Yesterday, the FlashReport awarded its 2006 Golden Trash Can Award to Assembly Bill 523 which represents an outrageous effort by the Coast Community College District in Orange County to make a de facto gift of nearly $20 million in public funds to finance a bid by KOCE television’s Foundation to buy the public broadcast station, which is being sold by the college district to generate funds. I won’t go over all of the details again, but I will encourage FR readers to read the piece. Since writing iy, I have not been provided with the actual Appellate Court rulings which are very clear when you read them. Presiding Justice Sills, who penned the opinion for the court, voids the sale of KOCE to the KOCE Foundation — the bit provided by the Foundation was for much less money than the other bidder, televangelism provider Daystar.
FR REVIEW IN-DETAIL THE APPELLATE COURT RULINGS
My eyes hurt this morning from spending a bunch of time reading through Appellate Court rulings, and so read the next two paragraphs at your own peril. It’s all complicated, but can be summed up by saying that it is clear that the District decided that they would pick the Foundation bid even though it was a financed deal, and for significantly less cash for the District than the Daystar bid.
In the documents, Justice Sills makes it clear in his first ruling that Daystar made a $40 million cash bid, as opposed to the KOCE Foundation bid of $8 million in cash plus payments of $16 million over thirty years (interest free and no payments at all for the first five years). Existing law says that ‘surplus property’ such as KOCE, under state law, had to have been sold to the ‘highest cash bidder’ — which was be Daystar. Actually, these numbers above for the Foundation bid don’t include a further reduction in $4 million that they will pay the district. In the second ruling, the court disallowed any post bid changes and compared Daystar’s 25.1 million dollar bid against the present value of the Foundation bid between 19.5 million and 23.5 million at the highest (and lets not forget Daystar’s bid was all cash, no financing at all). So it is clear that Daystar’s bid was still the highest.
It is noteworthy,that on page 6 of the second opinion, the court points out that the Foundation ran into financial difficulties after the bid closed and the School Board voted to allow the Foundation to amend it’s bid to less than 20 million.
I’m not a lawyer, and my favorite activity is not sorting through court documents. But I am attaching Sills’ opinions for those who would like to read them.
Suffice it to say that the FlashReport continues to urge a NO vote on AB 523, now authored by Los Angeles County Assemblywoman Carol Lieu that would change California law to create an exemption in Orange County for this instance only to allow the Coast Community College District to sell this property (the TV station) for less than the highest cash offer — which is outrageous.
In essence, the students and taxpayers within this college district would be subsidizing this deal.
SOME POINTS TO BE MADE:
SENATOR TOM HARMAN….
As I gave in an update yesterday, I erroneously listed State Senator Tom Harman, as a co-author of this bill. This was in error. Not only is Harman NOT a co-author, but he opposes the bill.
ORANGE COUNTY GOP COMMITTEE TAKES ACTION…
Last night, the important Endorsements Committee of the Orange County Republican Party was considering a request by Coast Community College Trustee Mary Hornbuckle for an endorsement for the party. The Committee voted overwhelming to recommend that Trustee Hornbuckle NOT be endorsed, and a major factor in their deliberations was Hornbuckle’s opposition to selling KOCE to the highest cash bidder (as provided by state law).
AB 526 IS SCHEDULED TO COME UP FOR A VOTE IN THE STATE SENATE TODAY…
Orange County’s Senators oppose this legislation. So you have to wonder why there is so much interest from politicians outside of Orange County to pass this bill? Why is Senate President Don Perata trying to pass this bill? Or is he? Right on the heels of news accounts that Perata’s Committee took a fat $500,000 contribution from the Building Industry Association after he scuddled a bunch of bills that negatively impacted the builders, you have to wonder… (Shades of Gray Davis?)
WHERE IS THE ORANGE COUNTY REGISTER?
Still the Orange County Register is silent. Nothing from their beat reporters. Nothing from their investigative reporters. And the silence is deafening over at the Register’s Editorial page. The Register’s financial gain (KOCE would become a major tenant of the Register under the deal) should be trumped by the need to shine light on this bad deal.
WHERE IS THE OUTRAGE?
Not only Orange Countians should be upset by this quite-literally "anti-free market" legislation, because if it can happen in Orange County, it can happen anywhere. I have already received a few dozen emails from upset FR readers, and I urge them all, and other concerned readers, to make some noise!
We’ll be following this bill closely, hoping that in the ‘sausage factory’ of the final days of session, this poor piece of legislation does not become law.
Jon
P.S. We’ll be bringing you some counterpoint from KOCE Foundation President Jo Ellen Allen – probably later today!
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