How can government-owned enterprises simultaneously compete with and serve their own taxpayers, while hiding from open records, public disclosure requirements

There has been a burst of ink on Utah’s UTOPIA over the last few days in response the state auditor’s most recent report on the muni-broadband cooperative. Below I’ve compiled all the news links to date and summarized the auditor’s findings and recommendations. To get you started, the UTOPIA Audit can be found here.

The Auditor’s findings were grouped into six broad categories. They were:

  • UTOPIA’s Ambitious Goals Have Not Been Met.
  • UTOPIA’s Bond Proceeds Were Not Put to Productive Use.
  • UTOPIA Used Bond Proceeds to Cover Operating Costs and Debt Service.
  • Poor Planning, Mismanagement, and Unreliable Business Partners Have Contributed to the Agency’s Financial Difficulties.
  • A Lack of Sufficient Subscribers Also Contributes to UTOPIA’s Condition.
  • Better Management and Financial Controls Are Needed to Improve Accountability.

As well, the audit provided recommendations for UTOPIA’s planning, operations and reporting going forward. In its final passages the auditor provided an important insight into one of the key pitfalls of public entry into competitive enterprise. He reports:

Board Members Are Concerned about Protecting UTOPIA’s Commercial Information. Members of UTOPIA’s board and its staff have asserted that the executive committee must conduct its business during a closed session in order to avoid disclosing the agency’s commercial information to its competitors. That information, they contend, is protected under the Government Records Access Management Act. They believe that disclosing such information in a public meeting would violate that act. 

We acknowledge that the authors of the Utah Open and Public Meetings Act may not have envisioned a situation in which a public enterprise, such as UTOPIA, may need to discuss protected commercial information in a closed meeting. If UTOPIA believes strongly that they cannot comply with both statutes, they should ask the Legislature to consider addressing the problem in future legislation. However, at present, we do not believe that UTOPIA has the option of disregarding the Utah Open and Public Meetings Act. We therefore encourage the board to explore ways to conduct its business without disclosing confidential information.

My question: How can a public entity be appropriately open and accountable to its taxpaying public and still conceal its decisions and behavior as a competitive enterprise in direct competition with many of the same taxpayers?

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