It was an anticlimactic ending to a four-hour meeting. Councilors were scheduled to decide between Ting’s $30.5 million offer and the co-op Keep BT Local’s $12 million bid. Instead, at 11:40 p.m., the council voted 8-3 to postpone the vote until November 6, when councilors will skip public forum and pick up where they left off.
Dave Hartnett (D-North District) requested the delay after councilor Karen Paul (D-Ward 6) recused herself from Monday’s vote. Paul had previously backed Ting.
Paul said as the meeting began that she had discovered “a professional conflict” over the weekend relating to her work as a CPA at McSoley McCoy & Co. Paul refused to describe the conflict, though she said that the issue “has nothing whatsoever to do with the parties interested in purchasing Burlington Telecom.”
“To hear the news that possibly there’s a city councilor that sat through this whole process that had a conflict of interest” raised concerns, Hartnett said. He added later, “It’s not responsible for the council to move forward tonight.”
Burlingtonians turned out en masse in anticipation of a vote. About 150 people filled chairs, sat along the walls and filtered upstairs in City Hall’s Contois Auditorium. A majority of the speakers at public comment supported KBTL, though a fair share encouraged the council to back Ting.
Those who backed Ting, the mobile and fiber division of the publicly traded Canadian company Tucows, expressed doubt about the co-op’s ability to run the utility. They pointed to the terms of KBTL’s $10 million loan from the Maine Fiber Company, which carries a 14 percent interest rate. And they cited the co-op’s lack of experience running a telecom.
Monday included a flurry of last-minute revelations. An email from Citibank to the city attorney included a threat to sue Burlington if the council selected the co-op bid, which the bank’s attorney called “not even remotely commercially reasonable and not qualified.” Representatives from another city creditor, Blue Water Holdings, said they also had misgivings about the co-op’s ability to run the telecom.
“It’s not a matter of whose offer is better — it’s does Burlington Telecom live or die at the end of tonight?” said Russ Scully, a Burlington business owner. “If we go ahead with KBTL, I don’t see a future at all for BT.”
Meanwhile, KBTL supporters keyed in on the need for local control of the telecom.
“I don’t support selling off our assets to the highest bidder,” said state Rep. Brian Cina (P-Burlington). “Please don’t let big business interests and out-of-state banks intimidate you. We need to protect what is ours.”
Four members of the Burlington Telecom Advisory Board, led by chair David Provost, urged the council to adhere to the board’s recommendation. In June, the board ranked KBTL as the weakest of eight proposals. “Just know that our guidance, suggestions and recommendations are not political,” Provost said. “They were developed with the best interests of Burlington in mind.”
Eight companies submitted bids for BT in June. Over the subsequent months, the council whittled down their options to four finalists. One bidder dropped out in September, and on October 16, the council voted to advance KBTL and Ting to the final round.
As the discussion turned to a vote, some councilors favored making an immediate decision. Joan Shannon (D-South District) called for councilors to respect the public who had shown up, as well as Ting CEO and president Elliot Noss, who had traveled from Toronto for the meeting.
Councilors asked questions of both Noss and KBTL board chair Alan Matson.
In an emotional plea, Abbie Tykocki, director of PR and marketing for Burlington Telecom, urged the council to hold the vote. “We are not pawns on a political chess board,” she said as she criticized the council for not actively seeking BT employees’ input in the sale decision. “We are citizens of Burlington and we are stressed … I ask you, I implore you … to put this to a vote.”
Mayor Miro Weinberger also asked for a final decision. “I believe the council has a fundamental responsibility and that is to vote,” he said. “We have a chance tonight to end a long, long journey that has been very strained and very problematic.” He noted that it was Ting supporters who were ready to vote and KBTL backers who were now questioning their initial decision.
But in spite of the criticism, Hartnett’s motion carried.
“I think it’s wise to do this,” City Council President Jane Knodell (P-Central District) said of the delay. “The council has done a lot of listening, but it hasn’t had the opportunity to do very much talking to each other. There are aspects of this decision that have not been explored, have not been fleshed out.”
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The Left Hand seemingly has no idea what the Far Left Hand is doing in Burlington City Hall anymore.
I’m dismayed at the fiscal short sightedness of council members. Burlington does not own BT because of fiscal mismanagement. If any of these people were selling their own property to pay off a large debt, none of them would accept a bid that’s ten million dollars under another offer. KBTL is not viable, they don’t have funds to extend service to all of Burlington.
As much as we may want BT to remain local, nobody is willing to put their money up to make that happen. I’m not willing to throw away millions of dollars fighting creditors in legal battles that’ll result in us losing all control of who buys BT. Ting is a good company with good people. The antiComcast. Please don’t mire us in years of expensive legal bills, taxpayers have already paid enough.
This is insane. BTV finally has a competent mayor who has helped clean up most of Bob Kiss’s messes and now the city council is about to throw the City and BT Telecom back into a state of disarray. Local control is great when it works, but the last time around it sure as heck didn’t help the City or BT Telecom. Things are finally on the right track but a vote for KBTL opens up the City to a lawsuit from Citibank, and possible challenges from other creditors. All that means is more taxpayer funds out the window to attorneys. In the end Citibank is going to do what it needs to protect its interests. Could that include a forced sale or possibly liquidation of BT assets? What good is a local control if there is nothing left to control but a pile of old cable boxes? How is it financially prudent for KBTL to take on a loan at 14% when BT Telecom is just keeping its head above water now and won’t be able to expand services to all of BTV under KBTL? There has to be a better basis to choose a company than simply “is it local?” It also has to make business sense.
Burlington did not get where it is today by buckling under dubious litigious posturing from big money. We have a history of standing up to big money interests and have one of the greatest senators in history spreading the economic development message that Burlington pioneered. Burlington moved forward in its hey-day when Mayors Sanders and Clavelle understood what it meant to be an activist government, because they understood how to analyze risk and drive our resources towards creating and sustaining nationally recognized and award-winning economic development programs that fueled local ownership. Our economic success is a nationwide brand that has grown and attracted small businesses up and down Industrial Parkway, Pine Street, Main Street, Church Street and North Street. We’ve seen Church St. marketplace retain a 70% local ownership rate while national chains like American Apparel, Ann Taylor, Olympia Sports, J Crew have folded up and fled for the suburbs, demonstrating less staying power. That’s because Wall Street cannot save Main Street – only local investment can build a sustainable economy.
Liz Curry’s comment is a good laugh. A nice satirical take on politics.
“Burlington did not get where it is today by buckling under dubious litigious posturing from big money.”
I’m sorry, but I don’t see anything “dubious” about the threat of litigation by Citi, and possibly also by Burlington taxpayers who will feel cheated if the Council goes with the insanely low KBTL bid. Such litigation will be very, very real indeed, and the Burlington taxpayers will have to pay to defend the lawsuit(s), even if they are not BT subscribers. How fair is that? And it will not be a meritless lawsuit.
BT owed Citi $33 million and Citi sued Burlington. With the helpful financial intervention of locally-owned Bluewater, Citi agreed to settle that lawsuit on very favorable terms for Burlington, but the settlement agreement required the city to sell off BT by a certain date, with the sale proceeds being split between Citi, Bluewater, and the city. If Burlington goes with a bid from which Citi and Bluewater (not to mention the city itself) get virtually nothing (in fact the city would have to re-invest additional money), as opposed to a bid from which they all get a decent financial recovery, Citi will be entirely justified in suing the city. To me as a taxpayer, it is not fair for the city to invite lawsuits onto itself and to ask city taxpayers (whether or not they are BT customers, or even can be) to pay to defend those lawsuits because other folks are pursuing a “local” ideology vs. a good financial deal for the city.
What’s “dubious” to me is a 14% loan by an out of state company that could end up owning BT if BT defaults on that loan, and then selling it off to Comcast or to whomever it wants, with Burlington having no say in the new ownership. What’s also “dubious” to me is the chances of KBTL ever getting approved by the PUC.
How many of these supposedly pro-Ting people showed up last night and spoke? Since when does a city only take into consideration money when deciding an issue about the culture of a city? Was money the deciding factor in building the waterfront park? I don’t think so. Did we get all those banners hanging in City Hall Park about being the most livable, wonderful city in the world come from kowtowing to moneyed interests? Don’t you believe it. The difference to the city in the two offers before it financially is only $4.5 million, not the $18 million difference in the price. Sticker price is never the actual measure of the value of an offer. Taking $4.5 million less now, but having a financial interest that pays patronage refunds for the foreseeable future (dividing what is now a $3 million dollar profit, which is bound to rise) is a prudent long term strategy that all the people with stars in their eyes at the thought of $30 million can’t see.
” the most livable, wonderful city in the world”
“Our economic success is a nationwide brand “
What? Have you people ever been anywhere or lived anywhere else?
Vermont has an anemic economy and no growth at all. Vermont and Burlington subsist largely on federal handouts. Taxes are insane, and the condition of the infrastructure is scandalous.
There is very little true innovation, but there are plenty of dogma-driven idealogues who insist on keeping things broken and mediocre. How, when Maine Fiber takes over BT in a couple of years due to KBTL defaulting on their credit card rate loan, is that keeping it local? KBTL is trying to guilt-monger a boondoggle into reality just like so many other money-wasting fiasco’s before it. Champlain Flyer? Green Mountain Care? If KBTL wins they will loose subscribers at an alarming rate because people do not trust that they have the experience or capital to make BT what it needs to be. And some of us are too busy to “show up and speak” assuming that the better bid is obvious.
It looks like our not-so-anonymous friend actually makes decent points. “Please don’t let big business interests and out-of-state banks intimidate you. We need to protect what is ours.” There is a fine line here, though. Burlington doesn’t want to botch the sale of something to an out of state interest and not get anything substantial in return a la the city center. However, Burlington can’t just keep things local if local can’t support what is needed.
By refusing to disclose her alleged conflict, Councilor Paul violated council rules requiring public disclosure of the claim.
If the unsuccessful bidder loses by one vote, a lawsuit is a good bet due to Paul’s secretly ducking a public commitment.