#1.  The Council led the Pledge of Allegiance.

     #2.  Councilmember Saxton moved and Councilmember Turner seconded to adopt the minutes of the City Council Meeting held April 6, 2004, which motion carried, all members voted aye.

(M 04-3)

QUESTIONS TO THE MAYOR FROM THE CITY COUNCIL

     Councilmember Christensen said he understood the Mayor agreed with the Council that the fluoridation issue should not be placed on the ballot.  Mayor Anderson said that was correct.

     Councilmember Buhler said the Council appreciated the Mayor’s recommendation on the Utah Telecommunication Open Infrastructure Agency (UTOPIA).  Mayor Anderson said the City had invested a substantial amount of money for a feasibility study which should be recovered.  He said at the time funds were committed it was the City’s understanding that taxpayers money would not be used.  He said he only wanted to remain in (UTOPIA) to the extent money could be recaptured. 

COMMENTS TO THE CITY COUNCIL

     Richard Wirick submitted written comments and spoke concerning revitalization efforts on 100 South between Main Street and West Temple .  He said progress had been made.  He said he was concerned Utah Transit Authority’s (UTA) proposal for a bus depot on 100 South would hurt downtown revitalization.  Councilmember Buhler said the Council could send a letter to the UTA board and he would ask staff to follow-up.

     Rob Dunham and Paul Bill Carl spoke in support of UTOPIA.  Their comments included home cameras, telecommuting, need for high-speed internet, government funding, attracting businesses, increased services, career opportunities, and creating jobs.  

UNFINISHED BUSINESS

     #1.  RE:  Adopting a resolution adopting the one-year action plan for 30th year Community Development Block Grant funding (CDBG),  Home Investment Partnerships Program funding (HOME), Emergency Shelter Grant funding (ESG), and Housing Opportunities for Persons with AIDS funding (HOPWA), (Fiscal Year 2004-05) and approving interlocal cooperation agreements between Salt Lake City and the U.S. Department of Housing and Urban Development (HUD).

     Councilmember Love moved and Councilmember Jergensen seconded to adopt Resolution 24 of 2004, approving an appropriation resolution adopting the 30^th year CDBG, ESG, HOME, and HOPWA one-year action plans as discussed during the April 1^st and April 13^th, 2004 Council Work Sessions, excluding Item No. 12 under Public Buildings because Councilmember Lambert needed to be recused on the issue, and that the Council amend the five-year consolidated plan and authorize the Mayor to enter into an interlocal cooperation agreements necessary to implement the 30^th year CDBG, ESG, HOME, and HOPWA programs with the following amendment:  that the Council take $5,000 of the $16,650 and give to People Helping People and give the remaining amount to the Salt Lake City Youth Division for their computer clubhouse.

     Councilmember Love said it was unfortunate a City representative led the Liberty Wells Community to believe CDBG was a viable funding source for their street lighting project.  She said historically, CDBG dollars were not used for street lighting projects.  She said the Council agreed to fund $16,000 for design and engineering for the entire Liberty Wells area.  She said it was the Council’s intent to work with the Liberty Wells residents to get street lighting installed though a special improvement district (SID) project.  She said when design and engineering estimates were available, she hoped residents would support an SID.  She said there would be some resident costs associated with the SID but the project would be completed faster.

     Councilmember Saxton said she was pleased the Council found a way to appropriate funds to People Helping People.  She said the money was well spent because hiring people who needed help was not something small businesses had the ability do.  She said she felt this money would go a long way to help people help themselves.

Councilmember Saxton said there was a long-standing request from residents living on private streets to redesign their streets.  She said people had put substantial amounts of money into their homes and paid taxes but were not eligible because City policy said the City would not fund private street redesigns.  She said the City had agreed to put some design money aside for Capital Improvement Program (CIP) funding.  She said she had served on the Community Development Advisory Committee (CDAC) committee which oversaw these funds.  She said the Council needed to be prudent when appropriating funds to City entities which had the ability to obtain funding through grants or loans.  She said these monies needed to be given to entities that did not have other resources.  She said she would support the motion.

     Councilmember Turner said these funds were important for westside projects.  He said there had been positive changes in his district because of federal funding.  Councilmember Christensen thanked Mayor Anderson and his staff for recommendations.  Councilmember Buhler said he agreed with Councilmember Love’s comments on the Liberty Wells street lighting project.  He said he hoped the proposed funding for engineering and design costs would help that project move forward.

     Councilmember Buhler called for the question.  The motion carried, all Council Members voted aye.

Councilmember Buhler said Councilmember Lambert would be recused from discussions on Odyssey House and UTOPIA.

     Councilmember Love moved and Councilmember Saxton seconded to approve Item No. 12 under Public Buildings of the CDBG budget (Odyssey House) as discussed during the April 1^st and April 13^th, 2004 Work Session, which motion carried, all members voted aye, except Councilmember Lambert who was recused.

(T 04-1)

     #2.  RE:  Adopting a resolution authorizing the execution by the City of a pledge and loan agreement and any other documents required in connection therewith; providing for the publication of a notice of pledge of excise tax revenues; providing for the running of a contest period; authorizing and approving the taking of all other actions necessary to the consummation of the transactions contemplated by this resolution; providing a severability clause; repealing resolutions and orders in conflict; providing an effective date; and related matters (UTOPIA).

     Councilmember Turner moved and Councilmember Jergensen seconded that the City make no financial pledge in connection with bonds to be issued by the Utah Telecommunication Open Infrastructure Agency (UTOPIA). 

Councilmember Turner said this was a complicated issue.  He said he did not want to dwell on technical aspects, differences between large and small businesses, or take rates.  He said he was concerned about the City getting involved in competition.  He said many constituents he spoke with did not understand the entire concept/proposal.  He said it was difficult to educate people in a short period of time.  He said this was a financial issue and he was concerned about impact on the City’s tight budget.  He said in several weeks the Council would be required to adopt a balanced budget.  He said he was concerned about having to deduct an additional $4 million per year from the budget if UTOPIA did not succeed.  He said he was concerned about impacts on services, residents, and jobs.   He said the City needed to provide services for its citizens and he would vote no on UTOPIA.

Councilmember Saxton talked about gambling versus wise investment.  She said as policy makers the Council had to make decisions which impacted future Councils and the City.  She said she had come to understand that what brought viability to Salt Lake City was to stay on the cutting edge for businesses.  She said it was important to provide an environment which would attract businesses and residents. 

Councilmember Saxton said Salt Lake City had a highly educated population with more computers per capita than any where else in the United States .  She said internet service needed to be a consistent flowing source of information.  She said service for businesses was everything.  She said she was convinced if the City used fiber optics as their vision for the future, the City would have a cutting edge which would allow it to be marketable to the rest of the nation.

Councilmember Saxton said it did not make sense to put millions of dollars into infrastructure if there were no computers and the City did not need to compete internationally. She said she did not believe in gambling and developing infrastructure for the future was a wise investment.  She said some items such as phones or televisions could be considered luxuries but computers would be a necessity in the future.

Councilmember Saxton said street lighting was needed throughout the City.  She said fiber optic trenches could be utilized to reduce the cost of providing street lighting.  She said one option she wanted to investigate was an insurance policy which would limit the City’s liability.  She said she wanted the City to continue with UTOPIA for five weeks to explore the insurance option.

Councilmember Saxton said additional time would allow the City to look at other investors who were willing to participate.  She said she needed more time to look at the business plan and model which UTOPIA and Dynamic City presented to the Council.  She said she felt government should get involved in issues when the private sector was not interested or refused to provide for citizens needs.

Councilmember Christensen talked about experiences of people who had the courage and foresight to make difficult decisions and how that impacted his decision making process.    He said he supported UTOPIA because he felt it was an important decision which would have a widespread impact on the community.  He said he felt to walk away from this opportunity would be a mistake.  He said every major infrastructure project in America had some government involvement whether it was a tax credit or a franchise.  He said he hoped the City would not have to rely on bonds backed by sales tax but he felt the risk was worth it.  He said he was not concerned about the 18 month exclusivity issue.

Councilmember Christensen said he had talked to local officials throughout Utah .  He said he was concerned about small cities which had initiated this process but had limited options and were unable to attract businesses.  He said he was worried about security because nearly all phone calls and communications were handled through one central facility.  He said the defense department developed internet protocol for that reason.  He said he worried about insolvency because the City was heavily dependent on one provider.

Councilmember Christensen said he wanted residents to have a choice.  He said he was frustrated when one provider told him there were sections in his district where it did not make economic sense for them to install fiber optics.  He said people probably would not move from their homes because of fiber but they might use it as a reason to purchase one.  He said as the City looked at revitalizing neighborhoods fiber should be a key factor.  He said he could not support the motion.

Councilmember Jergensen said he appreciated the previous comments.  He talked about constituent views and understanding of the internet.   He said he felt there was an education component in the City which needed to be addressed.  He said he was not convinced UTOPIA was the way to go.  He thanked those who had taken time to discuss the pros and cons of the proposal.  He said he had received an education on both sides of the issue.

Councilmember Jergensen said the discussion of UTOPIA was based on the concept for high-speed broadband services in our communities.  He said services needed to be available equally for both customers and providers.  He said he felt that was the fundamental reason for UTOPIA.  He said the City needed to maintain a leading edge in business and provide services to residents.  He said UTOPIA suggested the way to accomplish that goal was to form a public and local partnership involving a number of Wasatch Front cities and towns.

Councilmember Jergensen said cities and towns would work together to build, manage, and operate a fiber network that would be available to every home and allow equal access to providers.  He said it would cost approximately $540 million to construction the network.  He said initially the money would be available from bond proceeds without any requirement from participating cities to collateralize or guarantee repayment.  He said the market indicated an interest rate of between 12%-13% so participating cities were asked to provide a backstop guarantee of approximately 39% of the bond proceeds.  He said acceptance of the guarantee would drop the suggested interest rate from 12%-13% to 6%-7%.

Councilmember Jergensen said this guarantee meant City residents would pay approximately $71 million to bond companies in the event of a default.  He said UTOPIA suggested that a fiber network would be an economic development driver and would create a world-wide leadership role for Salt Lake City in terms of its involvement in broadband policy.  He said UTOPIA proponents said the private sector would not provide services in a way which would meet customer/resident needs.

Councilmember Jergensen said based on the service of certain providers in the past, the private sector would continue to be a roadblock to future service.  He said the incumbent telecommunication industry suggested the City not be involved in what was traditionally an area of private sector involvement.  He said the private sector claimed it already provided many of the services UTOPIA claimed it would provide.  He said as the market expanded incumbent providers would expand to meet customer and provider requirements.  He said he felt the concept of high-speed broadband service should be available to everyone and it was critical to the City.  He said the City needed to accomplish this goal expeditiously without putting taxpayer money at risk.  He said bonding was often used by the City and should not be an issue in this instance.  He said a guarantee of bonds to provide interest buy down for a project described by the market as risky was not something a municipality should do.

Councilmember Jergensen said with budget deficits, an additional requirement of $4.1 million annually for approximately 18 years would be an economic disaster for Salt Lake City .  He said even the proposed guarantees which he understood were around 75%, only covered a total of 35% of the total guarantee requirement.  He said that left City residents, with a total of approximately $49 million over a period of 18 years.  He said this was not a worthwhile risk for City taxpayers.

Councilmember Jergensen said he felt general availability of high-speed broadband would be absolutely necessary for future generations.  He said the City had not seen any significant examples as to the economic benefit of this project.  He said other cities costs and expenses were underestimated in feasibility studies.  He said that resulted in significant problems for those municipalities.  He said he did not believe the probability of economic development benefited the risk.  He said in some cases the public sector did provide better infrastructure than the private sector.  He said UTOPIA suggested that a guarantee was appropriate because the City should consider a fiber network as public infrastructure.  He said services were considered public infrastructure if there were no other practical or cost effective means to provide service to the public.

Councilmember Jergensen said the public sector came in where the private sector could not provide expected services to City residents.  He said incumbent providers might not provide the service level some people wanted but it worked for many citizens.  He said he was not convinced citizens did not want services proposed by UTOPIA.  He said he felt the City needed to establish a broadband policy which allowed private and public partnerships to provide high-speed broadband services to anyone who wanted it.  He said he did not believe UTOPIA was the right way to proceed.  He said he would vote in favor of the motion not to guarantee bonds for UTOPIA.

Councilmember Love said she wanted to thank those who participated in the public process and provided expertise.  She said she entered the process thinking technology would be outdated before bonds were paid off and concluded with a greater understanding of bandwidth and a certain skepticism of wireless communication.  She said she felt the proposal would provide benefits to the community including medical technology and better communication between citizens.  She said originally she agreed this was not an appropriate role for government but changed her mind.

Councilmember Love said she believed UTOPIA would not be competing but would provide an open infrastructure for retail providers.  She said through open infrastructure, customers would receive better service, reduced rates, and have more options.  She said she was concerned about the potential risk to taxpayers.  She said because she did not have complete confidence in UTOPIA’s business plans/projections and could not verify the information, she could not vote to back the bonds.

Councilmember Love said the City would put taxpayers at risk without absolute certainty.  She said it was difficult to vote against the proposal because of potential benefits to City residents.  She said she was concerned by the Taxpayers Association’s campaign to scare City residents and the elderly.  She said she hoped the Council would remain in UTOPIA as they reviewed the interlocal agreement in the next few weeks.  She said she wanted to keep the dialogue going and work at getting better service for citizens.

Councilmember Buhler said he wanted to address whether the City should continue its membership in UTOPIA.  He said the Council was assured Salt Lake City would not be required to guarantee the bonds and no tax funds would be placed at risk.  He said there was also assurance competitors such as Comcast, Qwest and other telecommunication providers would support UTOPIA and not view it as unfair government competition.  He said neither assurance turned out to be true.

Councilmember Buhler said he had a number of concerns.  He said his biggest concern was the issue of competition.  He said a quarter of a century ago telecommunications was a monopoly but today it was increasingly competitive.  He said Comcast did not have an exclusive franchise to provide cable television and broadband in the City.  He said anyone who wanted to make the investment could provide cable tv.  He said competition also existed with dish providers and internet service.

Councilmember Buhler said the City was being asked to use the power of government to provide a new infrastructure to compete with existing facilities built by private dollars and private investors.  He said businesses had invested substantial amounts of money building infrastructure with monies raised in private capital markets, not through government backed bonds.  He said he was concerned if the City proceeded with government sponsored competition, there would be an obligation to protect taxpayer investments which could lead to more unfair competition.  He said the City could face a lot of pressure to protect its investment.  He said he had some specific concerns with the UTOPIA plan as it had been presented to the Council.  He said proponents did not know what the cost of the project would be.  He said they talked about fixed cost contracts but only unit costs were fixed.

Councilmember Buhler said the units would then be applied against estimated engineering costs.  He said those costs had not been conclusively determined.  He said only cost estimates were available, because the design build contract did not exist.  He said the City would be moving forward without knowing what final costs would be or how many bonds would be needed to cover promises.

Councilmember Buhler said he was also concerned UTOPIA wanted to string most of the fiber above ground from existing utility poles because it would be less expensive.  He said he felt wherever possible utilities needed to be below ground.  He said UTOPIA could have underestimated the cost to use poles owned by other utilities.  He said the reliability of above ground fiber could be hampered by inclement weather.

Councilmember Buhler said the take rates in UTOPIA’s business model seemed overly optimistic.  He said industry information which was verified by City staff, showed 60%-90% of City residents have access to some type of broadband.  He said UTOPIA’s own market study by a 2-1 margin, showed City internet users still used dial-up.  He said residents have faster options which they do not take advantage of.  He said if residents do not take advantage of faster options now, why should the City believe they would switch to something even faster.  He said the City was told customers would subscribe because the service would be less expensive.

Councilmember Buhler said he was concerned because the City did not know what customer costs would be because the cost of UTOPIA was unknown.  He said UTOPIA’s take rate was based on the results of a poll question from a market study.  He said he was concerned about the results because poll questions could be written to obtain specific results.  He said the City currently provided excellent telecommunication infrastructure options for businesses.

Councilmember Buhler said historically, businesses paid higher costs for telecommunication services than residential customers.  He said the UPOPIA proposal would require residential customers to subsidize businesses.  He said however, if the City was forced to bail UTOPIA out, businesses would be hit the hardest because their property tax percentage was higher than residential.  He said he supported the motion to not back UTOPIA with bonding.  He said the Council would hold further discussions concerning the City’s membership in UTOPIA. 

Councilmember Buhler called for the question.  The motion carried, all Council Members voted aye, except Council Members Christensen and Saxton who voted nay.  Councilmember Lambert was recused.

Councilmember Jergensen moved and Councilmember Saxton seconded that the Council establish a City Council subcommittee on telecommunications and information services technology to be appointed by the chairman to establish a long-term, high speed broadband policy and to analyze City policies and franchise requirements to reflect long term policy direction and the City move aggressively forward to do so.

Councilmember Christensen said he would vote against the motion.  He said some good might come from it but he felt this was after the fact.  Councilmember Jergensen said he felt the City needed to establish a policy which allowed the City to expand its ability to provide high-speed broadband service to citizens.  He said the City controlled franchise fees, tax benefits, and other programs which might help the private sector provide services.  He said he felt those issues could be addressed by the subcommittee.  He said he thought the Council and Mayor agreed the City should move aggressively to establish a meaningful strategy/policy regarding telecommunication options for City residents.  He said a conclusion was needed to provide direction.

Councilmember Buhler called for the question.  The motion carried, all Council Members voted aye, except Councilmember Christensen who voted nay.  Councilmember Lambert was recused.

(Q 04-4)

     #3.  RE:  Adopting an ordinance amending certain sections of Chapter 2.72 of the Salt Lake City Code, relating to the Police Civilian Review Board.

     Councilmember Love moved and Councilmember Saxton seconded to adopt Ordinance 19 of 2004, which motion carried, all members voted aye.

(O 04-6)

     #4.  RE:  Adopting a legislative action requesting the Administration examine the City’s zoning ordinance to include processing timeframes once completed information was filed by the petitioner with the City, to when it would be scheduled before the Planning Commission, and the timeframe after it was voted upon by the Planning Commission and forwarded to the City Council.

     Councilmember Buhler said the legislative action asked the Administration, the Planning Commission (PC), and the Planning Division to review their processes.  He said they needed to develop a way to provide people with expected timeframes when they made application for a conditional use permit or zoning petition.  He said once the completed application was submitted, the applicant would know how long the entire process would take.  He said he wanted to recommend that the Council make this request to the Administration for their advice and then have it come back to the Council for future action.

Councilmember Lambert moved and Councilmember Jergensen seconded to adopt the legislative action. 

     Councilmember Christensen said he had reservations but this was an issue which needed to be achieved.  Councilmember Saxton said there was public perception that the time it took to work through the City process was lengthy and arduous.  She said she felt it would be good to look at the process to see if anything could be done to improve service not only to constituents but the public as well.  She said she would vote in favor of the motion.

     Councilmember Jergensen said he would support the motion with concerns he expressed in the Work Session regarding arbitrary deadlines.  He said some issues could require more time and the Council needed to be sensitive to that.  Councilmember Buhler said deadlines could provide a certain amount of discipline.  He said he assumed there would be a mechanism in place so if a substantial need arose a deadline could be overcome.

Councilmember Buhler called for the question.  The motion carried, all Council Members voted aye.

(G 04-9)

CONSENT AGENDA

#1.  RE:  Requesting that the Administration not hold a hearing regarding a request to enter into a Lease Agreement with McClelland Street Associates LC, for four aerial canopies attached above the windows on the north and east sides of a building at 1030 East 2100 South. Pedestrian sidewalk access and other public uses will not be inhibited.

(W 04-4)

#2.  RE:  Requesting the Administration not hold a hearing regarding a request to lease property near the Big Cottonwood Lower Canal conduit to Cerrito Development, LC, to install and maintain surface improvements adjacent to a multi-family housing unit. The improvements will not hinder access to the conduit.

(W 04-4)

#3.  RE:  Requesting the Administration not hold a hearing regarding a request to realign an existing easement conveyed to Utah Power through the Salt Lake City/County landfill to accommodate the replacement of wooden poles supporting the transmission line with structural steel poles. Utah Power will disclaim its easement and the Landfill will convey a new slightly modified easement. There is no net loss or gain being conveyed.

(W 04-4)     

#4.  RE:  Approving the appointment of Anne Palmer Peterson to the Art Design Board for a term extending through March 8, 2007.

(I 04-19)

#5.  RE:  Approving the appointment of Esther Hunter to the Capital Improvement Program for a term extending through June 4, 2004.

(I 04-20)

     Councilmember Turner moved and Councilmember Jergensen seconded to approve the Consent Agenda, which motion carried, all members voted aye.

     The meeting adjourned at 8:20 p.m.

______________________________

Council Chair

______________________________

Chief Deputy City Recorder

sc/bj