Welcome to Laurel County, Kentucky, where Auditor Mike Harmon recently spoke at the London-Laurel County Chamber of Commerce on March 21, 2019. Harmon addressed the work of his office in increasing transparency and accountability at both the state and local levels.
Harmon began his speech by sharing a humorous anecdote about a recent incident he encountered during heavy rains. He ended up driving into high water and had to abandon his car, spending the night without shoes. Despite the mishap, he emphasized his dedication to his work and thanked Representative John Blanton for accommodating him at a nearby bed and breakfast.
As the Kentucky State Auditor, Harmon’s office conducts over 600 audits per year, including examinations of county sheriffs, clerks, fiscal courts, and special exams. One significant audit carried out by his office focused on Kentucky Wire, an agency responsible for building a middle-mile fiber optic internet network to connect all 120 counties in the state.
Originally, Kentucky Wire was intended to be a public-private partnership, with most of the project funding coming from the private sector. However, the audit revealed that the project is nearly $100 million over budget and is already about two and a half years behind schedule. Taxpayers are still paying for a network that is not yet available.
What is most troubling about the Kentucky Wire project is the decision to flip the script, shifting the burden of funding and construction from the private sector to taxpayers. The original plan included appropriations from Congressman Rogers and the state, but the project agreements changed the dynamics. Instead of private investors, a non-profit entity called Quick Kentucky Wired Infrastructure Company issued tax-exempt financing for the project. This decision tied the project to taxpayers’ credit rating, increasing the financial burden on them.
Furthermore, taxpayers were misled about the revenue streams that were intended to finance the network, particularly regarding Kentucky’s K-12 schools. It was anticipated that these schools would transition to Kentucky Wire for broadband internet services, with funding coming from the federal E-Rate program. However, it was discovered that Kentucky Wire was not eligible for E-Rate funding due to conflicts of interest and insider preferences within the procurement process.
The loss of funding from K-12 schools, which accounted for 45% of the project’s financing, significantly increases the financial burden on taxpayers. In light of these challenges, Harmon has proposed alternative scenarios for moving the project forward. He suggested partnering with utilities, telephone companies, and cooperatives to rebuild the fiber internet system.
Harmon highlighted neighboring states, such as West Virginia, Virginia, and Mississippi, which have pursued similar strategies for their broadband projects. He believes there is no reason why Kentucky cannot adopt the same concept and utilize local companies to complete the project efficiently.
In conclusion, Auditor Mike Harmon’s speech underscored the importance of transparency and accountability in government projects. He shed light on the issues surrounding Kentucky Wire, emphasizing the need for responsible management of taxpayer funds. Moving forward, he hopes to find innovative solutions to complete the project and ensure that the citizens of Laurel County and all of Kentucky have access to reliable and affordable broadband internet services.
To learn more about Auditor Mike Harmon’s special examination of Kentucky Wire, you can review the full report on his office’s website. Stay tuned for updates on how Laurel County and the state of Kentucky address the challenges and opportunities related to this crucial infrastructure project.
Keywords: Auditor Harmon, London-Laurel County Chamber of Commerce, transparency, accountability, Kentucky, Kentucky Wire, state auditor, special examination, middle-mile fiber optic network, public-private partnership, taxpayers, funding, construction, private sector, tax-exempt financing, E-Rate funding, K-12 schools, broadband internet services, alternative scenarios, utilities, telecommunications companies, cooperatives, neighboring states, responsible management, Laurel County, Kentucky.