Kiss Says He’s Confident Burlington Telecom Can Be Saved
03/05/10 7:34AM By Jane Lindholm
| MP3 || Download MP3 |
(Host) Burlington Telecom is a publicly-owned cable, Internet and phone utility that's significantly in debt, and some city residents are worried they're going to wind up paying.
But Mayor Bob Kiss says he's confident the company can be saved.
VPR's Jane Lindholm has more.
(Lindholm) Beginning in 2008, Burlington's Chief Administration Officer, Jonathan Leopold, advanced $17 million in city funds to Burlington Telecom to cover rising debts. The City Council says it wasn't formally briefed on these transfers until the spring of 2009.
Speaking Thursday on Vermont Edition, Mayor Kiss said he knew the city was using pooled cash to bail out BT, but he didn't realize that the Certificate of Public Good required speedy payback.
(Kiss) "It was only later that I came to understand, that I read the CPG and saw that we had to pay money within 60 days and in the broader picture defined by money that was potentially available to us."
(Lindholm) There is a criminal investigation under way requested by the Public Service Department to determine if city officials misled state regulators about the loans. Meanwhile, City Administrator Jonathan Leopold remains on the job, despite calls for his suspension.
Mayor Kiss supports Leopold, saying he acted in good faith and should be allowed to stay on the job until and unless an investigation reveals wrongdoing.
(Kiss) My sense of this is that Jonathan has acted appropriately in terms of his responsibility as the clerk treasurer of the city and oversight of Burlington Telecom. And my sense is that there won't be anything found in respect to him exercising those responsibilities."
(Lindholm) Burlington Telecom is now about $50 million in debt and in danger of default. This could leave Burlington residents on the hook for the $17 million in city money loaned to the company, and it could damage the city's credit rating.
(Kiss) "We're in a very challenging situation. And we're in discussions with Citi Capital and what they've promised is not to do anything precipitously. But this does threaten our Moody's standing and it does threaten the future of Burlington Telecom, so we do have to move with speed. We're working right now to hire a financial consultant that will help us in the negotiations with Citi Leasing to try to move us forward in a way that we can sustain Burlington Telecom and try to protect the city's future."
(Lindholm) Mayor Kiss says he's looking at partnerships to help Burlington Telecom continue operating and to make sure the city gets paid back, at some point.
For VPR News, I'm Jane Lindholm.