There's no need to run a municipal agency as if it were a private business. What do you imagine the difference between "progressive policies" and "business principals" are?
While "maximize profit" and "deliver shareholder value" are a recipe for predatory behavior when applied to government organizations and government granted monopolies there's definitely a need for municipal departments to pay attention to money input in relation to services output.
I'm unaware of the specific details but I suspect Burlington Telecom lit a bunch of money on fire chasing some noble goal and in the process compromised their ability to do some other key part of their job in a satisfactory manner. This isn't an uncommon failure mode for municipal government departments that suffer scope creep.
Municipal agencies are still bound by the constraints of resource scarcity — and the goal should always be to efficiently provide services to citizens without glut/waste. You're right that municipal agencies shouldn't need to worry about turning a profit, but they should also need to make sure they don't run at a loss.
I'm unaware of the specific details but I suspect Burlington Telecom lit a bunch of money on fire chasing some noble goal and in the process compromised their ability to do some other key part of their job in a satisfactory manner. This isn't an uncommon failure mode for municipal government departments that suffer scope creep.