A Performance Audit of the Utah Telecommunication Open ...
A Performance Audit of the Utah Telecommunication Open ...
A Performance Audit of the Utah Telecommunication Open ...
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Chapter IIntroductionIn 2002, a group <strong>of</strong> cities formed <strong>the</strong> <strong>Utah</strong> <strong>Telecommunication</strong><strong>Open</strong> Infrastructure Agency (UTOPIA). Their goal was to build anadvanced communications network that would <strong>of</strong>fer broadbandservices to each home and business within <strong>the</strong>ir cities. However, dueto a number <strong>of</strong> unforeseen challenges, <strong>the</strong> agency was unable tocomplete construction <strong>of</strong> <strong>the</strong> network as quickly as planned.Fur<strong>the</strong>rmore, poor construction planning, mismanagement, andunreliable business partners have placed <strong>the</strong> agency in a precariousfinancial situation. This report describes some <strong>of</strong> <strong>the</strong> challengesUTOPIA faces, <strong>the</strong> possible causes for those challenges, andsuggestions for streng<strong>the</strong>ning organizational oversight andaccountability.UTOPIA Is a City-Owned<strong>Telecommunication</strong>s NetworkUTOPIA is an interlocal agency aimed at providing its users withsome <strong>of</strong> <strong>the</strong> most advanced communications services available. Theagency is building a wholesale fiber-optic network that <strong>of</strong>fers its usersaccess to high-speed video, data, and phone services. Once completed,supporters <strong>of</strong> <strong>the</strong> network believe it will help improve <strong>the</strong> quality <strong>of</strong>life for city residents and promote economic growth for <strong>the</strong> businesscommunity.UTOPIA Is Comprised <strong>of</strong>Eleven Pledging Member CitiesUTOPIA was formed as an interlocal agency under <strong>the</strong> <strong>Utah</strong>Interlocal Cooperation Act (<strong>Utah</strong> Code 11-13-101 et seq.). Elevenmember cities agreed to pledge some <strong>of</strong> <strong>the</strong>ir sales tax revenue as asecurity guarantee for UTOPIA bonds. Several years later, afterUTOPIA encountered financial difficulties, nine cities formed ano<strong>the</strong>r,related entity called <strong>the</strong> <strong>Utah</strong> Infrastructure Agency (UIA). Through<strong>the</strong> UIA, eight <strong>of</strong> those cities were able to raise additional fundsneeded to continue construction <strong>of</strong> <strong>the</strong> network by pledging some <strong>of</strong><strong>the</strong>ir franchise tax revenue. The UIA has no staff <strong>of</strong> its own butcontracts with UTOPIA to build that portion <strong>of</strong> <strong>the</strong> network whichUTOPIA is a municipalfiber-optic networkowned by 11 <strong>Utah</strong>cities.Office <strong>of</strong> <strong>the</strong> <strong>Utah</strong> Legislative <strong>Audit</strong>or General - 1 -
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