IProvo losses lead to big review
City hires 2 consultants to help stanch cash flow
The city has hired two national consultants while it continues to search for a new manager for the system and expects to add three new companies to the network in the next few months.
"There are 31 key strategies we want to pursue," Mayor Lewis Billings told residents who make up the city's telecommunications board Monday during a strategic summit that lasted more than three hours.
Losses over the first four months of the fiscal year, which began in July, total $214,000 for the fiber-optic telecommunications network that now delivers digital television, Internet and phone service to 10,236 Provo residences.
The city created this year's budget with the expectation that iProvo would gain 260 new subscribers a month. Through four months, it is adding 140 per month.
The iProvo shortfall for those four months is actually $614,000 — the $214,000 plus $100,000 per month the City Council is providing from the general fund to cover the losses that were anticipated by this year's budget even if the network had been able to generate those 260 projected new subscribers per month.
Billings and interim project manager Kevin Garlick did not shy away from those concerns. Instead, they said facts like those were the impetus for the intense review process they've initiated.
"There are circumstances and realities that are different than what we forecasted," Billings said. "We've had to look at the reality of where we are."
It was clear Monday that one strategy is to have city departments pay more for the benefits they get from iProvo, already getting about $400,000 this year from the Provo Energy Department.
"We should have done that on the front end," Garlick said, "but all the financial models showed we would have an aggressive take rate and good revenues and those revenues would go to benefit the other city departments."
Instead, iProvo suffered a slow start exacerbated by a disastrous relationship with HomeNet, the company the city chose to be the first to offer services over the network. HomeNet is in bankruptcy proceedings in Washington state and was replaced in 2005 by MStar and Veracity/Nuvont.
The city sought new service providers earlier this year. It has identified three it will consider adding in the next few weeks. Five others have expressed interest since Provo began looking.
Recent comments
This article done by deseret says it all!!!! Thanks for making it...
thanks deseret | Dec. 6, 2007 at 1:15 p.m.
You people have no idea what really goes on inside Iprovo. Anonymous | Dec. 6, 2007 at 7:18 a.m.
It’s too bad that the Associated Press and Deseret Morning News continue...
MStarInsider | Dec. 5, 2007 at 10:47 a.m.
