North Florida Broadband Authority:
Blood in the street
Columbia County, FL (Posted October 13, 2011 12:55 pm) Part VIa | Part VIb
By the time the October 7, 2011 emergency meeting of the North Florida Broadband Authority was gaveled to a close, every major firm doing the Authority's business, Government Services Group (GSG) the project managers, Capitol Solutions, the project's grant compliance firm, and Nabors – Giblin – Nickerson (NGN) the NFBA's attorneys had resigned. The NFBA's special dispute resolution master, Mike Griffins, seemed to resign. Of this group of insiders, only the North Florida Economic Development Partnership's Jeff Hendry was left standing, although he was on the ropes and promised a decision on whether or not he would be resigning by this coming Wednesday, October 19th. With these resignations, the NFBA was hoping that the Feds would again open the tap on the $30,000,000 broadband grant that had been completely suspended since August 17th.
Ten minutes before the meeting began, the NFBA's Chairman, Jefferson County's Stephen Fulford walked out on the balcony to take what turned out to be a phone call from the NFBA's newly appointed Washington law firm, Patton Boggs. The content of the conversation wouldn't be revealed for another hour and 15 minutes.
As the meeting began a poker faced Chairman Fulford explained that the feedback he had been waiting for he had received in his earlier phone call. He told the group, "We've gotten a lot of positive feedback from the players in Washington. Our counsel up there has been very instrumental in helping us with the proposals that are being brought to you this morning."
Chairman Fulford then invited the Special Corrective Action Plan (CAP) committee members, who had met two days before to say a few words:
Tommy Langford of Gilchrist County told the Board, "Stephen's been in contact with our legal counsel and our people in Washington. I highly recommend we yield to his suggestions and do whatever we have to do to get the project back on track."
Wendell Johnson of Lake City followed, "I'm very comfortable of where we're going to go today. I agree with what Mr. Langford said."
Sheryl Rehberg of Madison County told the assembly, "I'm not comfortable with firing somebody. I don't believe it's necessary except to get the money turned on."
None of them knew the content of the Chairman's earlier Washington to Florida phone call.
The NFBA hasn't paid vendors for months, many of whom are small mom and pop operations that are teetering on the edge, because based on the representations of the NFBA, they laid money out of their own pockets and now find themselves in financial difficulty.
Krystal Strickland of GSG explained that there is the equivalent of seven banker boxes filled with invoices and supporting material that have been sent to the feds.
Pat Lien of GSG explained that the accounting functions of the NFBA were contracted out to the general manager, which is GSG. "The general manager's experience [Robert Sheets] in doing accounting for local governments is unmatched in Florida," said Mr. Lien.
The path to reinstatement of the NFBA Grant - Reorganization
NGN's Heather Encinosa told the Authority that the clearest path to a reinstatement of the grant was a reorganization which would take place over the next 30 to 45 days.
It had been clear for quite some time that the word in Washington was plain and simple. If the NFBA wanted the grant restored, both GSG and Capital Solutions had to go. Not spoken quite as loudly, but clearly a matter that was blowing in the wind, the law firm of NGN was also on the chopping block.
Attorney Encinosa said, "Both GSG and Capital Solutions have indicated their willingness to resign from the project if that was needed to facilitate reinstatement of the grant."
First a surprise
The reorganization plan, prepared by NGN and handed out at the morning's meeting for the first time, had the firm remaining as legal counsel. NGN said it had been instrumental in the formation of the NFBA, the grant application process and the ongoing support services necessary to move the NFBA forward. It named the NGN attorneys who would be working with the NFBA. The firm has no reservations.
Chairman Fulford explained, "This was the original proposal, but based on our conversations this morning with the Patton Boggs attorney, the recommendation from the NTIA [the feds] is that we also go ahead and seek new legal counsel as well."
NGN's Encinosa didn't flinch and then explained that the firm was conflicted: We are -- internally conflicted whether we really had the -- this is a huge drain on our time and resources as well. We are sensitive. We do not want to leave the Board in a lurch, which is why we did offer a 30 day extension at the last meeting, but we are more than happy to transition to new legal counsel at the end of the month.
Going – going – gone
Lisa Blair, the Owner of Capitol Solutions was the first to go. She claimed she was buried in a sea of false accusations and would be vindicated:
"That this unfounded smear campaign has brought the project to a halt is offensive to me. Given the stakes for the entire region, it is better for Capital Solutions to step aside than to allow false accusations to stop deployment.
I assure you that I will use every means possible to make certain those responsible for the damage to this project and the damage to many of the good and decent people associated with this project are held accountable to the full extent of the law."
Robert Sheets of GSG was the next to go. He spoke about the importance of the project and false allegations:
"This project must move forward for the people of North Florida to have the kind of economic development opportunity that does not presently exist. For improvements in education, public safety, healthcare, and business this is a life changing project. We know that all of the unknown allegations that have been made will be brought to a satisfactory conclusion and GSG will be exonerated. We have been proud to serve the NFBA."
Bad business dies hard
Ms. Encinosa then announced that this coming Wednesday, October 19th, the transition agreements for those who have resigned, GSG and CST, will be coming before the Board after they have been reviewed by the two firms.
This is bad business as usual for the NFBA, as once again the folks who are responsible for approving the agreements, the NFBA Board members, will be the last ones to see them, with no time to read them.
Sheryl Millington of Suwannee County reflected the majority of the NFBA board when she said, "I feel it's quite a corruption of our general perception of our legal system that we are unfortunately giving the impression of assuming guilt by having to take this action... that we are being forced into this position by a single member of the board."
New Responsibilities for NFBA Board members
NFBA Board members are now assuming responsibilities that were delegated to GSG and CST.
Chairman Stephen Fulford, a Jefferson County Commissioner, will keep his administrative responsibilities as the Authorized Organization Representative (AOR).
Lake City's City Manager, Wendell Johnson will be responsible for finance.
The City of Cedar Key's Pat O'Neal, representing the City of Cedar Key and also apparently the ranks of the unemployed will take on the NFBA's operational responsibilities. It is not clear what experience the newly unemployed Mr. O'Neal has in this realm.
Mr. O'Neal had been one of the leading cheerleaders of GSG and there were some on the NFBA Board that thought Rapid Systems had something to do with the demise of GSG.
On September 29th, Rapid Systems CFO, Denise Hamilton, whose firm engineered the NFBA system and was its GC, until it was fired without cause "for convenience" and had kept working, laying out a half a million dollars of its own money until the Feds shut down the project, asked the NFBA Board if it would be paid when the Feds finally release the money. Ms. Hamilton was concerned about a replay of everyone not being paid when the Feds had questions about a few firms. Mr. Fulford said they would be. Mr. O'Neal, singling out Rapid Systems said, "Not Rapid Systems."
On October 5, after the special board committee meeting, the unemployed Mr. O'Neal mentioned in a "get even tone," how, after the money began rolling, he was going to submit to the Feds $3,000 in hotel bills and $600 in plane fare for a trip that he had taken.
As the meeting wound down to a close, White Springs's representative Walter McKenzie told the Board, "A lot of our problems have come as a result of our overseers in Washington." A view clearly shared by many on the NFBA.
Chairman Fulford set it straight when he said, "We are all responsible for being in this position and it's ultimately our responsibility to dig ourselves out of it."
(Tomorrow – Finance and the NFEDP/FSU's Jeff Hendry)