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Tax dollars wasted?

By Carol McIntire
Editor

BroadbandIf statements made by state and county officials last July were true, Carroll County would have broadband Internet service readily accessible to households today.

That is not the case at all. High speed broadband is not readily accessible to a majority of county residents and grant money that was suppose to make it happen, is gone; eaten up by unsupported expenses by the company contracted to make it happen.

Who was the contractor? How reliable was the company? How was the grant money spent and what for? Who was in charge of approving grant expenditures: local or state officials? Why didn’t county residents receive what they were promised?

The FPS set out to find the answers to these questions and more.

BACKGROUND
In June 2012, Carroll County received a $100,000 grant (termed “a significant funding award” by state officials) from the State Appalachian Development Program to aid existing broadband expansion plans.

In a press release issued at that time, Carroll County Commissioner Tom Wheaton said his intention was to have an August 2012 rollout that would “provide broadband access to approximately 8,000 households with plans to eventually provide service to the entire county, including the 2,500 households with no type of broadband service available to them.” 

Commissioners signed a contract with an Internet Service Provider known as Cue Band LLC July 5, 2012. The project was to be completed June 1, 2013.

Cue Band was formed in August 2011 by David Weddell of Hartford City, IN.

Weddell was listed as the company’s chief executive officer.
The plan was to utilize the grant money along with $400,000 in matching funds from Cue Band to “install equipment on eight existing towers in Carroll County to provide countywide high band width connectivity and reliable Internet speed and services,” according to the contract.

The terms of the contract stipulated the contractor would provide the county with copies of the leases for the towers as well as “firm documentation of matching funds prior to the disbursement of grant funds.”

WEDDELL’S BUSINESS EXPERIENCE
Weddell has a long and varied employment history, according to Internet business profiles.

He served as vice president of Business Development for Omnicity from April 2008 through July 2011. The company filed Chapter 11 bankruptcy in September 2011 after being hit with lawsuits from five companies acquired by Omnicity that claimed they had not been paid.

 He was director of sales for OnlyInternet from 2004 to 2007 and was founder and president of Cue Connex, LLC, a company he founded in 2007. Cue Connex, LLC was purchased by Omnicity, Inc. in 2009.

Weddell’s business profile on Omnicity’s Businessweek site also listed him as business manager of Westcare Industries; said he had 25 years experience in the print/packaging industry; noted he worked with GTE Wireless Data from Tampa, FL in 1996 and became the North American Sales Director for Supernova Systems, Inc., in 2003.

WHERE DID THE
MONEY GO?
Less than one week after the contract was signed (on July 9) Weddell submitted his first draw on the grant. An expense sheet for Operations Department employee Jim Chickarella included $803.95 for cell phone bills ($114.85 per month), $308 for Internet access ($44 per month) and a mileage reimbursement total of $1,687.40 for 3,068 miles ($.55) per mile. He also charged $55 in office supplies. No supporting documents were provided for the expenses.

Weddell’s expense report (dated July 10) charged the grant for $1,289.10 in cell phone bills ($214.85 per month), $180 in Internet access ($30 per month), $3,622.85 in mileage for 6,587 miles and $1,453.92 in office supplies.

Other charges included $20,306.10 for Internet network equipment (signup fees, training, license fees, warranties) a bill for $498.50 for the “minimum due” on a commercial insurance package and $5,335 for a telephone system and accompanying software. The total drawdown on the grant was $40,605.82.

AUGUST
On Aug. 3 Weddell submitted a drawdown on the grant that totaled $21,094.47.

The expense sheet for Operations Department employee Robert Meissner totaled $165.47 and included $42.82 for Internet access and a mileage reimbursement of $122.65 for 223 miles traveled.

Weddell’s expense statement was dated Aug. 11 and included $214.85 in cell phone charges, $30 for Internet access, $1,020.80 for mileage reimbursement, $261 for office supplies, $542 for motel expenses (dated July 31) for the Red Roof at North Canton and $476 in motel charges for the same date for the Country Inn and Suites at Dover. Once again, no supporting documents were provided for the expenses.

Also included were a $10,000 deposit on a lease with Agility Lease Fund-III, LLC, $645 for a desk phone and payroll charges for Meissner dated Aug. 20, Sept. 5 and two that had the same date, Oct. 10. Each one was for $1,500.

OCTOBER
The October drawdown on the grant totaled $10,955.96 and included expense reports for Chickarella ($3,147.56 for the months of August and September) and Weddell ($5,628 for the month of September) along with a charge for an upgrade for the Cue Band website for Carroll County ($2,180).

NOVEMBER
The November drawdown on the grant totaled $7,749 and included $5,599.50 in payroll and $2,491.72 in expenses for Weddell. Payroll expenses were $1,500 each for Meissner dated Oct. 20 and Nov. 5 and three pays for Weddell of $4,000 each dated Oct. 5, Oct. 20 and Nov. 5. Weddell included a notation on the payroll request noting one third of the time was spent in Carroll County.

Weddell received a check for $16,018.28 which was neither the amount requested or the total of the entire bill if the employees had worked full time in Carroll County.

DECEMBER
In December, Weddell collected $3,272.39 for his expense statement that included charges for an office phone bill, mileage, cell phone, Internet access, hotel reimbursement and office supplies.

Payroll included Meissner: $1,500 each for the dates of Nov. 20 and Dec. 5; and Weddell: $4,000 for the dates of Nov. 20 and Dec. 5.

JANUARY
Weddell drew down $9,011.71 for a bill dated Jan. 1, 2013. The charges were for payroll of $6,184 for himself and Meissner for spending half their time on the Carroll County project and Weddell’s expense report for $2,827.46.

FEBRUARY
On Feb. 25, Weddell submitted an expense report for himself totaling $4,135. The report showed cell phone fees, Internet access, mileage reimbursement totaling $2,113.10 (3,842 miles), office supplies ($365.72), hotel reimbursement of $1,157 (no hotel names listed) and an office phone bill ($280).

There were not sufficient funds left in the grant to cover the request, so Weddell was written a check for $3,813.08 which left the account with a zero balance.

Each bill was signed by Sonja Leggett (former commissioners clerk) with the words “Approval to pay” and a date written on it.

TIMELINE
Shortly after commissioners signed the contract, Weddell hosted town hall meetings where residents could sign up for his service, which many did. Residents were told they would be notified when the service became available. Those calls never came.

Meetings were held in July and August. In December, Cue Band ran ads soliciting customers to sign up for Internet service. If customers pre-paid the first year, they were promised one month of free service and given the opportunity to win a $100 gift card in a drawing.

Nearly $1,000 in local advertising charges incurred by Cue Band were not paid and not submitted to the grant fund for payment.

In late 2012 and early 2013, The FPS began receiving calls from customers who signed up for the service at the town hall meetings, but had not received a call. They reported leaving phone messages on the Cue Band phone number with no return calls and sending emails, which were not answered.

Callers were referred to Commissioner Wheaton and the FPS placed a call to Wheaton. He said “some problems were encountered and there had been a delay in the rollout.”

In late February 2013, The FPS received a news release from a company known as Agile Networks from North Canton announcing a ribbon cutting ceremony to mark the roll out of a statewide broadband network that would “go live” in Carroll County in February.

The release said the initial deployment would cover more than 4,000 homes, 865 of which did not have broadband access. It was also expected to cover 150 businesses in the Dellroy and Carrollton area.

While deploying in the new market, the release noted, “Agile was working with Cue Band to deliver broadband to the local residential and small business community.”

At the ribbon cutting (attended by both Cue Band and Agile officials), an Agile official said the Agile network was a privately funded build-out of data infrastructure using the state’s Multi-Agency Radio Communications Trunking System (MARCS) towers.

That was the last time the name Cue Band was heard in connection with Carroll County Broadband.

WHERE DID CUE BAND GO?
The FPS placed calls to Cue Band and sent emails, but the calls were not returned and emails were not answered. On Aug. 15, a machine answered the call with a message “our agents are anxious to assist you;” the call was put on hold, but was not answered by an agent.

A phone call was also made to Weddell’s cell phone number and a message left, but the call was not returned.

A search on the Internet for the Cue Band website, cueband.com, opens up as Lightyear Wireless. A statement across the top of the site states, “Personal website of Cue Band Wireless LLC.”

An FPS source, who wished to remain anonymous, told the FPS that after the meeting at Atwood “Weddell just left.” “He took off and left Agile holding the bag,” the source said.

UNRAVELING INFORMATION
The FPS requested copies of the tower lease contract and financial commitment that were required as part of the grant from Carroll County commissioners. Leases for the county-owned tower located near the intersection of SR 171 and SR 9 and the Baurer tower on Autumn Rd. were provided.

The commitment of funds consisted of a single piece of paper that contained an estimate of the initial cost of building a WiMax system with Weddell’s signature on the bottom. The paper was not dated and there was no commitment of $400,000 in matching funds.

The FPS contacted Stu Johnson, executive director of Connect Ohio, a group working to bring broadband to Appalachian areas, who was instrumental in Carroll County receiving the grant funds.

When asked what went wrong with the project and why Carroll County was left without broadband after all the grant funds were exhausted, Johnson said it is “unfortunate it didn’t work out.”

“A company called Horizon Telecom was to provide the middle mile for the project,” Johnson stated. “Cue Band was to provide the last mile. As of September last year, the middle mile was not completed and I’m not sure it’s in Carrollton yet. As a last-ditch effort, we got Agile Network to provide the middle mile, which only came to one tower in the county. The relationship with Cue Band didn’t work out.”

In response to a question about who was responsible for monitoring the grant, signing off on expenses charged against it and how $100,000 of taxpayer money would be wasted on a project that wasn’t completed, Johnson replied, “I’m not making light of the situation, but in the light of things, this was a small amount compared to some of the larger projects that haven’t worked out. I believe they (Cue Band) were well-meaning folks who haven’t been able to perform and fell short.”

The FPS contacted Wheaton for answers.

He was asked the following questions:

Who monitored the grant?

“Every single request was reviewed and approved by the Ohio Department of Development,” Wheaton replied. He specifically stated Mary Oakley sent an email for each set of bills granting approval to pay.

Was there any inspection or oversight on the grant?

“The state provided oversight,” he replied.

Was any equipment installed on towers and where is the equipment that was purchased with grant funds?

“I don’t know,” Wheaton replied.

Cue Band charged several thousands of dollars for office equipment, including a phone system, do you know if the company actually had an office?

“I don’t know,” he replied.

He said the grant was to help “start Cue Band’s business;” the company came highly recommended by Connect Ohio; Cue Band was the only company to properly submit a proposal for the project; Stu Johnson worked for Cue Band at one time and Weddell was a member of the Connect Appalachia Broadband Initiative (CABI) committee.

The Ohio Development Services Agency  (DSA) (formerly known as the Ohio Department of Development) has a different view.

Todd Walker, director of communications, said the grant was meant to “bring broadband to Carroll County.”

“That $100,000 grant was awarded for the specific purpose of providing broadband to Carroll County and included matching funds of $400,000 from the contractor,” he said.

When asked if the DSA approved drawdowns from the grant, he said that was the responsibility of county commissioners.  

“Our agreement for the grant is with Carroll County,” he said. “The county administers the day-to-day activities of the grant and disburses grant funds. The county approves expenditures.”

When asked about the location of equipment purchased with grant funds, Walker once again said he would have to defer to county commissioners.

“Our agreement with the county for the grant funding doesn’t end until Dec. 15, 2013,” he said. “They have until that date to complete the project and until that date, they are in charge of administering the grant.”

WHERE IS THE EQUIPMENT?
Wheaton told the FPS he didn’t know where the equipment purchased with grant funds is located or if any of it was installed on towers.

A source who has knowledge about the project and asked to remain anonymous, told the FPS the equipment purchased was not installed on any tower. They said the equipment purchased to operate the Carroll County system is located in Norwalk and is operating a broadband system in Geauga County in which Cue Band was involved during the same period of time as the Carroll County project.

The FPS also called Agile Network to ask if the equipment on the two towers they are utilizing belongs to Cue Band.

An employee told the FPS the equipment is owned by Agile Network.

CONSEQUENCES
The Development Services Agency was asked the question: What happens if it is determined the money was misspent?

Walker said when the grant period is over DSA will monitor the grant to see if funds were spent correctly.

“At the end of the day it’s about a company living up to the terms of its contract,” Walker said. “The Department of Development Services is working with commissioners to ensure the company follows through on its commitment and if needed, hold them accountable.”


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