Mission Viejo ‘s Investment Advisory Commission votes 5-0 not to “monetize” cell sites

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.

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