The UTA recently released a report that UTOPIA will be calling on tax pledges this year. They cite an April statement from Murray Mayor Dan Snarr as their sole evidence. “At this point in time, no tax dollars have been used on this project. That may change, and we may need to help pay for some of the operations until there are enough customers to cover expenses.” Rep. Craig Frank was all too willing to quickly attach himself to this report as solid truth. The problem for the UTA (and by extension Rep. Frank), however, is that this is their only evidence, this statement has been repeated over and over since the refinancing (elected officials need to hedge their bets), and there’s no way it would be possible for UTOPIA to call on pledge dollars anytime this year.
The facts are simple. UTOPIA does not have a bond payment due from operating revenue until June 2010. There is absolutely no possible way that they can legally call on the sales tax pledges this year as the UTA asserts. Elected officials have been saying the same thing as Mayor Snarr for the last year to cover their own butts in a worst case scenario. The UTA is just trying to spread fear, uncertainty, and doubt without citing any new or relevant facts. It’s scaremongering, pure and simple.
If UTOPIA is really doing so poorly, how is it that they managed to sign on Integra Telecom, a company that measures its revenues in the hundreds of millions? Don’t you think a company of that caliber (which is likely going to bring in hundreds of thousands or millions in new revenue) would do their due diligence? And how is it that there’s no criticism for city-owner power or the horrendously botched sale of iProvo? Anyone? Anyone? Bueller? Seems like you folks like to reserve your criticism for easy targets.
Perhaps it’s more accurate to say the UTA just jumped the gun? I believe some of what they are saying, that the cities WILL have to help pay the bond when it come due…will come to pass.
Only it will likely happen next year and not this year?
…and YES!!! UTOPIA is an easy target.
They are 1/2 a BILLION dollars in debt and fail to release any information (subscriber number, financial data) that would indicate they can pay their operating cost let alone their bond payments. (I’ll post a link to the 2009 financial reports they must provide the State when they are available.)
I believe they need 2000 installs a month and are doing perhaps 200? That’s 1/10th what’s needed. The hole they are in is just too deep…I’m not even sure the economic stimulus money they are lobbying for can save them.
The UTA is right….the crash is coming, they just got the timing wrong.
I disagree that UTOPIA’s coming failure shows it’s foolish to compete with private businesses. Some cities are doing fine with their telecom systems some are not. But the UTA is not a individual taxpayer association but a club for businesses and seeks to protect them.
But you are right that they should have better checked their facts. A mistake I myself have made in the past. Checking facts would be easier if UTOPIA were more open with the facts….but that is no excuse for not checking them.
Of course the UTA gets the last laugh if UTOPIA has runs out of cash and needs to draw money from the cities this year to pay bills? In that case they would be wrong about what the money was for (operating vs. bond) but would that matter to a city that had to come up with money for UTOPIA? There are still 7 months left in 2009.
I think it would be foolish to presume anything about the possibility of UTOPIA calling the bond pledges until there’s more data to play with. Like when new figures are filed with the State Auditor’s Office in the not-too-distant future. Until then, there’s a bunch of baseless accusations and the UTA knows it. (Funny how they have refused to publish my comment or trackback on their own blog. Maybe they don’t like having their nose bloodied in public?)
The facts are easy to check, but I’m pretty sure the UTA, just like the “Reason” Foundation, chose to cherry-pick their points to prop up a weak argument. I’ll take Intentional Omission for $500, Alex.
And if the UTA does, in fact, get the last laugh, they will be doing so at the expense of everyday taxpayers. Their business interest patrons have been rooting for failure from day one and the UTA has as well, no matter how much PR fluff they choose to dress it in. They don’t care about Joe Taxpayer; they’re looking out for the interests that fund them.
Right on target about the UTA!
I would say we do have some ability to estimate the situation UTOPIA is in.
With a $1,600,000 monthly bond payment.
Assuming $50 revenue per sub per month. (Which I believe is high…most UTOPIA customers are single play? I’ll bet the avg. revenue per sub is closer to $40 or below!)
They would need 32,000 subs to make the monthly payment. (They likely have about 12,000?)
…add the fact that they FIRST have to pay operating costs and you don’t need to be a rocket scientist to believe the bond will be drawn upon.
Did you place a comment on their web site they refused to publish? I see there are no comments on the story on their web site. If so, their censoring comments they disagree with is shameful!!!
There’s no doubt that calling the bond is a distinct possibility, but I don’t think we’re in any kind of position right now to know if that is or is not the case. Integra might switch a bunch of their customers to UTOPIA transport which could significantly bump the ARPU. Prime Time will likely do a very aggressive push for subs later this year and UTOPIA is just about ready to roll out the turnkey video product. I’m reasonably sure that by year’s end, the picture will look a lot better than it ever has.
Yes, I did drop a comment on their website linking to this rebuttal. It’s been almost 24 hours and it is still awaiting approval. Seems pretty sloppy to me.
I’m not surprised Rep Frank attached himself to the report. When we spoke last year about Concast’s questionable practices and why we need competition and a architecture like Utopia, he alluded that perhaps I did something nefarious (not his words) to cause Concast to terminate our families Internet.
What a tard. I told him if that’s the case then why didn’t we have legal action taken? Why are we not in trouble with whatever we did and why state we used the Internet too much as a reason to turn off our Internet?
He’s thinking the worst when he’s on his pedestal instead just maybe people really are legit.
Not everybody on this damn planet is as crooked our our politicians (apologies to the 1% of politicians that ARE not crooked).
Just left a couple of comments on his site. I’m very disappointed with how shallow our State Capital has become.
I’m challenging these guys to discuss solutions to the problem. I’m all ears. I’d love to hear what alternatives they are proposing.
After all, That’s what they do right?
I thought most of them were all about being demagogues.
You mean THEIR the demagogues…
Must be nice sitting up there and I’m sure getting well paid by .. shall we say, special interest groups to keep the status quo?
No wonder America is struggling.
And we hired these guys?
Still waiting for the Gods on high to respond on their forum about alternatives. I guess it’s easy money to bash people trying. In fact it’s cheap. Doesn’t cost them anything.
Now to actually work and try to contribute, now that’s real effort.
I would be AMAZED if any of our politicians came up with a solution that would allow competition to happen. This is the only way to protect citizens and push the Internet forward.
What a disappointment. As usual.
You misunderstand his position, He doesn’t believe that a solution is needed. He is using his blog posting to incite criticism against himself from those he considers himself to be against in order to validate his position to himself. The best thing you can do with a person like him is to completely ignore him.
Will do. When he’s up for re-election I promise however to ignore him and campaign for his opponent.
He’s quite the strange bird IMO. And if there wasn’t a need for a solution then people wouldn’t be complaining about what’s available.
He is among the lucky few to have access to a semi descent connection. Rapidwave is his provider and their net runs 5meg down 2meg up with 10meg burst speeds, Its an FTTN network. I will also note that Rapidwave’s network in American Fork started as a muni network committing the sin of risking tax payer dollars.
I’ve been checking them out the last couple days. I’m impressed with what they’ve built and from what I’m seeing, they have engineered a wireless solution which is FAR better than any I’ve seen.
I’ve checked to see if they were in my area. Received an email that I’m too far to take advantage of their solution. Go figure.
This is exactly what I’ve been talking about. Very few people can take advantage of these kinds of technologies. What I can do with a better connection to the Internet compared to what Rep.Frank will do?
I’d be setting up a couple of game / voice / photo servers for my family and friends across the nation.
What will Rep. Frank do?
Read email and browse cnn.com
Something not right here.
UTA seems to be deleted comments from their page, I posted comment on their article linked above, it was up for awhile and then disappeared. Even Rep. Frank leaves all the comments up on his blog much to his credit. Even if the UTA is against Utopia deleting comments drops their credibility greatly.
I wasn’t aware that Government censorship was the UTA way but hey, I didn’t know our government was soo screwed up until I started paying attention after the concast fiasco in 2007.
Now I pay very close attention and am contacting these monkey’s often. Not to mention leaving both major parties and looking to join one of the other parties out there.
Looking at Constitution party. Looking pretty good so far…
Really we need government reform. Its impossible for a third party to be elected in the way our voting system works. I would love to see a push to get http://en.wikipedia.org/wiki/Proportional_representation voting reform into the system. Really most Americans have no representation in their own government, Unless you are an admit liberal democrat or a ultra conservative republican. All pipe dreams tho, both party’s all through out American history have fought any system remotely like this.
Agreed and understood.
That’s why after watching the farce of this two party government we’ve decided we’ve had enough!
We don’t expect a third party to win however we are looking to associate ourselves with one which not only talks values we hold dear but makes every effort to live by them as well.
Tall order I know.
I’ve been told I’m throwing my vote away or that we need to vote the the lesser of two evils.
I don’t see it that way. The more people who move away from this farce of a government the more power third parties will have. It will happen. And voting for the lesser of two evils is like voting for Cocaine or LSD. Which is better? Tough choice.
Anyway, I don’t see myself as a Democrat OR Republican now. Funny how that happened.
It’s not just rather or not you can vote for a third party its weather you are given the right to in the first place. The nightmare third party’s have to goto just to get on the ballot is amazing, Their are places where it is outright illegal. Don’t get me wrong I voted for nader last election. I have been throwing my vote away for years on those who are nether republican or democrat. I wish their was a better way to fight the corruption.
I know. The only way to fight the corruption is not to give them what they need. The RIAA for example is an organization I don’t support. I don’t buy music which they get money from. If I want one I go to amazon marketplace or something like second spin.
I’m also looking at financial contributions to third parties (once I figure which I want to join). I’m leaning more and more towards the constitution party but I still have some questions I’m asking them before I toss my hat in their ring.
I’ve never given financial contributions before. Simply didn’t feel they needed it. But a third party? Likely they will.
Not only has UTA refused to publish my comment, they have retreaded their grossly inaccurate story in their latest newsletter.
Are we just splitting hairs here?
Are they right that cities will have to contribute money but wrong as it won’t be from the pledge? Is that not WORSE….as they will be contributing money IN ADDITION to the money they are still on the hook for via the pledge? Any contribution they make for operating expenses will not go toward reducing the pledge.
If Mayor Snarr’s statement is correct it would suggest that UTOPIA subscriber revenues today are not even sufficient to cover operating expenses. That puts them a year into the “new” UTOPIA under Todd Marriott’s leadership with a new team and an infusion of new money from the refinance, and they are still not able to cover day to day operating expenses?
It would also suggest that they have to yet gain even subscriber “Number 1” needed to cover the bond payments. My estimate is that they would have to sell and install about 35,000 ADDITIONAL subscribers to be able to make the bond payments? They would have to sell and install 2000+ homes per month between now and the end of next year.
Three times the number of installs they have done in the past 5 years, in the next 18 months…without capital or new build areas (where almost all their installs come from).
All that said….IF the UTA made a mis-statement or error, they should correct it.
But should we be more worried about the sorry state UTOPIA is in if they have yet to install “Subscriber 1” to pay the bond than with UTA’s mis-statement???
Think about it….5+ years into the project and about $100 million dollars spent and they may have yet to install “Subscriber Number 1” that would contribute to the bond payment. Is that possible???
It’s not splitting hairs. UTA is being purposefully deceitful and lying through their teeth on basic facts as a means of spreading fear, uncertainty, and doubt. By saying that UTOPIA has already failed when there is still a lot of time on the clock, they are hampering its ability to find and subscribe those new customers. Spreading these intentional falsehoods, no doubt at the urging of some of their financial sponsors, should be criminal. I’m of the opinion that UTA is nothing more than a mouthpiece of deep-pocketed business interests with little interest in presenting the whole truth or, in this case, even parts of it.
As far as your postulations, they are nothing more than speculation until we see the numbers in about a month. That is, unless you have access to data that we do not?
I think everyone is reading into Mayor Snarr’s statement way too much. As I have already pointed out, elected officials in all member cities have been saying the exact same thing since the rebonding plan was put forth. (I should know; I was at many of those city council meetings.) It’s simple CYA. I doubt his verbiage implies that they aren’t meeting operating expenses. Again, if you have data to the contrary, please share.
We’re all concerned with UTOPIA’s ability to get the subscribers they need. Given the dead silence prior to the rebonding and their continued insistence on keeping the books closed until their annual review, it’s very easy to assume the worst. All that said, let’s try and get some hard data before passing judgment. So far as I know, the only people currently using someone else’s money to pay for a fiber network are located in Provo.
Word on the street….A posting on Facebook by someone associated with the UTA (Utah Taxpayers Assoc.) claims that Todd Marriott (UTOPIA Ex. Dir.) just reported that UTOPIA will call upon the city pledge’s this year and may have to do so for the next 7 years.
I don’t think they even can call the pledges, as those are to cover the bond payments and those don’t start yet. Until Utopia actually announces such a thing its all corrupt politicking.
I’m guessing this rumor is going to pan out as true.
I don’t think the UTA would make claims that would cause them to lose credibility with the public and the legislature.
The UTOPIA Board must adopt their budget before the end of June and I’m willing to bet that budget includes money from the cities. As I’ve said before, I think it’s worse if they ask for money and it’s not for the bond payment.
It won’t be that long before that info is public and we will see what happens.
You should meet Rep Craig Frank. You wouldn’t be soo kind as to call it corrupt politicking.
Facebook. It’s possible but I usually want real info myself. Reading facebook is great with keeping up with the family and friends. The UTA posting on facebook just tells me about as much as a bathroom stall would 🙂
I guess the Utah Politicians got exactly what they wanted. All those years of lawsuits and doing everything possible to slow these guys down and waste resources.
I hope they are happy.
Congrats. You guys win.
Oh and for the record… I’m not a Democrat OR Republican.
Because both parties are without morals, courage or honor.
Had to share 🙂
I agree about Facebook…not being a member and having NEVER used it…but being on Facebook does not automatically make it wrong either.
As Jesse mentioned in another post….it’s just thrown out here to see if we can get confirmation or denial from reliable sources.
Of course UTOPIA had (and continues to have) the full opportunity to just step up and say, “No, we will NOT be asking for money from the cities this year!”
If they made that statement I would believe them. Just as I don’t think the UTA would make false statements that would cause them to lose credibility, neither would UTOPIA.
So what do we have…the UTA people making a statement, placing their reputation on the line…and UTOPIA….saying nothing to correct them….hmmmm
I say the smart money is on the UTA at this point? But I accept that it’s just speculation and rumor until it actually happens (or does not happen).
The budget link Luminous posted appears to be last years budget, when the new budget is posted (scheduled to be adopted by the Board on June 29th?)we will know more…hopefully much more.
why should Utopia have to go through the trouble of denying every nutjob rumor out their? they have better things todo with their time then trolling facebooks, twitter, dslreports.com etc to make sure then no unfounded rumor propagates through the tubes of the interwebs. Clearly Utopia having anything todo with the UTA is a complete waste of their time so why respond to such nonsense.
I don’t believe Utopia can call the city’s pledges for any purpose other then paying the bonds. I am pretty sure that with the tax pledges being the backing for the bond’s that the bank that issued them would sue and win if Utopia tried todo anything that ridicules.
I’m meeting with UTOPIA on Thursday and will definitely be asking these same questions. If it ends up as true, I’ll be a bit miffed since I put my own reputation on the line and they didn’t say “hey, you were wrong”.
luminous: It’s actually quite important that UTOPIA start engaging the public. The lack of new information means we’re all making assumptions. If they addressed issues like this and made information available, there wouldn’t be speculation and rumor. UTOPIA has let the UTA control the conversation for far too long and it’s time they took the reigns.
its one thing for them to engage the public, you, me, etc. completely another for them to engage a troll hellbent on their utter destruction.
Arguing on the internet is like competing in the special Olympics even if you win, in the end your still disabled.
If Utopia hasn’t been upfront about their situation then I’ll be very upset as well.
I don’t like being lied to. Probably why I don’t like politicians.
And as far as UTA or anyone else passing rumors around, it’s not necessary for them to address every issue HOWEVER they need to throw the public a bone now and then.
Otherwise it makes the critics lives very easy.
I don’t think UTOPIA should feel the need to respond to everything on the internet (or in the newspapers, etc.), but when they have the ability and opportunity to show their arch rival (UTA) to be making FALSE statements, they should take that opportunity as it has a direct effect on the creditability of an organization that seeks their demise.
By pointing out the inaccurate or downright false statements of the UTA (if they are false and inaccurate) they would make everyone pay less attention to the UTA whenever they make a statement.
I think it’s splitting hairs to care if the cities are required to provide funding to UTOPIA to say it’s NOT the bond payment call. I would agree that the bond payment call is not likely the reason for the money, but it could be. (I believe that Provo’s bond requirements did not require payment until “x” date, however they were required to start setting aside money to make that payment well in advance of the payment. Having that money in an account for the payment. Which of course Provo did with no problem.)
If the funding requirement is NOT for the bond payment but for operating costs or construction, that is MUCH worse. That might suggest current UTOPIA management did a poor job of budgeting the last cash infusion from the bond refinance or of controlling operating costs.
It might also suggest that UTOPIA is not currently cash flow positive. If that were the case and I were on the Board, Todd Marriott would be looking for a new job and some UTOPIA employees would be taking a cut in pay as they tightened their belt to live on their revenue.
But all this is just speculation and rumor and we will likely not know anymore about their budget until it’s on-line at the State site in Aug.
Looks like the UTA was right.
The egg is not on Rep. Frank and the UTA’s face.
Today’s Deseret News reports UTOPIA cities will likely be called upon to PAY THE BOND this year!
At least it sounds like it’s due to the poor structuring of the bond and not operating costs not being covered by revenues which could be worse.
I am somewhat upset that UTOPIA’s strongest defender…Jesse…was left exposed by UTOPIA on this.
He is providing the only information and defense of UTOPIA and they should not have let this happen to him. Their “secrecy” is not justified when they are doing the “people’s business and spending the people’s money”.
I’ve just filed 2 GRAMA requests with UTOPIA. One for their budget and another for their By-Laws.
Can you imagine having to file a GRAMA request to get a public entity’s by-laws? But when I requested their by-laws from them, they told me I would have to file a GRAMA request.
I have also contacted the State Auditor to inquire what requirements UTOPIA falls under for Budget policy and public review. They told me they do not fall under the Uniform Fiscal Procedures Act for Utah Cities…which is strange since they are an Interlocal Cooperative made up of cities. But if they don’t fall under those requirements I want to know which one’s they fall under.
In addition I’ve contacted the AG’s office to ask if UTOPIA is within their rights to require a GRAMA request for a citizen to see their by-laws and budget. I believe as a political sub-division of the State those should be public documents.
What secret stuff is there in the by-laws that would justify requiring a GRAMA request to see them? Nothing I’m sure.
UTOPIA’s top management should be replaced with someone that understands that UTOPIA is a PUBLIC creature and someone that will support the public’s “right to know” and not put up roadblocks on simple requests to see their by-laws.
The cities should DEMAND more info from UTOPIA and make that info PUBLIC. City employees on the board should be replaced if they fail to do so. Elected officials that don’t support full public disclosure should be voted out of office.
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As I said, with all the lawsuits and political tactics played against Utopia, it seems the politicians got what they wanted.
Time to reboot our government