BATH — The controversial sale of a city-owned property, and how to address a state revenue shortfall, will be discussed by the City Council at its Wednesday, July 24, meeting.

Residents spoke out June 5 against the way the Mid Coast Center for Higher Education was sold this spring, questioning the transparency of the process and the value of the sale.

The council in April unanimously approved the sale of the Park Street building to Robert Smith of Phippsburg for nearly $800,000; its assessed value is $6.5 million, according to the city’s online database.

Michael Wischkaemper of York Street said July 3 that after the June meeting he sent each councilor a series of questions about the sale, but did not hear back from most of the panel.

“You’re entitled not to answer when voters of the city of Bath want to know about the public things you do,” he said. “We’re entitled to make assumptions based on your refusal. When you ask questions of someone and they refuse to answer, you assume it’s because the answers would be embarrassing, or incriminating.”

Councilor David Sinclair agreed.

“I think that the council as a body needs to respond to the questions, because the silence of the body makes each member of the body look bad,” he said. “It makes us look bad as a group; it makes it seem as though we have something to hide. I don’t believe that we do, which is why I answered the questions individually. But I think we’re past time for the body itself, through the chairman, to respond to the questions that were put forward.”

Wischkaemper pointed out that the property had never been put on the real estate Multiple Listing Service, and said there was no reason that information such as the asking price had to be secret until the sale was completed.

The property was listed with a Realtor, and the city got a full-value offer from Smith six days later, according to City Manager Bill Giroux. Part of the offer was that the property would not be advertised until the City Council had an opportunity, soon afterward, to consider the matter, the manager said.

Jim Strickland of Park Street said that even as an abutter, he did not know about the sale.

“Personally, I think the price was low; I mean, bordering on ridiculous,” Strickland said, given the size of the building and acreage of the property. “When I heard the number, I was actually truly shocked. … I’m thinking, ‘is it condemned?'”

Paul Mateosian, Bath’s assessor and assistant city manager, said last month that the value of tax-exempt properties is an irrelevant number. He pointed out that the value listed in the database for the 1910 property is a “cost-approach number,” based on what it would cost to build a hospital that size, minus depreciation, and is not intended to reflect what the sale value would be.

That former hospital has been re-utilized as a rental property, and its expenses have exceeded income during much of the time the city has owned it, Mateosian noted. He explained that a property like the Mid Coast Center, with an unstable tenant situation, would be capitalized at a higher rate than a parcel with a stronger income stream, causing the value to be lower.

The City Council on July 24 will also discuss a $235,000 shortfall in revenue sharing from the state, a product of the recently passed state budget. Giroux noted that the council has several options for addressing the loss, such as increasing the tax rate, reducing fiscal 2014 spending, or something in between.

Sinclair asked that administrators produce a public memo, listing their recommendations.

In other business, the City Council adopted a proposed flag design by lead designer Jeremy Hammond, a 27-year-old resident. The panel’s Flag Committee – Councilors Sean Paulhus, Sinclair, Carolyn Lockwood, and formerly Mari Eosco – had offered input as Hammond honed the design, and agreed this spring on a design to propose to the rest of the City Council.

The top half of the design depicts a golden ship against a red background. The bottom half has two wavy blue lines, against a white surface.

The council also unanimously granted second and final passage to an ordinance that bans smoking in city parks and recreation areas.

The non-smoking ordinance prohibits the use of tobacco products within 25 feet of parks and outdoor recreation facilities the city owns or maintains. Those locations include Library, Waterfront and South End parks, all city boat launches, and trails and easements.

Alex Lear can be reached at 781-3661 ext. 113 or alear@theforecaster.net. Follow him on Twitter: @learics.