Leelanau County Broadband Fact Sheet

Contract with Broadband Consulting Company DCS Seeking to Be Paid $11,000 Monthly

History of Payments:

• Hired by Leelanau County through LIFT for inventory survey. Paid $42,660 in two checks dated 5/12/2021 and 9/14/2021.

• Paid $40,000 in "Startup Fees" from 3/7/2022 through 5/3/2022.

• Paid $6,316 monthly from 6/29/2022 through 12/4/2023.

• Starting 9/2/2022, payment draws were switched from American Rescue Plan Act funds to Special Projects in the Leelanau County General Fund. Reason unclear.

• Beginning 1/26/2024, paid $5,000 most months for “ongoing negotiations with Charter Communications for development of proposals for broadband installations in Glen Arbor, Empire, Cleveland, and Kasson Townships.”

  • Starting in September, payment wording changed to: “For services rendered regarding ongoing negotiations with Charter Communications, Agri-Valley, and Point Broadband for development of proposals for broadband installation in Glen Arbor, Empire, Cleveland, and Kasson Townships.”

• Also on 1/26/2024, paid $25,000 for “ongoing negotiations with Charter Communications” for broadband proposals in the same four townships.

• Additionally paid $8,000 monthly to oversee construction phases in February, March, April, June, July, August, September, October, November, and December.

• On two occasions (Nov. 4 and Dec. 3), DCS was issued two checks on the same date for consulting and project oversight: $5,000 and $8,000, respectively.

• Total amount paid: $388,900

Concerns with DCS Language and Compensation

• DCS should explain why it is seeking a 60 percent raise for work with service providers in Kasson, Glen Arbor, Empire, and Cleveland Townships.
  This is a critical question because the federally funded BEAD program selects internet providers on a competitive basis. The deadline to become an approved bidder is March 3. As of now, Point Broadband is not listed as an approved bidder.
  The BEAD administration will also oversee project completion, paying over $6,000 per hookup.
  What, exactly, would we be paying DCS to do, given its 2023–24 performance?

• DCS claims it will “independently perform verification of work as needed.” This suggests DCS acts as the regulator, while Point Broadband is the regulated company.
  However, Point Broadband has designated DCS—and specifically Chris Scharrer—as the sole party authorized to review and approve the broadband work.
  Leelanau County should be free to choose any contractor to regulate a $17.5 million project. An affidavit should confirm that neither DCS nor Mr. Scharrer has a financial relationship with Point Broadband.

• The “lobbying” component of the contract lacks accountability and is not performance-based. Nowhere does it require DCS to document or prove its work—especially at an $8,000/month rate. This obligation could be fulfilled with just a handful of monthly phone calls.

• The contract does not require a project-end report. One was required (and expected) after the previous contract.

• The contract fails to inform constituents. For example, the Benzie County website posts detailed broadband updates every two months (or sooner).
  Meanwhile, the Leelanau County Broadband Initiative section of our website contains only an initial “action plan” and a 2021 survey written by DCS Technology.

On the Need to Hire This (or Any?) Coordinator

• We are reviewing contracts from DCS and Point Broadband without adequate time to evaluate them.
  That is not the County Board’s fault. Mr. Scharrer did not return calls until pressed on the lack of a contract—meaning no contractual arrangement with DCS existed for six weeks. The board received a proposal just days before its regular meeting, bypassing the executive committee process.

• Leelanau has rushed the broadband project, costing the county millions of dollars. We were slow to recognize the national broadband push, and rather than ride the wave, we got ahead of it prematurely. Approving the current contract would be another costly mistake.

• We’ve made contract mistakes before. The original concept was a $17.5 million project—Point Broadband would contribute $12.5 million and Leelanau County $5 million via ARPA.
  While those numbers were included in original documents, Point Broadband later secured a $5 million grant, reducing its investment to $7.5 million.
  Leelanau County received no reimbursement. A single provision in the original contract could have saved the county millions.

• Compare with Benzie County, which moved at a more thoughtful pace. Its comprehensive broadband project is costing just $1.5 million in ARPA funds (per its website), and its consultant cost about $20,000 (per Mr. Maylone).