Councilman Steve Turley cast the lone vote Tuesday night against the resolution.

Turley said he opposed giving - rather than loaning - the money to iProvo. He sided with Mayor Lewis Billings, who preferred to front the debt-service payment in the form of a market-rate loan - its third in three years.

"Up to this point, iProvo has been self-sustaining with market-rate loans from the city," Chief Administrative Officer Wayne Parker said in an interview Tuesday, explaining that the council's plan will pay one year of the bond debt for the infrastructure.

"It would make up the gap between iProvo's operating revenues and operating and capital revenues for one year," Parker said. "The talk is that they'd have a chance to get on a stronger footing."

The $1.2 million comes from two sources - $856,859 in surplus sales-tax revenue along with existing capital-improvement funds that were budgeted but not spent, Parker said.

About nine months ago, the network launched Internet, television and telephone service, after two years of extensive construction to install fiber optic lines throughout the city.

The company serves an estimated 9,830 customers and is expected to break even when subscribers number at least 18,000.

One resident voiced objections to giving tax dollars - no strings attached - to iProvo, faulting the company for poor customer service.

"My family has chosen to live and retire here in Provo," Jay Roberts told council members, suggesting they instead divert the extra funds toward updated book acquisitions for Provo's library, improving the city's bike paths or adding landscaping and a stronger police presence at Academy Square.

Council Chairman George Stewart, a former Provo mayor, cautioned that the city's bond rating was at risk.

"It we don't pay the bond, we lose our credit rating and we don't want to do that."

cmckitrick@sltrib.com