During a special meeting March 31, Gering City Council members voted unanimously to reject an offer from Scotts Bluff County that would resolve the nonpayment of franchise fees from Allo Communications.
The franchise fees in question were from 2010 to 2018 when Allo was to allocate and pay the county, along with the Cities of Scottsbluff, Gering and Terrytown, for customers receiving Allo service in those municipalities.
Due to an accounting error, Allo paid all of the fees to the county rather than dividing them among the municipalities. Allo corrected the error after it was discovered in late 2018.
Scotts Bluff County received the entire $413,493 in franchise fees over the eight years of the agreement. The breakdown should have had the county receiving $3,604. Scottsbluff’s share was $318,087, Gering with $95,338 and Terrytown with $66.
County Commissioners discussed the misplaced fees during an August 2019 meeting. At the time, County Attorney Dave Eubanks said the original franchise agreement didn’t include any breakdown on how the fees should be distributed. It only stated the cable operator will pay the county 4% of gross revenues.
The municipalities met several times to find a way to redistribute the fees, but no agreement could be reached. So in October 2019, both Gering and Scottsbluff filed claims against Allo for their share of the fees that were erroneously remitted to the county.
A January 2020 letter from the Perry Law Firm of Lincoln said the county hadn’t redistributed the fees in accordance with the agreement with their client, Allo Communications.
“We must reiterate our demand for payment to the communities,” wrote attorney Daniel Kaplan. “We also request a prompt update as to what plan of action with respect to the demand by Allo that the county has decided to adopt, so that Allo may proceed appropriately.”
By March 6, the county made an offer of settlement to distribute $200,000 of the franchise fees to Scottsbluff, Gering and Terrytown.
The Perry Law Firm joined Allo in rejecting the offer as “wholly insufficient.”
The Perry Law Firm letter stated, “The aggregate amount of franchise fees that the county wrongfully withheld, in breach of its duties, was $413,493.09. The county has had the use of those franchise fees over the years.”
On their part, Allo said it would consider waiving the eight years of interest on the franchise fees if the county would remit them back to the cities promptly.
It took less than two minutes of the meeting for the council to join Scottsbluff in rejecting the county’s offer to settle for less than half the fees collected from Allo’s franchise with the municipalities.