Burlington City Council Set to Debate Telecom Fixes

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Updated at 11:45 a.m., Monday

After a weeks-long sturm und drang over the use of $17 million in city cash to keep Burlington Telecom afloat for more than two years, the city council Monday night will debate at least two resolutions designed to shore up the finances, and public trust, of the fledgling utility.

One, sponsored by Councilor Clarence Davis (P-Ward 3), would: Create an ad hoc committee of at least five councilors to review BT's governance structure and recommend possible changes; charge the finance board with hiring an auditor to review BT's operations and finances, and have the administration present to the council by mid-November refinancing options and other investment strategies for BT.

This first resolution mirrors, in large part, the fixes Mayor Bob Kiss suggested to the council on Tuesday at a special council meeting.

A second resolution, sponsored by four Democrats — City Council President Bill Keogh (Ward 5) and councilors Ed Adrian (Ward 1), David Berezniak (Ward 2) and Nancy Kaplan (Ward 4) — would: Create an ad hoc committee of at least three councilors to prepare a request for proposals to hire an auditor to review BT's operations and finances, and create a separate an ad hoc committee of at least three councilors to prepare a request for proposals to appraise BT's value.

Earlier this month, the city council approved a resolution to allow BT to possibly provide services outside the Queen City as a way to bring in needed cash to complete its network build out within the city. It also asked Mayor Bob Kiss to tell the council how much cash has been loaned to BT from the city's "cash pool". That finance report is due Nov. 16.

At a work session prior to the meeting, councilors will discuss the funding, and hiring, of staff to help the council sift through budget materials, and other information, provided by the administration.

At two special city council meetings this week, many councilors and the public expressed anger at the Kiss administration for not only using money from the city's "cash pool", but for failing to fully alert councilors about the impact of the decision to use the cash.

BT's failure to repay the money within 60 days is a violation of their license to do business, called a certificate of public good (CPG). Use of the money may also violate the spirit, if not the letter, of the city charter and potentially a council resolution passed last August that said BT could only use money to continue building out its network when it became "cash positive."

BT, with council approval, is seeking relief from the 60-day provision in its CPG in proceedings before the Public Service Board. It is also seeking clarity from the PSB about how best to complete its network build out.

In particular, councilors and the public have been critical of Chief Administrative Officer Jonathan Leopold. Since Tuesday, six city councilors have asked Kiss to put Leopold on some form of administrative leave until a full audit of BT's operations and finances are completed.

Kiss said he has no intention of putting Leopold on leave. Leopold's decision to loan BT the money, Kiss said, was the right thing to keep Burlington Telecom afloat and ensure that taxpayers wouldn't be placed at risk if Burlington Telecom were to collapse.

Kiss and Leopold say that the use of the city's cash pool, by itself, is a routine practice. Many of the Queen City's enterprises, such as the airport and electric department, borrow money from the city in anticipation of outside financing — be it bonds or other forms of revenue.

In all, BT has spent about $50 million to date, and it could cost as much as $10 million more to complete the build out within city limits. It has about 4600 subscribers and has passed about 85 percent of the city's residences and businesses.

Update

City Councilor Joan Shannon (D-Ward 5) will offer a resolution calling on Mayor Kiss to place CAO Leopold on administrative leave. The resolution would also direct the city to stop using "pooled cash" to fund BT operations.

In a series of "wheras" clauses leading to the penultimate request to put Leopold on leave, Shannon lays out a case that the CAO and the administration misled, if not deliberately thwarted, attempts by the city council to install more direct oversight of BT, and failed to tell councilors about BT's financial problems and CPG violations when they were first known, and decided to use the pooled cash without consent from the council or board of finance.

Comments

[Jimmy]

"Leopold's decision to loan BT the money, Kiss said, was the right thing to keep Burlington Telecom afloat and ensure that taxpayers wouldn't be placed at risk if Burlington Telecom were to collapse."

Other than the bond rating - which is a problem no matter how you slice it - borrowing $17m was what put taxpayers at risk in the first place. Either Kiss is the stupidest man to ever hold public office in this state or he just doesn't think he owes it to us to try to tell the truth. Pathetic either way.

"prepare a request for proposals to appraise BT's value."

This is absolutely necessary. They also need experts to review the business plan going forward, if there is one, before we even discuss spending more money.

[tea]

Jimmy the teabagger.

[Jimmy]

"Jimmy the teabagger."

Sadly, this Prog response was not significantly less well-thought-out than those of Kiss and Leopold.

[Dale Tillotson]

I urge the council tonight to start the process of moving forward. I urge them to demand the resignations of both Teflon Bob and Jerk us around Jonathan. We have absolutly no reason to believe anything coming from this administration. Think about it do we really want this duo, working on the pension fund issue? The moran plant? Water treatment bond coming due soon? They cannot be trusted.
One other thing here to cement my comments. I would imagine that Teflon Bob would be the person to do a yearly evaluation of the CAO. Evidently it was a good evaluation even with Teflon knowing of this severe violation commited by Leopold, so Teflon is as or more responsible. They got to go.

[mr]

Hopefully the mayor and cao and city council read the blurt comments because that Tillotson fellow really seems to make sense.

[Buster]

Bob Kiss has no intention of listening to the taxpayers he says screw em. Kiss and Leopold drove Burlington Telecom over a cliff and they put all the taxpayers in the bus with them.

Theft is theft, Kiss keeps braying about the value of Telecom well its time to put up or shut up Bob either you sell it to investors or you get to swallow the stink end of the stick.

I believe Kiss and Leopold will be hung on their own petard when they find out the truth Telecom as it sits is worthless. It will take an additional 35 million to make it viable if it ever will. is it really worth the risk when Comcast offers a cheaper faster download service?