Bristol Virginia Utilities Goes Independent
Update 2019: BVU Optinet has been sold off to Point Broadband in 2019. Much of the original public funding had to be paid back. Most of the original BVU management were sent to Federal prison on a number of charges.
As the above graphic proves the claims of installing cheap broadband did nothing to reverse the appalling poverty and jobs problem in the region.
This stands as a historical reference.
Update: Court challenges have failed and BVU is now a an independent entity in 2010.
Bristol Virginia Utilities will break away from the city and form an independent authority. The vote was 3-2 providing the impetus to send the controversial plan to the Virginia General Assembly. BVU CEO Wes Rosenbalm praised the council's action, which came at the conclusion of a nearly three-hour meeting. Rosenbalm said, "We're pleased with the vote. We wish it could have been 5-0, but we understand and respect the two councilmen who didn't vote for it and we look forward to working with them in the future."
Councilmen Jim Heaney and Guy Odum again voted against the proposal, citing concerns about its long-term impact on the city and its residents. Heaney specifically questioned BVU's unwillingness to change language that would allow the majority of the authority board quorum - three votes out of a five-person quorum - to petition the General Assembly for possible future changes to the authority legislation. As for the BVU Board the City Council would select five, the authority board would choose three, with one member coming from the Washington County Board of Supervisors. They are still a public entity under the freedom of information act.
One immediate benefit of the plan would be a substantial savings in interest loan costs on BVU's $49 million in revenue bond debt. A move the city could not make under federal guidelines. "The authority can refinance that $49 million debt and realize a $500,000-a-year interest savings.
On Oct. 5, BVU's board of directors first discussed the plan for more than an hour before unanimously approving it. The council gave its first 3-2 approval eight days later, after listening to more than 25 speakers and two hours of public comment on both sides of the issue. BVU officials said the plan has been discussed among its board and council members for months. Ref BHC Oct 28, 2009
Judge rejects city's attempt to quash BVU lawsuit
A lawsuit challenging plans to create a Bristol Virginia Utilities authority will proceed. The lawsuit contends the council's action constituted a sale of city assets that should have required a three-fourths or four-vote "super majority" by the five-member council. On both votes, the plan was approved by a 3-2 simple majority. Legislation to create the authority was introduced this week in both the Virginia Senate and House of Representatives. BVU officials had hoped to have the measure in place this year so the authority and its governing board could be created July 1.
The city, represented in part by former Virginia Attorney General Anthony Troy of the Richmond-based Troutman Sanders law firm, argued that the council's action was merely a request to create the authority. Troy also argued that the two October votes didn't constitute the actual sale of any assets and the Whitleys were asking the judge to rule on what the General Assembly might do. Extract BHC January 14, 2010.
More Fighting Over Bristol Virginia Utilities
BVU wants to separate from the City of Bristol in order meddle into new ventures. Many Bristol Virginia residents opposed to this and the legislation to make it happen. They expressed that view to state lawmakers. Speakers, including Whitley, Councilman Guy Odum, former council members Ron Morgan and R.L. Light and community activist Nancy Marney, praised the work of BVU and said it continues to flourish while remaining part of the city. (It's also $60 million in debt even after getting $10-20 million in pork-barrel government grants.)
"I see this as a power grab so that BVU can become a regional authority and that's not what it [BVU] was created for," claimed one opponent. adding that he foresees such an entity could have objectives not in the best interest of the city or could force "exorbitant rates" on residents. To BVU leaders and its unelected board filled with appointed political hacks they want to operate as a private business, but want rate payers and the taxpayers to carry the risk.
This legislation would allow BVU to break away from direct city oversight and form an independent, public authority with a separate governing board. Public oversight is already severely restricted and will become more so. Proponents argue the change would allow it to function more like an independent business and expand its OptiNet telecommunications division. But they get all of the advantages of being a government entity including tens of millions in economic development grants from taxpayers. That is really an unfair subsidy. (Some extracts BHC Feb 23, 2010)
Bristol Virginia Utilities and fiber optic across the region has failed to produce private sector jobs as we were promised. That was the reason they were given tens of millions in taxpayer subsidies to begin with. The only thing we did get was government contractors getting taxpayer subsidies along with their fat contracts, and a few call centers which we got before and was supposed to not get again. One in fact fired its workforce across the state line in Kentucky then moved to Southwest Virginia to get millions in corporate welfare.
The divided City Council approved this nonsense plan in a 3-2 vote last October and sent it on to the Virginia General Assembly. Here the concerned citizens are outgunned as State Senator Bill Wampler and Delegate Terry Kilgore were in on this from the start. They were also instrumental in diverting millions in State Economic Development and Tobacco Commission funds to Bristol Virginia Utilities. Instead of jobs and real economic development we have taxpayer funded movies. The House and Senate have already approved separate versions of bills and action is still pending. Posted February 26, 2010.
In the end BVU won the fight, the suit was dropped.
To quote Lenowisco Broadband Study Warned against Call Centers (PDF file):
- Wise Virginia Call Center Won't Hire 500 New Workers
- Tobacco Commission Sykes Fiasco Reveals Government Waste
"The region has been replacing traditional (better paying) manufacturing jobs with (low paying subsidized) call center jobs, which provide limited advancement and work opportunities. Call centers represent the factory floor of the Knowledge Economy; they are an important part of a diversified economic development strategy, but the region must be careful not to rely too heavily on them, as the work is easily moved to other regions and/or other countries."
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