"… Your staff, Mark Kaltsas, seemed sur-prised it was for sale.  I feel the city staff should be operating under the same rules as others.  We feel our initial contact with the city, to clarify the zoning, led to the city's knowledge of it being on the mar-ket.  The next day an offer was put in by the city.  We anticipate doing more work for the city and hope things go forward better in the future."
Said City Administrator Steve Sarvi, "Neither side feels they were treated prop-erly.  We were contacted by MABSSCO and went into quick action with a realtor.  Then someone told us there were other bidders.  We felt we were being put out also.  We were under the assumption we were given first choice and there was no other bidder."
Stated Mayor Bohn, "I don't feel like we did anything wrong.  We reacted."
"And we reacted very quickly," said Administrator Steve.  "The council could be sitting here wondering how we left it get away.  It's looking like we were hiding information from a potential bidder and that was not the intent.  We've just placed the opportunity in front of you."
A listing agent for MABSSCO was also in attendance to explain how things happened so fast.  He referred to Eugene Allen, executive director of MABSSCO.  "Originally, Gene expressed interest in letting the city know it would be for sale.  The sellers would love to work with the city," he said.
He also said that he talked to Three Rivers Park District who called the Lake Auburn property a "tier two parcel."  He said a "tier one parcel" is defined as a piece the park really wants, a "tier two parcel" they'd like to have but won't break the bank to get it, and a "tier three parcel" they don't want.
Stated Mayor Bohn, "I would say we're not looking for an opportunity for investment, but for a trade."
Said Councilmember Richard Tieden, "It's a wonderful opportunity.  It's also a million and a half dollars.  I never recall ever having a million and a half dollar item before the council so fast for a vote."
Richard related the purchase to earlier discussion about cuts being made to the proposed 2004 city budget.  "If we can sit here and spend $1.5 million now, but earlier we couldn't spend $1,500 to send our staff to training and buy hoses for the fire department ... If we can come up with $1.5 million this fast, we don't have to be so critical with our budget.  The sky is not falling.  It's obviously not falling in Victoria.  Have you talked to our finance director about this?  We must be doing all right then.  So why are we so worried about cutting $80,000 from the budget?"
He added, "It's a fine opportunity and I'm willing to do this, but I've seen the shell game.  It goes from one pocket to the other pocket and then another pocket.  I've been a part of it."
Stated Councilmember Mary Thun, "I think this is a great opportunity but I don't like how this sounds, looks, or is per-ceived."  She voted against the purchase.
MABSSCO also owns a two-acre parcel on the other side of County Road #11.  Mark informed councilmembers that MABSSCO plans to build a new group home on this parcel and needs time to design and construct the new group home before they could move off Lake Auburn.
This past April, MABSSCO also entered into a purchase agreement for a house and parcel at the D.Q. intersection with plans to turn it into an office bldg.

REVIEWING 2004 CITY OF VICTORIA BUDGET
WITH HOPES TO CUT OR HOLD THE LINE
August 14th
Councilmembers held a first work-shop on August 14th to discuss and pre-pare for the city's 2004 budget.  The draft budget, as presented by City Finance Director Jylan Johnson, included no trans-fer of dollars into a community develop-ment or downtown redevelopment fund as past budgets have included for at least a decade.
Stated Mayor Jerry Bohn, "The coun-cil has to be the one who decides where the cuts will be made."
The finance director was instructed to put $150,000 back in the community de-velopment fund.  Such funds have made it possible in recent years to purchase park property and downtown property to help spur development.
"I'd like another meeting where we can go over each of these items in detail, with that $150,000 for community devel-opment back in there, and we can decide where we want to make the cuts," said the mayor.
Because of accounting errors, as well as the loss of $4,000 in local government aid and approximately $80,000 in fiscal disparities, city councilmembers are want-ing to make cuts to "hold the line."
Most of Victoria's revenue comes in through property taxes.  Since most of the properties in Victoria are residential, versus commercial or industrial, most of Victoria's revenue comes from the home-owners.
Total revenue for 2004 is projected to be $2,333,599.  Approximately 2/3 comes from property taxes.  Approximately 1/3 comes from other sources such as building permit fees, plumbing and mechanical permit fees, plan check fees, recreation fees, and liquor/beer license fees.
Noticing that the draft 2004 budget was based on an estimated 125 additional new homes in the city next year, Mayor Bohn agreed, "Housing starts are pretty good."
In responding to the mayor's ques-tion, City Administrator Steve Sarvi said that each home generates an average of $8,000 in property taxes.
The administrator said that another potential source of revenue would be a franchise agreement with the utility comp-panies.  "In essence, you give Xcel and Minnesota Valley Electric the rights they already have," said Steve.  "They push us every year to do it.  It ends up being paid for by the people either way.  They put a franchise fee on customer bills." 
There are also increases of expendi-tures in the draft 2004 budget.  The finance director said she went with a 3% salary increase for city staff across the board.  She also said that the cost of health care benefits is seeing a 14% to 18% increase.  She said that firefighters are asking for an increase from $6.25 to $6.75 per hour for time spent responding to fire calls. 

Click here to continue.