City of Burlington Releases Final Schurz Communications Letter of Intent
Outlines Next Steps in Burlington Telecom Sale Process
Burlington, VT – The City of Burlington today released the final Schurz Communications Letter of Intent (LOI), following the City Council’s approval of the conceptual LOI at its last meeting on November 27, 2017. The non-binding LOI will be discussed at the City Council’s next meeting on December 11, 2017, and Council’s vote on the definitive documents that memorialize the commitments in the LOI is expected on December 18, 2017.
With the completion of the LOI, the City has begun working with Schurz Communications on the definitive asset purchase agreement, the legal agreement which will detail and ultimately supersede the LOI. The asset purchase agreement is expected to come before City Council for approval in substance on December 18 and to be signed no later than December 31, 2017. A petition for approval of the transaction by the Public Utilities Commission (PUC) is expected to be filed within 30 days of signing. The PUC approval timeframe is less predictable, but is anticipated to occur in mid-2018. During that time, the City of Burlington will continue to operate BT, and business will continue as usual without interruption. The sale of BT to Schurz is expected to close within 30 days following the PUC’s regulatory approval.
“Over the last week, we have worked hard on behalf of Burlingtonians and Burlington Telecom employees to finalize the conceptual agreement approved at the November 27 City Council meeting,” said Mayor Miro Weinberger. “I appreciate Todd Schurz’s collaboration over the last week to not only formalize what was committed to the City Council, but also to strengthen even further the proposal’s emphasis on the issues of affordability, net neutrality, and community re-investment. We will move from the LOI to the final legal documents as quickly as possible and bring them to the Council for formal adoption as early as December 18, 2017. After an important and substantive community debate for many months, I hope that the City Council and the public will now come together to support this direction and help us successfully put Burlington Telecom on a stable, long-term footing, and resolve once and for all one of the largest financial challenges in the City’s history.”
Details of the proposal include:
• A purchase price of $30.8 million
• Agreement not to increase prices on broadband for 60 months
• Agreement to an anti-monopoly future sales restriction
• Granting the City of Burlington the right to roll over cash proceeds from the sale into a minority ownership interest in the new BT, and to add a local Board representative
• Commitment to the full, rapid build-out of Burlington and likely neighboring communities
• $300,000 a year of annual contributions for at least ten years to growing the local tech economy, digital divide initiatives, and other community investments
December 6, 2017
Contact: Katie Vane 802.734.0617