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Ratepayer Advocates Back Burlington Telecom Settlement, Urge Approval

The state’s ratepayer advocates are in strong support of Burlington Telecom’s settlement with Citibank over past financial problems, and they are very optimistic about the potential sale of the public telecom to a private entity.

“The settlement that’s been reached with the city and Citibank, and the bridge financing agreement really offers the first realistic opportunity to move beyond the problems that have been plaguing Burlington Telecom and the city,” said Jim Porter, the senior policy and telecommunications director at the Department of Public Service.

The department represents ratepayers in utility-related issues, weighing in on whether a project is ultimately good or bad for consumers. At a hearing on Tuesday, DPS officials will voice formal support for the city's plan before the Public Service Board, which must approve all major utility deals in Vermont.

An agreement reached with prominent Burlington businessman Trey Pecor will help fund the troubled telecom’s settlement with Citibank, which sued when the utility didn’t pay its bills with the bank. Pecor, in making the investment, also takes financial risk away from Burlington taxpayers, an aspect of the deal the Department of Public Service looked very closely at.

“What we wanted to see is that if something goes wrong in the future, that it will not be the Burlington taxpayers that bear the brunt of that – that it’s actually the person who’s providing the financing,” Porter said., “And that is the case in this instance.”

The department is also optimistic about a potential future sale of Burlington Telecom, which is still recovering from financial mismanagement that led to officials wrongly using $17 million in taxpayer money to cover the utility’s losses.

“The fact of the matter is there’s been $50 million of investment made, and Burlington Telecom has not been able to generate the revenues to pay for it,” Porter said.

Porter said a decision from the Public Service Board is expected in August. If the board approves the settlement, the city is allowed to move forward with the settlement and bridge financing deal. Any sale to a private entity would require further proceedings before the board, Porter said.

Gov. Peter Shumlin also weighed in on the deal Thursday, applauding Burlington Mayor Miro Weinberger's efforts to get Burlington Telecom and the city out of the financial problems of former mayor Bob Kiss' administration.

"Mayor Weinberger inherited one heck of a mess at BT and I'm incredibly impressed by the job he's done putting together a package that's going to keep Burlington residents with the highest speed access you could ever dream of having," he said.

Shumlin also said he supports the idea of the sale of Burlington Telecom to a private owner.

"I think that whatever the outcome is, as long as it brings high-speed service to Burlington citizens and gets the taxpayers off the hook, improves the city's bond rating, it's a good outcome," Shumlin said.

Taylor was VPR's digital reporter from 2013 until 2017. After growing up in Vermont, he graduated with at BA in Journalism from Northeastern University in 2013.
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