Latest “special” meeting Mission Viejo Investment Advisory Commission

Yesterday afternoon the Mission Viejo Investment Advisory Commission met to scrutinize the latest proposal to “liquidate” cell tower contracts, a golden city asset. As there were only four of the five members in this meeting their eventual vote was 2-2.

The sad news is that these contracts, with service providers such as AT&T, Nextel, Sprint PCS, T-Mobile and Verizon, are what we in industry call “cash cows.” Not only are they automatic revenue generators we have absolutely “zero” operating costs while the checks arrive every month.
Several citizens and myself attended the two hour meeting to listen to the latest proposal from Communications Capital Group CCG, as presented by our cell tower representative Tony Ingegneri, president ATS Communications.


While the commission voted 5-0 recommending against selling these leases at their August meeting they had agreed to consideration of selling six that were deemed to be risky. At that time it was discussed that we might need to throw in a few investment grade contracts to sweeten the offer.
Let me begin by saying I oppose the sale of these contracts. While we learn basic math in grade school we surely know how to twist numbers and statistics when it suits our purpose. Yesterday’s exercise was no exception.
One 2008 council candidate takes credit for “growing our budget reserves to record levels” while Treasurer Irwin Bornstein admits that our discretionary surplus is in need of a transfusion, he also testified that “we have a softness in our receipts.”
Some of the commissioners expressed concern (after I testified about the “cash cow” liquidation) by my revealing plans to use proceeds for unnecessary CIP’s such as wish list to spend $3,720,000 for our Marguerite Tennis Center renovation and expansion and $985,000 for locker rooms at the Montanoso Recreation Center.

When being questioned by the Commission, Treasurer Irwin Bornstein responded that we cannot stop the proceeds of this sale from any use beyond our alleged goal to increase reserve levels.
If the city is truly concerned about marginal reserve levels I said that didn’t seem to bother them when they approved spending $300,000 for a Rose Parade float.

Folks. This is a case of the old boys network where the council majority have given exclusive freedom to Mr. Ingegneri to seek out potential bidders for these cell towers. We were told that there is only a single bidder at this time and that his offer is not what the commission had requested. The request was to dispose of all six risky leases. Instead Tony comes back with an offer to purchase only five while adding four investment grade leases in the CCG package.

This morning I was with three citizens of Mission Viejo who are actively engaged in investments. One has expressed interest in considering a bid to purchase the package, has the resources to cover the purchase price, including all six of the high risk contracts, and would like to see the Contracts. Amazing. We have given ATS the task of selling our lease agreements and accept his efforts. Folks I do not believe he has engaged in due diligence. This Mission Viejo resident asked me when I became aware of the reduced package under consideration. This has surely not been an example of transparency when the commission and a few watchdogs only found out about this most recent proposal this week. That being said, what is the urgency to make a city council decision by this coming Monday Oct 6th? This individual, or group of MV investors, could easily place funds in escrow. Their offer would surely show CCG that they are not the only game in town.  As it now stands “the CCG offer is subject to change caused by financial market conditions.”  I believe CCG is calling for a a 60 day escrow.

We have all heard that Governor Palin initially tried to sell former Alaska Gov. Frank Murkowski’s Westwind II jet on E-Bay. That’s being creative.
 
While we need to be careful with qualifying any offer, Tony will potentially earn a higher commission by engaging in competitive bidding with the open market. My recommendation is to open the bidding to all legitimate buyers if in fact the council still wants to liquidate these contracts. What is the urgency of providing a decision 96 hours after the commission deliberates this request?
Just my thoughts. I would appreciate yours.
 
Rather than reporting everything that occurred let me suggest that readers go to the Mission Viejo Dispatch where blog founder Brad Morton, who attended the meeting, posted his observations. That web site is www.missionviejodispatch.com


About Larry Gilbert