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Provisional Agreement to Settle Litigation

Joint Press Release: City of Bristol, Virginia and BVU Authority
Posted on: February 16, 2023 - 1:30pm
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Washington County, VA; February 16, 2023 - The City of Bristol, Virginia (the "City") and the BVU Authority (the "BVU") are pleased to announce a provisional agreement to settle litigation initially arising from BVU's sale of its OptiNet Division to Sunset Digital Communications in 2018.

The City initially sued BVU in July 2020, alleging the breach of a 2009 Transition Agreement. The City sought to claim a share of net proceeds from the sale of OptiNet. BVU denied those allegations and asserted counterclaims, including that it was entitled to title to certain real property in the City of Bristol.

After extensive discussions to resolve the dispute favorably to taxpayers and ratepayers, the parties have concluded a provisional agreement to settle the lawsuit. The agreement further acknowledges that neither the City nor BVU admits liability for any claim or defense asserted in the lawsuit. The material terms of the settlement include:

  1. a one-time cash payment by BVU to the City of $2.1 million of OptiNet gross proceeds;
  2. an estimated$ 226,000 annual reduction of BVU's future payment-in-lieu of tax (PILOT) payments to the City;
  3. the execution of a new agreement to replace the 2009 Transition Agreement, including terms for BVU's prioritization of any surplus OptiNet Division funds and the termination of $500,000 of budgetary requirements for BVU economic development funds;
  4. BVU's agreement to continue to serve as the City's sanitation billing collector with specified terms;
  5. cooperation in documenting the transfer of title to certain real property located within the City;
  6. a cooperation agreement on future utility improvements to real property located within the City at Bonham Road and Old Airport Road (Tax ID 308-2-1); and
  7. cooperation in certain future BVU utility improvement projects.

The settlement agreement is subject to approval by the Bristol City Council, the BVU Authority Board of Directors, and the Tennessee Valley Authority (the "TVA"). The Bristol City Council approved the agreement at its meeting on February 14. The BVU Authority Board of Directors approved the agreement at its meeting on February 16. The TVA approval process will take place following local approvals.

The case caption is City of Bristol, Virginia v. BVU Authority, Case No. 1:20-cv-00041-JPJ.