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North Florida Broadband Authority: Suwannee County tells the NFBA – One more strike and you're out

Wesley Wainwright
County Commission Chair, Wesley Wainwright, listens to the NFBA's Project Manager, Donny Lort.

LIVE OAK, FL – Tuesday afternoon, December 18, 2012, the North Florida Broadband Authority was scheduled to appear in front of the Suwannee County, County Commission. For a while it was touch and go as County Administrator Randy Harris advised the Commission he received a call that past Friday afternoon from the NFBA. He said he was told that the NFBA would not be prepared to have anyone at the meeting to answer questions or provide information. An e mail from Ms. Springfield suggested someone could be available after the holidays. County Commission Chairman Wesley Wainwright then announced, "Somebody brought us some handout."

stories are here

In the audience, unknown to the folks in Suwannee County, were NFBA Project Manager Donny Lort and NFBA Vice Chair Walter McKenzie from White Springs. Also present were Suwannee County's NFBA representative, Sheryl Millington and Diane Sholz, from FSU's Institute of Government. Ms. Sholz may have been sitting in for the NFEDP's Jeff Hendry, who appeared at the last Suwannee County Commission meeting to answer questions about the NFBA.

The NFBA's Lort stood up. County Administrator Harris asked, "Are you representing the Broadband Authority?

Mr. Lort said he was and Chairman Wainwright invited him to the podium. "My name is Donny Lort and I am the Project Manager for the NFBA. I came to answer any questions."

The NFBA, a governmental body in North Central Florida, was formed as a result of a $30,000,000 stimulus grant. The grant was awarded for the purpose of building a middle mile wireless broadband network. The grant period ends on January 31, 2013, at which point, the NFBA, in order to survive, must be sustainable. This will require a revenue stream estimated to be between $300,000 and $500,000 a month.

As this article is being written, the NTIA, the inept federal bureaucracy that administers the grant, is trying to figure out a deal to keep the NFBA from going belly up after January 31st.

The NFBA's Lort began

Newly elected commissioners Gamble and Bashaw did not look impressed with the NFBA's Project Manager, Donny Lort.

"In February, the NFBA will be on its own, sustainable, and moving forward and connecting customers all across our 14 County footprint... The grant was for community anchor institution connections. [governments, schools, libraries, health facilities] To be successful the NFBA had to deliver a network that would pass 308 anchor institutions per the grant application. We have done that. Now we are in execution mode. We are actually trying to connect as many of those anchor institutions as possible."

In the summer of 2011, GSG's Robert Sheets, during a NFBA Board meeting, reiterated that the purpose of the grant was not to hook up residences, but to hook up anchor institutions. This was the first time since then that someone from the NFBA publically recognized and articulated the purpose of the grant.

Mr. Lort went through a printed version of a power point presentation. Maintaining the NFBA's high level of secrecy, he refused to give a copy to the Observer or offer one to anyone from the audience. When he left, he left none behind other than those handed to the Commission.

NFBA Vice Chair, Walter McKenzie, reading from a prepared statement told Suwannee County to keep their word and deliver its in-kind assets.

County Commissioner, Phil Oxendine, asked, "At the last meeting we specifically asked for a financial statement. Do you have financial statements – specifically, where the money has gone; salaries; etc.?"

The NFBA's Lort answered, "I don’t have any of those with me. I can answer any particular questions you have."

The NFBA's $15,000 a month General Manager is an accountant. The NFBA recently hired a Director of Finance for $115,000 a year. Mr. Lort did not explain where they were.

The rate study: "prettty much how we're operating"

Someone from the audience said there was a rate study on line.

Mr. Lort said, "That's pretty much how we're operating."

Commissioners Fleming and Oxendine listen to the NFBA's Lort.

Mr. Lort did not advise the Commission that this was the third or fourth rate study, nor did he explain that the week before, at the December 12th NFBA meeting, it was announced that there was another rate study being prepared.

The Magellan rate study, which was commissioned earlier in the year, was broken up into separate parts so that the NFBA management would not have to put the rate study out for bids.

Commissioner Oxendine followed up, "After the 30 million is gone, where is the funding supposed to come from?"

Mr. Lort answered, "We have a line of credit and we also have system revenues and we also have a couple of opportunities that were working on."

Mr. Lort did not explain that the NFBA had blown through the $750,000 line of unsecured credit from TD bank well over a year ago.

When Commissioner Oxendine asked how many cities and counties had backed out of the NFBA, Mr. Lort said, "I don't really know off hand. I know Taylor County, Bradford County, Columbia, Lafayette County, although we haven’t received any notification, and the City of Perry. I believe that’s it."

Mr. Oxendine asked, "How many private subscribers do you have right now?"

Mr. Lort responded, "It depends how you want to count them. If you’re talking about every individual user that runs traffic across our network you are around 425."

Mr. Oxendine followed up, "I’m talking about individual households."

Mr. Lort asked, "Individual households outside of community anchor institutions?"

Commissioner Oxendine replied, "Yes. How many people are subscribers – individual households are currently using the system?"

Mr. Lort answered, "I don’t have a breakout per household, but we have 425 connections."

A short while later Mr. Lort announced, “Once we turn the corner, we will be able to provide nine dollar Internet connections.”

Commission Chairman Wainwright: Where did the money go?

The NFBA contingent: In the red vest, covering her face is Diane Sholz, FSU's Institute of Government representative; seated closest to the camera, Suwannee County's NFBA representative, Sheryl Millingotn; NFBA Vice Chair, White Spring's Walter McKenzie; looking at his iphone, the NFBA's Donny Lort.

Chairman Wainwright told Mr. Lort, "The North Florida Broadband Authority has already expended over $23 million in two years or so and there is just not a lot to show for it."

As Chairman Wainwright was speaking, the actual figure was very close to the $30,000,000 dollar mark. This was something Mr. Lort had to know.

Chairman Wainwright asked, "Do you have the information? Could you – would you be able to share with us the reason why the other communities and counties have pulled out?"

Mr. Lort explained that Dixie County pulled out because they had a difference with the management’s direction.

Mr. Lort then gave his take on the reasons for Columbia County's withdrawal:

When you look at Columbia County – they were totally misinformed. You’ve got some folks out there that really don’t know anything about the NFBA and they continually create an undertow. You can believe what they say or you can come to the NFBA and see what really goes on. I’m not really sure other than the misinformation.

Mr. Lort added that Columbia County Commissioner Williams had a question about a tower in the city of Lulu. Mr. Lort said, “He had the district that provides service to Lulu.”

Lulu is not in Commissioner Williams' District.

County Administrator Harris: misinformation and innuendo out there

County Administrator Randy Harris.

County Administrator Harris explained at the last Suwannee County Commission meeting the NFEDP's Jeff Hendry implied that there was a lot of misinformation and innuendo out there.

Mr. Harris continued:

I told him that being the case the Broadband Authority is very aware of that that they could turn this into an opportunity – an opportunity to fix that problem. Everything that I have read on the Internet and a lot of great people in this community send us information – a great deal of what I’ve read centers around questions that I asked at the last meeting that I thought might help clear up some misinformation and innuendo...

Everything centered around the issue – what are we getting for the $26 million that has already been spent; has the money been spent wisely?

That’s what all of these challenges appear to center around – was the money squandered; did we get what we paid for – where are the reports?

I’ll go back to the original [interlocal] agreement. It provides that the financial information be shared. I thought that in the last two weeks we would have received that information from someone, or at the very least, it would have been presented here today... I have to assume, because I don’t know any different, that this information exists somewhere.

A short while later, Mr. Harris told Mr. Lort, "You used the word early on in your presentation that this system would be sustainable, or at least sustain itself. I would offer that someone should be able to illustrate that on paper."

An NFBA paper trail: "In all honesty?"

After some conversation Mr. Lort told the Commission, "In all honesty – the way that the grant was written was – here is what we are going to do and here is the money it’s going to take to build it... This is what we’re going to do. It hasn’t changed from the start.

The original grant award from the Federal Government was for $30,142,676 with an in-kind match from the NFBA membership of $9,227,000 in assets in lieu of cash. The total project cost was $39,369,676.

 • Administrative and legal expenses were originally budgeted at $542,568. Through August 31, 2012, which was the last time that the NFBA released figures, administrative and legal expenses were $1,803,474.39.

 • Architectural and Engineering fees were originally budgeted at $1,536,000. Through August 31, 2012, which was the last time that the NFBA released figures, Architectural and Engineering fees were $1,967,890.88.

 • Other Architectural and Engineering fees were originally budgeted at $384,000. The August 31, 2012 figure is $736,178.54.

 • Site work was originally budgeted at $129,500. The August 31, 2012 figure, $1,238,789.02

After Mr. Lort ran through his characterization of the reasons the NFBA had the grant suspended he said, "I challenge all of you – get involved and help us get over the next three or four months – if you don’t feel like in the next three or four months it’s meeting your expectations – the next three or four months is sustainability, right? Everybody is expecting the NFBA to close its door February 1st. I challenge you. Stay with us. You have nothing to lose."

The Chairman was not convinced

Chairman Wainwright was not convinced.  He told Mr. Lort that for him the issue centered on how the finances and the management of the NFBA had been conducted since its inception. “Two weeks ago, when we had somebody here and we had an opportunity to ask for some more information and share more with us – we still haven’t got it... I’m reluctant to support it because were just not getting information or the assurances that we’re asking for.”

County Commissioner, Clyde Fleming, added that earlier in the day he was talking to a Commissioner from another county. "He informed me that the lack of information concerning the finances was information that they had not gotten. I asked him why he got out of there. He told me, "'They didn’t give me the information.'"

Mr. Lort told the commissioners that their appointed representative, Sherry Millington, had all the board packets and financial information and he couldn’t understand why she did not give the information to the Board.

Newly elected Commissioner Jason Bashaw wanted to know why Ms. Millington wasn't presenting reports to the Board.

Newly elected Commissioner Rick Gamble said he was going to be on the pro side and the con side. He said that he had problems when money was misappropriated, but that he believed in forgiveness.

Ms. Millington apologized for her lack of communication.

County Administrator Harris impatiently, "I’m not interested at looking at truck loads of minutes, so I’ll just ask you this, “Do you have the adopted budgets and the list of expenditures in accordance with the [interlocal] agreement.

Chairman Wainwright was also getting impatient:

We’ve all said it here today. We’re not getting the information and all the other counties that we talked to -- they’re not getting the information. Even the simple request that was made two weeks ago – we’re still not getting information.

If we are not going to get the information that we require then we just need to get out of the agreement.

If we can get some responses. If we can get some cooperation, then there is an opportunity that we can evaluate it and maybe substantiate our membership in it. But if we don’t have anything but – nothing but what your telling us – one side [and] what we are hearing from all the other people that are pulling out on their side.

There’s so much strife going on in this whole arrangement – I don’t want to be a part of it.

Commissioner Oxendine made a motion to withdraw. It failed for lack of a second.

Commissioner Fleming said he would like to see them [NFBA] bring the information. Commissioner Bashow agreed.

Chairman Wainwright said, "Commissioner Oxendine, I would have seconded your motion, but without enough support on the floor it seemed unnecessary, but I am siding with you in your thoughts. Commissioner Fleming I don’t disagree."

Chairman Wainwright addressed the NFBA. "If you all are willing, we’ll give you one more chance to bring us what we asked for."

As the NFBA contingent was getting up to leave, NFBA Vice Chair, Walter McKenzie, addressed Chairman Wainwright, "If you don't get the information, you'll get a good reason why." 

Comments  (to add a comment go here) 

On December 21, 2012, citizen49a from Lake City wrote:

If this wasn't costing us all $30 million it would be one hell of a great laugh watching these clowns. And what's wrong with Diane Sholz, representing FSU's Institute of Government? Why is she covering her face in the photograph? Isn't she proud to be associated with this gang?

On a more practical note, should anyone in the area desire actual, reliable internet service, the Dish Network included a flyer in last weekend's Lake City Reporter and Gainesville sun, indicating that high speed internet is available by satellite "anywhere" starting at $39.99/month. That's for service that is "3X Faster than DSL".

So if you have no internet service, then when and if these charlatans show up in your area you can sign up with this shaky outfit - or you can go with the Dish Network now, apparently.

I have no association with the Dish Network and can't make any evaluation of their claims, but I can tell you that they make their money the old fashioned way - they earn it by producing services which you can contract for freely only if you desire them - not by stealing taxpayer dollars.


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