The Public Service Board says Burlington Telecom cannot use public money to make a $386,000 interest payment due Wednesday. The cash-strapped utility is $51 million in debt. It hoped to get PSB approval to dip into the city's cash reserves to avoid defaulting on the loan. But word came Tuesday evening that request has been denied. The Public Service Board denied a motion to use the city's pooled cash reserves to make the payment to lender Citi Leasing.
In its statement, the PSB said Burlington Telecom "failed to present sufficient, reliable information to provide a basis for granting the motion." And the PSB said Burlington Telecom filed its motion too late, which prevented it from collecting evidence and conducting a full and fair hearing.
Mayor Bob Kiss, P-Burlington, issued a statement saying he is extremely disappointed in the board's decision, adding that it jeopardizes efforts to preserve and strengthen Burlington Telecom.
"Allowing BT to make its February payment using pooled cash would have given the City the time it needs to arrive at a more lasting and sustainable solution to addressing the issues it currently faces," Kiss wrote. "Without the ability to use pooled cash for the February payment, taxpayers and BT operations are placed at a greater risk."
City Council President Bill Keogh told WCAX News he is not surprised by the decision, based on the tenor of the last week's PSB hearing, in which Burlington Telecom requested this motion.
"The city has a real challenge to get out of this mess," Keogh said. "I hope it is not at the expense of the taxpayers."
With the payment due Wednesday, it is not clear what the city will do. Kiss says the city is discussing this situation with its financial advisors.
"While this decision limits the City's options," he wrote in the statement, "we will consider every alternative to meet BT's immediate needs and move forward to establish a stronger telecom enterprise for the City and BT's 4600 plus customers."