Hans V. Anderson Jr.’s Curious Definition of Failing

I suppose it could be possible for UTOPIA opponents and critics to make their case without lies or misrepresentation, but much like discovering how many licks it takes to get to the center of a Tootsie Pop, the world may never know. The latest example is an op-ed published in the Daily Herald from Orem City Council Member Hans V. Anderson Jr. In addition to many of the usual talking points, he makes multiple assertions that contradict what we already know about the deal with Macquarie.

For starters, he’s stating that Macquaries investment would be a loan. No published source has stated this at all. In fact, the published information is that the money would be a required network investment similar to what Google did in Provo. If it’s actually a loan, how is it that Anderson is the only one reporting such, especially when numerous city council members and mayors were at the same meetings?

Anderson then asserts that a proposed utility fee is actually intended to repay Macquarie for their investment. His own source, however, show that it is to retire the existing bond service. Instead of covering bond service from the general fund, it would be a clear line item spread across all Oremites, similar to how Provo assigned the debt service from iProvo to everyone in the city, subscriber or not. It seems very curious that he would contradict himself to make the utility fee into something it is not.

So what, exactly, is failing? UTOPIA has met or exceeded every financial goal under it’s current five-year plan. It’s now bringing in a partner to finish the network, relieve the cities of shouldering any operating expense shortfall, and likely provide some revenues to reduce or retire the proposed utility fee. I don’t see anything for someone who wants to lessen Orem’s financial load to be upset about at all. Why is Hans furious to the point of lying?

This is what happens when UTOPIA opponents want failure at any cost. Any success, no matter the size, must be turned into failure in order to prove their larger ideological point. Instead of retreating to the absolutely defensible and logical “I don’t like this approach” position, they have to cling to the “it just doesn’t work” one, evidence be damned. I hope the citizens of Orem will ask themselves which kind of elected official they want running their city.

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.)

UTOPIA Proving a Popular Scapegoat for City Revenue Issues

A lot of cities have been talking property tax hikes lately, and the most certain thing about all of the proposals is that elected officials are going to look for someone or something to blame. In UTOPIA member cities, blaming the fiber network has become the easy go-to solution, especially since so many mayors and city council members weren’t involved in the original decision. The problem, however, is that this blame is completely paving over a deeper problem of city tax structure that’s boring, doesn’t fit the anti-UTOPIA narrative, and is a much larger problem for city budgets. Let’s take the examples of West Valley City, Orem, and Taylorsville, the latter of which is not a UTOPIA member city. In all three cases, they’ve called for large (as a percentage) property tax increases to make up for lagging sales tax revenues. So if UTOPIA is the cause of property tax increases, why would a non-member city need to more-or-less do the same thing?

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Utah County Association of Realtors Planning Anti-UTOPIA Meeting in Orem

See below for update.  It appears that astroturfing isn’t just for the Utah Taxpayers Association anymore. The Utah County Association of Realtors, a very powerful lobbying group, has been organizing a “public forum” entitled “What does UTOPIA mean for your home?” and has been using robocalls to promote attendance at it. The call says that UTOPIA will be in attendance, but they never extended an invitation to them. They did, however, extend an invitation to the Utah Taxpayers Association and two anti-UTOPIA candidates for city council. Unsurprisingly, the low-scruples ousted Utah County GOP Chairman Taylor Oldroyd is the prime organizer.

I’d advise UTOPIA supporters in or around Orem to show up to the meeting at 1031 W. Center St. Orem on Tuesday October 25 at 2PM. There will no doubt be disinformation by the truckload that will have to be countered.

UPDATE: Per Chris Nichols, the president of the Utah County Association of Realtors, the Utah Taxpayers Association has been un-invited from the event. He stated that his goal is strictly to discuss the implications of transfer of title when a homebuyer has chosen to finance the installation including how it appears when doing a search on the property. He also made it clear that any attempts to derail the discussion beyond that would be thoroughly unwelcome.

Chris also stated that UTOPIA was invited, but the person whom he named as “someone who has done work for UTOPIA” was not a name I’m familiar with. Granted, I don’t know everyone on their payroll, but if the PR department doesn’t know anything about it, it kind of maybe didn’t exactly go to the right person. Sounds like they both had their wires crossed on that one.

For the record, he was pretty mad at me and spent over 10 minutes chewing me out on the phone. I tried to explain why I formed the opinion I did, but he had no interest in hearing it. The website for the event links straight to the light-on-facts UTA website and lists a smattering of candidates for city council in Orem, both of whom are anti-UTOPIA (though one of them is being a realist about the situation). These combined with questions that appear to imply that the UTOPIA contract causes significant real estate sale issues created a very bad public face. The website itself also has no contact information as to who the responsible party would be.

My take? He wasn’t holding a tight enough leash on his employee Oldroyd who then worked with the UTA to try and sneakily co-opt the event for his own political purposes. My publicizing of it was very embarassing (and understandably so) and he needed to take it out on someone right then and there. Hey Chris? No hard feelings this time, but maybe try to be a bit more understanding of where someone else is coming from next time around. A lot of bloggers wouldn’t be as gracious as I am to heavily update an article to show both sides.

UPDATE 2: For those who are interested, I have a copy of the robocall used to publicize the event. Link is below.

UCAR UTOPIA Robocall

Utah Taxpayers Association Spews More Lies

Several UTOPIA member cities are gearing up to start taking votes on the new Utah Infrastructure Agency designed to help fund new construction of the network. The Utah Taxpayers Association is trying to get people to show up at these meetings to protest the UIA and try and kill it. In their effort to do so, they continue to distort, twist, and outright lie in their efforts to rile people up.

First off, the UIA bonds are not an unconditional loan. They are funds that will be secured by payments from subscribers. If there aren’t enough subscribers to secure repayment, the money doesn’t get touched. You would think that such an arrangement would be acceptable to an organization that purports to represent taxpayers as it clearly shifts the burden from the taxpayers as a whole to the subscribers. Attempting to characterize the UIA as a big grab-bag is a big lie.

Secondly, the UTA says that UTOPIA is running a $20M deficit in “operating expenses”. The problem, however, is that their version of “operating expenses” is entirely unclear. I’m betting that they chose to include equipment depreciation and possibly even the bond payments in that figure in order to paint a much more dire picture than actually exists. For all of the accusations by the UTA that UTOPIA doesn’t disclose enough information, it’s hypocritical and extremely irresponsible of them to distort the numbers for the purposes of supporting their arguments.

Remember the last time the UTA tried to organize an anti-UTOPIA protest? UTOPIA and its supporters showed up and ended up turning half of the attendees into subscribers. Let’s show them it can be done again. Centerville meets tonight (October 19) at 7PM, Orem is October 26 at 6PM, and Payson is October 27 at 6PM. All meetings are at the respective city hall. Let’s show the UTA that lying won’t get them very far.

Orem City Manager Jim Reams Passes Away

Those of you who have been following UTOPIA for some time will recognize the name Jim Reams. As Orem’s City Manager and the city’s UTOPIA board member, he was instrumental in pushing the 2008 bonds forward and was gracious enough to arrange meeting space for myself and other UTOPIA supporters in Orem. Every interaction I had with him was unfailingly pleasant and he was an all-around good guy. I was saddened to learn this morning that he passed away last night of an apparent heart attack at just 53. Whoever takes his place has some mighty big shoes to fill.

You can read the articles at the Daily Herald, Deseret News, and Salt Lake Tribune.

What does the broadband stimulus mean for UTOPIA?

Now that UTOPIA has $16.2M in federal funding, the question is what it’s going to do. The money itself is specifically to hook up “anchor institutions” such as schools, libraries, healthcare facilities, and government buildings. This money will be used to run fiber to over 400 buildings in Perry, Payson, Midvale, Murray, Centerville, Layton, Orem, and West Valley City. With those connections in the ground, it will be much less expensive to build out to nearby neighborhoods. That is, provided that your city joined the UIA and is willing to finance the cost of installations. A few cities are either in opposition to or on the fence about joining the UIA, so the fiber would stop at those anchor institutions. Time is limited to get them on the boat, so make sure you’re hounding them about joining.

And if you want to, go take a look at the original press release.

Rally Fail: UTOPIA Hijacks Utah Taxpayers Association Event

The Utah “Taxpayers” Association thought it would get an upper hand with a BBQ in Orem just before the city council voted on a new construction bond. Unfortunately for them, the plan backfired when UTOPIA made a surprise appearance at the event with their “mobile command center” and started actually talking directly with the meeting attendees, many of whom had no opinion of UTOPIA yet and came to get more information. According to my sources, about half of the 250 or so attendees ended up registering their interest in UTOPIA services, a major coup for the network that upstaged their most vocal opponent.

Apparently what convinced a lot of the undecideds was the UTA’s refusal to disclose who pays their bills. That lack of transparency translated directly into looking like they have something to hide (hint: it’s Qwest and Comcast dollars) and left many looking at their fantastic claims skeptically. I’d like to say that there were some talking points to address, but an eyewitness account called it so much kool-aid drinking, a series of incomprehensible rants filled with insinuation, innuendo, insults, and no concrete addressable facts. In contrast, UTOPIA discussed their new business plan with individual residents and offered demonstrations of how well the service can work. Truth has power and it wasn’t on the UTA’s side.

In attendance were Rep. Mike Morley, UTA VP Royce Van Tassell, UTA President Sen. Howard Stephenson, Rep. Steve Sandstrom, and Sen. Margaret Dayton (who did not speak). UTOPIA openly challenged both Stephenson and Van Tassell to provide outside oversight of their plan, an offer which they declined to accept. Considering that the UTA regularly chides UTOPIA for mismanagement and secrecy, I would think they’d jump at the chance to look at things from the inside. If nothing else, they could fabricate some juicy new attacks from half-truths. This says a lot about the true motivations of the Utah “Taxpayers” Association. If they really wanted to keep an eye on UTOPIA for the benefit of all taxpayers, why would they turn this down?

Please, UTA, consider holding more of these events. As many as you want. You come out looking like fools and UTOPIA gains even more customers and mindshare. I’ll even volunteer for the dunk tank.

Also, see coverage from the Deseret News and Daily Herald. Bonus: I’ve got about a paragraph in the Herald article.

As a side note, I saw it reported that the connections on the new plan will be $50/mo plus service, but I don’t know if that’s accruate and haven’t gotten a reply to an e-mail I sent Monday seeking clarification. It’s also unclear how much a service provider tacks on top of that if that is the case, though it had better be well south of $20/mo for Internet. You’ll know more when I do.

Utah Infrastructure Agency Moving Forward

Remember UTOPIA’s new plan to shift the cost of the network from the cities onto subscribers? It’s been moving forward in the form of the Utah Infrastructure Agency, a way for cities to bond for construction without having to put taxpayers as a whole on the hook. So far, West Valley City, Lindon, Midvale, Layton, and Orem are on board with Perry and Tremonton deciding to sit it out. Other cities are still considering signing up for it and need to hear from you.

So what exactly does this do? In short, it’s the next evolution beyond the SAA used in Brigham City. The SAA model was to  find demand, form an SAA, and then get the funds to start construction. The UIA will, instead, get the money first, find the areas of demand, and then start construction once it becomes feasible. Just like the SAA, the subscribers that get hooked up under the arrangement will be the ones footing the bill. This speeds up the process of connecting customers while still continuing to shift the burden of supporting the network away from cities and onto those who get service.

To be quite honest, I can’t see why a city wouldn’t be all over this. There’s no cost to the cities to participate and increased subscribers will only decrease or eliminate the called pledges. Given the benefits to the taxpayer, that they are taken off the hook, you’d think the Utah “Taxpayers” Association would be all for it. (Fat chance, I know.) The good news is that any city that doesn’t elect to participate now can always reconsider in the future. If your city has already declined to join (or does so in the future), you can still pester them until they reconsider.

Note: While Orem was part of the founding group of the UIA, they haven’t taken an official vote on the matter yet. There will be a public hearing on Tuesday after which the Orem City Council will decide if they will join. They chose the new bond in a 6-0 vote last time around, but the UTA is holding their rally just before the meeting to try and pack the house with opponents and scare council members into reversing course. It’s very important that UTOPIA supporters turn out in force both at the rally and the meeting to thwart these efforts. I hear there’s going to be a fun surprise for the UTA during their BBQ, so show up and be prepared for a laugh at their expense.

Broadband Stimulus Applicants Revealed

As of a couple of days ago, applicants for broadband stimulus funds are now listed on the NTIA’s website. Utah has a number of applicants including the University of Utah, The Utah Transit Authority, and, not surprisingly, UTOPIA.

Several rural ILECs have also gotten into the game including Emery Telecom and Manti Tele Communications. Emery is apparently looking to deploy FTTP to beef up their triple-play offerings and replace their existing HFC CATV network. The finished product would be active Ethernet like iProvo and UTOPIA with up to 1Gbps at each address served. A separate request would use FTTN and wireless to reach more remote areas. Manti, meanwhile, is looking to use WiMax to reach more remote areas that currently do not have broadband service. Both of these projects are good news for Utahns.

Ogden City has also made an application to provide broadband access to government services and underserved residents. There is also an application for what appears to be a city-wide WiFi network. Given their reluctance to join UTOPIA, it’s rather surprising that they have done an about-face on city-provided services. My best guess is that they were holding out for someone else to pay for it.

So what about UTOPIA? They made three separate applications totaling around $54M. The only thing available is a general overview, but the requests appear to be targeted at Orem, Murray, Midvale, West Valley City, Layton, and Centerville. One of them hints at using a special assessment area (SAA) to triple the impact of at least $10.5M of the money applied for. Depending on how fast NTIA can review and approve applications, we may soon know if there will be more money for UTOPIA construction in the near term.

With applicants asking for 7 times what’s available in the first round, it will be interesting to see who makes the cut.