Stew Lilker’s

Columbia County Observer

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North Florida Broadband Authority:
Feds put failing stimulus funded NFBA on life support. 3yrs and $28+ mil later, 60 customers, $15k a month revenue and no revenue model.

MADISON COUNTY, FL – The stimulus funded North Florida Broadband Authority (NFBA) met in Madison County at high noon on Wednesday, the home of the only directly connected customer of the Authority. In order to allow the failing Authority to draw down the remaining $1,673,874.81 of the American People's money, on January 31st, NOAA approved extending the federal grant 60 days past the deadline.

Darryl Register
Darryl Register was not happy with the answers.

 Baker County's Darryl Register told the NFBA Board, "At this point we've seen no projections – nothing. All we see is the expenses on the spending of the grant funds. We don't have any idea how many customers we have. We don't have any idea how much internet capacity is used or not used. We have nothing that would prove or disprove the NFBA surviving past the end of April."

NFBA Finance: When the American People pay, money is no object

On August 10, 2012, the NFBA hired Donald Schleicher to be its $115k a year Director of Finance and Administration. The NFBA has a handful of employees. Most have been hired because of who they knew. Mr. Schleicher's position was advertised. Mr. Schleicher's position is funded by the grant.

stories are here

In a memo dated April 1, 2012, the $15k a month General Manager, Richelle Sucara, wrote, "Obviously, a cost savings would be realized if we ramped up and brought more accounting services in house, even after benefits are factored in."

In December of 2011, Purvis Gray & Company was hired to be the new accounting firm for the NFBA. Purvis Gray continues to do all the accounting and preparation of reports for the Authority. Mr. Schleicher reads what he is allowed to present to the Board. He is not allowed to present any report that shows in detail how the grant funds have been expended.

In the last quarter of 2012, Purvis Gray averaged $16k a month for accounting services, paid for by the grant.

Sometime after the first of the year, the NFBA's top technician quit. No announcement was made or communicated to the Board. A new employee was hired without advertising the position. Both positions were funded by the grant.

Manufactured emergency gives accounting firm, Powell & Jones of Lake City, a $28,000 free pass

The Florida Legislature, in relevant part explains the legislative intent of Florida procurement law this way:

The Legislature recognizes that fair and open competition is a basic tenet of public procurement; that such competition reduces the appearance and opportunity for favoritism and inspires public confidence that contracts are awarded equitably and economically; and that documentation of the acts taken and effective monitoring mechanisms are important means of curbing any improprieties and establishing public confidence in the process by which commodities and contractual services are procured...

The NFBA's contentious relationship with its past auditor James Moore & Co. began in 2011, when the Authority was not happy with some of Moore's findings. Moore was hired by the NFBA based on its response to a Request for Proposals (RFP). Moore's fees are funded by the grant.

In December 2012, James Moore presented two audits to the NFBA. General Manager Sucara was clearly agitated by Moore's observation that the NFBA's website was not up to date with the latest minutes. When Lake City's NFBA representative, City Manager Wendell Johnson questioned why the 2011-12 audit had not begun, Ms. Sucara said she was looking at hiring another auditing firm. The NFBA's website is funded by the grant.

Donald Schliecher
Donald Schleicher gave a limited presentation.

This past Wednesday in Madison, the Authority's Director of Finance explained that an exigent (emergency) situation existed and that Powell & Jones had to be hired right away. Mr. Schleicher also told the Board that Powel & Jones was in Lake City and could come to NFBA offices. Powel & Jones' fees will be paid by the grant.

The miniscule revenue stream of the NFBA is causing the Authority to close its offices and relocate into their warehouse to save money. The move and rent are paid by the grant.

Mr. Schleicher also complained for the absent General Manager that James Moore did not come to their offices, but did everything electronically "which caused things to get lost."

Walter McKenzie
Walter McKenzie thought perhaps it would have been nice to have had an RFP for Auditing Services.

After a few remarks from NFBA Vice Chair McKenzie, Board Chairman Tommy Langford of Gilchrist County announced that, "Several months ago she [General Manager Sucara] had discussed changing auditors... Things have always been behind; it's been very slow; she's had to beg, borrow and plead to get things done... I was aware of this, but I haven't talked to her in a while about it."

While there was ample time for the NFBA to follow federal stimulus procurement guidelines for the hiring of its external auditor, Vice Chair Walter McKenzie from White Springs told the Board, "Time is of the essence... given more time there might be a different way to approach this... Ideally, it would be nice to perhaps have had an RFP."

Baker County's Darryl Register told the Board, "As a governmental entity, I think this is a poor way of doing business. This should have been handled through an RFP process...  Management has known for months this was probably the direction they would want to take."

For the NFBA's Inside Players:  Mum's the Word

On February 4th, seven days before the NFBA meeting in Madison, the NFBA insiders: Lake City's Wendell Johnson; Board Chairman Langford; and Cedar Key's Pat O'Neil were advised via email by NOAA of the following: The NFBA's latest Federal Financial report was submitted late and the NFBA had a negative cash balance of -$229,678.96

NOAA wrote the NFBA that a negative cash on hand balance in excess of $5,000 may be considered a questionable cash management accounting practice.

The email warned the NFBA that if its ability to account for Federal funds continued to be a concern to the Department of Commerce the grant could be suspended, designated high risk, or ultimately result in the termination of the award.

Not one word was mentioned about this communication to the Board.

The Project Report

Jacobs Engineering, the 4th engineering firm's contract expires

Donny Lort
Project Manager Donny Lort gave his opinion of NFBA revenue.

The NFBA's Project Manager, Donny Lort announced that Jacobs Engineering's contract had ended; however, there were some outstanding issues with American Tower Company (ATC) and Jacobs. Mr. Lort told the Board:  There are some outstanding issues that need to be resolved... They did the quality assurance on the towers. I have ten sites that I got back from ATC that said there are some issues that they had with the way the towers were built out. That was under Jacobs QA (quality assurance) program and also their construction program... I think some of them are starting to get resolved, but we still have some outstanding issues."

Mr. Lort said Jacobs is cooperating.


Who is monitoring the network?

Mr. Lort told the Board that two network servers went out. "We tried to get Inspired [Technologies] to fix [them] for us for about 6 weeks. Nothing runs on it other than our Solar Winds, which monitors the network."

No mention was made of INOC, the folks originally hired to monitor the network and it has never been made clear who is monitoring the NFBA's network, or if there is a network operations center.

More federal dollars on the way?

Mr. Lort announced that through FSU's Jeff Hendry, the NFBA has reached out and may get help in applying to RUS (Rural Utilities Fund) for more money. The NFBA is also looking for more money from a Rural Health Consortium. The funds from RUS would be in the way of a loan.

Mr. Lort explained that the RUS loan would, "Allow us to beef up into providing last mile service... Right now the NFBA doesn't have a staff to be able to monitor the network; resolve the issues; repair it and hook up last mile customers."

Jeff Hendry
With time running out on the NFBA, FSU/NFEDP's Jeff Hendry believes some folks are tearing down the NFBA dishonestly.

Mr. Lort also announced that the City of Lake City, which is the home of many internet service providers, such as AT&T, Comcast, Century Link, Verizon, and Windstream is looking to hook up directly to the NFBA network, allowing Lake City to use the American People's money to bypass free enterprise internet providers. This has never been discussed publically by City Manager Wendell Johnson.

Mr. Lort again insinuated that Comcast is ripping off its customers. He said, "They're not getting what they're paying for. That is an advantage that I can use to sell against."

Mr. Lort explained that the NFBA is purchasing equipment [with American taxpayer dollars] for the use of last mile provider, SVIC. There is some kind of agreement, however, Springfield Law, the NFBA's attorney claims the record is exempt as a proprietary trade secret because the NFBA is a public utility (it is not) under Florida law.

City Manager Wendell Johnson asked about sustainability

Mr. Lort said, "I'm doing everything I can... We have our challenges..." The NFBA has $100,000 a month in tower lease payments and $40,000 a month in payroll.... Our revenue stream is not anywhere near that. I mean we're at what – 15 – 20 thousand dollars a month?"

Mr. Lort left out the cost of rent; cell phones; internet; benefits; insurance; electric, etc. An independent estimate of operating expenses obtained by the Observer shows that the monthly cost of electricity to run the network is over $12,000 a month. Mr. Lort underestimated the tower lease cost by $15k a month.

Mr. Lort told the Board, "We have to gear up and we have to find funding."

For the past six months, General Manager Sucara had been telling anyone who would listen, including her own Board, that the NFBA would be self sustaining at the close of the grant on January 31, 2013.

There is no sustainability model for the NFBA, save the Magellan Business Model that cost the American People about $100,000. Although being highly touted at the time as a model for other BTOP projects, it has gone under wraps and been forgotten about by the feds, who have extended the grant, apparently with no strings attached, for another 60 days.

Epilogue: Why is everybody tellin' lies about us?

The new mantra of the NFBA insiders is that folks are trying to tear down the once suspended project by spreading falsehoods, lies, and propaganda.

FSU's Jeff Hendry, who has been paid approximately $300,000 for community outreach told the Board, "You have a group of folks and individuals tryin to tear down and tear the product down inaccurately and in many cases, dishonestly."

If, over the past three years, Mr. Hendry was directly responsible for half the 60 customers of the NFBA, the cost to the American People has been $10,000 a customer for outreach.

Tommy Langford
NFBA Chairman Tommy Langford, "People are tellin big lies, not just little lies."

Board Chairman Tommy Langford told the Board, "We do have some severe opposition out there. You've got people tellin lies... There's elected officials that are making phone calls and tellin lies about us... People are tellin big lies, not just little lies. There is no truth to it."

Before the meeting concluded, Cedar Key's Pat O'Neal, the only board member whose expenses have been funded by the American People, told the Board that thirteen 7-11s in his area are looking to do business with the NFBA. According to Mr. O'Neal, the government built and financed NFBA network could give them better and cheaper service than the private sector folks supplying their T-1s.

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