Wednesday was D-Day for Burlington Telecom-- the deadline to make a $386,000 interest payment on its loan. And so far it appears that will not happen.
WCAX News spoke with both the city's attorney, Ken Schatz, and Burlington City Council president Bill Keogh. Both said Burlington will be notifying its lender, Citi Leasing, that it will not be making the payment on time. But Keogh says that doesn't necessarily mean the city will be held in default on the loan-- a concern because the city does not want to lose its good credit rating. Keogh and Schatz confirmed the city and lender Citi Leasing are still negotiating, trying to work out a deal.
"The real question that comes to mind is how are they going to deal with this?" said Steve Shepard, a telecommunications industry analyst. "They've got a couple of options; the most obvious is they find a funding source. That doesn't seem to have happened, and I'm not sure they're going to. Because not only have they lost the confidence of the Public Service Board, and we know that from the very interactions they've had, they've also lost the confidence of the market. And that's a dangerous thing."
Shepard says that loss of confidence may create a difficult downward spiral for Burlington Telecom. It could turn off both potential customers and potential funders. But he says an outside investor may be the most realistic alternative. In other words, separate Burlington Telecom from Burlington.
"I know that's a politically not popular solution," Shepard said. "But one thing we could do is make it a standalone entity. Let a group of investors come in and take it over and run it as a company, not as a division of a city. That's what a lot of people are saying is perhaps the most viable option for them."
That begs the question of who would invest in something that appears to be losing money. Shepard says Burlington Telecom is a world-class telecommunications network and there may be an opportunity for the right investor to turn its finances around.
Mayor Bob Kiss and City Council President Bill Keogh issued a joint statement Wednesday, saying while they're disappointed in Tuesday's decision by the Public Service Board, they are committed to working through these issues. The city continues to consult with its financial advisers.
"The Blue Ribbon Committee on Burlington Telecom has made several recommendations about how to move forward," they said in the written statement. "All alternatives and options should be considered as we look to preserve Burlington Telecom and make it stronger into the future."
The mayor has not been physically visible on this issue here in Burlington. He is in Vancouver at a sustainability conference.
Sunday, May 19 2013 12:06 AM EDT2013-05-19 04:06:03 GMT
Vermont State Police have charged 22-year-old Adam Page of Newport for stealing the Newport City Elementary School bus, which has now been declared totaled. A stolen dog was also recovered in the busMore >>
State Police say he is also being charged with the theft of two other vehicles and a woman's dog.More >>
Saturday, May 18 2013 11:45 PM EDT2013-05-19 03:45:20 GMT
State police are looking for the person responsible for stealing a school bus and taking it for a joyride in northern Vermont. Troopers say the 2014-model bus belonging Newport City Elementary SchoolMore >>
Police say the school bus belonging to the Newport City Elementary School was taken for a joy ride Friday night.More >>
Saturday, May 18 2013 10:10 PM EDT2013-05-19 02:10:53 GMT
A fatal accident in Lyndon Saturday. It happened around 2:30 Saturday afternoon on Route 122. Police say 76-year-old Gerda Blaszczyk of St. Johnsbury swerved to avoid an animal. Her car travelled up anMore >>
Police say the driver swerved to avoid an animal.More >>
Saturday, May 18 2013 8:03 PM EDT2013-05-19 00:03:45 GMT
Senator Bernie Sanders is touring the state this weekend with a special guest. Sanders and the Danish Ambassabdor to the United States are hosting town hall meetings in Burlington, Brattleboro and Montpelier. TheMore >>
Sanders and the Danish Ambassabdor to the United States are hosting town hall meetings.More >>
Saturday, May 18 2013 7:56 PM EDT2013-05-18 23:56:03 GMT
Saturday marked a new beginning for Castleton State College students. "Were all gathered here, getting fired up, having a good time," explained Castleton graduate, David Carrier. The 500 graduates hadMore >>
It's graduation day for the class of 20-13 at Castleton State College. And just for the occasion, the college invited back an alumnus with a strong connection to the school.More >>
Saturday, May 18 2013 7:51 PM EDT2013-05-18 23:51:14 GMT
Young bikers were learning the rules of the road in South Burlington Saturday. Kids who brought their bikes to the Dorset St. Park received free checks for their brakes, chains, and tires. Helmets alsoMore >>
and much more... making sure kids are safe before they hit the roads this summer.More >>
Saturday, May 18 2013 7:49 PM EDT2013-05-18 23:49:26 GMT
On a sun-soaked Saturday, Karen Trayah and her dogs enjoyed the sights, sounds, and of course smells of a festival for fidos. "It's called Woofstock, however, this is our 1st year doing it here at theMore >>
Making sure our furry friends have a place to call home.More >>
Friday, May 17 2013 7:54 PM EDT2013-05-17 23:54:10 GMT
The door to room 118 at the Liberty Inn and Suites is gone-- busted by police during an early morning drug raid. They say tenant Julie Herron, 41, was selling heroin out her room. She was living thereMore >>
A South Burlington drug bust exposed new abuses of the state's homeless voucher program. A couple was arrested for selling heroin out of their motel room, and police say the state was footing the bill for their stay.More >>