Auditor Mike Harmon sounds alarm about cost of KentuckyWired

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FRANKFORT, Ky. (KT) – An ambitious statewide broadband project will cost taxpayers nearly $1.5 billion over the next 30 years, Kentucky Auditor Mike Harmon said Thursday.

Harmon released the results of a much-anticipated special examination of KentuckyWired at a press conference in Frankfort. Findings from the nine-month review will be turned over to the Executive Branch Ethics Commission for review.

“When KentuckyWired was announced by the prior administration, Kentuckians were told they would only be responsible for a $30 million investment approved by the General Assembly in 2014, and the majority of funding would come from private investment,” Harmon said. “What we now find is that, between what has been paid out thus far, what has been bonded, and what we have been obligated to by former leaders, taxpayers are responsible for 93 percent of the total cost for KentuckyWired.”
Harmon said the review found that KentuckyWired is almost $100 million over budget and has already missed its planned completion date.

Harmon said he plans to continue an investigation, including issuing subpoenas if necessary.

In October 2015, state officials in Kentucky signed a contract to install 3,000 miles of fiber optic cable to bring high-speed internet access to all 120 counties. Harmon said the project is at least four years behind schedule because of persistent delays that have cost taxpayers a projected $96 million.
Harmon said state officials were warned in writing of problems with the contract.

"It was as if sirens were going off all around and no one was paying attention," he said.

Lawmakers have raised concerns about the delays and went so far as to threaten to kill the project earlier this year.

Initially, state officials said private sector partners were borrowing the money and assuming most of the risk for the project. But state officials later changed the terms of the deal to take advantage of tax-exempt bonds. That reduced the cost of the project while shifting the debt burden to taxpayers.

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