In our December 17, 2019, issue, one of our front page articles covered Clinton’s Board of Aldermen approving a one-time payment of $272,000 from American Tower, a company that leases a cell phone tower in the city, for a permanent easement. The Mayor and Board discussed the options in their December 2 work session, then the Board approved the acceptance of the one-time payment at their December 3 meeting in a 6-1 vote, with Alderman Jim Martin voting against the approval.
At this past Tuesday’s (January 7) Board meeting, a motion was made to bring the matter back up for consideration. The motion passed, and a new vote was held. With the new vote, the motion to approve the payment failed, 4-3. Aldermen Garrett, Martin, Cossit and Ellis voted not to accept the lease buyout. Below you will find responses from the Aldermen to better explain their votes.
Since we had originally reported the motion passed, we are pushing this information out electronically to get in front of as many readers as possible. Be sure to pick up a copy of our January 21 issue for a print article on the subject.
All seven of Clinton’s aldermen were asked to provide us with their comments about the American Tower buyout. Five of the seven responded to our request. Their comments are copied and pasted below.
Following the Board of Aldermen meeting in which the American Tower buyot was approved, some of us began to realize that the information we had received on the buyout was either woefully incomplete or inaccurate. We had also been under the impression that the matter was not going to come before the Board at that particular meeting, and there would be time to further understand the issue. When it did appear on the agenda, we, unfortunately, made a decision to approve it without all of the facts. Fortunately, a board is provided the opportunity to vote to reconsider a previous vote at the next meeting, and since we had additional, relevant information, we did that.
By rescinding the previous vote, the Board is able to better analyze the various options relative to the tower and make a decision that is financially best for the city.
In the meantime, the current lease is still in place and provides a monthly income to the city. The Board always appreciates the opportunity to consider the Mayor’s proposals and make a decision based on facts and sound reasoning. We will continue to do that on this issue and others.
I am gravely concerned about a number of financial transactions undertaken recently in the City. I do not, however, think that we are in such dire straits that we need to liquidate income producing assets at distressed fire sale prices to provide funds for the City.
The December 3, 2019 Board of Aldermen 6-1 vote to sell the long term cell tower lease for a permanent easement was made without full information provided to the BoA. The vote warranted reconsideration and reversal at the January 7, 2020 meeting.
The matter was first mentioned to Aldermen by the Mayor at the December 2, 2019 work session. It was stated at that time that the proposal would be further considered at a later time and would not appear on the December 3 BoA agenda. An email from the Mayor the next morning informed the Aldermen that the matter would be placed on the agenda that night for consideration of one of three options – in the “Other Business” section of the agenda. The BoA voted 6-1 to accept a lump sum buy-out of the lease for a permanent easement. I was the dissenting vote, being concerned about the rushed vote and the lack of information as well as concern over the propriety of the proposal.
For a better presentation of the issues, I will provide more detail.
At the initial introduction of the matter at the December 2 work session, Aldermen were shown, on the wall TV screen in the City Hall conference room, portions of 2 letters from American Tower. Aldermen were not given copies of the letters nor were the entire letters scrolled and carefully review.
It was explained that we had one of three options to consider. A lease buy-out with a lump sum payment for converting the lease to a perpetual easement or payments over 5 or 10 years. I understood that the 5 or 10 year payout options were for a continuing lease rather than time payments for the perpetual easement, as later discovered.
A substantial amount of time was spent discussing whether technology would change and cell towers would not be needed, prompting American Tower to terminate the present lease.
At the December 3 BoA meeting, I was told that the 5 or 10 year options were for periodic payments, rather than the lump sum payment, for the same perpetual easement. Another Alderman voiced similar confusion. We were asked to vote only on one of the 3 perpetual easement options. With the matter being added “at the last minute” in the Other Business section of the agenda, there were no documents or a written proposal for consideration. A motion to accept the lump sum amount of $272,000.00 for a perpetual easement passed 6-1.
During the next few days after the December 3 meeting, copies of the 2 American Tower letters and a copy of the present Ground Lease were requested and provided for review.
A review of the documents provided much additional information that had not previously been provided.
By reviewing the Ground Lease, it was noted that the present lease provided options through 2036. Five year extension options could be exercised every 5 years, with the next available option on January 17, 2022. Therefore, the present Ground Lease could not be cancelled for at least 3 years. There was, still, the issue of whether American Tower might choose not to renew the 5 year extensions in 2022 and 2027 to continue the lease through 2036.
By reviewing the 2 American Tower letters, it was noted that American Tower also offered an option to extend the 2036 lease to 2057. This option was not discussed at the December 3 work session. While the 2057 lease extension proposal included some periodic opportunities to not renew for the full 2057 term, the fact that American Tower wanted the extension to 2057 indicates that they assume that there will be a long term need for the cell tower. Furthermore, since they were primarily requesting a permanent easement, they wanted to secure it forever!
One of the American Tower letters stated that it was “actively reviewing its portfolio of sites to determine ways to maintain a more efficient and economical portfolio.” That fancy language merely means that they want to make more profit. If they pay the City less, they make more profit. Obviously American Tower is not trying to make the City more money.
The gist of the decision to reconsider the vote was that Aldermen did not have full information to make an informed decision. We did not have copies of the American Tower letters explaining all options and we did not have a copy of the Ground Lease to consider our present position. Aldermen were informed of the Mayor’s negotiations for a lease buyout for a permanent easement but not informed of our present position or all options.
There was some discussion at both work sessions and both BoA meetings of where the lump sum would go if taken. Discussions included going into the general fund, the rainy day fund or the water/sewer fund. Clearly there was no urgent need for the funds for a specific project that could not be funded otherwise.
At the January 7 BoA meeting, there was some discussion of time value of money considering a present discounted payment as opposed to a long term payout of more money. While that was a good economics lesson, accepting a discounted present value sum typically assumes that one can take the lump sum and invest it in something that provides an equal or better long term return than waiting on the present long term payment plan. A city does not invest its money for long term money accumulation. It spends it, hopefully wisely. Furthermore, a lump sum payment should be the true present value of the long term payout to be a wise decision. That information was not provided. I believe that the $272,000 lump sum is a distressed fire sale price considered over unsupported concern of American Tower possibly terminating the present lease.
It would be interested to put the cell tower out for bids to see how competitors value the tower. Since it is under lease with American Tower, we cannot put it out for bid. It can only be bid if they terminate their lease. American Tower is making these negotiations while safely within their present lease to avoid our opportunity to explore competitive alternatives.
Alternative reasons to accept a discounted lump sum payment are urgent need for funds for a specific project that cannot be funded otherwise or being in dire straits for funds to balance the budget. Neither of those appears applicable.
Also of concern is selling a permanent easement. Permanent means forever. Presently we are leasing this tract of land and retain it when or if the lease terminates. Possibly a provision could be included that the permanent easement is not really permanent if American Tower no longer needs the cell tower. Another option would be to make it a “no more payments” lease for as long as they operate a cell tower. Those types of things were not discussed.
The biggest concern of the proponents of the lump sum payment seemed to be what would happen if American Tower chose not to extend the lease, when they are allowed the opportunity. While that is a valid consideration, cell towers are in high demand and likely will remain so. American Tower wanted to cover that base with a long term extension from 2036 to 2057 or, even more so, with a permanent easement. While there is some risk, I am comfortable with that risk, believing that someone else will quickly step in if American Tower wants out. Obviously American Tower does not want out. They want permanent and they want cheap.
As one of the aldermen that voted to accept the buy out. I had all the information I needed to make an informed decision.The $272,000 is guaranted money.
The offer for longer term contracts of 15 to 20 years is not guaranted money. The lease can be terminated by the company with notice well before the time is up.
OLD PROVERB – “A BIRD IN HAND IS BETTER THAN TWO IN THE BUSH”.
In response to the overturned vote Tuesday night. This issue had already been reviewed and voted on. The Mayor presented a negotiated deal between the city and American Tower, at our work session, for review. The deal consisted of three options. A one time payout and 2 lease option payouts. The four Alderman that voted to rescind will tell you that there were “more options on the table” for this deal. I do not consider a deal that can be withdrawn from as a viable option against a deal that is contractually guaranteed. The non-guaranteed options left American Tower an opportunity to NOT renew their lease every 5 years, potentially leaving the city at a loss.
Alderman Martin stated that the board didn’t give permission for the mayor to negotiate a deal without board involvement. However, it is well within the mayors right to negotiate a deal and then bring it before the board. It’s my opinion that the mayor negotiated a fair deal that was best for the city. That opinion was backed up by a 6-1 vote in favor of the mayors negotiated deal.
Alderman/woman Martin, Ellis, Cossitt, and Garrett voted to resend the overwhelming 6-1 vote in favor at the previous meeting, in light of “newly acquired information”. Yet, I have been just involved with the process as others and know of no new information. We were all aware of options that did not consist of contractually guaranteed money. The 2057 lease option, mentioned in Tuesday’s meeting, is a non-guaranteed option potentially leaving the city at risk of losing money, and in my opinion, is not an overwhelming reason to rescind a 6-1 vote.
We know that American Tower already stated potential issues with the current lease. Let’s get real, no one has an issue with a lease because they want to pay more than they are paying. This means to me they are devaluing the space occupied. Which tells me that a non-guaranteed lease would not be best for the city. Why would I agree to continue in a non-guaranteed multi-year contract when I was presented with a guaranteed option that would bring a lump sum payment to the city? It makes no sense.
So with that I will hold true to my vote. I believe the mayor did a good job at negotiating the deal we originally voted 6-1 on. Guaranteed money, in my opinion, is always a better option than maybe money.
The city received a letter from American Tower Corporation (ATC) dated October 31, 2019. The purpose of the letter was to inform us that they were in need to modify our current contract for a tower located at 1005 Springridge Road.
The letter included the following language, “…”modifications to your Lease are needed in order for ATC to maintain a long term marketable presence at this location.” In the closing section they also noted that, “Should you choose not to participate in this program the site will be reviewed for alternate strategies including but not limited to potential relocation and/or termination of the site if permitted under the Lease.”
The current lease was signed in January of 2007. The first term of the lease was for 5 years with 5 subsequent opportunities to extend the lease in additional 5 year increments. If carried through in its entirety, the lease would cover 30 years. The lease also had termination provisions that would allow vacating the lease at each of the 5 year renewal periods OR “if the subject tower and property shall become unacceptable to Lessee as part of its network design or for other technical reasons.”
Throughout the month of November, Mayor Fisher negotiated with ATC and at the work session on December 2, he provided the board with a detailed explanation of each step of the negotiations. He presented two proposals that he rejected and the final proposal that was presented to the board for discussion.
The Board did discuss the option at length and it was the position of the majority of the Board that the best option was the GUARANTEED of $272,000. Mayor Fisher placed it on the agenda for the next day’s meeting where the proposal was accepted by a 6-1 vote, Alderman Martin voting in the dissent.
Over the next month there was no additional discussion of the vote.
At the next work session on January 6, Alderman Martin expressed his opposition to the outcome of the vote and Alderman Ellis informed the Board that he was going to offer a motion to reconsider the vote at the next meeting. Alderman Martin indicated that the Board did not have all the necessary information at the time of the vote.
IT is important to note here that IF an Alderman feels they do not have adequate information to cast a vote, they are entitled to ask for a delay until such time the requested information is delivered. NONE of the Board members made such a request. The Mayor provided the negotiation documents and the step by step process of how we got to the final position.
At the Board meeting on January 7, Alderman Ellis made the motion to reconsider. I asked if there was additional compelling information to be presented as I did not have any more documentation that day than I had a month earlier. I supported the motion to reconsider as I felt an open “on the record” discussion would serve the public well. The Motion passed 5-2 and the issue was back in front of us.
As discussion progressed, it was clear that there was no additional information provided. The only document that SOME of the board felt was missing was the original contract, of which I had a copy in front of me. No other compelling information was provided and the debate was essentially a repeat of the discussion held at the December work session.
Alderman Martin tried to make the case that, because of its prime location and marketability, the lease on this tower was worth much more than what we previously voted. The only problem with assertion and evaluation was he was considering the WRONG LOCATION. Some of the Board members thought the tower was located elsewhere, when in fact on the original letter dated October 31, the address was clearly stated.
I find it both confusing and concerning that while several board members argued that they needed more information, they apparently did not read the information that was provided.
By a 4-3 vote, the Board rescinded the purchase and we now revert back to the current contract which we know is not palatable to ATC. The $272,000 is now at risk. If ATC agrees to come back to the table, we may be able to get more. If ATC walks away, we risk losing the $272,000.
One thing that all parties should consider is the actual location and condition of this tower. This is not a multi client tower like some of our water towers. This is a single pole with a single user, not multiple users. It is barely over tree high and is situated within mere yards of the city limits. If Clinton doesn’t negotiate in good faith, there is little preventing ATC from going out of the city limits to secure a better deal.
Once again, a good faith negotiation ends up with the city changing positions after the conclusion of the negotiations. Unfortunately, this isn’t the first time. In my opinion, this type of action doesn’t put our best foot forward.
Casting votes is critical responsibility of any board member. It is incumbent upon each member to research the issues completely. It is their responsibility to ask questions and have a clear understanding of the issue BEFORE THEY VOTE. Apparently that wasn’t the case in this instance. Nothing new was revealed at the January 7th board meeting.
I hope that ATC will come back to the table. I hope that the final disposition of this issue is mutually beneficial to the city and ATC. Given all of the specifics of this issue, it is a risk that I was not willing to take.
Duties of the Mayor:
Miss. Code Ann. §21-3-15
The mayor shall preside at all meetings of the board of aldermen, and in case there shall be an equal division, shall give the deciding vote. The executive power of the municipality shall be exercised by the mayor, and the mayor shall have the superintending control of all the officers and affairs of the municipality, and shall take care that the laws and ordinances are executed.
Duties of the Board:
Miss. Code Ann. §21-3-15
The legislative power of the municipality shall be exercised by the board of aldermen by a vote within a legally called meeting. No member of the board of aldermen shall give orders to any employee or subordinate of a municipality other than the alderman’s personal staff.
Miss. Attorney General. Opinion to Lee (Sept. 15, 1993):
As a general statement, the statutes governing the Mayor/Alderman or “code charter” form of government, empower the board of aldermen to set policy through the enactment of ordinances, orders and resolutions, all subject to the Mayor’s veto as set out in Miss. Code Ann. Section 21–3–15 (Revised 1990). The Mayor, as the chief executive officer, oversees the daily operation of municipal government and makes recommendations to the board.
I bring this up because it speaks to a bigger issue – understanding the powers/limitations of the Alderman’s legislative responsibility and the Mayor’s executive responsibility. In short, a Mayor runs the City day to day and has superintending control of all the officers and affairs of the municipality. This duty includes negotiations as necessary. Alderman approve or disapprove policies (personnel, ordinances, etc.) and budgets as presented by the Mayor and/or Department Heads.
As a point of interest, Alderman are not allowed to direct or instruct Department Heads as per Miss. Attorney General Opinion to Hurt (Oct. 13, 2006):
“We have further opined that, while individual aldermen may serve as advisors and may observe the operation for the purpose of reporting to the entire board, aldermen “may not become involved in the day to day operation of municipal government or in the direction of a department head” and “do not have the individual authority to direct daily activities of employees.” MS AG Op., Baker (March 8, 1995).”
The Mayor has the discretion to permit, or not permit, Aldermen attendance at staff meetings per Miss. Attorney General Opinion to Carter (Sept. 13, 2002):
We are of the opinion that the mayor may meet with department heads and/or employees at any time in exercising superintending control over the municipality. A meeting between the mayor and staff members would not constitute a public meeting of a public body subject to the Open Meetings Act, and the mayor could disallow an alderman from attending.
The underlined sentences above are made by me, for emphasis.
I do not feel the need to “invite” any Alderman to any department head/staff meeting and I would never ask them to leave if they wanted to attend. They are welcome anytime. Alderman Cashion, Perritt, and Barnett have attended my Monday morning 10 A.M. staff meetings many times. Alderman Garrett, Martin, Ellis, and Cossitt – by their choice – have never attended.
Finally, there are open meeting laws that allow public access to the meetings and discourage Alderman from meeting outside a public meeting. Hinds County Board of Supervisors v. Common Cause of Mississippi, 551 So. 2d 107, 110 (Miss. 1989)
The philosophy of the Open Meetings Act is that all deliberations, decisions and business of all governmental boards and commissions, unless specifically excluded by statute, shall be open to the public. Miss. Code Ann. § 25–41–1.
No doubt there are occasions when board members would speak more frankly on some matter if only the board members were present, and no doubt there are instances in which a board member would personally prefer to speak only to his colleagues. Of far greater importance, however, is that all public business be open to the public. Every member of every public board and commission in this state should always bear in mind that the spirit of the Act is that a citizen spectator, including any representative of the press, has just as much right to attend the meeting and see and hear everything that is going on as has any member of the board or commission. Miss. Code Ann. § 25–41–1; Mayor & Aldermen of Vicksburg, supra; Board of Trustees v. Miss. Publishers Corp., supra.
I place the part in BOLD to emphasize that Alderman cannot meet and discuss public business in secret for any reason, especially to change/solidify a position and vote as a block to influence an issue.
Now that everyone understands the separation of responsibility in City government, I can better talk the cell tower issue. The gist of the cell tower issue is whether or not the City should continue the current contract with no buyout and no guarantee. Or agree to the guaranteed contract I negotiated (see Mayor Responsibilities above), paying the City a one-time buyout amount, a five-year guaranteed payout or a 10-year guaranteed payout.
Let’s look at the money. For ease of reading I’ll use the topic headings “Not Guaranteed Contract” and the “Guaranteed Contract”.
- Not Guaranteed Contract – Signed in 2007, we currently have a 30-year contract with options to renew or cancel every five years. If the contract is cancelled, the payments stop, thus not guaranteed for the agreed upon life at signing. The next opt out period for this contract is in 2022. If the opt out option is exercised, the payments end. If that option is renewed, three more opt out opportunities exist until the scheduled end of the contract in 2037.
2007–2012; $12,000 for 1 year and 3% increase each year
2012-2017; $13,911 for 1 year and 3% increase each year
2017-2022; $16,127 for 1 year and 3% increase each year, or $1,344 p/m*
2022-2027; $18,695 for 1 year and 3% increase each year
2027-2032; $21,673.33 for 1 year and 3% increase each year
2032-2037; $25,125.34 for 1 year and 3% increase each year
We are in the 13th year of the contract (2017-2022) and receiving $1,344* p/m. If the contract is not canceled between 2020 and 2037 the City will receive a total of $383,400. But because the contract is not guaranteed to run until 2037 and three opt out opportunities remain (2022, 2027, 2032), the total available amount is not guaranteed. The City will receive as little as $37,390 if the opt out option is exercised in 2022.
- Guaranteed Contract – The cell tower company approached the City with a proposal to modify the current non-guaranteed contract to another non-guaranteed contract. Their initial October 31st, 2019 offer;
$1090.00 per month commencing February 1, 2020
3% annual escalation will continue- next escalation to be February 27, 2021
Providing four (4) additional terms of five (5) years each
Final Lease Expiration date will be February 26, 2057
A lump sum cash payment of $228,000.00 in exchange for fee-simple or perpetual easement interest in your property paid at close in lieu of rental payments
Looking at our current contract’s monthly payment of $1,344 vs. the reduction in payment to $1,090 under this initial offer, I reasoned that they wanted to reduce their payments in order to opt out of the contract. This is due to the changes in technology being used to deploy cell services. Specifically, 5G technology, placing equipment on existing utility poles along with other upgrades, negating the need for long- term cell tower leases. Of interest, the $1,090 p/m from the initial offer was almost the same amount as the 2007 payment of $1,000 p/m. Again, is accepting less money for a longer non-guaranteed period of time a shrewd financial move? I did not think so.
This offer extended the contract to 2057 or another 37 years. Think back 37 years ago and all the technological advances made between 1983 and 2020 – what was “cool technology” in 1983 (VCRs, cassette tapes, phone booths, AOL dial up internet, the K-Car, MTV). Look how much has changed and imagine how much will be different in 2057.
With that in mind, I decided to negotiate for a higher buy out option rather than monthly payments that could be cancelled before the ending term of the contract. Think about it, if you receive a large inherence, almost any financial planner will tell you to take the one-time sum because over time, the value of money is greater with a lump sum on the front end.
I countered offered with $383,000 as a one-time buyout to test their reaction. On Nov 15th they countered with:
Option l – Lump Sum – Purchase Price of $264,000.00 in exchange for
Option 2 – Monthly Installments Over (5) Years
(60) Monthly installment payments of $5,318.00
Total after all payments: $319,051.00
Option 3 – Monthly Installments Over (10) Years
(120) monthly installment payments of $3,182.00
Total after all payments: $381,820.00
Note all their counter offers were significantly higher than their initial offer and the monthly payments are higher than our current contract monthly payments of $1,344. But no guaranteed payment for the life of the contract. I continued believed they would cancel the contract before the end of the term.
I made another offer for a $306,000 one-time payment. On November 18th, they made a final offer;
Option I – Lump Sum – Purchase Price of $272,000.00 in exchange for perpetual easement
Option 2- Monthly Installments Over (5) Years
(60) monthly installment payments of $5,479.00
Total after all payments: $328,719.00
Option 3 – Monthly Installments Over (10) Years
(120) monthly installment payments of $3,278.00
Total after all payments: $393,391.00
Note the increase and guarantee of a 5 year and 10-year payment versus a no guarantee contract with the same time length or the initial offer with a 37-year time length. Also note the increase in the buyout from their initial offer of $228,000 to $272,000 or $44,000 more to the City. I believed then, and believe now, I negotiated a good deal for the City.
I took it to the December 2nd Board of Alderman work session for review and comment. I told them that with the guarantee of a five-year or ten-year period and the higher buyout option, I was good with any of the three choices (although my personal choice was the buyout). During the discussion, I showed them all three documents from the cell tower company, the amounts offered and my counter offers. Without asking for an opinion or vote (no voting in a work session), six of the seven Alderman, volunteered their approval for the negotiated agreement and a buyout, Jim Martin voiced his opposition.
Since I felt the Board was in overwhelming support, I opted to put it on the agenda for the Dec 3rd Board meeting and get the documents in a final signing order as soon as possible. When notified the next day (Dec.3rd), no Board member objected to that action or requested additional information/time and the motion passed 6-1, (Martin voting no). No Alderman came by the office, called, e-mailed, or texted, any issues or desire to relook the issue for the next 34 days.
At the January 6th work session, Jim Martin began objecting to the Board vote from the Dec. 3rd Board meeting and asking questions about the process I used. He did not give me the courtesy of notifying me of his desire to talk the issue again, so I was not prepared to answer his questions. Davis Ellis announced he wanted to review the vote and said he would make that motion the next night. Ricki Garrett voiced her agreement.
At the January 7th meeting, a motion to reconsider was made and a lengthy discussion held. After Jim Martin coached Davis Ellis through a motion to rescind the December action, the Board voted 4-3 (Jan Cossitt joining Martin, Garrett, and Ellis) to rescind the December action.
So, what happened? That is a question for David Ellis, Jan Cossitt, and Ricki Garrett to answer. At least, Jim Martin was consistent in this voting and was opposed throughout. Without a single question or reservation from the Dec 2nd work session, the Dec. 3rd 6-1 vote at the Board meeting, or over the 34 days leading to the Jan. 3rd reversal, three Alderman decided to change their vote. Transparency demands they explain their reasoning in their own words.
If their excuse is, they did not have enough information, they are a month late raising that issue. Since I print an agenda for work sessions, the option to request specific information is a viable one – but no one did. No one asked for more information at the work session. The other three Alderman (Bill Barnett, Keith Perritt, and Mike Cashion) had the information. Of course, Barnett, Perritt, and Cashion call or come by City Hall on a regular basis so their votes are made with more knowledge.
If their excuse is that the Mayor cannot negotiate for the City, I refer you to my opening above explaining the responsibilities of the executive and legislative branch.
From a practical stand point, people that want to do business in communities do not like to deal with indecisive City Boards vacillating over issues. Our City demands strong decisive leadership that takes part in the government they are elected to serve, makes decisive decisions, and sends a positive, knowledgeable message of competence.
Of note, I sat on the Board of Alderman from 1992-2008 and on the Board of Supervisors from 2008-2013. I know how local level Boards can interact with Mayors and other Board member to be successful or unsuccessful. Successful Boards stay in their lane (executive or legislative) and work towards a solution with questions and discussions aimed at the best choice and not personal agendas.
The quickest way to failure is when members of a Board believe their responsibility is to sit as a judge and jury vs. an involved body. Failing to participate in the process, not calling or coming by between meetings, or only showing up for one work session and two Board meetings a month does not meet any reasonable standard for the exercise of a corporative competent government.