Court order prohibits additional city spending on BT

Chittenden Superior Court issued an order on Friday that prevents Burlington from spending any city funds on a $386,000 interest payment that was due Wednesday towards Burlington Telecom's $33.5 million dollar debt, according to a story in the , according to a story in the Burlington Free Press, unless they are granted permission by the state Public Service Board. On Tuesday, the PSB denied the city that permission.
The order was a response to a request by the attorneys of Eugene Shaver and Fred Osier, who have filed a suit to require the city to repay $17 million that it spent on BT. By using city money to fund BT, city officials violated Condition 60 of the company's state license. The order prevents any spending that violates Condition 60, and says that the city must document and prove to the court that any money from the city account used to fund BT can be repaid with revenue from BT.
In addition to a written request submitted earlier in the year, BT appeared before the Public Service Board last Thursday, where the Public Service Department argued against the city's request that they be allowed to use city money for the payment. City Council met in executive session following the meeting, and voted unanimously to have members of the blue-ribbon committee work with an outside financial advisor to work towards a solution to its financial problems.
Despite the uncertainty of its financing now that the interest payment deadline has come and gone without BT making the payment, officials say there will be no interruption in service and it will be business as usual.