Tag Archives: Macquarie

Brigham City on Macquarie: Yes, please

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On Thursday night, the city council in Brigham City voted to move forward on a predevelopment agreement with Macquarie. This is a positive step towards bringing $300M in investment to UTOPIA, completing the buildout in all member cities, and contributing money towards the UTOPIA bond payments and Lending Tree. Unfortunately, the meeting wasn’t without theatrics and hysterics with plenty of incoherent rants and untruths during the public comment period. We even got a special Hitler reference from one of them.

You can watch the work session and city council meeting online (skip to 33:00 to begin public comment). The work session includes a very informative history of how private industry failed to build the infrastructure the city needed to keep businesses. Some quick facts from the work session and council meeting:

  • In Brigham City, a total of 1600 people signed up for the SAA and about 1300 are current subscribers to the service, about 26% of the city.
  • Brigham City is currently not contributing any payments towards UTOPIA’s operational shortfall of about $2.1M per year.
  • UTOPIA’s revenues raised much faster when they started primarily targeting business customers.
  • January’s income is much higher than expected.
  • Anything beyond the current plan to slowly grow the network to profitability would be a much more expensive option. But we already knew that, didn’t we?
  • Reissuing the bonds would be very expensive because of the way the current bonds are issued.
  • The network will remain the property of the member cities. Macquarie is primarily interested in a return on their investment, not ownership. To break even, they’d need to bring in $10M per year over the life of the contract.
  • Per Ken Sutton, owner of UTOPIA ISP Brigham,net, if the network doesn’t make a profit, Macquarie doesn’t get paid. Period.
  • The woman who canceled the RUS loan to UTOPIA is now an executive at Frontier, the incumbent operator in Tremonton. Isn’t that special?
  • Per their IT director, Box Elder School District depends on UTOPIA for 55% of students to get Internet access. They have no other fiber options available to them.

As expected, Ruth Jensen was combative for much of the work session, fitting her previous history of more-or-less unhinged opposition to UTOPIA. She even went so far as to propose suing UTOPIA, calling it “enslav[ing] the people”. The city attorney promptly smacked her down, saying that it would be the city effectively suing itself. (Skip to ~38:00 in the work session video to see it for yourself.)

So far, West Valley City, Layton, and Tremonton have also signed on. Centerville and Murray are considering it this week. Payson, as usual, is hoping that the whole thing will just go away and is ignoring anything UTOPIA-related. Word around the campfire is that all of the other cities want to move forward on a full study.

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

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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.