BURLINGTON - A longstanding financial battle in Burlington is coming closer to a resolution. Mayor Miro Weinberger announced Monday the city has reached a settlement with Citibank in the $33 million lawsuit.
Mayor Weinberger, city officials and councilors all touted the deal’s immense meaning and the small impact it should have on the city’s taxpayers.
“We anticipate that this settlement payment will largely be paid for by BT revenues and non-city sources,” Weinberger said.
The settlement is for $10.5 million and a share of Burlington Telecom’s future value.
Only $1.3 million is slated to come from the city. That figure will be paid for by Burlington Telecom, not taxpayers according the mayor.
$6 million will come from an investor that might eventually take majority ownership in the telecommunications company.
“That may be several years off while we seek to maximize value and find the right partner,” Weinberger said.
The rest of the funding comes from co-defendant in the lawsuit, Burlington's insurance carrier, and revenues from BT.
The mayor says maximizing value in BT is the best way the city can get back some of its original $17 million dollar investment. As part of the settlement half of BT’s future value when sold will go to Citibank and half to the city of Burlington.
“How much will we be ultimately able to secure we're not in a position to put a number on that today,” Weinberger said.
Weinberger also used Monday to acknowledge that reaching a conclusion to the Citibank/Burlington Telecom dilemma was one of his top priorities entering office in the spring of 2012.
In 2009 city officials learned of the nearly $17 million loss investing in the Burlington Telecom.
Later the financer, Citibank, filed a lawsuit against the city seeking $33 million.
The city's bond rating moved to near junk status.
City councilor Karen Paul and Council President Joan Shannon have played active roles in finding a feasible and affordable solution for the city. Both were on hand for the announcement Monday.
“Our darkest days are behind us and our return to a stellar credit rating and financial soundness are achievable goals on our immediate horizon,” Paul said.
“The proposal the mayor brings to us today is really all that we could have hoped for,” Shannon said.
But the settlement is not final yet. The city council has to approve of the agreement. The Vermont public service board also has to approve the agreement.
“We still have a lot of work to do to complete the settlement agreement and put the lawsuit behind us,” Weinberger said.