[B]URLINGTON — The City Council has taken the first step toward buying interest in Burlington Telecom.
Councilors instructed the city attorneys Monday to ask the Vermont Public Service Board — the state regulatory body tasked with approving the sale of Burlington Telecom to Indiana-based Schurz Communications — to approve an agreement allowing the city to buy a stake in Burlington Telecom.
The city signed off on the sale of Burlington Telecom in late December, and Schurz will take over the company after the Public Service Board completes its review, which is expected to come in the summer.
The sale process continues to be the subject of public ire and is a prominent issue in the race for mayor, which will be decided March 6. The process dragged on for months and culminated with a combative late night meeting that produced Schurz Communications as a buyer.
Monday’s action by the council opened the door for the city to buy part of the company they just sold in hopes of seeing a return on their investment whenever Burlington Telecom changes hands next, and to gain a seat on a company advisory board.
The city will make $5 million through its sale to Schurz. On Monday, councilors were mostly in agreement to move forward with having the conversation, but had little sense of where they wanted to go, with some councilors arguing that the money could go to better use.
“I hope that we’ll also be thinking about the other options where we might invest these funds,” said Joan Shannon, D-South District.
“The city has talked endlessly about our housing needs,” Shannon said.
Dave Hartnett, I-North District, said an option for the windfall could be returning it to the taxpayers, to which Shannon agreed.
The city can buy up to 33 percent of the company under the sale agreement.
If the city can buy 7.5 percent of the company, it will be allowed to occupy one seat on a seven-member advisory board. If the city buys in at the 33 percent level, it can occupy two seats.
“We’ll be in the room, but we won’t have much power of persuasion,” said Chip Mason, D-Ward 5.
Since Schurz Communications has expressed a willingness to retain and grow the business for decades, Mason also said it’s an open question if the city would get a return on its investment.
Sharon Bushor, I-Ward 1, defended the investment, saying it’s important for the city to play a role in the long-term growth of the broadband company under plans submitted by Schurz executives.
“Any kind of investment, you don’t look at the short-term gains, you have to look at the long-term,” Bushor said.
Ralphine O’Rourke, an attorney retained by the city to assist with the Burlington Telecom sale process, said even if the city invests and the company grows, the city won’t be able to withdraw the investment whenever it likes.
The council approved the action opening the doors to buying interest Monday night by a vote of 11-1. The only no vote came from Ali Dieng, P/D Ward-7.
“One vote at the table? It’s not enough,” Dieng said.
