In 2017 and 2018 leaders in Burlington, Vermont debated what company it would sell the then-municipally owned Burlington Telecom to. It was a contentious decision with many residents wanting the city to maintain ownership. It was eventually sold to Schurz Communications. The City Council this week voted against reinvesting its proceeds of the sale in the utility.
It was nearly 1 a.m. Wednesday when Burlington city councilors acted on a motion to enter into an agreement with Schurz to reinvest $2.4 million from the sale into what is now called Champlain Broadband LLC.
The idea drew remarks from residents including two former city councilors who sat on the panel during the sale debate. Former South District councilor Jane Knodell noted that current councilors were concerned about risk. “We can all think of lots and lots of things that could go wrong if the city were to reinvest in Burlington Telecom. But the question is: what is the major factor that is likely to go wrong, such that the city would lose on its investment? As I look at this it's very hard to see what that would be.”
Former North District Democrat Dave Hartnett also favors reinvesting. “The only ones we haven't paid back are the taxpayers of Burlington, out $12 million. And the only opportunity to get any of that money back is to reinvest.”
Ward 3 Progressive Brian Pine offered the resolution that would create an agreement for a 7.5% interest in the company and place one city representative on the 7-member board. Pine discounted the idea that they were making a speculative investment. “We just sold this company two years ago for $30 million. It's already grown in value since then. It will grow in value year after year as long as this market remains strong. So BT has a great future. And now this is a chance for us to keep a piece of local control, ensure that the upside of the company be returned back to the taxpayer to hopefully put downward pressure on property taxes.”
East District Progressive Jack Hanson feels the money should go directly to the community not back to a private company. “There's other ways that we could spend this money that would also provide real economic relief and economic benefits and other benefits directly in our community. And I think this could be really an opportunity to explore that further with the community.”
Ward 6 Democrat Karen Paul said reinvesting in the company is not a sure thing and too risky an investment. “All of the projections all say ‘subject to change’ because they don't know. They're just based on assumptions. I think this is a violation of what I think we should be doing which is exercising a great deal of prudence with other people's money.”
Pine retorted that the city takes risks with taxpayer money every day. “We take risks as a city council all the time. And I'm just saying because I think the risk and reward here is being completely misconstrued.”
The proposal to reinvest in BT failed on an 8 to 3 vote. Ward 8 Independent Adam Roof recused himself from debate and voting due to a professional conflict.
Audio from the Burlington City Council meeting is courtesy of the live webstream from Channel 17 Town meeting television.
