increase was for employee salaries. So yes, you’re full of crap when you say that the call wasn’t designed to elicit an angry response and lie to the recipients. You guys are supposed to be better than that, but I guess you’re getting your cues from the UTA now? (PS The UTA was proven by the audit to have lied about UTOPIA’s budget numbers on numerous occasions. You sure you want to line up with those folks?)

            I also see that you’re cherry-picking facts to support your opinion. That leads me to believe that you formed the opinion first, then sought the facts that backed it up. (Again, I expect better from Sutherland. A LOT better.) You failed to mention the legislative hurdles that crippled UTOPIA’s first business plan and the Qwest lawsuit that delayed construction for 18 months by trying to assert ownership over another company’s poles. Tell me, did you even read the audit for yourself? I’d recommend it, even if it omits a lot of key points, and then come back here for the missing bits that add required context.

            Tell me, what “increased financial obligations” are you referring to? To my knowledge, UTOPIA has extended the bond once, back in 2008. If you’re referring to the UIA money, that’s money that can’t be spent without guarantees of repayment from subscribers, so it doesn’t create any financial risk to the participating cities. I otherwise can’t figure out exactly what money you’re talking about. Maybe you can clarify? Or are you using more inflammatory rhetoric?

            You’re also calling UTOPIA’s current business plan a failure, but it’s nowhere near completion. There’s in year two of a five year plan. Last year, they almost doubled revenues while dropping costs about 7.2%. That sounds pretty good to me, and it certainly doesn’t project failure so far as I can tell. It’s irrational at best to call a plan a failure when it isn’t even half-completed.

            I think you’re a decent enough guy, Derek, but I have very little patience for people who go off on their half-cocked opinions when I actually know all of the relevant details. (It’s also really REALLY frustrating to keep on rebutting the same lies over and over and over again; it makes me get a bit short with people.) I also don’t have much patience for people who like to cherry-pick data. There are a lot of valid criticisms of UTOPIA, but you’re not really hitting on any of them very well.

          • Derek H Monson says:

            Jesse,

            For whatever reason, the blog doesn’t give me the option to attach a reply to your longer response to my longer comment…so I chose to reply to a shorter comment above it. But in any case, this is in response to your comment of August 16, 7:04 pm on this string.

            The only relevant point I can see in the issue of the state mandates on UTOPIA is that it gives me even more reason to think of UTOPIA as a failure and as a project that will never succeed. Every business and/or organization has to deal with burdensome regulations…successful businesses and organizations find ways to overcome those hurdles, and certainly don’t end up $120 million in the red while using regulations as an excuse.

            Your criticism and reasoning on our robo-call is simply flat wrong…finding conspiracies where none exist. The city council proposed a 50% property tax hike, and that would make Orem residents pay “another 50%” in property taxes beyond what they’re currently paying, plain and simple.

            As a matter of factual accuracy, no where in our robo-call did it say that the property tax hike was “solely the responsibility” of UTOPIA…you’re putting words in our mouth with that one. The robo-call says that the tax hike would “continue to pay for” UTOPIA. When roughly 85% of the proposed tax increase is going to pay for the UTOPIA bonds, that is not an inaccurate or misleading statement. The city has recognized the connection between the UTOPIA bonds and the tax hike, as did the proponents of the tax hike who spoke at the city council meeting…you’re the only one I hear making a huge deal of the fact that relatively small portion of the tax increase was going to go elsewhere.

            Another way to make this point about your robo-call criticism is to note that it is based on what you see us implying based on a handful of words. You’re reading into what we said implications that you’ve cooked up in your own mind…seeing what you want to see. You’ve taken logical leaps to find a malignant conspiracy to lie to the public, and it’s all coming from your head, not our mouths.

            I don’t see how the legislative hurdles and Qwest lawsuit change the assessment of UTOPIA as a failed project. Have the state’s actions and the lawsuit contributed to UTOPIA’s failure? Sure…but it has still failed. In order to be considered a “success,” the UTOPIA project would have had to produce some significant set of accomplishments that justify its costs…not simply have the excuse that the barriers supposedly preventing them from attaining those accomplishments are outside its control.

            Another way of thinking about this is to look at a genuinely successful organization, such as Apple. Do you think they haven’t faced hurdles outside their control, like regulatory burdens or lawsuits? Of course they have, but they have found ways to overcome them, which is why they are successful. UTOPIA hasn’t, and that’s just part of the reason that it’s a failure.

            The UIA cities formed the UIA to provide more financing to UTOPIA. Inasmuch as it’s committed to getting more money for UTOPIA, it is a financial obligation for those cities.

            Again, you’ve put words in my mouth concerning the current business plan. What I’ve said is that the UTOPIA project is a failure, and the new business plan has yet to produce anything of substance to change that assessment. The only way UTOPIA was able to double its revenues in 2011 was to convince cities to pony up more money through the UIA, and more money from cities is not a sign that they’ve fixed their real organizational problems, such as misuse of revenues and an inability to meet the subscriber goals necessary for success.

            In conclusion, your calling my opinions “half cocked” is an irony, given that you didn’t attend the city council meeting and then went off in a blog post on everyone involved on the other side of the issue, as if you knew everything that was said…you know, some of those “relevant details.” I’ve given you the facts and reasoning for all of the statements and positions you’ve asked about (I’m still waiting to hear how we painted “a picture of apocalypse,” by the way). Obviously, you disagree with and have no patience for those facts and that reasoning, and those two realities explain your own comments more than any facts or reasoning that you’ve yet put forward.

            Derek H Monson

          • Jesse says:

            I think WordPress may limit the nesting level to so many deep. I’m assuming it’s because after so many levels, the display becomes burdensome at best.

            What you’re missing here is that UTOPIA didn’t charge into existing regulations without careful consideration. They made a business plan, got the loan… and then had the regulations changed specifically to sabotage them because Qwest and Comcast didn’t like it. It’s protectionism by industry incumbents, pure and simple. If the point of the Act was to ban municipal networks, it should outright do so, not continually club municipal governments in the kneecaps until they capitulate (and especially not after the fact). It’s irresponsible for legislators to torch cities to make their ideological points, and you should be ashamed of yourself for effectively supporting it.

            Given that Paul was on the robocall, I know he must have read the script. I also know he’s the kind of guy who uses language very precisely knowing full well what the effect will be. I doubt most reasonable people will interpret “another” the way you have presented, and I can’t believe Sutherland to be dense enough to not know that. Stating “that 50% increase would continue to pay for the failed UTOPIA project” creates the implication that the entirety of the money is meant for UTOPIA, especially without mentioning any other things it can or would be spent on. Again, you guys are smart enough to use language precisely. You can’t even acknowledge the possibility that the call could be interpreted that way?

            As far as UTOPIA accomplishments, they are one of a handful of providers to offer 1Gbps connections to homes they serve. Google spent a lot of time talking to them to try and replicate portions of their model including pre-signing customers in specific footprints. Almost all new networks use active Ethernet instead of PON because UTOPIA proved that topology was the best. Comcast and Qwest have done cut-rate pricing in UTOPIA areas as a direct response to the presense (or potential presence) of the network. Orem is saving at least $50,000 per year in just phone costs from using the network. Hundreds of businesses have paid up to tens of thousands of dollars to get the network extended to their offices. To say that the network has accomplished nothing of note is to admit ignorance of what they do. Heck, being imitated by one of the largest tech companies in the nation is proof enough that they’re doing something right.

            You’re mischaracterizing the UIA money. Not one red cent of that money is covered by taxpayers. It is all covered by subscribers that subsequently lessen the burden on taxpayers. Shouldn’t that be something that makes the best of the situation and thus be something you support?

            Hold the phone there; the UIA money hasn’t even been touched yet. There is absolutely no possible way that it accounts for the doubling of revenues in the last fiscal year. That is completely and totally 100% false, and you could have found that out by actually talking to UTOPIA about it.

            As detailed above, there’s a reason I’m hammering you so hard: you obviously did surface research to support an already-formed opinion. It frustrates me greatly because I’ve been watching this thing very closely for six years and, quite honestly, know more about it than you’re ever likely to. Furthermore, you don’t ever make it clear as to what the goal of your criticism is, be it to serve as a warning to other cities or to try and influence what current cities are doing. All I’m getting from you is some rather vague rage to the effect of “they should have never done it and by golly I’m going to make sure they feel the pain to know why”. It feels like you’re invested in their failure because any success, no matter how small, would, in your mind, invalidate or denigrate your position. That’s not only dangerously intransigent, it’s fiscally irresponsible to not propose a least bad way forward. (Seriously, go talk to Mike Winder and John Curtis. They’ll provide a lot of insight as to what I’m talking about.)

          • Derek H Monson says:

            Jesse,

            There are obviously multiple ways that the robo-call language could be interpreted, and experience has shown that any time we write something, no matter how precise we’ve worded it, people will interpret it how they want to interpret it. You’ve proven that conclusively by how you interpreted it, for instance.

            But there’s a difference between having multiple possibilities for interpretation, and you concluding that you know the “correct” interpretation and then accusing us of malfeasance and lying to the public. What I’m saying is that your accusations are based 100% on the interpretation you’ve come up with in your mind, and that interpretation of what we put out is incorrect, at least from the perspective of our intended meaning. That is simply the reality of the situation.

            So do you think that all of the accomplishments that you listed make UTOPIA a success despite the failed goals, mismanagement of taxpayer-supported bond funds, and net worth of -$120 million? In my opinion, the failures still outweigh the accomplishments. I simply have yet to hear anything so compelling in what you’ve said UTOPIA has done as to say that all of the bonded indebtedness and net-negative value were worth it.

            According to the legislative audit that you questioned whether I had read, nearly half of UTOPIA’s 2011 revenue came from UIA (see the graph and sidenote on page 9 of the audit). In UTOPIA’s letter responding to the audit, they did not bring up this assertion to dispute it. I think that most reasonable would therefore believe it is true.

            The goal of our activities was to discourage the Orem city council from raising taxes. That obviously didn’t happen, but it they cut the tax hike in half, which is a partial victory. The only reason I’m going into the rest of this with you is because you’ve accused us of lying and ignoring facts, and I respect you enough to respond.

            I’m sure you know more about UTOPIA than me, and I haven’t pretended otherwise (though I do claim to know more about Sutherland’s reasoning and activities than you). But you have also admitted to not having been at the city council meeting to hear everything that was said, and you also were not aware of everything we put out in preparation for that meeting, nor the reasoning and motivation behind it.

            Yet, those very things which you admit being unaware of were the focus of your attacks in your blog post. And when I have endeavored to inform you about these things, both of which I was on hand to witness myself, your response has been to question my intelligence and Sutherland’s integrity, and to brow-beat me with comments like “you should be ashamed of yourself.”

            I guess I just don’t understand how you can openly admit to not being aware of everything your attacking (i.e. the city council meeting and the things we put out before it) and still attack it like you know everything about it…even as I tell you, as one of the people behind what you’re talking about, that you’re wrong. That kind of thinking is just beyond me.

            Derek H Monson

          • Jesse says:

            Personally, I think you (as a group, not personally) latched onto UTOPIA in the robocall because it would generate a stronger response. If I were in your shoes, that’s what I’d do, and Paul’s anti-UTOPIA editorial on KVNU only lends credence to it. Maybe you don’t even realize you did it, but I’d bet lunch that if you rounded up a dozen people who heard the call, they’d pick my interpretation over yours.

            “[T]he failures outweigh the accomplishments” is a pretty big walking back from “no significant accomplishments.” Just sayin’. You’re also using a pretty screwy timetable for measure success or failure. From the moment shovels hit the ground, it takes seven to ten years for an average telecom project to see black ink, public or private. UTOPIA started construction in earnest in, what mid-to-late 2003? Add in the 18 months during which construction was halted by the injunction from Qwest and you can see that UTOPIA is in the median for all projects. Again, this is why you need to find actual telecom expertise instead of trying to “cram for the test”, so to speak. You’re measuring against a yardstick that nobody in the industry uses. Why should UTOPIA be expected to outperform the industry?

            If the entire goal was just to avoid tax increases, then 1) why did you drag UTOPIA into it in the first place, 2) why did you not discuss any counter-proposal of how to pay for the bond debt, and 3) why are you offering no suggestions on how to make the best of the situation? To be honest, Sutherland’s position on this feels like “I don’t know what I want, but I don’t want this!” That’s not terribly productive, now is it? Bring some meat to the table instead of just banging your clenched fists on it and I’ll be willing to take you more seriously on this. I’m all ears for a better “least bad” way forward.

            I stand by that you should feel at least some sense of shame for stirring up anger over tax increases (which lead to unhinged comments about bankruptcy and defaulting) without presenting any kind of counter-proposal. You guys are supposed to be a policy think tank for crying out loud. Where’s the policy papers that Sutherland is famous for? It’s not there. You’re sloppily shooting from the hip on this issue based on how you feel about the project, not with concrete numbers, and it’s showing. That’s not living up to the Sutherland reputation at all.

            I don’t think I’ve once insulted your intelligence, but I have absolutely denigrated your grasp of the facts and history as woefully incomplete, and I think I’ve made it pretty obvious as to why. It doesn’t matter how smart you are, if you don’t have all of the knowledge, you can’t reasonably form a good assessment.

            Your suggestion is that if I wasn’t at the city council meeting personally, then I couldn’t possibly have any idea what was going on. That’s just plain silly. I watched at least a dozen people tweeting the happenings and talked to others who were there. That’s good enough for most reporters. Why isn’t it good enough for you?

            And yes, I can see that I was wrong about the UIA money. (See? I can admit fault. Try it on for size sometime.) I double-checked against the FY2011 statement to verify. I’m not happy that they’re doing that at all, but most of the UIA money is specifically to be paid back by subscribers and used to hook them up.

          • Derek H Monson says:

            Jesse,

            I can’t really speak to how a dozen other people interpreted our robo-call language…but that’s not really what we’re talking about. We’re talking about what the correct interpretation of that language is, based on our intended meaning. I have told you that meaning; believe what you will.

            We chose to talk about UTOPIA because the UTOPIA bond was what the overwhelming majority of the property tax increase was about, as decided by the city council. And yes, within that context, we crafted the language to try and get a good response, in terms of people showing up to the city council meeting.

            Concerning your second point, I never claimed that UTOPIA had “no significant accomplishments.” What I said was that if you want to call the project a success, “the UTOPIA project would have had to produce some significant set of accomplishments that justify its costs.” Then later, when you presented me with a list of accomplishments, I told you that, in my view, they didn’t meet that bar (“the failures outweigh the accomplishments”).

            The “screwy timetable” was UTOPIA’s, not mine. They told the legislative auditors that their original plan was to build out the fiber network in three years and have a positive cash flow in five. I’m measuring using the yardstick that they created for themselves, and your attack of it only confirms the fact that UTOPIA had no idea what they were doing in the first place…or that they did know what they were doing and simply needed a better sales pitch to convince policymakers to back them with taxpayer money, which would be even worse. You’re indicting the very organization you’re trying to defend.

            We didn’t drag UTOPIA into anything, the city council did. They decided that 85 percent of their proposed tax increase should go to make the UTOPIA bond payment, and they openly acknowledged the connection between the tax increase and UTOPIA. If you would have been at the city council meeting, you would know this, as it was acknowledged by most and not disputed by anyone.

            There were multiple, flexible, and sufficient spending-cut proposals that had already been proposed as alternatives to the tax increase, so there was no need for us to provide more. City council members and many Orem residents were aware of them, and discussed them in their comments. Again, if you had been at the city council meeting you would have known this.

            My suggestion is not that you “couldn’t possibly have any idea what was going on” because you weren’t at the city council meeting. My suggestion is that your opinions of what we did and what happened at the city council are as ill-informed as you believe our opinion on UTOPIA to be. To follow your analogy, if our opinion on UTOPIA is based on “cramming for the test,” your opinion on what we put out and what occurred at the city council meeting is based on the “cliff notes” from Twitter and the media on what actually happened.

            Your knowledge of what happened at the city council meeting is limited to what could be crammed into a short news article and 140-character tidbits…in other words, not very much in the context of an 8-hour meeting. Your “good enough for reporters” question says a lot. Believe it or not, a lot more happens in reality than what you read in the newspapers and on Twitter.

            There were nonsensical suggestions made in anger at the meeting (the bankruptcy and default ideas you mention), and those made a big splash in the newspapers and on Twitter exactly because they were so sensational. But for every one of those not-so-reasonable ideas, there were three or four valid suggestions made that were completely valid and feasible, such as delaying planned city employee pay raises, re-structuring city employee benefits, and canceling subsidies to private businesses, among others. There was a fair amount of substantive discussion concerning some of these ideas, and they eventually decided to replace some of the tax increase with several of them. Some of this information was in reporting on the meeting for the discerning eye to find, but what is that compared to much more “interesting” calls for the city to declare bankruptcy or default on it’s bond payments?

            I have no problem saying that I don’t know everything about UTOPIA…I suggested as much in my last comment. But for all of your knowledge of the project, I have yet to hear about anything UTOPIA has accomplished that is so compelling that it makes the project worth all the failures. Further, nothing you’ve recounted in the history of UTOPIA has given me confidence that the organization has what it takes to make things any better several years down the road than they are today. Quite the contrary, given your opinion of their original timetable and the obstacles that they have been unable to overcome. If they could even come close to hitting the necessary take rate or to generating a positive cash flow from subscriber revenues, perhaps there would be something to talk about. But all they really have now is a plan…exactly what they had ten years ago.

            You may believe that opinion uninformed and something to be ashamed of…I think it’s simple reasonable disagreement. In any case, it’s certainly not something that supports unsubstantiated attacks on the motivations or integrity of those that disagree with you, which is all your original blog post really boils down to.

            Derek H Monson

          • Jesse says:

            The city council did pin the blame on UTOPIA, but it was an easy scapegoat. Read my previous article on how the real issue here is declining sales tax revenues and the resultant shift to more stable property taxes. (FYI, someone at UTA privately agreed with my assessment.) You simply chose to pile on with the scapegoating using a political hot potato and recent negative news stories. That’s a cheap shot and you’re better than that.

            Based on all of the publicly available materials from Sutherland, can you honestly say that someone could draw differing conclusions than I have? Your video asks the question of if municipal telecom should be done at all, but it says nothing about taxes. Paul’s Mero Moment on the same topic does the same thing. You spent zero time talking about taxes, but now you want to backtrack and say that this is what it’s all about? And you couldn’t even summarize the competing proposals? Give me a break, Derek. You put on one public face and are trying to claim something else entirely. Maybe you need to step outside to see the big picture.

            By your own admission, 20-25% of the comments at the meeting were over-the-top suggestions that would have been terrible ideas. Does that seem normal to you? Do you think that maybe talking about the alternative tax proposals or making this a taxes issue instead of a rehash of the decade-old debate about municipal telecom would have lead to better dialog? Your entire organization is support to be built around responsible citizenship, but on this issue, you chose to go for a “easy win” hot button issue. That’s beneath Sutherland.

            Like the audit, you choose to make no distinction between the Roger Black days and the Todd Marriott days. You’re going to be hard-pressed to find anyone (even a staunch supporter like me) who will defend Roger Black’s management of the network. The build plan made no sense, operations were never as lean as they needed to be, and there were a number of bad partners (including AT&T who pulled out after being purchased by SBC and Mstar who didn’t have any idea how to build a business). For almost a year, a skeleton staff worked without pay to keep the lights on. That UTOPIA has managed to survive with minimal additional funding is a minor miracle, and I think Todd has more than a few accomplishments under his belt including the build-out of Brigham City and Centerville, the securing of $16M in ARRA funds, and creating a plan to effectively shift from taxpayer-supported to subscriber-supported. The direction and speed of travel matters as much as the distance traveled.

            You know what would give you a lot more credibility on the issue? An actual write-up about the competing proposals for how to service the debt. Yeah, it’s too late now to have any effect (you already blew it), but it would at least give the impression that you care about the practicalities of a tax issue rather than having a philosophical debate in an attempt to undo an old decision. And, to be honest, I have no idea which one you’re trying to do. Maybe both.

    • I could care less about your video… a lot of the things your group supposedly represents are travesities I agreed to fight against as a United States Marine. As far as your Robo-call… I did receive it AND was discusted. This article spells out the truth behind the motives of both the Utah Taxc Payers Association AND the Sutherland Institue. Your call was very directful at Utopia being the largest portion of ANY increases present… sure; this may have merit when you only look at a small potion of the entire story but in all honesty; a falsity in its FULL context.

    • Mr. Monson…

      my favorite BULLSH@T attack your two groups kept coming with was the Tea Parties ‘big governement’ lie. Read my sole post to se what Im talkn about, but not to intentioanlly repeat myself…

      How can Utopia be ‘big government’ when its a CO-OP? Apparently in all your wisdom, this may be unfamilair to you. Let me spell it out… THE COMMUNITY OWNS AND OPERATES UTOPIA! The only way Utopia can be ‘big government’ is the fact that our government IS giverneed BY THE PEOPLE of its communities.

      While a lot of your fellow neighbors will take your woird without ANY actual research; me and the veterans I am aware of arent so easily misled.

  2. Ronald D. Hunt says:

    I smell an attempt to put the ground work in for legislative action against Utopia, And a bit of election year politics. All these groups piling on at the same time and coordinating with each other on the back of a politically charged legislative audit seems too convient.

    What legislative districts cover orem, is this just a dog and pony show for them?

    • Jesse says:

      The audit was spearheaded by the UTA to renew their attacks. That it left out so much critical detail despite 18 months of work leaves me thinking that it was intended to be an attack piece, not a neutral assessment.

  3. Ronald D. Hunt says:

    Derek H Monson,

    Funny that you should use the post office as an example. The post office being constrained by congress from setting the price of a stamp as the price of a stamp is a fixed amount set by congress rather then the post office. And the post office has been required to pre-fund their retirement for 75 years, that is they are being required to put the money into the pension fund for people that haven’t even been born yet. And they have been given 10 years in which do to this, The grand majority of their $5.5 billion dollar shortfall is from this absurd requirement that no other corporation or government in the world is subject to.

    And Utopia didn’t hit its 3 and 5 year goals due to a number of lawsuits from the Qwest corporation, Lawsuits that where complete nonsense, One of these lawsuits for example was over whether or not Utopia could attach fiber lines to telephone poles owned by a third party QuestStar gas! This including an injection that prevented Utopia from continuing construction at the time, There bond payments didn’t go away.

    Another big thing was the nonsense pulled by the Bush USRDA, Utopia applied for low interest loans through this agency for the rural cities that qualified. Utopia did over $60 million dollars worth of work under this arrangement, But these where setup to be paid after the work had been completed, after Utopia did the work the USRDA refused to pay, Utopia was forced to rebond to repay contractors and shortly after the markets crashed.

    And this doesn’t even cover the legislative record of corruption pressed again Utopia, Where we have people such as Sen. Howard Stephenson who is a paid lobbiests for Centurylink/Qwest while being a sitting legislator.

    • Derek H Monson says:

      Ronald,

      Regulatory burdens from government and lawsuits are simply an excuse for failure. Successful organizations find ways to overcome hurdles outside their control and succeed anyway.

      Any successful private organization, for-profit or nonprofit, has had to deal with regulatory burdens and other hurdles outside their control (Apple, Microsoft, and various non-profit religious organizations come to mind). The fact that they’ve met their goals in spite of what they faced is a testament to their success. UTOPIA’s inability to deal with what they’ve faced is just another testament to its failure.

      And concerning the Bush USDA, while UTOPIA was obviously not responsible for what the USDA chose to do down the road, the organization did choose to go down that path in the first place. As the legislative audit points out, this was not part of the original plan, but was a deviation from that plan in an attempt to get more money for UTOPIA. That turned out to be a bad strategic decision, and it was a choice that UTOPIA made, not anyone else.

      Derek H Monson

      • Jesse says:

        Again, you’re wrong and showing your ignorance of history on the project. UTOPIA’s plan was always to have two tranches of money: one backed by sales tax pledges and one backed by system revenues. The RUS loan program fit the criteria of the second tranche, though the program was launched after UTOPIA got started. Good gravy, man, get your facts straight!

        • Derek H Monson says:

          Jesse,

          The legislative audit described RUS-loan motivated change as “a major change in the direction” of its plans (see page 7 of the audit). Again, this is a statement that UTOPIA in its response letter chose not to bring up in order to dispute it, therefore at least implying that it is accurate.

          What you portray as me failing to “get your facts straight” is, in fact, something that even UTOPIA officials chose not to dispute.

          Derek H Monson

          • Jesse says:

            The audit got a lot of things wrong (or missed them entirely) and UTOPIA is choosing (likely out of necessity) to be more diplomatic than I have to be. I can call people idiots in public; them, not so much.

      • Ronald D. Hunt says:

        “Regulatory burdens from government and lawsuits are simply an excuse for failure. “

        You just said that?, After all the blog entries on your site decrying “job killing” regulation, and business killing “liberal policies”, your going to tell me that they should just buck it up!

        “Successful organizations find ways to overcome hurdles outside their control and succeed anyway. “

        I will quote you next time you complain about regulation!

        “Any successful private organization, for-profit or nonprofit, has had to deal with regulatory burdens and other hurdles outside their control”

        Ohh yes, because the $3 billion dollars we paid to Qwest/Century link in the form of FUSF(universal service fund) dollars is such a “burden”, Or the discounted rate they get for easement access, Or the fact that through bought and paid for regulation they can keep private competitors out of the market.

        Or the fact that Qwest will use lawsuits to prevent market competition against private entities and not just public ones. The fact that these lawsuites lead to injunctions seems to mean nothing to you, even knowing the lawsuit was later thrown out for being complete nonsense.

        ” As the legislative audit points out, this was not part of the original plan, but was a deviation from that plan in an attempt to get more money for UTOPIA. “

        It still doesn’t make the situation right(or legal), had the law been followed by the Bush USRDA that program would have been a big boon for Utopia.

        • Jesse says:

          Shorter version: crap happens, and it’s all UTOPIA’s fault! (Hint: that kind of attitude doesn’t make anyone sound reasonable.)

        • Derek H Monson says:

          Ronald,

          If you read those blog posts carefully, you’ll find the are talking about government regulation of private businesses, not government regulation of a government-owned enterprise. You can’t really compare one with the other.

          That said, I wasn’t saying the regulations of UTOPIA are a good thing or a bad thing. I’m saying that truly successful organizations don’t point to outside factors to excuse failure…they succeed in spite of outside factors. That’s a high bar, and a large number of organizations fail to meet it. That UTOPIA hasn’t only means that they are another organization that has so far been a failure.

          Derek H Monson

          • Jesse says:

            You keep using the word “excuse”. What leads you to conclude it isn’t meant to explain? (As long as you’ll accuse me of projecting, turnabout is fair play.)

    • You forgot the other (BIGGEST) reason Utopia has been having difficulties meeting its goals recently…

      We have a community project in a state that SUPPOSEDLY values community involvement more than ANY OTHER STATE IV BEEN TO. Yet, Mr. Monson and his associate groups have been running around giving half truths and misleading facts about Utopia ALL OVER WHILE IN CURCH.

      To be honest, Mr. Monson has caused great concern in my faith as Iv never seen so many people be BLATANTLY misled and fight against something that is ENTIRLY under the control of the communities it serves. Maybe if Mr. Monson and the others in your groups understood just how important COMMUNITY PROJECTS (if they are like some of us they probably earned a merit badge in community involvement) are to the success of a city/town/state; Mr. Monson would have been spending time figuring out what changes neded to be made versus purposfully and intentioanly causing financial loss through borderline slander.

      Im curious if Mr. Monson has a meeting with his elders/bishop about how his desire to see communities (and community involved projects) like Orem and Utopia fail… not just to ourselves but this will reflect failure of Orem in the eyes of business’ looking at us BECUASE we have a REAL fiber network. This is a network that no one person will be able to hold us hostage over unless it is actually privatly owned.

      WE OWN IT… NOT THE GOVERNMENT (as you suggest.)

  4. Just so I’m not accused of an ethical breach, let me mention this first: I am UTOPIA’s communications manager.

    I am also knew to the “company”, as I started in June. It has been an interesting experience to see the opposition to UTOPIA. Being a conservative guy, I can understand the foundation for their arguments, I suppose, but their arguments seem to conveniently ignore the financial realities.

    No one has been able to address this, that I have seen: the only solution that really benefits the taxpayer is do what it takes to grow the network as quickly as possible and drive up the subscriber base so that the subscriber revenue can cover the costs, not city revenues (i.e., taxes).

    • charlesH says:

      “the only solution that really benefits the taxpayer is do what it takes to grow the network as quickly as possible and drive up the subscriber base so that the subscriber revenue can cover the costs, not city revenues (i.e., taxes).”

      I completely agree Jason.

    • Derek H Monson says:

      Jason,

      I’ll only point out that what you propose as the only solution beneficial for the taxpayer assumes that it is feasible or likely that UTOPIA can drive up the subscriber base enough to cover costs. Anything’s possible, but UTOPIA’s track-record on getting subscribers is not promising in this regard.

      And if UTOPIA doesn’t sufficiently drive up the subscribers base that it needs, it will mean there are more financial liabilities down the road for the member cities than exist today. In that scenario, which to me seems more plausible than the one where the subscriber base goes up – though obviously there’s room for disagreement here – the option most beneficial for taxpayers is to simply cut your losses and get out of UTOPIA before the financial situation worsens, while continuing to pay off the bonds the cities are obligated to pay.

      It’s kind of like the options you have after making a bad investment decision: you’ve lost money that you’re not likely to recoup, so you accept it as a sunk cost and minimize your losses by getting out. Yes, you’ve lost money, but that’s better than losing even more money down the road.

      Again, some may disagree and think that the current UTOPIA plan will turn things around, but getting out and paying off the bond is the other option, and it very well may turn out to be the better choice.

      Derek H Monson

      • charlesH says:

        Derek,

        How in the world is it better to get out and just pay off the bond? Current subscribers contribute some to pay off the bond. If Orem “got out” would not the city’s taxpayers have to pick up the total bond payments?

        The current path (growing the subscriber base) seems to be decreasing the portion of the bond payments taxpayers have to pay. If at some point something is proposed that increases the taxpayer portion of the bond payments then that is the time to decide.

        Am I missing something?

        • Jesse says:

          You’ve missed nothing. The new subscribers coming in under the UIA lessen the load on taxpayers as a whole. The only reason to trash it as a UTOPIA opponent is because you want them to fail and fail big.

      • Jesse says:

        Derek, will you issue a correction and retraction if the five year plan lessens the sales tax pledge burden of member cities?

        • Derek H Monson says:

          If the five-year plan leads UTOPIA to be successful, then I’d be willing to say that they have turned a failing project into a successful one.

          Derek H Monson

          • Jesse says:

            That’s some good weasel wording right there. By choosing your arbitrarily defined version of success, you’ll never have to do it.

          • Ronald D. Hunt says:

            “If you read those blog posts carefully, you’ll find the are talking about government regulation of private businesses, not government regulation of a government-owned enterprise.”

            Ohhh that’s right, Utopia doesn’t receive Billions of dollars of federal money every year, Utopia doesn’t have a sitting legislator on the pay roll like Qwest does, And Utopia while having to follow ALL of the same regulations as Qwest/Comcast has additional regulations imposed into it above and beyond what private industry has.

            Many of said regulations passed onto Utopia shortly after its creation with the very intent of causing problems.

            Utopia has weathered multiple bogus lawsuits designed to prevent competitors from entering the market, EXTREME regulation on bonding that no other form of municipal bond is subject to, outright FRAUD by the USRDA costing them multiple tens of millions of dollars, A market crash that made the interest rate they pay much worse on their bonds.

            Qwest and Comcast are both lowering their prices below cost in Utopia markets very much in violation of anti-trust laws, But its against a muni company so who gives a damn right?

            Every step of the way the political forces out against Utopia have used manipulative, decitfull language and misrepresent ion of facts to undermine the project.

            The lies told by the UTA about the Brigham SSA, or the fake companies filing coverage claims over Utopia area’s in their stimulus applications.

            You special case regulation Dependant on rather or not its something you like.

            You decry favoritism in the tax code, you have many entries dedicated to complaining about loopholes and deductions. And yet at the same time advocate for all of those things using the term “economic gardening”.

            Your hypocrisy knows no bounds.

          • “If the five-year plan leads UTOPIA to be successful, then I’d be willing to say that they have turned a failing project into a successful one.”

            …and will you and the Sutherland Institue AND Utah Tax Payers Assocaition stop creating such mis-represented facts (drop any and all Utopia opposition) during that time so that you arent hindering the success you so loudly say you want to see?

            Thats what Id like to see, just say’n…

          • Derek H Monson says:

            Jesse,

            “Weasel wording”…nice, I like the alliteration. How about we set a baseline of “success” as at least coming somewhere in the vicinity of meeting the goals that you create for your own organization? If UTOPIA ever gets there, then maybe we’ll have something to start talking about here.

            Derek H Monson

          • Jesse says:

            I think the appropriate baseline is the one set in the UIA plan: hook up enough subscribers to cover operating expenses. Anything more or less than that would be expecting too much or too little from them.

  5. charlesH says:

    Assumption: We need to boost OremCityUtopia subscription rates to eliminate the drain of City tax revenues ASAP.

    One Idea:

    1) Use street level cameras connected to OremCityUtopia to deter crime, enhance police/fire personnel safety and assist in criminal prosecutions.

    2) Invite OremCityUtopia subscribers to install street view camera (at their own expense from an approved list) witch are monitored/screened a) first by a computer, b) then existing 911 operators, c) then, if wanted, by police/fire cell phones d) before/as dispatching police/fire personnel.

    3) Service is free to OremCityUtopia subscribers. Orem residents using other networks are invited to participate for $30/m (the fiber fee).

    4) Limited to outdoor (street, front yard, parking lot) view cameras. Public areas that the police already have unlimited access to. No indoor cameras.

    5) Orem posts small signs “Police Monitored 24/7″ on street address signs in covered neighborhoods to deter crime.

    Thoughts anyone?

    Remember, even if YOU don’t want OremCityUtopia the more of your neighbors who subscribe the faster the drain on city tax revenues is eliminated.

    • Jesse says:

      There’s a piece of me that says that’s a bit Orwellian, but we definitely need more creative ideas for how the city can leverage the network to reduce their costs or deliver services more effectively. Fiber isn’t about a single killer app; it’s a bunch of small things that add up into something significant.

      • charlesH says:

        Yes, there is negative by some for greater “virtual” police presence.

        However, my proposal makes it a choice of each individual. To each his own.

        As for me and my wife, we would love to have street cameras that police can monitor.

        Please note that it is quite possible that your neighbor across the street already has a camera pointed at the street (and your front yard). Does that possibility bother you?

        • Jesse says:

          I suppose it would be akin to setting up a private security system and allowing the police to access it. It’s “creepy”, but I can’t think of a complaint beyond that.

  6. BIG GOVERNMENT!!!

    This was the second largest joke of the entire city council meeting. Im still trying to figure out how something OWNED AND OPERATED by the communities it serves is considered big government? Seems to me, its about the polar opposite of big government, but what I do I know; Im only looking at the facts of what and how Utopia exists. Yes; it was funded by our cities agreeing to back the bond, but that doesnt make it government controlled.

    Additionally, the fact that Utopia is a co-operative intitative (owned and operated by the communities it serves) leaves me COMPLETLY STUPIFIED why so many peoples of a faith based in community involvement and action would want one of its fundemantal infastructure projects to fail.

    Not only would this leave the residents (of Orem) owing a great deal more than today, but would send a message to the world that Orem; as a community, cannot work together fiscally or otherwise. That the community of Orem would rather fail versus pulling together to make this community project a great success. And upmost, that the residents of Orem cannot be trusted at their word.

    My family have been LONG STANDING residents of Utah county and my family has been a large reason we are who we are today. My great-great grandfather has now been attributed for building the first and second log cabins (homes) in the city of Orem. There was once a time when Orem was split down fourth south; one side the maternal element of my family the other side the paternal side. Im frankly discusted we are calling these city council meetings by a title the ‘Tea Party’ seems to reserve for its functions. I find the ‘Tea Party’ a group that misuses facts and statements to suit the private interests (not cummunity interests) it is ran by. As a native Orem-ite for over a century; Id like to personally make a move to BAN any political parties function titles from our gatherings. We are a group of ALL walks, not just one.

    Jesse, Ill say what you wouldnt above. Its become VERY obvious that a private group, or maybe just individual, has realised the potential of a fiber network and the profits it could potentially provide to that one private interest. Either the owner of Comcast or Century Link is upset that Utopia cities have insured (at least until Mr. Monson destroys more community projects) that no one private group will plunder themselves in our pocketbooks. Maybe its someone outside of both of those that realise it but either way, someone isnt happy they cant bankroll of our communities and force us into their own individual will/desires/costs.

    Bottom line spells itself out thru the actions, regardless of what they say. One group/individual is upset it cant profit of our community so its attacking the projects ran by this community.

    Personally, my faith in my chosen religon (Utah’s prodominant choice) has been shaken to the core. After seeing so many mormons get up and state half facts that they got from groups like Sutherland left me disusted, for the evening, that I was a church member who holds the Melchizedek Preisthood. This wasnt because of my own thoughts of the church but seeing so many of its members get up and state FB and Wiki and even outright lies as though they were part of the Words Of Wisdom. This was was truly disheartening. ‘Facts/lies’ like there is already a fiber network for residential use in Orem, ‘facts/lies’ like Utopia is owned by the government, ‘facts/lies’ like Utopia is an ISP, etc, etc. As one who holds the preisthood; I look at the success of the community as a top priority not the success of individual wealth. Mr. Monson, along with the Sutherland Institute should clear at least a good hour next sunday for counciling with the preisthood members and their mis-representation of facts… when my kids try to misrepresent facts we call it a lie.

    Mr. Monson; I implore you to discuss ALL FACETS/MOTIVATIONS of your groups intentions with your chruch leader and see if its really ‘in the best interest of the peoples’ for one of its greatest community projects to fail and go back on their (the communites promise). The dicitonary defines ‘obigation’ as a promise or commitment. Whether Mr. Monson, or myself, missed the initial Utopia meetings; we have obligated our good city to its success, not its failure.

    As I still struggle with this new shaking of my faith; I look even farther that these peoples of my faith would want a community project OF ANY KIND to fail. We are the great city we are because of our dedication to the community and its projects, but someone said ‘big government’ and most of my neighbors were off to the races without ANY fact checking of all the context. How can I trust my faith under circumstances like that?

    THIS IS NOT THE COMMUNITY INVOLVED PEOPLES I GREW UP AROUND OR WAS TOLD I SHOULD STRIVE TO BE AS PERSCRIBED BY THE LEADERS OF MY FAITH!!!

    Additionally, I wanted to thank CharlesH for his submission. While he maintains a very nuetral look, he recognises the effect breaking our promise would have.

    To Mr. Hunt, a very special OORAH and Semper Fi as you used Mr. Monsons owns verbatage to combat him and disprove everything he says he stands for. Thats REAL!!!

    ***As far as the future of fiber, its now being looked at to deliver the power for our homes so this seems Orem initially made the right decision to me. Fiber IS NOT simply for delivery of communications any longer. The uses for fiber continue to grow as we now study the manipulation of light and its energy.***

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>