Burlington’s mayor has offered his recommendation for which finalists he believes the City Council should advance the final round of consideration as the city sells its telecommunications service.
Burlington has been in a fiscal and legal mire over Burlington Telecom since 2009, when it was revealed that the city telecommunications utility had spent $17 million in taxpayer money without authorization for operations costs. By early 2014 the city faced the start of a jury trial in which City Bank sought $33.5 million from the city, plus penalties, interest, and return of the underground cable. Burlington Mayor Miro Weinberger said Tuesday at that time a settlement was reached that required Burlington Telecom be sold. "The agreement capped taxpayer liability. It secondly kept the cable in the ground and it kept Burlington Telecom out of receivership. And then the third major thing that the settlement did is it secured for the city three to five years for the city to operate Burlington Telecom and direct a sale.”
Eight bidders eventually came forward, and three finalists are still in the running. The City Council will choose two to advance to the final round on Oct. 16th. Mayor Weinberger says he does not support the only local bidder, KBTL, or Keep Burlington Telecom Local. “Unfortunately as a result of a host of operational, financial, regulatory and ultimately legal concerns I do not believe that the KBTL proposal meets all of the city’s selection criteria and I do not believe that it is currently a viable proposal. Both the Schurz Communication and the Ting/Tucows proposals are very strong and ultimately accepting either will result in big wins for Burlington Telecom customers, taxpayers and the city.”
Burlington Telecom Advisory Board Chair David Provost believes the mayor’s recommendation is best for Burlington. “That effort of KBTL it’s not my opinion at this time that they’ve been able to overcome issues around financial capacity, around the cost of debt and around management experience. So the two proposals in Ting and in Schurz, we are giving Burlington two great solutions.”
Keep Burlington Telecom Local Cooperative Board Chair Alan Matson isn’t surprised about the mayor’s lack of support but plans to continue efforts to convince the city council to accept the group’s bid. “We would have hoped that we could have overcome some of the issues by now and I guess we haven’t. You know it is tough but we have to keep our offer on the table. We know that there are things we could do to improve our proposal. On the other hand we feel very strongly that it’s viable, it can be a great ongoing opportunity for the city.”
Schurtz Communications, based in Indiana, bid nearly $31 million. Ting, out of Toronto and owned by Tucows, bid $27.5 million. The local coop KBTL submitted a bid of $12 million.