Lake County, Minn., Broadband Project Goes to Court

The company behind a Lake County broadband project is suing the county for unpaid work and materials.

by Adelle Whitefoot, Lake County News-Chronicle / November 6, 2017
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(TNS) -- After three days of testimony in a civil trial between Lake County and Rohl Networks, LP, five witnesses have taken the stand and the plaintiff has rested.

The plaintiff, Rohl, is suing Lake County for unpaid work and materials related to the county's broadband project. It seeks nearly $2.3 million in restitution.

The trial started Monday, Oct. 30, and is scheduled to last through Friday, Nov. 3. Visit lcnewschronicle.com for the final results of the trial and to learn more about the testimony from the defense's witnesses.

Former CEO takes the stand

Rohl first called witnesses: former Rohl CEO David Marinelli, former Rohl Vice President of Operations Jeff Lopez and Rohl General Manager Michael Wiecinski, who served as director of business development during the course of the project.

Marinelli testified Monday, Oct. 30, to the nature of the contracts between Rohl and Lake County for the broadband projects. He said that before construction started, Rohl was confident each phase could be completed in the timeframe established in the contracts.

The timeframe for Phase 1 — the cities of Two Harbors and Silver Bay — was 60 business days; Phase 2A — along Highway 61 between Two Harbors and Silver Bay — was 200 business days; and Phase 2B — the remaining selected area in Lake County as well as some parts of St. Louis County — was 356 business days.

According to Marinelli, each phase was intended to be completed before the next one was started, but this didn't happen because Lake County and its hired engineer, Compass Consultants Inc., caused project delays.

Marinelli said the causes of the delays varied: The county didn't have the "make-ready work" completed prior to construction; the engineer completely changed the scope of work; the U.S. Department of Agriculture's Rural Utility Service (RUS) withheld funds.

"Make-ready work," according to several witness testimonies, would include obtaining pole agreements, permits, private property easements and bridge attachment agreements, as well as ensuring poles were ready for attachments.

"The delays that we experienced were massive in size and recurring," Marinelli said.

According to the contracts, if Rohl was experiencing delays, it was required to submit a written extension request within 10 days. Though Rohl submitted letters to the county and Compass expressing concerns with the issues, the letter didn't specifically ask for an extension.

Marinelli, who sent many of the letters, claimed it was because he didn't know when the issues would be resolved. Therefore, he couldn't give exact days.

In October 2014, Rohl suspended work on the project and claimed the county owed it nearly $7 million in unpaid invoices. It refused to continue working without payment. The invoices weren't paid because RUS suspended funding over concerns about the project.

Eventually, the county paid Rohl $500,000 from its own funds in late October 2014. It then paid $43,601 in interest in December 2014, a few weeks after Rohl requested another $500,000 payment.

Lopez: 'It was three years of trying to make this work'

Lopez testified Tuesday, Oct. 31, to the delays Rohl experienced with make-ready work, as well as engineering problems he observed.

Lopez said 90 percent of the time he has worked on a project, the make-ready work has been completed before construction started. He claims this wasn't the case with the Lake County broadband project.

"There were a lot of areas that were waiting for make-ready," Lopez said. "I can't tell you how much time I spent trying to fix these problems instead of making sure this project was profitable for my company, which was my job."

Lopez said Rohl ran into issues with Cooperative Light and Power (CLP) poles not being made make-ready, as well as issues with the ownership of the poles.

In Two Harbors, the city believed it owned all of the poles; however, Frontier Communications later came in and claimed it owned some poles in the city.

Until Frontier and Two Harbors came to an agreement, Rohl had to stop work in Two Harbors, Lopez testified.

In Silver Bay, Frontier and Minnesota Power owned the poles, but had to determine who owed what poles before work could continue.

Lopez said there were also issues when Rohl would be laying fiber and then run into an area where easements hadn't been secured, so work was halted on that line.

"It was three years of trying to make this work," Lopez said. "Our federal government was generous enough to give the Arrowhead Region millions of dollars, and I felt that I had a fiduciary responsibility to make sure it was done right. I kept wanting to get the job done, but I couldn't."

Lopez and Marinelli said they believe that Lake County formally took control of the fiber when the line went live and the county began to make money, so Rohl had the right to charge the county for any repairs to lines that were already laid. The county disputes this claim.

Rohl GM testifies to invoice accuracy

Wiecinski was the last witness Rohl attorneys called to the stand. He testified Wednesday, Nov. 1, to the accuracy of the invoices that Rohl claims are outstanding. He and plaintiff attorney Nathan Sellers reviewed each invoice, split into three categories.

One category equals more than $1 million in owed retainage. A second totals about $619,085 in invoices that showed Compass approved them, but Lake County hasn't paid. The last category shows $607,161 in remaining open invoices that haven't been approved by Compass or paid by the county.

Wiecinski also disputed an invoice Lake Connections sent to Rohl for work done by MP Nextlevel, the contractor hired to finish Phase 2B, where Rohl stopped work.

Defense calls its first witnesses

The defense called two witnesses as of Wednesday, Nov. 1: Compass project manager Janell Gibble and Lake County Administrator Matt Huddleston.

Gibble testified how invoices for installed units were created and approved.

"As units were being installed, we had tabulated sheets saying what had been installed and everyone would sign off on the agreed footage," Gibble said.

According to Gibble, these tabulations were done daily and signed daily and would be used to create invoices. The invoices would be created by Rohl, then sent to Compass for approval and then to Bob Thompson and Jeff Roiland of Lake Communications Inc. for approval before the invoices would be sent to the Lake County Board of Commissioner for approval to be paid.

Huddleston was called to testify late Wednesday afternoon.

©2017 the Lake County News-Chronicle (Two Harbors, Minn.) Distributed by Tribune Content Agency, LLC.