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
Here is the comment I posted in the MV Dispatch:
On September 17th, 2007, Councilmember Trish Kelley put a motion on the floor to remove the wording in “Goals of the ATS Wireless Master Plan” section.
The goal that Kelley was pledging to remove was: Generate revenue for the city.
Kelley’s motion was seconded, and unanimously approved by the council.
If Kelley supports this monetization of cell tower leases on Monday night, she will be presenting herself in a hypocritical and dishonest light. So, I hope she will think carefully before supporting Cellular Tower/Antennas as the new cash cow of the city.
MV residents who own homes in close proximity to city leased cell towers have to accept potential property value loss over the perceived hazards of radiation from these cellular antennas.
How will these residents feel when they learn that the city of Mission Viejo and ATS, are cashing in TWICE on their misfortune? the first time when they earned the lease revenue, and the second time when they cash out on these very same cell tower leases.
(Today I emailed both Councilmembers Kelley and Ledesma to interview them on their opinions of the ATS deal, and neither has responded so far)
http://www.MVcell-out.org
Sounds as if Mission Viejo’s city finance department needs a forensic audit if Councilman Frank Ury is claiming the city has (HOW MUCH???) $50 million in reserves and the city treasurer says the city has only $5 million in reserves.
Instead of liquidating assets, why not spend some time before holding the fire sale on Monday to figure out which city employee embezzled $45 million?
email response:
I as a resident of Mission Viejo am very disturbed that we are liquidating such valuable assets. These assets take no maintenance, no care, and certainly no administration by any city staffer. Also it would appear that ATS and “The good old boys network” within the industry have conspired to low ball the bid. Instead of seeking more bidders the city acquiesces to ATS to find bidders–totally unacceptable. Is there a conflict here—you bet there is.!!!
Obviously your casual conversation found; in minutes, more interested parties for the purchase of these sites if–God forbid–these valuable assets are liquidated.
It is only financially responsible to publicly submit this opportunity to a valid and public bidding process. It appears that the administration can be held accountable for their lack of fiduciary responsibility.
Grover Cleveland
Haya. I attended, and spoke at the Sept 17th 2007 city council meeting on the draft Wirelss Master Plan. After two hours of public and council testimony, and Motions made by Trish and Frank Ury, Item #20 was approved that evening.
Council member Kelley made a Motion to amend two of the proposed goals. First relating to potential park sites and here second related to revenue. Trish Kelley’s quote from the city video archives follows:
“Eliminate goal #4..delete that from the study to generate additional revenue for the city of Mission Viejo ..I don’t think that needs to be a goal that we have in our planning document and I would like to call for eliminating that.”
The revenue generation bullet was deleted. I would argue that her Motion was relevent to the council vote that evening yet we now are looking to cash out.
Another brilliant comment came from Bill Curley, our city attorney, who stated “the contract is flexible in the city’s favor.” Really???
Member Ledesma argued that he opposed our giving “exclusive” rights after having paid ATS $200,00 for creating the Plan to market city sites.
The jails will be full of elected officials
Their screams will be heard for a thousand years
The jails will be full of elected officials
The trials will begin on November 5th
(sung to “The Sound of Music”
“The Hills are Alive with the Sound of Money”
Thank you Larry, and I think it’s important to explain what we, the public, understood when Kelley motioned to remove the goal “generate revenue from cell tower leases”.
The public was expressing mass opposition to the city’s adoption of the ATS Wireless Master Plan, and outrage that by voting to “accept” the plan, the city was encouraging ATS to market our parks to cell tower companies for $$ and was solidifying their contract with ATS as a “separate entity” or arm of the city, subject to their own legal structure. Ledesma was expressing concern that the city had now given ATS the exclusive rights as a 1 Bid contractor in all future cell lease decisions.
So, what the public was understanding (and believing) from Kelley’s motion, was that she wanted to assure the public that this ATS deal was not about money; that the city’s intentions were good and would be for the public benefit instead of financial gain.
I suppose these intentions related to “better cell phone coverage for city residents” and “better planning and co-locating of antenna sites”.
When the public hears an elected official making a pledge or promise, they expect that this is coming from an honest place. The public feels betrayed when such promises are not kept, and that is why the public starts going around singing, “the Hills are Alive with the Sound of Money”.
It is my hope that Kelley will remain true to her promise, and uphold the trust that MV citizens have placed in her.