Councilors at Burlington City Hall Credit: Courtney Lamdin

A contingent of current and former Burlington city councilors are urging their colleagues to reinvest the proceeds from the Burlington Telecom sale back into the now-privately owned utility.

In a tripartisan press conference at city hall on Wednesday, the five councilors and former councilors took turns at the mic to explain why the city should invest in the once-sinking telecom that wounded the city’s reputation and its balance sheet. It’s now thriving, they said.

“This is not the same Burlington Telecom of 10 years ago,” said Jane Knodell, the former Progressive city council president and a University of Vermont economics professor. She was flanked at the podium by current council president Kurt Wright (R-Ward 4), councilors Brian Pine (P-Ward 3) and Sharon Bushor (I-Ward 1) and former councilor Dave Hartnett, a Democrat.

Knodell estimates that Burlington could earn up to $660,000 a year by reinvesting the $5.3 million in proceeds from the sale last spring to Indiana-based Schurz Communications, assuming a 12.5 percent rate of return.

Mayor Miro Weinberger has recommended reinvesting $2.4 million, which would buy Burlington a 7.5 percent stake in the company and a seat on its board. Knodell said would take eight years to recoup $2.4 million.

Wright said the group is concerned that a council majority will shoot down the proposal. The topic is scheduled for debate at the council’s meeting on Tuesday, February 18.

“We need to highlight this issue as a critically, critically important issue,” Wright said. “I think we will rue the day that the city council makes this decision — if that’s what happens — down the road, as we watch Schurz reap all the benefits.”

Pine said the council has an opportunity to increase revenue without raising taxes and to try and recoup some of the $16.9 million that the city spent to keep the failing utility afloat.

“We’re getting some of that back from the sale proceeds — in my opinion, not enough,” Pine said. “The only way for that to grow is to reinvest the capital in a revenue-producing source.”

Pine has heard his fellow councilors suggest that the city could opt out of BT and use the money for other, one-time expenses, he said.

“That is completely backwards. This is not windfall money,” Pine said.

Bushor said her constituents want lower taxes. If the city spends the $5.3 million on other projects, there would be no direct return on those investments, she said.

Hartnett said this is the city’s last chance to get some of its lost money back: “If we vote no on this, that’s it; we’re done. No ownership, no nothing,” he said, adding, “We can’t afford not to do it.”

Knodell acknowledged that there is risk in the deal but said if the earnings don’t pan out or if the city needs a large sum to pay for other capital needs, Burlington can always cash out. If that time comes, Schurz has agreed to buy the city’s shares, she said.

“The real risk is not doing anything,” Wright added. “The real risk is cashing out and saying, ‘Sayonara.'”

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Courtney Lamdin was a staff writer at Seven Days 2019-2025, covering politics, policy and public safety in Burlington. She received top honors from the New England Newspaper & Press Association, including for "Warning Shots," a coauthored investigation...

14 replies on “City Councilors Past and Present Urge Reinvestment in Burlington Telecom”

  2. Am I missing something. Wasn’t it part of the sale agreement that the city would get $7 mil as stated in a previous seven days article when the deal was signed.? This article states it is only $5.3 mil. Did I miss something? Are some of these the same councilors that got us into this mess to begin with under their watch? There is no guarantee that the city will get their money off another $5 mil investment. The tax payers are already out $10-12 mil on the deal.

  3. Let’s see, Burlington taxpayers, reduce taxes, fix potholes, buy one way tix for homeless (just kidding!!!), pay down gap in pension funding — or invest in something that, well, didn’t work out so well the first time?

    You get my point?

  4. 12.5% return on annual investment, in today’s market?
    Really?
    This from an economics professor?
    I’d drop out of the that class or pull my child out of that class, with that statement

  5. For what it’s worth – BT is a great asset for the city and its businesses. Solid and reliable service with a great sales team and great support.

  6. Select only the photo with street signs.

    You know that one…

    So, yeah, WTF are two ex-councilors doing in this latest mug shot.

    Oh, wait, they’re closing the deal!

    But, hold on. Didn’t those two either retire mysteriously from the council or lose re-election to it?

    And that one on the left – didn’t she lose her party’s endorsement at a recent caucus?

    Oh, and the dude in the middle, the one behind the lectern didn’t he – oh, Wright, okay, yeah, he decided to quit.

    Now it all makes sense.

    What a town.

  7. What this article fails to tell us is what is the state of BT now compared to when Burlington ran it. From what I heard this morning they have doubled the number of customers and are making money. They are ahead of the curve in terms of technology campared to comcast. 5G, well how does verizon get 5g to the poles? Yup fiber optic. Who has fiber optic……………………..BT!

  8. Just why would Schurz offer the city an estimated 12.5% return and a seat on their board?

    What does Schurz get in return from Burlington that they wouldn’t get by offering this investment to private parties at a 7% estimated return?

  10. So Seven Days only interviews the folks who want this to happen? Nice going.

    The City might as well go buy a bunch of lottery tickets as opposed to investing in Schurz.

    I have BT and have had it since it became available in my neighborhood and love it. I loved it better when we owned it.

  12. @Jimmy
    Just why would Schurz offer the city an estimated 12.5% return and a seat on their board?

    I believe it was part of the sales aggreement.

  13. This press conference may not have been the best way to get the word out, but after asking Brian Pine about the specific details of the deal, I must say it sounds like a better option to re-invest some of these proceeds back into a now professionally run, profitable BT and have the city (tax payers) receive dividend payments in perpetuity. It would be a different revenue source other than taxes.

    Perhaps current City Council opponents could require that some of the revenue generated by such a deal be earmarked for specific ongoing infrastructure or other projects to earn their votes? Otherwise, I’m just afraid once this bit of money is spent on any one-time projects, it’s gone, instead of being a new (and growing) revenue source for the city.

    Could someone post the specifics of the deal for people to analyze? I think it would really help people understand the offer in front of them.

  14. So, we need a big increase in the school budget and some more $$ for another EMT team, but let’s spend the money WE HAVE in an investment in telecom. Exquisitely stupid!

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