The administration of Mayor Miro Weinberger appears to have negotiated a good deal for the city in the proposed $10.5 million settlement of Citibank's $33.5 million lawsuit over troubles at Burlington Telecom.
While the settlement would pay off the city-owned utility's debt to Citibank, it does not immediately reimburse taxpayers for an additional $16.9 million improperly spent by BT — although Weinberger said in announcing the deal Monday that it could eventually lead to at least partial reimbursement.
And the settlement may eventually come at the price of ceding control of the city-owned utility to private interests, as well as requiring taxpayers to cover at least a portion of the $1.3 million city contribution to the settlement.
The plan unveiled Monday will likely lead to the city ceding majority ownership to an outside partner or partners within four years, Weinberger said. While corporate interests would be most likely to have the necessary cash, the local group working to form a telecom co-op could conceivably emerge as the new owner, Weinberger said.
Alan Matson, a leader of the co-op effort, said in an interview that his group will seek to “seize this opportunity” to keep BT in local hands and under democratic control. But the fledgling co-op, which has so far raised less than $300,000 from supporters, will have to achieve a stunning financial breakthrough in order to come up with the $6 million “bridge loan” the city needs to pay off part of its debt to Citibank.
Weinberger said at the news conference that “investment banks” would be the likeliest source of the bridge financing.