Burlington taxpayers could be on the hook for any unpaid money owed to the city’s general fund if Burlington Telecom were to be sold for less than what it owes outside investors.
That admission came from Chief Administrative Officer Jonathan Leopold under tough questioning from Councilor Ed Adrian (D-Ward 1) at last night’s special city council meeting called to discuss financial problems at the city’s municipally owned telecom company.
In all, Burlington Telecom has borrowed roughly $17 million since early 2008.
To date, Leopold has stressed that city taxpayers would not see their money put at risk due to the loans given to BT. Instead, Leopold said refinancing the debt or a sale of the assets could cover the owed money.
But, when asked by Adrian how the loss would be accounted for if Burlington Telecom were sold for less than what it owes, Leopold said it would be a “negative balance” on the city’s general fund.
This article appears in Oct 21-27, 2009.
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city charter, Section 438 (c)(1), directs the Public Service Board to ensure that all of BT’s costs be “borne by the investors … and in no event are borne by the city’s taxpayers, the state of Vermont, or are recovered in rates from electric ratepayers.”and24 V.S.A. App. § 3-51. Ordinance enforcement(a) The violation of an ordinance, regulation or by-law adopted by the city,… may be prosecuted as a criminal or civil action#2: how can it be that the $17 million doesnot include taxpayer or electric ratepayers money?BT’s commercial debt now about $33.5 millionwas financed by “lease-purchase” agreementsbeginning with Koch Financial in 2003, 2004 and 2006 and subsequently in 2007 with Citicapital.The lease-purchase model is analogous to a mortgage.The Burlington Telecom system is the collateral for the loan. [$17M is NOT collaterized!](cmchoatelaw.com)”…honest services fraud is defined in 18 U.S.C. § 1346:…includes a scheme or artifice to deprive anotherof the intangible right of honest services..”biden sez:”..a new public corruption statute that will beused to bring charges against anyonewho attempts to deprive the citizens of the United Statesor of any State of the honest servicesof a public official,or against anyone who attempts to corruptthe election process..”