BURLINGTON — City officials are reversing course and now say they will release bids from the four finalists vying to purchase Burlington Telecom.
A group of city councilors and the mayor’s chief of staff announced the change at a news conference, saying they were motivated, in part, by an outpouring of residents calling for greater transparency in the sale process.
“We have all heard as city councilors the concerns from our constituents…and I think we all know those are legitimate concerns,” said City Councilor Kurt Wright, R-Ward 4.
Under the new process laid out Wednesday, final letters of intent from the four finalists will be made public on September 20, with a public comment period between then and an October 2 special City Council meeting that the mayor plans to call.
At that special meeting, the council is expected to take a vote further winnowing the field to two final bids. Then at a regularly scheduled October 16 meeting, the council is expected to select a buyer for the fiber network.
Mayor Miro Weinberger had said previously that he believed releasing information about the bids would hurt the city’s bargaining position, and maintained that there was already extensive public engagement through the adoption of criteria for the sale.
City Council President Jane Knodell, P-Central District, who has previously said she favored their release, appears to have prevailed on the mayor. Knodell said several weeks of talks with Weinberger, the bidders and others allowed the city to unwind non-disclosure agreements that previously blocked a more transparent process.
Weinberger was not able to attend Wednesday’s news conference, as he was participating in mediation between the city’s school board and teacher’s union, but his chief of staff, Brian Lowe, spoke on his behalf.
“I’m here to show support to the council president and the council and to express the significance of the work here in trying to make this a good and transparent process to allow more informed public input and engagement,” Lowe said. Lowe thanked the four finalists for agreeing to make their bids public.
A 2014 settlement with Citibank, then the municipal fiber network’s main creditor, requires Burlington Telecom be sold, though the city can retain partial ownership. If the telecom is sold by January, the city will retain a larger portion of the sale proceeds.
A timeline for the sale process passed by the City Council earlier this year had anticipated settling on a buyer by the end of August to ensure the January deadline is met. Officials have said they are confident they will still meet that target despite missing the August benchmark.
Any sale of Burlington Telecom must be approved by the Public Utility Commission — formerly the Public Service Board — but city officials say that the commission doesn’t need to sign off on the deal before January for the city to retain a larger share of the sale proceeds.
In addition to the letters of intent identifying the bidders and outlining their offers, the city has hired accountant Jeffrey Small to do a financial analysis of the bids, which will be released to the public on September 25. Small was recommended by the law firm Primmer Piper Eggleston & Cramer, which the city has retained to help navigate the sale process.
The city has previously said all four offers would not result in major staff changes at Burlington Telecom; the city would have the option to retain a “significant ownership interest”; and the entity would continue to offer residents an alternative to other cable or broadband providers.
Two offers are from established telecommunications companies. Both are cash offers and would not require Burlington Telecom to take on any new debt. Another offer comes from a local private equity.
The final offer comes from Keep BT Local, a group proposing a cooperative member ownership model, which publicly identified itself early in the process.
The two cash offers from telecommunications companies are within a few million dollars of each other, and are more than double the lowest offer, officials said, though no dollar amounts have been released.
David Provost, chair of the Burlington Telecom Advisory Board, recently said the board “unanimously expressed serious concerns about the sustainability” of Keep BT Local’s financing plan and its “lack of operating experience.”
That led co-op chair Alan Matson to say his group was feeling like an “underdog,” despite strong support from the community. Most residents who have spoken at public meetings say they want the co-op to prevail and are in favor of more transparency.
On Wednesday, Matson, who attended the news conference, appeared energized. “I feel nothing but positive about what (the City Council) has said they’re going to do over the coming weeks,” he said.
“Our group will have our proposal out, and people will be able to look at it more closely, and as I’ve said a couple times, unfortunately I’ve had to speculate about the other parties and now we won’t,” he said.
Keep BT Local has managed to gin up public support for the co-op model, in part through frustration over the opacity of the process, but Matson acknowledged that when the bids become public, it could actually hurt the co-ops prospects.
“There could be an amazing bid out there that has everything that we offer and more…but on the other hand, if that’s the case, and that can be shown, it’s only going to be good for the city,” Matson said.