Burlington City Council Continues Review Of Burlington Telecom Sale

Dec 12, 2017

The sale of Burlington Telecom was again on the Burlington City Council agenda Monday night as the panel works to finalize the sale of the cable and broadband utility.

The city council started and ended its meeting in executive session to discuss the purchase and sales agreement with Schurz Communications to obtain Burlington Telecom.  Because the purchase agreement is being reviewed by lawyers, the public deliberative agenda could only include discussion of the company’s Letter of Intent, or LOI, according to Ward 4 Republican Councilor Kurt Wright.  “The LOI is already crafted. That's basically done. Whoever won the bid we would have had to spend significant time throughout the month of December with attorneys on both sides working on the final purchase and sales agreement. Because really the LOI we had already seen the LOI from Schurz weeks earlier. And that's what they worked from on the night that we passed it except they added some elements from the ZRF LOI which actually strengthened it. So this was not what's being characterized the way it's being characterized.”

Wright notes that owner Todd Schurz appeared before the council to answer questions and clarify points of the proposed contract.  “We knew the main elements of the LOI and the basic thrust of their proposal. And the biggest parts of it are the valuation was nearly thirty-one million which meant that we would have no legal hurdles with Citibank. It’s  the most capitalized company of the group,  that's not part of the LOI but I'm just you know what the good parts of this are,  family owned business, have freeze on broadband price increases for sixty months five years. They have a lot of community investment now. Some of  that's going to be done with the help of the ZRF investment. A lot of good parts to this proposal. That's why we were able to get to a final vote across party lines.”

Among the questions North District Independent Councilor David Hartnett wanted answered was how the company plans to execute the contract once the sale is finalized.  “Like the partnership we kind of wanted to know exactly what that partnership is going to look like and what does it entail and what will be Fasil’s  role, which is ZRF,  what is their role going to be in the partnership? So that was a question that a lot of councilors had last night. Then there was talk about how we would operate the first right of refusal in the proposal.  You know we couldn't get into a lot and publicly.”

The deliberations over the sale of Burlington Telecom have been contentious. Two weeks earlier, Hartnett had a charged exchange with fellow Councilor Joan Shannon as she posed questions to the head of ZRF during a council meeting on November 27th.  “But you have had meetings and discussions about not, to change, to alter the bid in some way? There was no discussion about the bid?”
Hartnett:  “Point of order. They’ve had discussions about the sale. His sale.”  
ZRF/Schurz rep: “No I, my…”
Council pro-tem:  “So, so okay..”
Hartnett:  “She is out of control.”
ZRF: No no let me answer. My bid was…”
Hartnett:  “You’re out of control Councilor Shannon and you’re going down the wrong path.”

At the latest meeting, Councilor Hartnett apologized for his outburst.   "I felt like that had to happen for us to move forward. You know I crossed the line. There's a code of conduct that a councilor should adhere to and I you know was disrespectful and you know I crossed the line and you have to step up to the plate and just apologize. My actions are reflection on the council so I apologized to the entire Council as well."

A final copy of the agreement to purchase Burlington Telecom is expected to be released by Dec. 15th. The City Council meets again on December 18th.  A special council meeting could be scheduled on December 27th.