After hours of discussion and gridlock on Monday, the Burlington City Council ultimately decided to ask the co-op Keep BT Local and the Canadian-based Tucows to come up with a joint venture proposal by Friday.
The council voted 11-1 to accept a resolution introduced by councilor Ali Dieng (D/P-Ward 7). The agreement instructs the two bidders to come up with a proposal that would benefit the city of Burlington and BT subscribers, as well as create a governing structure for the combined group.
Both sides seemed amenable to working together after the lengthy impasse.
“There is some philosophical alignment about doing what’s best for the community,” said Monica Webb, Tucows’ head of market development and government affairs.
“Our view is to hold true to [the co-op model] as much as possible,” said Andy Montroll, vice chair of the KBTL board. “We don’t know whether there’s a place to go with this,” but he added that the group is “looking forward to attempting something.”
For a time Monday night, it seemed as if councilors on both sides would refuse to budge. On two separate occasions, six councilors voted in favor of the co-op’s $12 million bid, while the remaining six voted for Tucows’ $30.5 million offer.
The meeting began with lengthy monologues from each councilor defending their respective decisions. Council President Jane Knodell (P-Central District) relied on her background as a University of Vermont professor when she started the council meeting with a economics lecture on what she saw as the weaknesses of the Tucows offer. She described the bid as creating inadequate returns for Burlington and a “loss of local control.”
“I just have to say, I am not feeling the love,” she concluded, to whistles and applause from the pro-KBTL crowd.
“Once you lose something that’s local, it’s gone forever,” chimed in councilor Max Tracy (P-Ward 2).
Councilors supporting Tucows claimed that current BT employees favored the publicly traded company over the co-op. Richard Deane (D-East District) offered a biting critique of KBTL’s bid, saying that picking the co-op is “a gamble” for a “future unspecified and unquantified benefit.”
Around 10 p.m. — after the pair of tie votes — the council took a recess to re-group. At that time, representatives of both bidders, Mayor Miro Weinberger and a few councilors gathered behind glass doors in the offices outside City Hall Auditorium. The city attorney looked on to ensure there wasn’t a quorum of councilors, thus triggering public meeting laws. After a few minutes, Knodell strode out, muttering: “There’s some kind of bullshit going on in there.”
But in spite of Knodell’s misgivings, the group reached an agreement. When the council reconvened, Tucows’ Webb and KBTL’s Montroll said they had agreed to work together. The councilors voted on the compromise, giving the two organizations four days in which to come up with the joint venture agreement. Knodell envisioned a Tucows proposal with some revisions based on KBTL’s community-based model.
What a final proposal will look like is unclear. The two bidders seem to be diametrically opposed: KBTL has no telecom experience but strong local support, while the Toronto-based Tucows has experience operating a telecom — in addition to more secure financial footing.
If the two groups cannot reach an agreement by Friday, two other bidders, Schurz Communications and ZRF Partners, will be invited back and the council will select a buyer from those four on November 27. But if the agreement is reached by Friday, the council will vote on the joint venture proposal next Monday.
The council seemed resigned to compromise. “I’m strongly committed to the cooperative model, but we have to try to come to some mutually beneficial solution,” said Tracy.
Only Dave Hartnett (D-North District) opposed the resolution. He accused KBTL of “sell[ing] themselves out to Ting,” a reference to the name of Tucows’ mobile network and internet service division.
The council had been scheduled to make a final decision October 30, but instead decided to postpone the vote. Councilors needed more time, Hartnett argued, after Citibank — Burlington’s creditor — told the city in an email that they would sue if the council selected KBTL.
At the same meeting, Karen Paul (D-Ward 6) announced that she had discovered a “professional conflict of interest” and could not vote that night. She did not disclose the nature of the conflict, and the city attorney’s office completely redacted a subsequent Seven Days records request that asked for correspondence between Paul and the city attorney’s office.
Last Thursday, Paul announced that she had quit her job to alleviate the conflict and to be able to cast her vote on Monday. She voted for the Tucows bid.
Meanwhile, there had been a flurry of behind-the-scenes negotiation. In late October, five councilors visited Tucows headquarters in Toronto. Last week, Knodell told Seven Days that she had met with Weinberger about allowing Schurz and ZRF Partners back into the process in the case of a council tie. Knodell said she had been in communication with ZRF CEO Faisal Nisar, who dropped out of the process in September.
“Given the condition of the bids to date, neither option in its current form” meets the needs of the city, Knodell said last week. “I personally feel the best outcome would be some model that combines the strength of these two options,” she said, referring to the Tucows and KBTL bids.
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Paul unrecusing herself with no explanation of conflict and no guarantee she won’t go right back to her job after the BT vote is over is irregular at best, and definitely creates an appearance of conflict. The Mayor clearly wants her vote regardless, but the council should get a second opinion for Blackwood’s guidance.
On top of this, they’re talking of bringing back ZRF. They dropped out because of a CONFLICT OF INTEREST. We need an ethic commission.
The Bidding process has now been turned into a sham the same way the original Town Meeting Day Referendum that tricked residents into voting Yes for a ‘Stand alone BT entity’ was also rendered a sham when the City and its agents began summarily violating the very City Charter, State Statutes, and Public Service CPG conditions that were put in place by that Referendum Vote as safeguards to prevent exactly what wound up happening.
With this latest drama, Burlington City Governance has now lost the Public Trust concerning their ability to even sell BT, let alone manage it as a going concern without hiring expensive outside consultants and lawyers; and it’s becoming obvious to all that NO ONE in City Hall has a clue about how to run a competitive and highly regulated business and remain compliant, let alone profitable, without even higher powers in the Courts and State Government having to look the other way and sweep things under the carpet for them. They do, however, know how to spend taxpayer funds like drunken sailors having spent $50 Million ($33 million Citi Loan plus $17 Million stolen from the taxpayers) on something worth half that and now want to accept chump change, and promises of unicorns, rainbows, and lollipops that grow on trees down the road just to ‘keep it local’.
I love how everyone assumes that Karen Paul’s conflict was with Ting. What if it was with KBTL? What if she were supporting KBTL’s bid? All of the money in my wallet says that if that were the case, her critics would be way less concerned about the conflict.
Localism has become a fetish in Burlington. It contradicts the progressive principle of global interdependence.
Re: stellaquarta – I do not presume anything except that not following the rules when they are inconvenient undermines public trust in our elected officials and process. The last sentence of this section of the City Charter seems pretty clear.
ARTICLE 46. CONTRACT BETWEEN CITY AND OFFICERS
133 Conflicts of interest.
(a) No city officer shall participate in any fashion or cast a vote on any matter in which either a direct or indirect conflict of interest is present. Nor shall a city officer participate or vote on any question in which such participation or vote would reasonably create in the mind of an objective person the appearance of a direct or indirect conflict of interest. The presence of a circumstance as above enumerated shall be regarded as a conflict of interest situation. In the event a conflict of interest situation arises, the affected city officer shall at the first opportunity formally declare the existence of the conflict of interest situation. Thereafter, such officer shall not participate in any fashion at any level, formally or informally, in the discussion of the matter, nor cast a vote of any kind at any level with respect to the matter to which the conflict of interest situation applies.
These six councilors are going to send taxpayers down the river once again. Wasn’t Bushor part of voting that created this whole financial debacle? The six willfully ignorant councilors who voted for KBTL don’t care that KBTL doesn’t have the money to succeed or repay BT creditors. Even without bringing millions of dollars of lawsuits down on the head of taxpayers. So BT will fail, Burlington will end up with nothing and taxpayers will be left holding the bag.
Shame on these six shortsighted councilors. Ting would have provided excellent service and a welcome alternative to Comcast. Now the actual owner of BT, Bluewater, will sell BT for the highest price and who could blame them? and it wouldn’t be a shock if the highest price comes from Comcast. I hope the people in the wards with these councilors who did this to us will vote them out in the next election. Jane Knodell particularly is a menace with her economic theorizing that has nothing to do with good business sense or providing high speed fiber that’s accessible to every taxpayer in Burlington.
I will stick with Comcast, they provide solid reliable service to my home, I would not touch this mess with a 10 foot ethernet cable.
taking a stab here ….
– convert bt into a cooperative
– board makeup 30% ting, 40% residents, 30% city officials
– ting cannot exceed 30% ownership
– burlington cannot exceed 70% ownership
– current bt employees are excellent, retain them and gain seniority with growth
– current bt service is phenomenal, nationally its some of the best, dont water it down or jack up its tiers
– immediately draft plans to expand expand service to 10k residents total for phase one, all within a year
– immediately draft plans for business to accomadate growth for phase one
– develop timeframe for subsequent and aggressive expansion, phase two, three, etc.
I think it is highly unlikely that Ting and KBTL can reach any agreement that the City Council can ratify, first because they are not dealing from equal places of power and respect, and secondly because I suspect neither wants to actually cooperate with the other. This will operate to bring back one firm rejected already and one that withdrew with–surprise!–a conflict of interest. How’s that going to work? I suspect we will still end up with a tied vote, unless the Dems stay locked into Ting. Some indicate they may not. This dog-and-pony show will continue potentially ad infinitum. This is what comes of having a 12 person council. I’m surprised it doesn’t happen more frequently.
It was amusing to see the one Republican side with the Dems but I’m sure he will peel off now that his favorite is back in the race. Oh, what fun we shall all have if Ting and KBTL can’t make a marriage of true minds!
It is unbelievable that city leaders and citizens here can’t get out of their own way. You can’t run a city efficiently, you couldn’t run a telecom company (you have a high level of expertise in that area). There is a reason nothing gets accomplished in a timely manner here, but I don’t envision that changing. Looking forward to retirement in another state in the future.
With a 12-member council, shouldn’t the Mayor be given the opportunity to break the tie vote?