County board discusses miscues in franchising fees

Local Allo Communications representatives Clint Schleicher and Kami Balthazor listen in as Allo President Brad Moline, via telephone, explains to county commissioners how the county mistakenly received franchise fees from the company for the past nine years.

GERING — Scotts Bluff County Commissioners will be trying to sort out what to do about $413,493 in cable franchising fees that were erroneously remitted to the county.

Allo Communications entered into franchise agreements with the county, along with the cities of Scottsbluff, Gering and Terrytown in 2010.

Allo launched its cable services in 2011 and until the end of 2018, was remitting franchising fees to the county, but not to the cities.

Allo President Brad Moline, speaking via telephone, told commissioners Scott Bluff County was the only county franchise the company had.

“We set up Scottsbluff, Gering and Terrytown as one account under Scotts Bluff County,” Moline said. “All the municipalities got coded as a county franchise fee. But the county franchise fee should only relate to people living outside a specific city.”

It wasn’t until last year when the City of Scottsbluff was preparing to renew its fee agreement and realized they hadn’t been receiving payments.

What was discovered was that over the past eight years, remittances should have been $318,087 to the City of Scottsbluff, $95,338 to the City of Gering, $66 to the City of Terrytown and $3,604 to Scotts Bluff County.

Allo corrected the error in 2019 and has been remitting each quarterly payment to the correct entity.

Allo suggested the county remit the $413,493 in two separate payments, which would lessen the budgetary impact on the county. Allo would then return the fees to the municipalities.

Scotts Bluff 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.

“It says nothing about us remitting fees to Scottsbluff, Gering or Terrytown,” Eubanks said. “I’m not privy to what was in Allo’s agreements with the municipalities, but they were entitled to monthly revenue and didn’t see a penny.”

Eubanks said the breach of contract was made by Allo nine years ago when the municipalities didn’t receive their franchise fees.

As for the remittances to Scotts Bluff County, there was no breakdown of number of subscribers in Gering, Scottsbluff or Terrytown. The county just got a check for the 4% fee under the agreement.

“I’m stunned by the level of incompetence,” Eubanks said. “Nine years and no one said a thing about not being paid.”

Eubanks continued that even if Allo had assumed the county would distribute the fees to the municipalities, there’s nothing in the agreement that makes the county responsible for that.

“I think I understand what happened and understand your position,” Commissioner Mark Harris told Moline. “But I can’t imagine that in 100 years we’d make a decision on this tonight. I’d like the county to take a look at the agreement and make sure we have all the information we need before talking about our options.”

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Jerry Purvis is a reporter with the Star-Herald. He can be reached at 308-632-9046 or emailed at jpurvis@starherald.com.

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