BURLINGTON, Vt. — Mayor Miro Weinberger has bucked a transparent process for deciding who will purchase Burlington Telecom, but individuals close to the situation disagree on whether that’s good for taxpayers, who are on the hook for millions of wasted dollars.
After years of financial mismanagement scandals, the city is finally selling its troubled municipal broadband company. Who will become the lucky owner is anyone’s guess, however, as the mayor has taken the process into closed session.
“The big picture reason is we are trying to secure the best possible outcome for the people of Burlington — the taxpayers, the ratepayers — that we can,” Weinberger told the Burlington Free Press. “We’ve designed the process after a lot of public input.”
Weinberger is excluding the public from knowing who the eight bids came from, now narrowed down to four. That means details like the bid amounts or operational plans are also unknown. All the mayor has been willing to say is that none of the eight bidders were telecom giants, such as Comcast.
Not everyone is buying Weinberger’s explanation for his actions.
“It’s hard for the public to have confidence,” Norman Williams, an attorney with the Burlington-based law firm Gravel & Shea, told True North. “Basically, I think when a government official says, ‘Trust me,’ that’s a problem. I’m more of a ‘trust but verify’ person, but there’s no way to verify this because it’s all confidential.”
Williams filed a lawsuit on behalf of two former City Council members against the city’s former chief administrative officer, Jonathan Leopold, after he illegally used $17 million in city money to keep the struggling telecom afloat. The Vermont Supreme Court did not hold Leopold liable.
The city was also sued by Citibank for $33 million for not paying back a loan of the same amount. Finally, the Public Service Board ordered the sale of the telecom due to mismanagement.
“So, basically, the city got $50 million — $33 million from Citibank and $17 million from the taxpayers — for, I dare say, a company that was marginal at best, and losing money at its worst,” Williams said.
He said a more transparent approach would be to simply take “the highest offer.”
“Although I think the highest bid is not necessarily the winning bid, (because) they are looking for some other factors,” he added.
City Councilor William “Chip” Mason, D-Ward 5, came to the defense of the mayor and his colleagues in the council. He told True North it’s not just the city that is asking for confidentiality regarding bid details, it’s the bidders, as well.
“There is a desire on the part of the Council as well as the mayor’s part to release what we can, but it’s complicated in terms of what can be released and at what stage,” he said.
Asked if all bidders were requesting confidentiality, Mason said, “I’m not, unfortunately, at liberty to comment on any specifics of any of the offers at this point in time.”
He acknowledged that the criteria for choosing a finalist are not limited to seeking the highest offer. Other criteria include the bidder’s ability to commit to net neutrality, partner with the city, offer affordable services, continue a local presence and more.
Williams said he can’t say for sure that the city is attempting to retain ownership or control of the telecom.
“That’s really the point that I would be most concerned with, the idea of retaining any kind of financial interest,” he said.
He also said it’s not just Burlington that has failed at running a telecom.
“Other municipalities have also tried to have their own telecom companies and it’s been a disaster,” he said. “It’s pretty much been a disaster everywhere it’s been tried, and I think that the takeaway is that there’s a huge problem when a municipality tries to compete in a private market.”
While Williams said secrecy is “an unavoidable problem” when municipalities try to compete in the private sector, he also said electoral politics are a threat to sound decision making.
“They did not want Burlington Telecom to collapse like it probably would have if it was a private business. Instead, they kept punting it because it would have been a big problem if it collapsed.”
City Council meets Monday evening in executive session before the regular agenda resumes. Weinberger said the public can expect to see a summary about the four finalists soon afterward.
“This will be a continued conversation,” Mason said. “I have heard from a number of constituents and interested members of the public about the transparency, and it is something we are trying to address after consultation with counsel and the advisors that are advising us on the transaction.”
Mason said he expects some comments on the proceedings to be released to the public, but added it would ultimately be up to City Council President Jane Knodell to decide.