Will TVC debacle end Democrats' dominance?
Mayor Marian Galbraith and her fellow Democrats who control the Groton City Council face a difficult task in trying to convince voters they deserve re-election for the way she, and they, handled the Thames Valley Communications debacle.
Mayor Galbraith and her supporters are trying to make the case that the mayor faced a very difficult situation head on. As a result, city-owned Groton Utilities was able to unload a failed company that had placed the city's bond rating at risk, while not abandoning the cable subscribers that company served or the employees working for TVC.
The mission of the Republicans and their mayoral candidate, James L. Streeter, would appear easier - make the election a referendum on what happened with TVC. If you missed the reports, Groton Utilities ended up selling the cable franchise, practically giving it away, for $550,000. In the process, the City of Groton was left with $27.5 million in debt, tied to losses dating back to the company's formation in 2004.
City of Groton residents can't be happy with that outcome. They also can't be happy that the seriousness of the problems TVC faced were kept largely secret for so long. And if voters take out their anger on May 6, Republicans could end the long domination of Democrats in city government. A Democrat has sat in the mayor's chair for 28 of the last 32 years.
The demise of Thames Valley Communications was years in the making. Most in the city thought it a good idea when first floated in the late 1990s. Even Mr. Streeter, then a member of the City Council, approved. Residents OK'd bonds floated to build the cable franchise. The premise was that Groton Utilities, with its successful water and electric operations, could create a cable company that would offer superior TV and Internet service while competing with the existing cable provider, Comcast.
But it took a huge investment to build the infrastructure to serve the five-town franchise area state regulators granted TVC. And when it came time to start recouping that investment, the industry had changed. There were more options for getting TV programming and Internet service and so more competition. Paying for programming to distribute on cable had also become far more costly, and little TVC lacked the negotiating power its big competitor had to limit those costs. Layer in damage caused by the Great Recession, and TVC began hemorrhaging money.
Galbraith, then a member of the City Council, said she learned in January 2011 how bad things were and that the city's entire financial standing was in peril. "It was jaw dropping news," she said.
When elected mayor in May 2011, Galbraith knew TVC was her biggest problem.
"For a very selfish reason, I wish I could have just let it go by, but I couldn't. It would have been so much easier to ignore, but you can't do that. I inherited it … I took care of it. What else can you do?" she said.
Asked if her predecessor and fellow Democrat, Mayor Dennis L. Popp, should have dealt with the crisis sooner, Galbraith did not hesitate.
"Yes, absolutely," she said.
On that, at least, both she and Streeter agree.
The 2010 annual report made it clear that the city could not keep carrying the TVC debt, said Galbraith, and there was no expectation of the cable company getting back the money invested.
"I think (decisions) should have been made when they started having to right off the money to GU (Groton Utilities) in the first place. I think they should have said, 'We're not going to wait.'" said Galbraith.
Popp, who served as mayor from 1999-2011, disagrees. He said steps were taken to find an equity partner, consideration given to rolling TVC into GU, rather than operating it as a private subsidiary, and there remained some hope of it turning around.
"Just not enough time," he told me.
Streeter says both Popp and Galbraith were complicit in keeping information from the public. The first time most Groton city residents became aware of how bad things were was when Galbraith announced the deal to sell the company and inherit the $27.5 million debt. Both Popp and Galbraith said announcing the seriousness of TVC's problems sooner would have further damaged the business, causing it to lose subscribers and perhaps make it impossible give away.
Streeter's not buying it. People, he said, had a right to know. I agree.
Paul Choiniere is editorial page editor.
Stories that may interest you
This recovery package might be well-intended and may will serve its purpose, but previous gluttonous misspending cycles have left all of us in an unenviable financial situation.