Every Mission Viejo resident should be happy to learn that we have a sound group serving on one of our city Commissions. Yes, I am about to write something positive about Mission Viejo.
For three hours this afternoon I joined a half dozen concerned citizens in a “Special Meeting of our Investment Advisory Commission.” The sole purpose and Agenda item of this meeting was the “Evaluation of Proposals Solicited by ATS Communications for the Monetization of the City’s Cell Site Leases.”
While there has been a strong push by several members of our city council to approve this (ATS) contractor proposal, only two candidates for city council attended to learn more of the options. In addition to resident Joe Holtzman and myself only council candidates Cathy Schlicht and Neil Lonsinger attended and added their Public Comments expressing strong opposition to the ATS proposal.
For those not following this topic let me provide some background.
At the present time the city collects lease revenue from service providers such as T Mobile, Sprint PCS, AT & T and Metro PCS at 22 cell sites which generate around $450,000 in lease fees per year. The ATS proposal was to “monetize” these future revenues to take a reduced payout from an investor in which ATS get’s their future revenue up front.
Those living here surely know that the topography of our city is not flat. As such we each experience areas of weak or no signal at all. With the expansion of features comes the need for wider bandwidth and more cell towers to meet our growing use of cell phones and i phones.
The bottom line is that ATS Communications President Tony Ingegneri submitted a proposal in which the city would net $4.4 to $4.9 million dollars by “factoring” 30 years of future revenue with the fancy word of “monetization.” Near the end of the three hour discussion Irwin Bornstein, our Assistant City Manager/Treasurer, provided a revised projected valuation of future revenue to the city with figures ranging from a low of $7.5 million to $13 million dollars over the same timeframe .
There are surely factors to consider when making these decisions. In my Public Comments I showed the Board the City Treasurer’s Monthly report for May 2008 which reflects our having over $50 million dollars in the bank. Our annual budget is around $60 million. As such we are not hurting for cash. I also pointed out that many of our CIP’s were already completed such as the renovation/expansion of our recreation and community centers.
Commissioner Duncan stated “you factor when you have a cash flow problem..it would not be prudent to go down this road.”
One member asked: “what’s driving this item?” Great question.
Another commissioner said we have an “asset that could increase in value.”
Irwin raised a valid point in stating our having two questions. “Do we need it? What to do with the money.” A commissioner replied stating that the “two decisions should not be blended.”
Commissioner Patrick Imburgia asked the ATS representative if the bidder would consider a higher monetary offer to the city to which Mr. Ingegneri responded that this was a highest and best we could get, or words to that effect.
Let me close with the Motion as made by Chairman Jay Standish which reads:
“The commission is not in favor of monetizing the 22 leases” we are “open to further analysis of the high risk lease sites.” As there may have been differences of opinion on the list Irwin will focus on the SITA, (Steel in the Air) recommendations.
The final vote was 5-0 to oppose the request.
Again I am pleased to report that those tasked to watch our city investments demonstrated their talent and skills today. Now if only we could have the council majority use similar fiscal restrain.
PS: Not to mix apples and oranges but in the Public comment phase, before the monetization Agenda item, I asked if any of the five commissioners were contacted by their council members for their opinion about spending $300,000 for the Rose Parade float when Pasadena was spending around $70,000 and Long Beach $115,000. The answer was no. That is not part of their duties and responsibilities. That is true.
One member did question the ROI but I’ll drop it here.
Chutzpah (some nerve) is the word we use in yiddish for the shameless “panhandling” of ATS/
Tony Ingegnari.
First, they bilk the city of Mission Viejo for a $200,000 “wireless master plan”, which the city of San Clemente got for free. When San Clemente city folk heard what MV paid, they evidently had a pretty good laugh. ATS was offering their services as just a revenue sharing program for any future cell sites brokered. Same as what’s been listed on the ATS website.
Then, ATS comes back for a second round offering to short change Mission Viejo out of at least $3 million dollars, by brokering current cell tower leases for less.
And how much did ATS propose to pay itself for these services Larry? what was supposed to be their take in these “spoils”?
It’s good to hear that an Investment Advisory Board knows how to add. Let’s hope that our city councilmembers do.
http://www.MVcell-out.org
Finally! Good news from M.V.
How did this meeting become an “emergency”? Can anyone specify which council members favor “monetizing” and which do not?
I attended the “Emergency Meeting” as noted in the the Juice. The preponderance of the data and information provided indicated it was not a good–or even close to good decision to “sell” the cities future revenue from the present or proposed cell sites.
The five member MV Investment Advisory Commission asked some very pointed questions concerning the proposal. After some deliberations the Investment Advisory Commission voted 5-0 to NOT recommend this proposal.
In addition after sitting thru this meeting it became obvious to me that this proposal was the brain child of ATS and some of their political associates in Mission Viejo. The proposal would have “sold” more of our assets in Mission Viejo to the benefit of the special interests—all at a significant cost to the citizens of Mission Viejo.
Haya.
While not present, a man named Ken joined the discussion on our speaker phone from a Florida airport. His presentation began by questioning “the longevity of the wireless industry in general.” To closely paraphrase Ken he stated: “A basic assumption of mine is that we are OK for 10 years..possibly 20 years..can’t determine longevity.” He later added that “consolidation represents the biggest risk to the city.”
After Ken was off the phone, and much later in the meeting, I asked City Treasurer Irwin Bornstein for Ken’s last name. He responded Ken Schmidt.
I do not know what Ken’s role is with regard to the monetization decision. Who is he? Does he work as a consultant for the city? Does he represent ATS? That information would have been of value to me, as well as the five board members, in deciding if his presentation was slanted.
As to the proposed “short” sell. Even if some companies may eventually merge reducing future city revenue, using Irwin’s “likey case scenario” we would receive $9.5 million if we just wait for the checks in the mail. As such we would be giving up close to $5 million dollars. Bad proposal knowing the exploding growth of cell phone usage.
Observer.
Emergency? Technically they called it a “Special Meeting” which required 24 hour notice.
The urgency was to fast track giving ATS roughly $500,000 for putting the proposed “monetization” deal together based on his 10 percent fee of the gross package. They needed to fill in the blanks for staff recommendation for Item #35 on Monday’s Council Agenda. I am glad that I was able to post the Commission Motion and 5-0 vote just to be certain that we are on the same page.
Folks. With regard to future cell tower sites we are not having a “going out of business sale” in Mission Viejo. We have two new applications in process now. So we draw a line in the sand with 22 sites to go through the check out line with Tony Ingegneri’s hand out today but what about tomorrow?
How is it that they are concerned with eventual phase out or mergers and acquisitions yet we will CONTINUE placing sites on our hills and valleys.
Are we blind? PLEASE. Give the public some credit for seeing through this slick attempt to steal from the taxpayers of Mission Viejo.
And while we are flush with cash today, what if 10 or 20 years down the road we can use that annual $500,000 (from just these 22 sites) for operating expenses.
Correction. It is item #34.
To support my above comment on the on-going applications Commissioner Imburgia asked to clarify “whether or not we sell these leases, the (new) projects will go forward?” Yes they will.
a source tells me that Ken Schmidt is from Steal In The Air, another wireless municipal consulting firm.
Cell tower leases run generally for 20 years and are subject to their own contract terms set between the wireless company and reviewed by the city’s attorney.
Many of the cell tower leases in Mission Viejo are probably going on their 7-10th year; with another 10 years to go.
Thus, Mission Viejo has a guaranteed income stream for the remaining contracted years that Ken was speculating on anyways.
Antennas do not go away, even through mergers. Wireless companies will often hire companies like “Blackdot” to renegotiate terms at lower fees. But the antennas are not going away any time soon.
So, as the saying goes, “Fooled once, shame on ATS. Fooled twice, shame on Mission Viejo”
Let’s hope there is a majority of 3-2 sanity when it comes to council