Misunderstanding keeps state in Kentucky Wired Deal

09/14/2018 10:17 AM

FRANKFORT- The embattled Kentucky Wired program was once again the topic of a committee meeting Thursday.

Members from the Program Review and Investigations Committee heard from the state’s chief procurement officer. He says the state could have opted out of the program in 2015 for around 9 million dollars—but a misunderstanding of a federal education grant caused officials to green light the project

“The e-rate funding equated to around $11 million, which was 39 percent of the project with regard to the e-rate modernization moneys.” said Secretary of Finance and Administration Cabinet William Landrum. “The commonwealth was under the assumption that the competitively bid Macquarie contract..would meet the FCC’s competitive bid requirement.”

The state however did not receive the $11 million in funding from the federal government in 2015 leaving that price tab for the program to absorb.

Members wanted input on how the contract for Kentucky Wired was approved—and if it was part of the normal approval process.

Secretary William Landrum told members he believes the problems with program arose because of two things—the budget and the timeline.

“I don’t have any evidence but I do believe this was trying to be done prior to the end of the prior administration,” said Landrum. “So you have a timeline of trying to complete the project to not leave it undone and get it completed prior to the end of the administration.”

The contract to Mcquarie Infastructure Developments was awarded without being fully negotiated—which caused the risk of the project to increase.

Pole attachment agreements were not in place, or easements allowing workers to access land, and several items were left unfunded. In turn—caused the project to become delayed, and incur extra costs.

“None of these things had been hammered out,” said Landrum. “These were the risks that were involved while you are still making the deal after you sign the contract.”

It’s estimated the project will cost around $475 million to complete now—
this includes the extra $88 million taxpayers have payed due to delays.

The project which was originally scheduled to be completed in 2016—will likely not be finished until next year.

Members from former Governor Steve Beshear’s administration were asked to testify in front of the committee thursday—but they declined.

Michon Lindstrom

Michon is a producer for Pure Politics. Michon comes to Kentucky from Springfield, Illinois where she served as the statehouse reporter for the NBC affiliate. During her time in the Land of Lincoln she covered the state’s two year budget impasse and the largest school funding overall in Illinois history. Pure Politics airs weeknights at 7 and 11:30 on Spectrum News. Follow Michon on Twitter at @MichonLindstrom or reach her by email at michon.lindstrom@charter.com

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