Niles wasted millions on technology “doomed to fail”

By Jordan Cohen

news@vindy.com | First of 2-day series

NILES

Niles spent at least $3 million on technology that failed to meet expectations, including $2 million on a citywide Wi-Fi system project in 2007 that never came to fruition.

An investigation by The Vindicator has found that not only is Niles still paying for those financial mistakes of years earlier , but obsolete technology from the long-shuttered Wi-Fi system is still being warehoused.

Unchecked spending including the millions on Wi-Fi and a depleted general fund were among contributing factors when state Auditor Dave Yost placed the city in fiscal emergency in October 2014. Another shortage: a $2 million deficit in the city’s water fund, much of which was related to the technology upgrade.

One week after Yost’s declaration, a team from his special investigation unit confiscated a number of records, including some apparently related to the Wi-Fi and other purchases. Nearly three years later, the state still holds those documents, making it difficult to determine how much was actually spent, said city Auditor Giovanne Merlo.

Records in the city auditor’s office were not computerized during the past decade. Instead, the office relied on appropriation cards containing handwritten entries for each item, which adds to the difficulty of determining the total expenditures.

The Vindicator’s examination reveals that the most glaring of technological misfires was the attempt from 2007 through 2010 to establish the citywide Wi-Fi system that wound up costing well above estimates. It was presented to city council by then-Mayor Ralph Infante.

The project was neither completed nor implemented.

“The project was destined to fail,” said Mike Dibble, information technology director.

Dibble, hired in late 2014, years after the funds were allocated, discovered Wi-Fi purchases that have, in essence, left the city holding the bag.

“The [equipment] is long out of warranty so the city can never recover what it spent,” he said.

Interviews uncovered other costly errors attributed to a combined lack of planning and knowledge. Among the discoveries:

Lack of tree trimming interfered with one of the most important elements for Wi-Fi to function properly — line of sight.

Much of the equipment remains in city storage, outdated and worthless.

An expensive software program for the city’s utility billing system proved so troublesome that it had to be replaced — adding to the city’s technology expenses.

Costly laptop computers for police cruisers were largely ineffective upon installation because their connectivity was dependent upon the city’s aborted Wi-Fi system.

“Poorly planned, poorly designed and poorly implemented,” said council President Robert Marino, summarizing the Wi-Fi and other technology failures. “The city deserves plenty of criticism, but where were the state auditors?”

“All I can tell you is we can’t comment on it,” responded Ben Marrison, Yost’s communications director. Such responses may indicate that the state has yet to complete its investigation.

A review of expenses by The Vindicator reveals that from 2007 to 2012, more than $2.4 million was spent on the Wi-Fi and other technologies through CDW-G headquartered in Vernon, Ill. The company provides “multi-brand technologies” for government, business and education.

That figure includes $830,000 in 2007 for meter wireless connectivity purchased from Proxim Wireless Corp. in Fremont, Calif.

CDW-G is classified as a state term vendor, which means Ohio has determined government entities are assured of the lowest price by going through the company for purchases. Cities that purchase through the vendor are not required to solicit bids before purchase, and Niles never did.

Also, there is no indication the administration considered the possibility of grants that might have helped cover the costs, according to Mark Hess, who was engineering, grant and development coordinator at the time.

“No one approached me with regard to any grants related to the Wi-Fi project,” said Hess, now Trumbull Transit administrator. “I wasn’t asked to even seek them out.”

Records also show the city spent more than $226,000 for information technology expenses including “network infrastructure” from NetIT Solutions in Wadsworth, Ohio, in 2008 and 2009. The company is no longer in business.

Marino would later demand accounting of the expenditures in a series of emails, copies of which he provided to The Vindicator. In one addressed to then city Auditor Charles Nader in July 2013, Marino complained that the data he had reviewed “clearly demonstrates ... a runaway spending train.”

As conceived in 2007, the Wi-Fi would enable access from police cruisers to Ohio’s Law Enforcement Automated Data System (LEADS). It would also provide connectivity for electronic water meters to be accessed by computer, which would eliminate the need for meter readers to go house to house.

Yet there is no indication that Infante ever requested a design study in advance.

Several council members contend they voiced objections at the time.

“It should have been engineered, but the mayor fought that idea,” said Steve Papalas, D-at large, who was finance committee chairman. “He said the city had all that it needed.”

Thomas Telego, the city’s billing manager, was Infante’s choice to head the project. However, Telego’s background in computers was limited to repairing them, according to Mayor Thomas Scarnecchia.

“I think there is an issue of competence here, but it has to be pointed at the mayor,” said Scarnecchia, who defeated Infante in the 2015 primary election.

Telego, who has been undergoing treatment for undisclosed medical issues, agreed to respond in writing to questions by The Vindicator.

“I was working with an engineer from the wireless company who did all the engineering and a local contractor, Advanced Lightwave Communications Co. of Warren,” he wrote. “As long as an engineer and ALC were involved with this project, I was comfortable.”

But by 2010, according to Telego, Infante dropped ALC from the project and “the situation deteriorated.

“With absolutely no assistants to help me, I was it,” Telego wrote. “[Infante] was not interested in providing me a backup.”

Papalas defended the former billing manager when asked if Telego had enough background to effectively administer purchase and installation.

At the time, Telego was also tasked with other responsibilities including direction of 911 operations, emergency management, electronic water meters and the billing software

“We asked him if he could do all those jobs, and he said, ‘No,’” Marino recalled. “The mayor said nothing.”

The series of equipment purchases for Wi-Fi mystify Dibble. In particular are access points – rectangular boxes with antenna inputs – most of which remain in storage years after their delivery.

“We uncovered stockpiles of equipment that were never installed [and] long out of warranty,” Dibble said. “The only thing they’re good for now is a paperweight.”

Those include the Proxim access points that have remained in unopened boxes for more than six years.

What happened with the access points seems to typify the lack of understanding by the Infante administration of the complexities involved in developing citywide Wi-Fi. “They didn’t use devices to go point to point,” Dibble said.

The IT director said each access point could accommodate only 63 users at a time, and the city did not purchase enough of them to operate an effective system.

Papalas said that the mayor periodically would ask for additional funding for the project.

“We could never get a straight answer on balances,” Marino said.

Infante, meanwhile, awaits trial on 41 counts including theft in office and bribery. A message left with his defense attorney seeking comment from the former mayor was not returned.

Recently a city fiscal supervisor reported Niles is making “tremendous strides” toward financial recovery. The city has since turned to Verizon for its Wi-Fi services and has been paying the provider $1,363 monthly, nearly $33,000 thus far, according to Merlo.

“I believe that we were very shortsighted on the possibilities that the wireless system could have brought to Niles,” Telego wrote. “Whoever the people are or were that placed obstacles in front of this venture, they may have cost Niles a potential future filled with economic possibilities.”

COMING TOMORROW: Other technology problems including utility billing software and expensive police cruiser laptops, getting the meters out of the city pool, and what the administration has learned from mistakes of its predecessor.