Totten reports that a citywide litdrop is in the works in Burlington this weekend, all to continue to try and change the subject from a financial scandal that related to Burlington Telecom, to a conversation about Burlington Telecom. This is presumably the same flyer that was distributed in some parts of the old north end entitled, "Burlington Telecom, the Facts Not the Politics." All of this, again, will simply serve to marry public impressions of the landmark public utility with their impressions of the scandal itself, which - if successful - places BT in dire jeopardy so long as Kiss & company continue to feed the flames of anger by denying responsibility for any screwup. All of this is precisely why die-hard opponents of BT are so willing to oblige the Progressive leaders, as its like handing them a loaded gun and pointing it at BT's temple. (I say Prog leaders, as the Prog or Prog oriented folks I've spoken to tend to be concerned about the same things everyone else is)
And so down the hole we keep going. What follows are some of the apparent distinctions (or just odd fits) that arise in a side-by-side comparison between this week's piece from Jonathon Leopold, and the next day's reporting from the Free Press of the leak of emails between the city and its attorneys on the matter (emails which the City Council correctly voted to release publicly, even though the final decision on their status was in the hands of Mayor Kiss prior to the leak). While the Council's vote was a great step towards healing, the denial-lit drop is liable to rip open the wound wider than ever. I'm afraid this may continue until BT becomes Burlington Telecompost. I hope I'm wrong. Gawd, why is it just so hard to say "mistakes were made" and move on?
Burlington pools the cash reserves of city departments. It is a customary and accepted municipal financial practice to draw from this cash pool for short-term financing of city departments.
(11/17 email from Attorney Bill Ellis:) Jonathan,
Upon reflection, I'm not sure a loan to the city for "capital projects" will necessarily cure the problem. Won't his (sic) end up still looking like the City getting a loan, and then loaning BT $10 million? Let me know your thoughts.
(11/17 email response from Leopold:) depends on how we structure it, remember, BT is the city
(11/18 email reply from Ellis:) I will leave the financing nuances to you.
...This litigation strategy was the product of advice from a legal team of City Attorney Kenneth Schatz and Joseph McNeil and William Ellis of McNeil, Leddy & Sheehan to address the Condition 60 issue as soon as possible, and the recognition that its solution was inextricably linked to also solving the build out requirement of condition No. 17.
"Notwithstanding my earlier 'Agenda' for tomorrow's planned meeting with DPS, my present assessment is that the present use of the city's 'pooled resources' to fund BT to the toon (sic) of $10 (million) with no repayment obligation within 2 months is a violation," Ellis wrote.
[...]"It is our preliminary view that the city should address this issue head on sooner rather than later, and not wait to have it brought up by DPS or worse, Comcast," the attorneys wrote.
Did I ignore legal advice in November 2008 regarding Condition 60?
No. Had I done so, the city's attorneys would have been obligated to so advise the council and mayor.
On April 14, Ellis and fellow attorney Joseph McNeil wrote Kiss directly in a memo marked "for your eyes only."
They explained the Condition 60 violation: "(It) provides that BT may participate in the city's pooled cash management system provided BT reimburses amounts advanced on its behalf within two months." BT had not been repaying the money, the attorneys told Kiss
Are taxpayer funds at risk?
No, with the recovery of the financial markets, BT can be refinanced.
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.
Was the use of pooled cash for BT secret or hidden?
No. Pooled cash has funded BT's cash flow from inception and has been documented in our annual audits. Its use is specifically authorized by the Vermont Public Service Board. The city budget for FY 2009 showed an $11 million gap between revenues and authorized expenses to be financed either through outside financing or the pooled cash. This issue was specifically discussed with the Board of Finance in May 2008.
On May 6, Ellis told Leopold by e-mail that "one or more councilors" had been asking the Public Service Department questions about Burlington Telecom. "Should I be copying in any city councilors on our filings?" Ellis asked.
"Do not copy anyone," Leopold responded. "Tell DPS not to discuss anything confidential or provide any of our confidential info & see if you can find out who it was."
The councilor was Council President Bill Keogh, seeking DPS input.
