Mayor Bob Kiss (left) and Haik Bedrosian
Interview with Mayor Bob Kiss on 01.14.11 between 9am and 10am at his office in city hall.
Mayor Bob Kiss (left) and Haik Bedrosian
HB: OK so we are recording... oh man forgive me, I procrastinated preparing for this so I stayed up all night last night trying to think of smart, tough questions, so...
BK:[chuckles]
HB:[apologetically]...and if it doesn't take the entire hour, also...
BK:Yup....
HB: OK, so... I would like you to just touch base brief briefly on, you know, what's going on with Moran, the topic of the public forum today at noon...
BK: That's actually, that's a formality. We have to have to be able to have a public hearing as part of the charter change. That's what this afternoon meeting is... it's almost a...to make sure we fulfill all the requirements of the process.
HB: Right, and there were three proposed charter changes?
BK: I'm not sure what the final number was
HB: One of them is a provision to make it a fifty percent threshold...
BK: Sure.
HB: In a...
BK: ...election of mayor.
HB: Right. In a regular, non-IRV election. How do you feel about that?
BK: Well, I supported that. And I would say again- IRV worked well. I do believe it was demagoguery that allowed that to be lost in the election process. I think people were misinformed about the process in terms of 'that it didn't work' because in fact it worked exactly how it was expected to.
HB: Right...
BK: I believe the majority of voters understood the ranking and the benefits, and so my sense of this is that we'll come back to IRV because it's the better process.
HB: OK, but it terms of this one...
BK: But in the meantime, I believe we should have mayors that are elected with a majority of the voters supporting them so... the forty percent rule that was in place before didn't do that...and so you'd have sixty percent of the people potentially vote for somebody else, and someone who gets forty percent of the vote becomes mayor, so...
HB: Right, but I mean that worked well for Peter Clavelle and Bernie Sanders and governor Shumlin only got forty-nine-something...are they less legitimate because of that?
BK: Uh... I think that we should...IRV promised and did deliver a mayor that got more than fifty percent of the vote. Based on that I think it's a good procedure to follow so I'm going to support the fifty percent rule- even though it very likely promises there will be a runoff election.
HB: Right. Which could sort of work against the candidate with less money because they have to go for a longer campaign.
BK: Right. And for all the reasons you don't want to have that happen- it's likely fewer people will come out for the second election. That's the fact of the matter. And you have to spend a lot more....And it [IRV] doesn't always reflect that the top two candidates would ultimately be the victor. In IRV it's certainly possible that someone in round one who was third would be mayor.
HB: Did you find it...I don't know... Do you think there's a cruel irony to the way it worked out in the second election with all the 'exceptions to the rule' if you will- there were a lot of statistical anomalies in that election in that...I don't know if you've studied the issue a little bit... but there's a method of counting votes called “Cordasett” [mangling pronunciation of Condorcet (“Con-dor-say”].
BK: Condorcet. [Correcting my pronunciation.]
HB: Condorcet? [Trying to mimic his pronunciation.]
BK: Yeah... I don't want to get...
HB: ...And I guess Andy [Montroll] would have won it that way...
BK: There's people who could devote a lifetime to this... but the Condorcet anomaly, I think doesn't affect the election in a major way. I do think that IRV as it was practiced in Vermont was pretty straight forward and I believe voters understood the significance of it. People came to me who were very happy to be able to say they voted for me second- others came to me and said they were very happy to be able to vote for me fifth. I mean people really had an understanding I think, of the implications of the choices
HB: So we may come back to that.
BK: Yeah, yeah.
HB: And there's another proposal to remove the CAO from the board of finance.
BK: Right...
HB: I guess you don't support that...
BK: I don't support that, partly because it's served Burlington well, and people will have to appreciate that right now there's three city councilors, the mayor and the CAO. And under that procedure we've actually previewed and acted on a number of things that then go to the city council. No serious issue that's approved by the finance board doesn't go before the city council as well, or anything that comes up the city council can always take it off the consent agenda and deliberate on it.
HB: Do you think that the term “CAO” makes it a little bit easier for people to contemplate that person's removal from the board for finance than it would if the person used the term “treasurer?” I mean it'd be a little harder to take the “treasurer” off the board of finance, wouldn't it, for people... psychologically....than the “CAO...?” Nobody really... you know, it's an acronym...not quite as...
BK: You know, in Rutland for example, because the treasurer there is elected... then people would say there's accountability to the voters in that process so that's OK... so I believe the proposal that's on the ballot, by the way, would replace the CAO with another city councilor, and it doesn't at all, this particular vote doesn't say anything about the fact that with president of the city council automatically on the finance board and with three additional city councilors, there's no requirement that there not be a party domination in that. So you could have the city councilor who is, let's say a Democrat, and have two city councilors appointed beside him or her who are Democrats- you'd have three Democrats on the finance board.
HB: But I mean during the time that the Progressives held the presidency of the city council, wasn't that de facto the way it was for the Progressives because there would be a Progressive mayor, a Progressive-appointed treasurerer and Progressiveve city councilor making up the majority of the board of finance?
BK: That's possible, but I mean there are, sort of, the district responsibilities of representative city council versus, sort of the administration of the city...
HB: That's a good point...
BK: All I would say is when you look back at this, third party review from around the world recognizes the fact that in a lot of ways the city has been a model over a long period of time. So I think people should think carefully about changing that. Burlington has been a success story.
HB: Right. Sort of if it ain't broke, don't fix it.
BK: Well, you know... and like I say- every significant decision made by the finance board can be reviewed or acted upon by the city council. So that is the, sort of, the review process that's already in place, and I believe that should work.
HB: OK. Did we talk about Moran yet? Is there...
BK: No...What was the third item on ...? [gesturing to my notes]
BK: ...oh, I don't... uh... this is 'Lockheed' [referring to my notes, unsure if he meant my my notes, or ballot items] I was going to ask about, but I'd like to just skip that....Any chance that we might get a botanical garden instead, down at the waterfront? That's my personal... you know, a big open sunny thing you can go to in the winter time and, be with the...
BK: You know we have that third spot that's open, and I think that what we're moving to do is have development agreements with the two tenants that we have- move on those and begin the process and I'm convinced that we'll find a third tenant- will come into seven thousand square feet that's available and a work in progress and I think that will work well, but we don't know who that third tenant will be yet.
HB: Do you think it will be a good idea to bring it back to the voters because it looks different than what they approved the first time?
BK: No.
HB: No?
BK: I mean I think that we've moved beyond that. There's already been, clearly, a vote in support of the renovation and use of the building, clearly a vote in opposition to destroying it and we've made major investment in the concept of at least three key tenants... I think the two, the choices that we've had as that third tenant- each one of them has brought merit to that process, whether it was the children's museum or the maritime museum- we're not going to bring a third tenant in that doesn't reflect that kind of...
HB: Sure. And just briefly I want to mention this while I have a chance, the- I guess it's got two terms- you prefer “Champlain Parkway...”
BK: That's right.
HB: Other people call it the “Southern Connector” or maybe that was its older term...
BK: Yeah...
HB: It appears you are going to be the first mayor to oversee the completion of that project after it been in the works for how long? Forty years or something?
BK: Probably more than forty years, yeah. So we will in February begin the act 250 permitting process, and that's the last permitting we have to go through. But I believe that we've worked hard to answer the environmental issues associated with...
HB: Yeah...
BK: …And some clean up details... and some of the choices we've made are determined by historic preservation requirements and...
HB: ...Sure, but it's an accomplishment though, I mean...
BK: I think it will be... and in 2011 should we be doing a road project? I think yes, still. Motor vehicles and mass transit are still going to be part of our future for probably quite a few years- this will be a benefit to the south end and ultimately to the city as a whole.
HB: OK- so now to the tough questions... If discussion of any of this puts the city at a substantial disadvantage in the face of whatever- negotiations, or litigation- obviously you're going to...
BK: I won't respond.
HB: Right. Exactly. So anyway...On December 17 Shay Totten quoted you and wrote:
““The Larkin Report lacks credibility,” said Kiss. “BT’s viability is of paramount importance. It is a major mistake to rely on the Larkin report. It is dated, incomplete, and contains numerous omissions.”” OK- so I'm positing that to say that something is dated, incomplete and contains omissions is not to say what is in it is incorrect. So I'm going to pull a couple of pieces out of it [Larking Report] to see if you agree with...
BK: OK...
HB: ...it.
BK: ...Well, see- let me just jump in, maybe before I see what you've asked, you know...So essentially the Larkin Report is- A company out of Michigan hired by the public service department to review Burlington Telecom. And what it is- essentially is an adversarial piece developed by the pubic service department and I have to say that David O'Brien's role in all of this over the time he was there, I think was political...and not alone his charge to protect the ratepayers- and that his posture in the press was, I believe, unfortunate and compromised the department and its role.
HB: OK...
BK: ...So what's really critical, just to- In terms of the credibility of Larkin- These people from Michigan, who are not auditors, never talked to a single person from the City of Burlington, never talked to our auditors, and never talked to our financial advisers Dorman and Fawcett...
HB: Right...
BK: Not one word. And so there are snapshot reflections on this that I think are in error- and in addition to that, despite the fact that we've done significant changes in terms of moving forward and...
HB: Uh huh...
BK: ...including negotiations with CitiCapital, and looking for strategic investors, there's no recognition by Larkin, of any of the progress that was made in addressing issues...
HB: So that frames it as adversarial and I don't know how useful it would be to get into why you think O'Brien is adversarial or out to get you...or...but...set that aside for the moment, if we could just pull some quotes from it [Larkin] and I could get your response to the quotes... [awkward pause] um...so let's see... from Larkin page [awkward] ...oh, well- Just generally- was BT in violation of condition 60 since 2005 like the report says?
BK: So partly, I'm not going to talk about this stuff a lot because we're on the verge of issuing our response to Larkin and that's probably the appropriate place for these details to be, you know, sort of formally put back out there, but... [awkward pause] ...uh, you know what...
HB: OK well, we can skip that issue [nervous laughter] I guess...
BK: Yeah..and I mean...[awkward pause]
HB: Um...yeah...OK...[awkward pause]
BK: And I think we'll... that response at that time is probably the appropriate place for people to see the whole response, because it's a bigger series of questions and answers. You know...
HB: OK, how about just um... In response to your quote in the Blurt blog, Why is BT's viability of paramount importance? Why is it... Is it too big to fail? I mean why can't it stop existing? Why is it so important?
BK: Well, first of all I think it's an important telecommunications investment for the city of Burlington. It really is part of our economic future- and one thing that everybody who's looked at it...
HB: I don't disagree with that, by the way.
BK: ...And that's what I was going to say, is that the third parties including the blue-ribbon commission who looked at this- they all agree that there's a technological benefit here that the investment paid for. That's a good thing. So people aren't saying “oh my God, it doesn't work.” They're saying “it works, but there are some financial issues that we need to address.”
HB: But...is...I guess...so.... I mean what you're saying then ultimately, is that it's important that the fiber doesn't get torn out of the streets.
BK: Of course.
HB: That would be a waste.
BK: That would be a waste.
HB: Right...
BK: And let me go on...
HB: But theoretically Citi could demand that.
BK: Well we're still in discussion with CitiCapital, but the lease- Their collateral to the lease is the equipment. And there'll be a long discussion before we would ever remove fiber from the poles for from the ground and there's a reasonable view of why that would be the case because it would be..
HB: Sure. Because it would be a waste...
BK: Yeah. It would be like, tragic.
HB: But...
BK: Now let me just say the other reason why it's important to maintain the viability of Burlington Telecom- all those financial sources that we're talking with about going forward all understand that in order for this to work, one element of going forward has to be an opportunity to recover the 16.9 million debit to pooled cash. So that as there's money made available through the operation of BT some of it goes back to returning that resource to the City of Burlington. So from my perspective for example, we work extrodonarily hard to make sure that BT remains viable so that that payback occurs to the city. We all need to...include that as one element of any part of our discussion.
HB: OK so subtracting the debt-service which BT is no longer paying on because you canceled the lease with Citi, is it cash neutral at least for operations right now?
BK: We're cash flow positive.
HB: Cash flow positive?
BK: Yeah. For operations. And that does exclude anything related to the debt. Of course under the current scenario- we terminated the lease. Both parties acknowledge the lease has been terminated and so the 33.5 million...
HB: So if it's cash flow positive is it in a position to start paying back the 16.9 million?
BK: Well I think we're still working our way going forward, but there is- they're projecting a net positive at the end of the year of probably four to six hundred thousand dollars...But we're still in discussions with Citi about the future and we're definitely in negotiations with strategic and investment financial sources...
HB: So that answers how BT is surviving right now. Um... who are Dorman and Fawcett? Are they financial consultants? Telecom consultants? Or both?
BK: They're financial consultants.
HB: OK so who is running BT since Chris Burns left?
BK: The interim general manager is Steve Barraclough who's a Dorman and Fawcett employee.
HB: Oh. So in a sense they are telecom consultants too.
BK: They are, but really what we're relying on is our own telecom staff, but they're the management decision makers...
HB: And they're a private company?
BK: They are.
HB: So that gets to the philosophy of using private contractors to head what is essentially a city department, or at least a “small d” city department. I mean is there anything...is it appropriate? Should there be some public- should it be a public employee who's at the head of that department?
BK: Well, strictly speaking Burlington Telecom still answers to the CAO. Burlington Telecom is a project of the Clerk-Treasurer's office...
HB: Right. Is that appropriate?
BK: Well, yeah... That's one way that we do business. I mean ultimately there would be a different configuration for that, but that's how the design was set up in order to move forward. And that's fine. I think that's not unreasonable. Remember the other thing that we're operating with here with is the blue-ribbon commission recommended that we bring in a financial adviser and that our first step would be to try to renegotiate, restructure the...
HB: Right, right. And um..
BK: And that's what we did. We brought in Dorman and Fawcett out of that recommendation... So they've been leading the process in terms of restructuring and next steps.
HB: Right and the Larkin Report says that BT finally got its own separate bank account in 2009. I know you don't necessarily want to address the Larkin Report specifically, but is that true?
BK: In terms of identifying it separately within city finances- yes.
HB: Right...
BK: It's not a bank account, it's an account within the city.
HB: But it's separate from...
BK: It's identifiable within city financing, yeah.
HB: Alright. Um... Joan Shannon is a potential mayoral candidate. She says she supported resolutions in 2008 and 2009 to make BT a city Department with a commission to increase oversight of BT. Do you support that? Why or why not?
BK: ...I think until we have Burlington Telecom on sound footing moving forward, then I think it's reasonable to continue to operate it the way it is. And we'll see how this- how we move forward as we negotiate with...financial partners...But we already have at least one advisory group for BT. That's a function of our CP...
HB: Right but they don't have any real power...
BK: No. It's advisory, but it's required by the public service board...
HB: Wouldn't it be more democratic to have it be an actual Department like BED with a commission or the School Department that I'm a commissioner for, something like...No?
BK: It's not out of the question. I think we have to just take it through to where the viability is set again, then decide what the best function is. You know the unique aspect of Burlington Telecom is- unlike waste-water, unlike BED it's not a municipal monopoly and so it's in a pretty fierce competitive market. And so we just have to make sure that we give it accountability and oversight and also make sure that it can survive within the marketplace it has to function in.
HB: In terms of accountability, a lot of the pubic comment and blog comments that are out there seem to lament that so many of BT's discussions are held in executive session...A city councilor walked out of executive session recently to protest the frequency of them, or the number of them...
BK: Yeah now we have a question...Paul Decelles's walking out I think compromises his fiduciary responsibilities...you know the city councilors, I think, have to opt in, not opt out. And we keep examining the place where there can be open and frank public discussion, and where providing that information compromises the ability of BT to succeed as a business. So we have to keep weighing those sort of- that tension...
HB: Yeah...
BK: Because Comcast...
HB: Well Comcast has five thousand times more subscribers than BT...
BK: Of course, yeah. They're a national company.
HB: That leads me to wonder- Is there anything BT could have possibly have thought of...that Comcast hasn't thought of already? How does it make sense? Don't they basically know everything about the telecommunications business?
BK: They might. But we don't have to give them all of our marketing plans and where we're going to focus our attention... that's not...
HB: But in terms of an enterprise owned by a public body, by the city government- my question is- wouldn't more transparency invite more trust among the pubic? If they could see more about what was going on, wouldn't some of their concerns be...
BK: Haik- one thing you should- I mean you could do it- you go to the web page now, and there's a massive amount of information that is available in public. I'm just saying that I'm not sure that a business plan in full detail- probably it's not reasonable to say that that should be an open and public document for Comcast. And I think reasonable people would agree on that... What we want BT to do is provide the quality service in a way that Comcast can't, and be able to be viable- so we'll just have to keep our eye on the ball there.
HB: OK um...this might be...
BK: One thing about BT- as a fiber to the home system, everything that I've understood about it is that in Burlington it has a fifty year capacity and that it's definitely geared to the future which moves away from cable.
HB: Well the technology being awesome is... yes that's true- but not exactly the issue that a lot of people are...it's not...no one disagrees that the technology is awesome...
BK: I know. So that's...But it's important. If we were just like Comcast- if all this was was well 'your marketing is better than my marketing,' then maybe we'd say- you know what? What are we doing? But we're not like Comcast for two reasons. One reason is our technology is superior to Comcast's. Fact of the matter. And the second is that- I do believe that having a public role in providing this particular technology has a profound impact on the future of Burlington in terms of its economic development, and in a way that the same technology in the hands of Comcast doesn't serve the people of Burlington. And that tension is why we really need to struggle to make this work.
HB: Yeah. Well, OK. So... Any thoughts on Carina [Driscoll] running for the Democratic nomination [for ward five city council]... kind of leaving the Progressive party? Leave her to speak for herself?
BK: I'd leave her to speak for herself.
HB: Yeah. Alright...
BK: Carina and I were in the house together as Progressive state representatives- sat right beside each other for those years. I think she brings, certainly, a long political history and a creativity to the process. And...you can see right now there is some fusion activity going on between Progressive and Democratic parties, and if you look closely at the city council we've got primarily conservative Democrats in Burlington and more liberal Democrats from Burlington in Montpelier. And they're not the same Democrats...and what went on in Ward Five in regard to Joan Shannon and Carina Driscoll I think reflects that challenge within the Democratic party and that challenge within the Democratic party in Burlington is why there's a more powerful Progressive voice here, because there's been such a conservative Democratic voice...
HB: Could you envision a fusion candidate running for mayor?
BK: I doubt that.
HB: You doubt that?
BK: I don't think that would happen...
HB: Do you plan to run for re-election?
BK: It's too soon to have that conversation.
HB: [laughter]
BK: [chuckling]
HB: Of course... But it would be too soon to count you out?
BK. Oh yeah. Absolutely.
HB: OK...
BK: You know what, [getting up from the table] I want to show you something...
HB: I don't know if we'll have time to get to some of the tougher stuff here... it gets even a little tougher, I think...
BK: Have you seen this [brandishing what looks like a dominatrix lasher]?
HB: [laughter]
BK: This is not a whip.
HB: Can I take a picture?
BK: Sure. This is the cable that runs underground an on the poles of Burlington for Burlington Telecom.
HB: Oh. I've seen the small bit of it that runs into my house [snapping a picture of Bob with the cable].
BK: So Chris Burns brought this over because I was asking him about it and he said, I think, there are twenty-five of these little strands in each one of these...
HB: Right, and each one of them is...
BK: ...He said, Bob...that single strand will carry all of the activity from all of the communications related to BT in the city of Burlington, and behind it, all these additional strands, and I think there are twenty-five in each on of these flat beds...That's the future. What happens in terms of a BT hookup is- one of these strand is taken to each household who signs up for Burlington Telecom, and each one of these can currently hold and transmit all of the activity of the city of Burlington. And so in part Chris was just talking about the capacity then, of fiber to be able expand to meet the needs of the future. That's why he would call this a fifty year investment in fiber... And one of the reasons we responded to Google... you know, the whole national Google thing, which hasn't materialized yet into anything. One of the reasons we responded was we had a capacity here for them with...very little technological upgrading to be able to test everything they have on our system. One of our hopes was they would come and try that out because we have a system that would allow that to happen.
HB: Yes. The technology is awesome. We all agree....Um...OK, here's a tough one- In the master lease... [with CitiCapital] Joe McNeil offers an opinion for the purposes of, I guess, getting the lease signed and done, and I've just bracketed one part of the opinion- Joe writes:
“There is no prohibition of utilizing general fund revenue of the city for telecommunication activities, however there is a specification that losses from telecommunications are not to be borne by the City's taxpayers, the State of Vermont or recovered in rates from electric ratepayers. The same restriction applies to costs incurred in the event of any abandonment or curtailment of the telecommunications system by the City. We are advised that approximately 40% of general fund revenues are derived from other sources than through taxation of the City's taxpayers.”
HB: OK here come some tough questions. Doesn't this strongly imply that even if we abandon BT we'll still pay back the 33.5 million?
BK: Well, I'm not...that might be part of our response...The lease-purchase agreement is the lease-purchase agreement...in the case of a non-appropriation...that agreement says that CitiCapital has a right to the equipment but that's the collateral, ultimately, behind the...
HB: OK. Do we have a moral obligation to pay back that money?
BK: Well you know part of that, as I understand it, is even though a lease agreement based on the equipment invites the potential to have a non-appropriation- and one example would be, let's say the technology didn't fit any more. At that point then...the City has the opportunity to say this particular lease agreement doesn't meet our needs anymore. I think the agreement allows for the city to have a non-appropriation. And so, I mean it's...anticipated that...the city has this capacity. And I would say, Haik- I mean certainly we went into this partnership to build this particular system...and that, in fact, my understanding always was that we could...that there would be another re-financing...The city council actually declined to support exploring one more refinancing with Piper Jaffray.
HB: Was that a huge mistake?
BK: Well... I don't...
HB: Was that a mistake?
BK: I think if we could have moved forward, I would have liked to explore that. Now we might not have done it, but I would have liked to have Piper Jaffray go out there, because what we would have done then, if we had been able to do that...we would have ended the debit to pooled cash...We would have looked for ten more million dollars so we could do the last steps in terms of moving forward, and then we would have been without any liabilities- part of the whole discussion about how to take Burlington Telecom outside of Burlington...We would have been in a much stronger position to resolve the issues. We would have still needed to look for, I believe, a financial partner, in order to solve all the issues financially, but we would have been doing that from a position of strength. Instead we're struggling with, you know, debit to pooled cash...
HB: Philosophical question- if 40% of the general fund revenues are not from tax, then why it it wrong to say that sixty cents of every dollar spent from the general fund came from taxes?
BK: Well I think that in Joe's...
HB: You get the question, yeah?
BK: Yeah. Well some of the money definitely is- comes from taxpayers...property taxes...but other income that comes into the city, I think is legitimately not called taxpayer funds.
HB: But once money goes into the pooled fund, either from tax sources or from non-tax sources, how are they distinguishable from each other?
BK: Well I mean I think in this paragraph you'd have to be making distinctions so that you could say OK 'these monies are taxpayer monies' and 'these monies aren't.' And I think the opinion was that some of the monies that currently come into the City isn't strictly taxpayer money.
HB: So if there was a way to do the accounting so that it showed that the money going to BT was from a source other than tax, would that be...it would still have to come out of the cash pool though... and then condition 60 would still apply...
BK: Um...right. Condition 60...is a requirement that...we have to repay it within sixty days.
HB: Are you open to the idea of the city being a minority partner in BT?
BK: You know, I'd have to find out what that means, but uh...
HB: So not no?
BK: Huh?
HB: I mean, that's not “no...”
BK: No, no. That's not a no...But I mean, a minority partner- in terms of some decision making- I think the City would have to have some influence over for sure- The whole configuration might be something different. It might be that the general manger would be selected in concert with a financial partner. You know, financial partners would be looking for some assurances that there'd be common interests that moved on together. I'm sure that's true.
HB: And are there any financial partners, or any potential financial partners, and if so, who are they?
BK: Terry Dorman is meeting, based on my conversations with him, he's been meeting with six different potential, financial or strategic partners and we're working on trying to actually nail down those...
HB: Can you name any of the six?
BK: No...no...It's probably not my place to do that right now.
HB: OK, alright. Uh...Let's see... Were you there the night Kurt [Wright] called the cops on Ed [Adrian]?
BK: I was there. Yeah. That was a city council meeting.
HB: Any thoughts on that incident?
BK: [pensive laughter] Well, uh...
HB: [laughter] That was a bizarre incident...
BK: It was.
HB:...in city council history, I think.
BK: ...I mean, no one consulted with me. I didn't feel like there was a requirement to have the police at that meeting...so I don't have any particular thought- You know- people accept responsibility for what they do...
HB: OK...
BK: By and large we don't have police officers, or the need to call police officers at the city council...
HB: Yeah. Rare event. Very strange...OK, um... wouldn't it improve CitiCapital's bargaining position if they fought for the original leased equipment, because they know we'd have to tear up our streets to get to that, and it would maybe, you know, cajole us into paying them something?
BK: Yeah I don't...
HB: No comment on that?
BK: I have no idea. Yeah.
HB: OK. Well these are the questions people are asking.
BK: Sure. What of course, we're proposing is...on the cable in particular, the fiber, is that we would provide them, and the language is “like kind” replacements. Essentially 186 miles of fiber...
HB: And that's about eight million dollars, you estimate?
BK: for all the equipment it's six to eight million dollars. That includes the head end stuff. That's more than the fiber.
HB: And we're hoping anywhere from one to six of those potential investors will help cover that?
BK: That's right. And part of the understanding this is the cost of putting all that in place was a major part of that 33 million dollar investment. And that's why- the fact that it is in place is important. I mean that is Burlington Telecom.
HB: Right. OK, we just experienced our third Moody's downgrade in about a year. And that affects 87 million dollars of total city debt.
BK: You know the most important thing, I think, about the most recent Moody's downgrade is Moody's knows that we're working to address the BT issue, and I'm hopeful that we actually can address the 16.9 million debit to pooled cash, and that we'll get there. People have to stay with this. We have to be resilient. The other thing that's important about the Moody's review is that it did recognize the strength of the general fund management and the strength of the economy of Burlington in general. So while we did get a downgrade, it identifies the problem that we're dealing and then all around it, it also acknowledges that we're in pretty good shape. If we can solve the BT issue, Burlington will definitely I think, rebound from the current Moody's assessment.
HB: Some minutes from a board of finance meeting from November of 07 show Jonathan [Leopold] telling the board of finance, which included Andy Montroll, Kurt Wright and Sharon Bushor at that time:
“CAO Leopold provided the Board of Finance a status report on the finances of Burlington Telecom through October 31, 2007. In summary, the current customer hook-ups are 75% of the forecast and budget projections. If the shortfall in customers is not recovered, the loss of operating revenues would be the equivalent of $1 million annually. In addition, the capital budget for Telecom is projected to exceed the forecast and budget by more than $3.5 million. CAO Leopold noted that the Burlington Telecom business pro-forma and model needed substantial revision and the City was retaining an independent consultant to advise the City how to remedy the current shortfall in hook-ups and operating revenues. He advised the Board that a full report would be provided to the Board the first week in December
At this point in the meeting, approximately 5:50 p.m., Councilor Montroll left.”
HB: So didn't that essentially tell the board of finance that BT was going broke at that time?
BK: Well I think that we began to acknowledge that the business plan was not playing out the way Tim Nulty had predicted it would. And we brought in Rob Shanahan who's a telecommunications consultant. He's run companies of his own. And that's where we began to change the business plan of BT, acknowledging that we needed to do that.
HB: Does the city council bear some responsibility here for...I mean... is anyone on the city council being disingenuous about not knowing more sooner? Should they have known more sooner, than they claim to?
BK: I don't want to...I think that the city council, as we began to appreciate some of the financial difficulties, was informed, and they were kept informed. It's been a long time now that, I think, a lot of information's been available. And I think there's not a lot of public acknowledgment or responsibility that comes from the council. But I think we've been working on this together in a way- particularly since the blue-ribbon commission- where there is a shared understanding. I hope that we don't lose sight of the common goals to succeed with Burlington Telecom. That would be a mistake.
HB: Last really, really tough question. Did you ever make a conscious decision to ignore condition 60?
BK: Of course not.
HB: No? OK, well...
BK: And in fact...
HB: Well- and that's good for people to hear, you know?
BK: The first meeting I had as I became mayor- as it happened, my first day on the job was a Tuesday, on the first Tuesday of the month- and that's when department heads meet- so my first meeting was with the department heads and I know at the end of that meeting I said you know when we leave hear people are going come up and say 'what did that guy have to say?' And I said make sure that you tell them I'm asking two things of department heads. To put people first and to tell the truth. And I think that that is what's significant about my view of how we do business here- that we put people first, and we tell the truth, and if we do those things, then we're fine.
HB: Are they more likely to do those things if they're a public employee, than a private contractor?
BK: Well, who knows- I expect that of- sort of the city and...
HB: And its affiliates...
BK: Yeah. Whoever we touch in that respect, as part of the city operation. And you know this- massive amounts of detail...
HB: Massive amounts of detail...
BK: And there are sixty-five points in our CPG. I can tell you that now, but I couldn't have told you that for a long time after I became mayor.
HB: Do you think some of the vitriol over BT stems from pent up frustration people have felt with the Progressives over thirty years? Do you think BT in any way is an outlet for people venting anger they feel toward the Progressives generally? Does any of the commentary on BT come from a place that is not necessarily about BT but more generally about...
BK: ...There might be some of that, but more- I think people have legitimate concerns about the finances of Burlington Telecom. I wouldn't dispute that. But my hope would be that despite that, our goal is to make sure we're constructive in terms of the city interest, and our own interests in terms of economic development...
HB: Right.
BK: So I try not to personalize the debate.
HB: Fair enough. I'm trying to think of some kind of light-hearted question to wrap up with. You know- that would be the polite thing- like if there was a sports team- 'how about those- whatever' but-
BK: So you know I have a football signed by Roger Staubach.
HB: Oh. I've actually heard of him. I'm not a huge sports fan, but that's a big enough name.... and how did you get that football?
BK: I went to a US conference of mayors meeting- and Roger Staubach now is a big realtor- and I put my card in a bowl, and my card was drawn, and that's what I got, which was a signed football by Roger Staubach who was the quarterback for Dallas.
HB: Wow. Well that's pretty good.
BK: So we could have a sports discussion.
HB: I gotta take a picture [taking a picture of the football above the mayor's desk] of the football.
BK: And the bear on the left [wooden bear to the left of the football] comes from Yaroslavl, our sister city.
HB: Oh yeah- I noticed that your business card has Russian on...one side and English on the other...
BK: So we went to Yaroslavl for the millennium and I did that because I thought it'd make it easier for people there to know who I was if there was Russian on one side, you know...people in Yaroslavl, I think, appreciated it, and what a simple thing to do. So what are your thoughts about 2011 Haik?
***This is where I shut off the tape recorder. I demurred, not wanting to explain my bleak thoughts about 2011 to the mayor. We chatted a little more, and I thanked the mayor for being gracious enough to allow me to interview him. He really is a very nice man, and he has a hard job.