In response to Mr. Sibson's Letter to the Editor on Saturday, I want to take this opportunity to dispel the inaccuracies and inconsistencies.
Most importantly the property purchase west of Lake Mitchell was not "railroaded during a special meeting." The special meeting was advertised well in advance of the 24 hours required by law. The timing was a result of two things. First, it was set as a special meeting to allow for discussion of this issue and only this issue. The intent was to keep the topic from having to compete with some 15 other agenda items for Council review and public commentary at the regularly scheduled meeting. This allowed it to be the only topic addressed at the meeting.
Second, the special meeting was held as soon as possible after all the contract documents had been prepared and signed. Having this completed was essential to insure no other party could take advantage and try to buy this property out from under the city, or drive the price up having knowledge the city had an interest in this property. Knowing the public should never be removed from the process necessary for a purchase like this, several contingencies were built in to the purchase agreement to ensure the public still had its voice. For instance, the purchase agreement became void if the Council voted against the transaction after holding the special public meeting. The special meeting itself was well attended by the public and a very constructive discussion was held between the Council and those citizens attending the meeting wishing to voice concerns, or support, for this purchase.
While the city has attempted to explain several times, it bears repeating, there will be no tax increase relating to this property purchase. In the presentation at that special meeting, we divulged how the purchase would be addressed using 84 percent of revenue from the property and Poet payments for water usage, and the cost to the city would amount to $49,000 in debt contribution from general fund, using monies in that fund, with no increase in taxes.
To recap the revenues used to pay for this: $225,000 comes from the Poet payment for water used from Lake Mitchell; this money was originally earmarked for use in Lake Mitchell, but was being placed in the general fund until that was recently corrected; there is a crop lease through 2030 for the cropland that pays $22,000 per year; there is a CRP payment of $1,000 on the land through 2023, which with the new farm bill can be renewed at its termination. At the end of this debt service, the city owns the land and can insure it continues to assist with cleaning up the watershed and Lake Mitchell forever. Other sites within the watershed would only be leased, which means we have no control as to what happens at the end of those leases.
This project is far from a "bail out of a family who built a home nearly 100 percent of Mitchell's citizens cannot afford." This was an opportunity to purchase land in the Firesteel Watershed, adjacent to Lake Mitchell, that can be used to clean-up Lake Mitchell in a reasonably affordable way. The city had no interest in the residential property. It was not until the agricultural land was added as an option in the real estate listing that the city even considered this purchase. We do not need the buildings, and we intend to place them back on the market for sale. We will, however, use the agricultural land to better our lake and the watershed, all while maintaining control of the property within the watershed.
Unfortunately it has been claimed this was tied to the water and sewer rate increase approved in the meeting the day before, calling that increase a "tax" to pay for this purchase. First, the fees are user fees by state law and not taxes. The increase in these user fees is to pay for the State Revolving Fund (SRF) loan taken for infrastructure repair and replacement. This would be the construction phases on Sanborn Boulevard, and the storm drainage construction for the East Central Drainage Project (the area around Klock Werks). Second, the rate increase has nothing to do with this purchase. The property purchase is paid for as stated above.
It was stated by Sibson the increase in water and sewer rates is a 97 percent increase, not correct at all. The base water rate increases $2 and the base sewer rate increases $5.75, for a total increase of $7.75, or 17 percent of the total monthly cost for the average household. The funds are enterprise funds; therefore, the monies collected go to pay operating expenses, much like any other business in town. This particular increase allows us to apply for low interest loans to address our infrastructure issues within the city. Addressing infrastructure is something I believe most citizens agree we need to take action on. The cost of infrastructure improvements are extremely expensive. Without having the ability to fund those improvements through low-interest loans with the state, it would be many years before the city could fund the improvements. The city's new utility rate is still 14 percent below the average rate of first class municipalities (municipalities having 5,000-plus residents) for comparison.
This proposed land acquisition by the city was a serendipitous discovery that came at a fortunate time. At the time, the city was not looking for property to acquire, we were reviewing options for leasing and looking for producers willing to work with us. We still need both those things, but this property gives us much broader control of clean-up efforts.
We will be able to use the cost of the property to leverage additional dollars for Firesteel Watershed and Lake Mitchell, bringing the overall cost of addressing clean-up to a more manageable figure than originally thought. I have tried to be as transparent as I can be and still make the city budget go as far as we can stretch it.
I am quite pleased with the huge steps forward the city of Mitchell is taking in Lake Mitchell, the watershed, and in addressing ongoing infrastructure needs within the core of the city. If there are doubters still out there, I encourage you to come visit me and learn the facts from the source. Hopefully I can help you understand just how proud of this city you should be.