Orem approves $24M for UTOPIA without public hearing, vote
Orem • While other cities are pulling back the reins on telecommunication company UTOPIA, Orem is riding toward it at a full gallop by agreeing Tuesday to bond for $24 million more toward their original 2010 commitment. Council members approved the funding without a vote or public hearing, much to the frustration of residents.
During a Tuesday night study session, the city also approved to amend its current budget to make way for an additional one-time loan of $250,000 to cover UTOPIA's seemingly endless operating expenses.
The decision was made after council members gave verbal consent, but no one from the public was allowed to speak.
The move appeared to confuse residents in attendance and at least one council member.
Councilman Hans Andersen, though, clarified for himself that the city council was not voting after Orem Mayor Jim Evans began informally asking council members their thoughts on moving forward with the funding. Evans then gave city staff approval to move forward with the bond.
Richard Manning, administrative services director, said Wednesday a vote wasn't required because the city approved the full $65 million bond in 2010. He said rather than doing a public hearing when an unexpected budget item comes up, the city simply will get a consensus from council members. At the end of the fiscal year all of those budget items are placed into one resolution and the council votes on it during a public hearing. Manning said at that point residents are allowed to object, but such objections are basically a moot point.
Ryan Roberts, the Utah State Auditor's office local government supervisor, said a public hearing needs to be held if any budget changes are made.
"They cannot spend that money until they have amended that budget," Roberts said, adding the city's bundling of all budget bills at the end of the year is legal as long as checks aren't cut until there is a public hearing. It wasn't clear when UTOPIA will receive the money approved Tuesday night.
Residents such as Claude Richards want more transparency.
"What this means is multiple tax increases," said Richards, who attended the study session. "It's like [the city] is saying 'We have got two fists stuck in it now, so now let's kick it.'"
He said October was the only other public UTOPIA meetings residents were invited to, but it wasn't a public hearing either.
Government transparency expert Joel Campbell said the city is working in a gray area of the law.
"It seems like the city is trying to avoid that public hearing and that public accountability," Campbell said.
City staff made the presentation resolving questions the city council asked in August, before the council decided to move forward with the second round of bonding. In 2010, the city committed $65 million to become part of the Utah Infrastructure Agency. An initial Orem bond of $29 million ran out this month to fund UTOPIA, which is hemorrhaging an operational deficit of $210,000 a month, according to Manning.
The two-hour presentation detailed all the possible options for the city moving forward: not building out the network further but keeping alive what they have, selling the network, extending the network to more of the city through Wi-Fi technology or continuing to finish the network in all the cities.
Stopping the service would potentially open up litigation and ongoing debt, staff said. However, Tremonton and Murray have opted out of providing additional funding for UTOPIA's operational costs and Brigham City recently discussed doing the same.
"There is not a real option for us to stay as is," Manning said during the meeting. "Either we are moving forward or we are taking a few steps back."
Councilwoman Nancy Street said she thinks UTOPIA is successful and supported moving ahead.
"It is not bankrupt," Street said. "It is not a failed enterprise."