Six people were effectively laid off today at Burlington Telecom, less than two weeks after city officials proclaimed that the muncipal utility was paying all of its bills and netting a positive cash flow — absent paying off the debt it owes to taxpayers.

The six positions are slated for elimination as part of a staff restructuring being overseen by outside consultants. The positions include two technicians, two customer service representatives, an outside plant manager and BT’s marketing coordinator. The six people who hold those posts were placed on administrative leave today; the City Council will have to approve the changes. Once approved, the six people will be officially laid off, said consultant Gary Evans of Hiawatha Broadband.

At a special City Council meeting two week ago, Evans said the main problem facing BT was too few subscribers. So, why axe the marketing position?

“This doesn’t mean that BT’s marketing efforts will stop,” Evans said.

After the layoffs, BT will have a workforce of 20 employees. “We don’t think there’ll be a need for additional layoffs,” said Evans. “This action does, in no way, suggest the beginning of the end or that this is the end of BT. On the contrary, we feel as if this will put BT at the right staffing level for its customer base.”

Two weeks ago, outside consultant Steven Barraclough, who is helping to run BT’s day-to-day operations, told attendees at a special City Council meeting that BT has a “surplus” of roughly $40,000-$50,000 per month and is not taking any money from the cash pool. In addition, BT is paying the interest on the $16.9 million owed to the cash pool.

Burlington Telecom is in the midst of discussions with several financial and strategic partners in an attempt to stay in business. The city is awaiting word from CitiCapital about what equipment it wants returned, and how. The city backed out of its $33 million lease purchase agreement with CitiCapital last year after it could not reach an agreement to restructure its debt.

When asked, however, to produce a standalone termination letter, the city said no such document exists.

“There isn’t a stand-alone termination letter,” wrote City Attorney Ken Schatz in an email to Seven Days. “Letters between the City and CitiCapital involve ongoing contract negotiations and settlement discussions. Therefore, in order to protect the City’s interests, we need to keep them confidential.”

Barraclaugh said at the January meeting that BT has priced replacement equipment it suspects it will need when CitiCapital seeks return of the equipment it now owns as a result of the lease termination. Barraclough said the replacement equipment will cost about $6 to $8 million.

BT is developing a plan to take out existing equipment and install new equipment that is designed to provide “minimal disruption in service,” Barraclough said in January.

This article appears in Feb 9-15, 2011.

Shay Totten wrote "Fair Game," a weekly political column, from April 2008-December 2011.

42 replies on “Layoffs at Burlington Telecom”

  1. They told Citi they could pay $40K a month when they were at 5000 subscribers. Now it’s $40-50K with 4000 subscribers. I guess they were actually paying money to the 1000 people that dropped them.

  2. Thank goodness for the PSB forcing Citi to keep the lights on while City hall forms a plan to buy 50 million dollars worth of goods for 3 million it should take twenty years for this city to get its act together. All of the BT subscribers who wish their family budget would plump can now stiff BT on their service contracts. UNcle Kiss sez” kids you are really stiffing CITI and the dupes I mean widows and orphans school teachers and fireman who supplied CITI with the capital to string the fiber to your home. We need it more than they do we do the hard work fronting for Lockheed in Burlington” Never mind about the pesky details like money, debt service just gets in the way of a terrific asset we deserve for free.Hows about a hippie coop how many of you want to buy in at 5grand for cable and telephone service? This asset farts cash at the tune of 400k a year and iffin we fire the rest of the employees and the consultants and lawyers who are soaking us it might fart 400k more who wantsa buy a work share and save fifty bucks on your internet bill? There is a fart and fall back position kiddos if CITI will do business with the dirty hippies in town.

  3. Shay you should ask about the numbers.4000 subscribers doesn’t mean much. What is the average revenue per user and how does that compare against the norms for triple-play providers? If you have 6000 subscribers but half are only taking 1 service (ie internet only) then that ain’t very good.And besides, all the revenue generated by the system each month above and beyond expenses will be part of a lengthy list of debts owed to CitiFinancial. They own everything including the revenue generated by system. That should be another question to ask, Shay. Confirm it. Don’t just take the assertion as idiotic or truthful. ASK.

  4. Wonder if next Monday on Feb. 14 when the council votes on this it will be the St. Valentines massacre recreated. It seems some councilors may have other plans for that night though. I would urge them to get the love out of their system on Sunday and perform their civic duty on Monday.

  5. It’s like Alice in Wonderland. Steven Barraclough sez….BT is cash flow positive. If you ignore the 51Mil in debt, oh yeah and the fact that they don’t actually own anything and aren’t paying rent on the equipment or lines…. Steve, I wonder, are the proceeds generated by BT currently even BT’s or are they Citi’s? It’s their line, fiber, boxes, head system… would appear the money is also theirs. So how can BT be cash flow positive if they aren’t generating any money?

  6. I bet the remaining customers are stoked to hear that they canned two customer service reps. Although with 1000 fewer customers (according to the BFP) maybe it’s not such an issue.

  7. The moderator sez: Keep it civil, please. No personal attacks.And Haik, I believe Lisa left last fall.

  8. It’s a shame that these employees are bearing the costs of City Hall’s mismanagement. I hope that you all land on your feet.

  9. “This doesn’t mean that BT’s marketing efforts will stop,” Evans said.Huh? Okay I’m done laughing. Gary Evans: we love you but your out of your mind with your paid cheerleading. BT is in the throes of a death spiral and Mayor Kiss has his foot planted firmly on the neck of BT while spouting off about the wonderful “asset” the City has. The City owns less than nothing. The only liability bigger to the City than BT right now is KIss himself.Resign Bob.

Comments are closed.