A Performance Audit of the Utah Telecommunication Open ...

Figure 2.4 Summary of the Agencies’ Statements of Revenues,Expenses, and Changes in Fund Net Assets. In fiscal year 2011, bothUTOPIA and UIA posted losses.Revenues UTOPIA UIAOperating Revenues $ 5,235,876 $ 368,452Non-Operating Revenues 959,679 2,831Total Revenues $ 6,195,555 $ 371,283ExpensesOperating Expenses $ 6,110,348 $1,050,149Non-Operating Expenses 5,518,567 6,083Bond Interest and Fees 13,326,289 231,287Total Expenses $ 24,955,204 $1,287,519Change in Net Assets $ (18,759,649) $ (916,236)Source: UTOPIA and UIA financial statements.Much of UIA’srecognized revenue forFY 2011 came directlyfrom member cities.A significant portion of the operating revenues shown in Figure2.4 are not customer payments. Although UTOPIA had operatingrevenues of $5.2 million, $2.1 million was a payment received fromUIA. Of that $2.1 million, UIA recognized just over $1 million asoperating expenses, but it capitalized the remaining $1.1 millionpayment which therefore did not appear in UIA’s statement ofrevenues and expenses. In contrast to UIA’s approach, UTOPIAposted the entire payment from UIA as operating revenue. For UIA,nearly all of the revenue in Figure 2.4 represents direct payments madeby UIA’s member cities, not revenue from customers.UTOPIA’s loss of over $18 million in fiscal year 2011 increased itstotal deficit to over $120 million. Figure 2.5 summarizes UTOPIA’sassets and liabilities at the end of the year.Figure 2.5 Summary UTOPIA Statement of Financial Position, June30, 2011. UTOPIA’s liabilities exceed its assets by $120 million.AssetsMillionsFiber-Optic Network (net of $32.2 depreciation) $ 79.3Current and Other Assets 6.1Deferred Outflow of Resources 52.4Total Assets $ 137.8LiabilitiesRevenue Bonds Payable $ (185.0)Note Payable (to member cities) (15.9)Interest Rate Swaps Liability (52.4)Current and Other Liabilities (4.4)Total Liabilities $ (257.8)Net AssetsSource: UTOPIA financial statements.$ (120.1)- 10 -A Performance Audit of the Utah Telecommunication Open Infrastructure Agency (August 2012)