It's laid out through most of the city and Burlington Telecom's fiber optic network now provides cable, internet and telephone service to approximately 4,800 city residents and businesses.
Few would argue that Burlington has built a world class state-of-the-art system, but there's one problem-- they can't afford it and the Blue Ribbon Committee says there aren't many viable options available.
That committee was charged with assessing BT's viability and the conclusion now reached doesn't look good. David Provost chairs the group.
"The basic concept of the current debt structure and the debt structure needed to comply with the CPG that would be in the range of $51 million to $65 million and based on the proforma-- the future forecast of what BT can generate-- that debt load is just too significant," Provost said.
Burlington Telecom's current revenue falls in the $6 million to $7 million range and refinancing would only add to the burden. Provost says an outright sale of the utility would yield the lowest return, so the group has concluded that a joint venture with an outside partner is the only viable solution with the city as a minority partner.
"And we think the best solution would be a restructuring of the debt, hiring an investment banker to help us work with the debt holders to find a possible solution of restructuring the debt and then finding a partner, finding a partner that can bring to the table some of the operational areas that were identified in the report," Provost explained.
Mayor Bob Kiss isn't sold. He believes refinancing is still an option if the city can defer payments for two to three years while BT acquires new customers. But he says all options need further study.
"There some interesting ideas, plans and assessments that I think we all share. It's going to be a how do we make those work," said Kiss, P-Burlington. "I think a lot is possible-- and may include a partner so I don't reject any of this. It's part of the process to get there and to have more people be included in how we shape the future in that."
The Burlington Telecom recommendations will be presented to the City Council next week. It's the next step in a complicated and controversial situation surrounding the debt-ridden city-run utility.
Tuesday, May 21 2013 6:00 PM EDT2013-05-21 22:00:03 GMT
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