Quantcast
Home » News
Home » News

iProvo sale? Perhaps, but not soon, mayor says

Published April 22, 2008 1:25 am
This is an archived article that was published on sltrib.com in 2008, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

PROVO - For the first time, Mayor Lewis Billings hinted Monday that he might be willing to unload Provo's struggling fiber-optic network.

But like the famous pitch for Paul Masson and his wines, the city won't be selling iProvo before its time.



"There have been offers," Billings said, "and after due diligence, we determined we are not at that point."

The mayor told Provo's Telecommunications Board and Municipal Council on Monday that he is willing to consider privatizing the network, but not before it matures to the point where the city can get the most out of what he considers a valuable asset. He compared it to planting corn and having to patiently wait until it is ready for harvest.

Previously, Billings has indicated that selling the system was not even an option.

For now, though, city officials and two consultants (CCG Consulting and Franklin Court Partners) are offering various options for shoring up the network's finances - from using it to automatically read electrical meters to possibly offering some services such as Web site hosting and data storage.

Critics still maintain the best plan is to sell it to someone with experience running a telecommunications business.

"I don't know how many more millions are going to be taken from the

taxpayers before the mayor decides to cut his losses," said Royce Van Tassel, vice president of the Utah Taxpayers Association.

The city has been subsidizing iProvo by about $2 million a year to make up for insufficient subscriber revenue.

Municipal Council Vice Chairman George Stewart, a former Provo mayor, agrees with Billings on one point: The network is a valuable asset. So much so, he said, that the city could sell it now and easily pay off the $39.5 million bond for the system.

If the city administration cannot be persuaded to take that route, Stewart said using the system to read electrical meters and connect electrical service is the next best option - although it will take longer to break even. Stewart said his calculations show that it would take nearly 15 years to pay off the money that would be spent on that option.

CCG and Franklin Court were asked to look at charging city departments, without considering selling the system. But privatization was not the only thing not included in the consultants' reports.

Jenifer Vallejos, of the state Auditor's Office, said CCG, which examined iProvo's relationship with its commercial providers, did not mention improving the city's ability to collect fees from the retailers leasing bandwidth.

Vallejos' office is scrutinizing Provo's accounts receivable after it was discovered that iProvo was owed $1 million in unpaid fees.

Kevin Garlick, iProvo's interim manager, said that issue was outside the scope of CCG's study.

dmeyers@sltrib.com

What's next

* The Municipal Council will vote tonight to appoint its own panel of outside experts to review iProvo and advise how the city should budget for the project in the coming fiscal year.

* Mayor Lewis Billings will announce his recommendations for options that will make iProvo more viable as part of his budget presentation May 6.

* To read the consultants' reports on iProvo, go to http://www.sltrib.com.

 

 

 

 

 

USER COMMENTS
Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
comments powered by Disqus