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October 16, 2009

City to Host Special Meetings on Burlington Telecom

City officials have called two special meetings in the next two weeks to discuss the ongoing financial issues at Burlington Telecom.

They are also taking issue with comments made this week by Department of Public Service Commissioner David O'Brien about BT's viability and use of city pooled cash to fund its operations.

As first noted in "Fair Game" three weeks ago, BT is violating two key conditions in its certificate of public good. First, it hasn't completed wiring the city so all residents have a chance to buy the service; and secondly Burlington has essentially loaned BT $17 million from the city checkbook. Under its CPG, Burlington Telecom is supposed to repay any borrowed money from the city within 60 days.

BT has been borrowing the money, without repaying it, since early 2008.

City Council President Bill Keogh told Seven Days that the forums are meant to both give councilors a better understanding of how to proceed, and to give the public a chance to weigh in on the controversial topic.

Mayor Bob Kiss has called a special meeting of the Burlington City Council. It will take place on Tuesday at 7 p.m. in City Hall's Contois Auditorium. The second meeting will take place 7 p.m. on Oct. 22 in Contois Auditorium and has been called by the city council.

In an email to councilors this afternoon, City Council President Bill Keogh explained that Kiss, Chief Administrative Officer Jonathan Leopold, and BT's General Manager Chris Burns will open the meeting with an oral report on BT.

Keogh said he expects this summary will be followed by a secret session of the council, though he admits this the meeting is not about the operation of Burlington Telecom, per se, but about the council as a whole and how it should proceed.

(Quick editorial side note: If it's not about the operations of Burlington Telecom and it's just a "think out loud" session then it shouldn't be in secret.)

At its Oct. 5 meeting, the council approved — by a 13-1 vote — a resolution to amend BT's certificate of public good so it doesn't have to repay the money within 60 days. It had previously given BT the OK to amend its certificate of public good to give it more time to complete the buildout within the city.

"The city council needs guidance and needs to know where to go on this issue," said Keogh. "There were some issues that we didn't get to [at the last meeting] and we need to talk those through."

Keogh didn't name those other issues. The council has given the Kiss administration the OK to seek changes to BT's certificate of public good.

Keogh said that Kiss, Leopold Burns and other members of the administration are urged to attend the second meeting, on October 22.

"City Councilors are also urged to attend to listen to the voices of our constituents on the Burlington Telecom issue," wrote Keogh in his email to councilors. "There will be no Council action that night, there won't be an opportunity for debate or any verbal exchanges. We are there to listen."

City officials are bristling today over comments made by Department of Public Service Commissioner David O'Brien made in "Fair Game" this week, as well as in today's Burlington Free Press.

“I have to say this is perhaps the most irresponsible utility behavior I’ve seen in my seven years on the job,” O’Brien said in "Fair Game" this week. “The failure to deliver on the promised buildout alone is enough to be seriously concerned, but the wanton use of public funds and apparent effort to deceive the voters is an outrage.”

Mayor Kiss said the city had been working with O'Brien's departments for months and he should have known the city wasn't repaying the money on time.

"Commissioner O’Brien knew or should have known of the City’s use of pooled cash to fund BT’s capital expenses and start up costs for almost a year," said Kiss. "His comments only serve to undermine the confidence of BT’s customers, the interests of whom his department is charged by statute to protect."

O'Brien told Seven Days this afternoon that, in fact, he only learned of the city's violation of the repayment condition recently.

"I became aware when they came to meet us a couple weeks ago. It was confirmation of what I had long suspected. If they could not build out because they were out of money and they were operating at a loss, money had to be coming from somewhere," said O'Brien.

City officials have admitted that they didn't know about the repayment condition until November of last year. O'Brien finds that hard to believe.

"As to how they didn't know, it's a lie or incompetence," said O'Brien. The CPG is in the name of the city, not Burlington Telecom, he noted.

According to city officials, they first disclosed the use of pooled cash to fund BT operations in November 2008, and then again during proceedings before the Public Service Board in June.

The city released this timeline late Friday about its dealings with the department:

  • September 2008—BT filed a petition with the PSB  seeking relief under Condition 17 of its Certificate of Public Good (CPG) to complete build out of the city as BT’s finances allowed.
  • November 2008—City meets with the DPS and informs the DPS that the city is using pooled cash to fund BT’s capital expenses and start up costs in excess of the $33 million financing with Citicapital.
  • Dec.2008-Jan. 2009—Settlement proposals exchanged between the city and BT concerning Condition 17.
  • Feb 2009 - Discussions failed and Condition 17 discussion heads to litigation before the PSB.
  • April 28, 2009—City discusses with DPS the need to amend petition to address Condition 60, and DPS recommends not addressing Condition 60 at the time and putting the proceeding on hold.
  • June 4, 2009—City and DPS file a joint motion to postpone proceedings until August 31, 2009 so city may finish audit and cost estimates for completing BT's buildout in the city.
  • September 30, 2009—BT files amended petition seeking relief under both Condition 17 and Condition 60.  In this filing city acknowledges that it should have brought Condition 60 to the PSB’s attention earlier.

Go, O'Brien, go. King Leopold and his assistant Bob Kiss knowingly broke the law. Blatantly. And hid it. They should be removed from office.

Bob Kiss is an illegal alien, too.

Nice deflection there, OFGS. Are you saying Kiss's administration didn't knowingly violate the terms of BT's permit and illegally use $17 million of Burlington taxpayer funds on BT (which there's a possibility some or all of which might never get paid back)?

Either Kiss knew about it, and therefore either participated in or condoned illegal activity. Or he doesn't know what's going on in his own office, which is incompetence and negligence.

Which is it?

This isn't fixing a $10 parking ticket, my friend. This is $17 million worth of illegal activity.

started with 34 g to wayne gross and now it grows to 17 m for b telecom. the kiss administration is more negligent than the nixon administration. sounds like kiss has agnew in charge of finances. kiss and leopold must go and now.

Troublesome when the council Pres. uses the words secret session. I hope he did not say that.

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