The Burlington City Council solidified plans Monday to choose a Burlington Telecom buyer after councilors deadlocked between the two final bidders — Canadian telecom company Ting and the local co-op Keep Burlington Telecom Local.
A plan to combine Ting and Keep BT Local failed in the past week.
All four final bidders — Ting and KBTL along with Indiana-based Schurz Communications, and New Jersey-based ZRF Partners — are now back in the running and will have to present updated proposals in accordance with a resolution councilors adopted during Monday’s meeting.
The resolution assures the deadline for deciding a buyer will be Nov. 27, the next council meeting.
“Many in the public have shared with me and others some frustration. This resolution presents a clear path to the finish line,” said Adam Roof, I-Ward 8.
Roof wrote the resolution and will be part of a subcommittee of councilors that will decide on the final voting process. Councilors Chip Mason, D-Ward 5, Jane Knodell, P-Central District, and Kurt Wright, R-Ward 4, will also serve on the subcommittee.
Roof said the members were picked for their contrasting politics and bidder preferences.
Part of the resolution prohibits councilors from speaking with any of the bidders, and funnels all negotiations through the designated council negotiator, Terry Dorman of the firm Dorman & Fawcett. Seven Days reported last week that Joan Shannon, D-South District, raised ethical concerns over Knodell’s communications with ZRF in the past few weeks.
“I’m concerned about inappropriate communications,” Shannon said Monday. “Why does the council need to be communicating directly with bidders at all?”
Knodell has said that she did not negotiate any terms with ZRF, but was simply trying to figure out where bidders stood.
“It was me, sitting there as council president saying we seem to be all tied up, what do we do if we can’t break a tie? One obvious thing is we have these finalists,” Knodell said. “For me it was a matter of practicality.”
Dave Hartnett, I-North District, defended Knodell during an interview last week.
“To question Jane Knodell’s integrity is kind of unbelievable really,” Hartnett said.
A proposal by Max Tracy, P-Ward 2, to apply similar communication limits to Mayor Miro Weinberger and other city officials was voted down after Weinberger defended the city administration’s role both generally, and in negotiations such as the Burlington Telecom sale.
“It’s both impractical and inappropriate for the council to tell the administration how the administration can conduct its business,” Weinberger said. “The mayor’s office does not work for the council, it works for the people of Burlington.”
Hartnett and Shannon both voted against the proposal and implored Weinberger to keep the council up to date on talks with bidders.
“I would hope that we have an open line of communication and the trust that we always had, and always worked well, with this administration,” Hartnett said.
The source of distrust between some councilors and Weinberger came to the fore when ZRF partners withdrew from consideration after Weinberger voiced concerns he and city professionals had with its proposal, Weinberger said. Many of those details remain secret under a non-disclosure agreement.
Hartnett said it looked like Weinberger circumvented the council.
“What I did was make him aware that our professionals had concerns about their proposals that would become a matter of public debate should he become a finalist,” Weinberger said last week. “After I raised the concerns with the bidder, he decided to withdraw.”
Weinberger said he never explicitly asked Nisar to withdraw, though he expressed remorse for how the situation played out.
“If I had a chance to do over with this period, some councilors felt I got out ahead of them,” Weinberger said.
KBTL last offered $12 million for Burlington Telecom, and Ting had offered $30.5 million. Schurz Communications last offered $30.8 million and New Jersey-based ZRF Holdings offered an undisclosed amount due to the non-disclosure agreement.
Burlington Telecom is owned by the holding company Bluewater and its assets are leased back to the city, an arrangement reached following a settlement with Citibank. The 2014 settlement with Citibank ended a $33 million lawsuit brought by the bank, which had loaned money to Burlington Telecom.
Burlington’s agreement with the holding company allows the city to select a buyer. If Burlington is to keep the largest possible portion of the proceeds, the sale must be completed by year’s end.
