Schools’ savings mount after ending IEN deal

BOISE – The tally of savings from dumping the troubled Idaho Education Network continues to climb, as lawmakers received final figures Thursday showing school broadband costs dropped 37 percent and the cost per megabit declined by a whopping 61 percent.

Meanwhile, legislative budget writers lashed out on Thursday at the state Department of Administration, which ran the IEN and signed up 21 state agencies for a separate broadband service agreement with its vendors – all of which are void now that the IEN contract has been declared illegal by a court.

“It’s more evidence that the Legislature is taking the right steps to push the hold button, so to speak,” said Sen. Shawn Keough, R-Sandpoint, vice chairwoman of the Legislature’s Joint Finance-Appropriations Committee. Lawmakers have opted to continue local district contracts next year instead of a statewide contract for high school broadband and video-conferencing services to replace the IEN.

Gov. Butch Otter had requested $10.5 million for the IEN next year, including $6.7 million in the department’s budget to replace federal funds lost because the state issued the $60 million IEN contract illegally. Individual school districts mostly are expected to qualify for the federal e-funding next year, which will substantially reduce the state’s costs.

On Feb. 27, the Department of Administration declared an emergency and signed a 39-page, $1.88 million, no-bid contract with CenturyLink, the broadband provider for the IEN, to continue serving 21 state agencies for the next six months.

“Our focus in the short term was on trying not to disrupt the school districts and the kids,” Keough said. “We actually told the Department of Administration that they were on their own … with the state agencies. While I was surprised at their action, they signed a six-month contract.”

With strings tied to next year’s budget, the Joint Finance-Appropriations Committee is requiring the department to “do a real bidding process,” Keough said.

More than 125 school districts across the state scrambled and signed new contracts, mostly with local vendors, for broadband service to replace the IEN service that had linked the state’s high schools. All that work was completed in less than two weeks, and no schools saw interruptions in service.

The Department of Administration awarded the $60 million IEN contract in 2009 to two politically connected vendors, Nashville-based Education Networks of America and Qwest Communications, now CenturyLink. Another vendor, Idaho-based Syringa Networks, challenged the award, and a 4th District court issued a final ruling in February declaring it illegal.

The U.S. Justice Department is investigating the deal. Both ENA and CenturyLink have filed tort claims against the state, demanding millions in payment for IEN services from September to February; state law prohibits the state from making payments under an illegal contract.

The department’s purchasing manager, Bill Burns, wrote in the Feb. 27 emergency declaration that for the 21 state agencies, “discontinuance of services provided through this contract creates an immediate threat to the health, welfare and safety of the citizens in the state of Idaho.” He added that alternatives could not be engaged immediately without disruptions.

The budget that the Joint Finance-Appropriations Committee set Thursday forbids the department from entering into any long-term contract for broadband services without direction from the Legislature and governor.

The joint budget committee voted unanimously in favor of the budget bill, which also sharply cuts state funding to the department, to reflect that the IEN no longer is run there. Instead, money was allocated to the state Department of Education to reimburse school districts for their broadband costs, both next year and for the rest of this year.

The budget bill still needs approval from the full House and Senate and the governor’s signature to become law, but budgets rarely change once they’re set by the joint committee. Overall, the budget for the Department of Administration for next year reflects a 66.2 percent decrease in state general funds.