Wednesday, Feb. 27, 2013
Cass County broadband project dies
By Bethany Bashioum
The Cass County Broadband Project initiative has lost all of its steam.
Cass County Commissioners decided Feb. 25 that there is little to no feasibility left for the county’s broadband project, and made the decision to ultimately kill it during a public meeting by a 2-1 vote.
The project, conceived two years ago, looked to build a broadband fiber network in order to bring high-speed Internet access to 11,592 households and 701 businesses in rural areas of the county.
But after swiftly moving through a short list of other agenda items during Monday’s meeting, Presiding Commissioner Jeff Cox entertained a motion to approve a resolution in regard to the county’s Request for Proposals with general contracting firms to take the broadband fiber to homes in rural Cass County.
Associate Commissioner Jimmy Odom made a motion for approval, but the question quickly died due to the lack of a second.
In response to the previous motion, the following agenda item, a resolution to authorize the publication and release the broadband project’s RUS Form 515 became moot.
A few moments later, Cox then asked the Commission for the authority to disband the project.
Associate Commissioner Luke Scavuzzo seconded the decision.
In a brief statement, Cox cited a number of reasons for his decision after spending nearly two months studying the project.
Part of the decision, he said, was linked to the issue that although the county has requested a 60-day extension to the United States Department of Agriculture for the county’s 2011 audit as well as releasing a reimbursement of $326,000 that the county has spent on recent engineering costs.
Cox said that to date, the USDA has refused to release those funds.
“USDA funding is still frozen and we’re continuing to incur engineering costs that are not being reimbursed from the federal government,” Cox said. “We’re basically at the point where we can either take the monies out of the general fund to pay the engineers or we can just default on our contract with the engineer. Or, we can take the money out of the Certificates of Participation, which are supposed to be used for non-USDA eligible costs.”
Incurred engineering costs are eligible for USDA reimbursements.
Before making a decision on moving forward with the broadband project, which has been a highly-discussed topic since the newly-elected trio of Commissioners took office, Cox said he also wanted to examine engineer bid specifications and Solicitations of Interests from telecommunication providers before he asked the Commission to take some overall direction on the broadband project.
The bids and SOIs were due Feb. 15 and Feb. 18, respectively.
Cox said on Monday that the county did receive bid specifications for Phases 1, 2 and 3 of the project, but as of yet, no plans for Phase 4, which is the portion of the project that drops the fiber to homes who wanted the county broadband service.
Broadband Director Melissa Freeman also originally reported that the county received three SOI’s from interested providers.
However, Cox told the Commission and the public in attendance that one of the three inquiries was just a letter stating that the provider was not interested in the project.
“When I took a look at these I only saw one that was minimally responsive,” he said.
Cox also added that there are a host of other issues that have been brought up by the various parties involved that would question the feasibility of the project, one of those being inspection costs.
Within the $26 million budgeted for the project, the county only planned to hire one inspector for the entire scope of the project.
Since, the county has been told by the USDA that they want one inspector per crew.
“That can be a difference of millions of dollars in this project,” Cox said.
There’s also issues with unbudgeted maintenance, make-ready and right-of-way costs that haven’t been solved.
“On all of these things, I’m told that ‘we’ll deal with those things when we get there,’” Cox said. “If we issue the RFPs, it’s going to rope us into another month of this process. That’s hundreds of thousands of dollars more of costs that we’re going to continue to incur, and my concern is that we’re going to get to the point where by the time we get through that process, we’re not going to be able to afford to get out of this project.”
Cox said he believes the county should get out of the broadband project while they can still afford to do so.
“I think we should return our focus to providing the core services that county government has a responsibility to provide, such as road and bridge and law enforcement. The things that the people in the rural areas, that this initiative was meant to help, are the people that I have seen hurt the most out of all of this because all the money that has been diverted from those core services.”
Cox also explained his perspective on the overall risk versus reward of the project.
“We’re talking about upwards of $30 million, and it seems that the risk is so great because we’re making the assumptions that this is a fast-track project, that there will be zero time delays, and everything is going to come in under budget,” he said.
When Cox opened the floor for the other commissioners to voice their perspectives, Odom, who has supported the project for it’s prospect to enhance economic development in the county, said he wants to hear more about the audit issues and why the USDA funds aren’t being released.
“I’ve never seen anything like that in government where we’re that far behind and I would like to know why,” he said.
On the other hand, Scavuzzo voiced his disapproval of the project, but thanked Freeman for her work.
“This project scares me because I don’t think we have the expertise and the knowledge to carry this out,” he said. “Melissa, you’ve done a great job and educated yourself very well on the telecom industry, but I just don’t think we have the expertise to go into a $30 million project.”
Concluding the discussion, the Commission carried the vote to disband the project 2-1.
Cox and Scavuzzo voted in favor of ditching broadband.
“Initially, what I will be doing will be notifying all the parties involved now that the Commission has given me the authority to do that,” Cox said. “We will then have to deal with getting all those final bills paid.”
Cox said that there are few options available to deal with the debt that’s been accumulated, one being that it can be rolled into the county’s existing COP funds since the county is already paying the full interest on those funds.
“I think we need to return our focus to providing the core services that county government is responsible for,” he said. “I think it’s important that we get out now while we still can afford to do so.”