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A governor-appointed council set up to give away $5 million in state funds for projects to bring high-speed Internet to homes and businesses in West Virginia wound up paying nearly $2 million to an out-of-state consulting firm, according to a financial statement released last week.

Since late 2009, the West Virginia Broadband Deployment Council has paid L.R. Kimball, an Edensburg, Pennsylvania-based company, $1.88 million. The payments are expected to top $2 million — about 40 percent of the council’s entire $5 million legislative appropriation — by Dec. 31, the day the council is scheduled to be disbanded.

L.R. Kimball received the bulk of its consulting fees — nearly $1 million — to manage the Broadband Deployment Council’s grant program. The council has awarded 11 grants over the past two years.

Council Chairman Dan O’Hanlon said Kimball’s consultants have done exemplary work, but he acknowledged, “They’re not cheap.”

Kimball has charged the council about $30,000 a month this year, O’Hanlon said. “They’re very knowledgeable, very professional,” O’Hanlon said.

In 2009, then-Gov. Joe Manchin established the broadband council to fund projects that would make high-speed Internet available in West Virginia’s most remote areas. State lawmakers set aside $5 million for the council to spend.

In August 2009, the Broadband Council signed a contract with Kimball. The state law that established the council exempted the council from state purchasing regulations. Kimball received its first payment in October 2009.

The Broadband Council didn’t start distributing grants until December 2012, after getting sidetracked with discussions about a $126.3 million federal stimulus project designed to bring fiber-optic cable to schools, libraries and other public facilities. The Legislative Auditor’s Office issued two scathing reports about the statewide project, citing waste and mismanagement.

The Broadband Council paid Kimball consultants more than $1.1 million in consulting fees — mostly for “strategic planning” — before awarding a single grant, invoices show.

O’Hanlon, who was appointed to the council in 2011, and other panel members suggested hiring an executive director, and possibly more staff, but the proposal never got traction. Kimball’s contract allows the firm to charge up to $260 per hour for the work of its highest-paid consultants.

The Broadband Deployment Council has no full-time staff.

“I said, ‘Let me hire somebody, and it won’t cost as much,’ but that’s not the way it went,” O’Hanlon recalled.

Kimball has a stable of consultants who are experts on multiple topics, such as broadband technologies, grants and government rules, O’Hanlon said.

“We could have hired somebody for $60,000 [a year], but you wouldn’t have found one person who has all the skill sets that Kimball had,” he said. “We’ve had three or four different Kimball employees, and they’ve all been top flight. We are very satisfied with their work.”

Kimball’s project manager, Joshua Clemente, would not comment last week.

In late 2012, the Broadband Deployment Council asked Kimball to manage the panel’s grant program. Many council members had potential conflicts of interest because of their ties to organizations and companies seeking grant funds for broadband projects.

Kimball set up a grant application website, and scored and reviewed applications before board members voted to award funds to nine projects in December 2012 and two projects earlier this year. Nine of the council’s grants went to one company, StratusWave Communications, a Wheeling-based company that provides wireless Internet to homes and businesses.

Kimball also received and kept confidential business information from Frontier Communications and other Internet providers that detailed where the companies offered broadband service, or planned to expand. Kimball used the information to score grant applications, and recommended against projects that would bring high-speed Internet to communities that already had it.

“The Ethics Commission said we needed an outside group to handle things,” O’Hanlon said. “We decided to let Kimball do that.”

For more than a year, Broadband Council members repeatedly asked for financial statements that would detail the group’s expenditures. Last week, the council received its first written financial statement, which lists Kimball’s $1.9 million in charges to date.

Since its contract started, Kimball has submitted monthly invoices to the Department of Commerce. The invoices list 16 tasks that the Broadband Council asked the firm to complete. The tasks include “strategic planning,” “stakeholder coordination,” “kick-off,” and “outreach.” Kimball provides a running total of expenses charged for each task.

The invoices don’t include the names of the Kimball consultants who worked for the Broadband Council or hourly rates. Kimball’s invoices don’t disclose any details about the work for which the firm bills the council.

“I’ve looked at the invoices,” O’Hanlon said. “They all seem reasonable. They’ve always done what we asked them to do.”

Broadband Deployment Council members plan to discuss Kimball’s invoices at their next meeting, in October.

Reach Eric Eyre at ericeyre@wvgazette.com, 304-348-4869 or follow @EricEyre on Twitter.

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