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06/02/2008 CITY COUNCIL WORKSESSION MINUTES CITY OF CLEARWATER June 2, 2008 Present: Frank Hibbard Mayor. John Doran Vice-Mayor Carlen Petersen Councilmember George N. Cretekos Councilmember Paul Gibson Councilmember Also present: William B. Horne II City Manager Jill S. Silverboard Assistant City Manager Rod Irwin Assistant City Manager Pamela K. Akin City Attorney Cynthia E. Goudeau City Clerk Brenda Moses Board Reporter The Mayor called the meeting to order at 1:35 p.m. at City Hall, following the CRA (Community Redevelopment Agency) meeting. To provide continuity for research, items are in agenda order although not necessarily discussed in that order. Development and Neighborhood Services Approve an amendment to the Code of Ordinances, Appendix A, Article XXVIII, Business Tax Receipt Fees, for a 5% increase in fees and pass Ordinance 7966-08 on first reading. In 1995, the City Council adopted an ordinance that restructured and revised the City’s Business Tax Receipt fee schedule. That restructure was done in accordance with the guideline set forth by Florida State Statute 205.013. Florida State Statute 205.0535 allows municipalities to increase Business Tax Receipt fees by up to 5% every other year. This requires a majority plus one vote of the governing body. Rate increases have occurred in 1997, 2000, 2002, and 2005. A 5% maximum increase in the rates to become effective immediately upon adoption is requested. For fiscal year 2006/2007, the Development & Neighborhood Services Department processed a total of $2,075,983.02 in revenues (revenue code 010-321101). The current 5% increase will generate approximately $103,799.15 of additional revenues. The next increase cannot occur until 2010, translating to 5% over five years. Development & Neighborhood Services Director Jeff Kronschnabl said new rates only cover City costs, which have increased. 501(c)(3) businesses are exempt. Economic Development and Housing Authorize an intergovernmental loan to the Community Redevelopment Agency in the amount up to $350,000 from funds provided to the City from the United States Environmental Protection Agency as part of the Brownfields Cleanup Revolving Loan Fund Program for cleanup of the Clearwater Automotive Salvage site and adopt Resolution 08-12. Council Work Session 2008-06-02 1 In October 1999, the City Council authorized the City Manager to sign a Loan Fund Agreement and Work Plan for the $500,000 award received from the United States Environmental Protection Agency (EPA) for the Clearwater Brownfields Cleanup Revolving Loan Fund (BCRLF). EPA awarded the City supplemental funds in the amount of $700,000 on September 28, 2006, increasing the original $500,000 award to $1,200,000. The action also approved a time extension of the budget and project period date from September 30, 2006 to September 30, 2008. The current balance of $702,482.85 is available from this award, with $623,000 earmarked for loans. The BCRLF was structured to provide low-interest loans to parties interested in the redevelopment of environmentally impaired properties. The BCRLF also allows government entities to loan to other government agencies, but requires a City resolution. The rule also states that the City may discount up to 30% of the principal amount of the loan, provided that the total amount of the principal forgiven shall not exceed $200,000. The City determined that the best use of these funds from EPA would be for the cleanup of the Clearwater Automotive Salvage Yard site. The City also determined that the CRA is in a better position to convey the site to a developer or other private entity if it provides for the environmental cleanup of the site. For these reasons, in May 2005, the Council adopted Resolution 05-19 authorizing use of $350,000 earmarked for loan funds provided to the City by the EPA as part of the BCRLF to the CRA for the environmental cleanup of the Clearwater Automotive Salvage Yard project. The cleanup costs have exceeded $350,000. Resolution 08-12 requests the Council to allot additional monies up to $350,000 in the form of a loan to the CRA to complete remediation of the Clearwater Auto site and address off-site environmental impacts (AAMCO site). In order to obtain a Site Rehabilitation Completion Order (SRCO) from FDEP (Florida Department of Environmental Protection) for the Clearwater Auto site, the City is obligated to address off-site contamination related to the Clearwater Auto site. The presence of foundry sands/slag material at depths of between two and six feet below land surface was documented in soil borings at the Ron’s AAMCO site. This material historically ties Clearwater Auto activities to the adjacent Ron’s AAMCO property. As a result, this material must therefore be delineated and evaluated for potential remediation as part of the Clearwater Auto site assessment. The delineation has been completed and remediation is the next step. An executed July 17, 2006, interlocal agreement outlines the City and CRA responsibilities in preparing the site for redevelopment. It also notes that the cleanup of the Clearwater Auto project may exceed the $350,000 adopted by Resolution 05-19. The agreement allows the City, through its Brownfields program, other sources, or the CRA, to cover the additional costs to remediate and prepare the site for redevelopment. According to the agreement, the CRA agrees that it will require the developer, person or entity to whom the site is conveyed, following the environmental cleanup, to pay the City the necessary amount so appropriated from the BCRLF as part of the sale agreement. The loan amount to the CRA will have a zero interest rate and shall be repaid from: a) amounts repaid to the CRA from the private developer or another party to whom the CRA ultimately conveys the site following the environmental cleanup; b) TIF (Tax Increment Financing) funds; c) the General Fund of the City through budget appropriations in subsequent years so that such BCRLF may be made available by the City for the environmental cleanup of the other sites if the property is unable to be sold after a reasonable time (within five years of completion of the environmental cleanup provided for herein); and d) other means legally sufficient and approved by EPA. Any Council Work Session 2008-06-02 2 payment from the City General Fund is subject to the annual appropriations process. As stated earlier, a portion of the loan may be discounted to reduce total funds due to the BCRLF. Economic Development & Housing Director Geri Campos Lopez said none of the loan funds comes from the General fund or property taxes. As long as funds are recycled for other projects, the City does not have to repay EPA. Approve a $700,000 loan to SP Country Club Homes, LLC to acquire vacant real property legally described as Lots 1 - 6, Block 3, REVISED PLAT OF BROOKWOOD TERRACE, as recorded in Plat Book 8, Page 34, Pinellas County Public Records, together with Lots 1 - 7, and the North 1/2 of Lot 8, FAIR LANE ADDITION, as recorded in Plat Book 11, Page 16, Pinellas County Public Records, located on Drew Street between North Betty Lane and Fredrica Drive. (consent) Southport Financial Services, Incorporated (Southport) is proposing to develop 36 units of affordable townhomes in the East Gateway District of the City’s CRA area. The Country Club Homes development will be located on Drew Street between North Betty Lane and Fredrica Drive (southeast corner of Betty Lane and Drew Street). This project will represent an investment of over $7 million in the East Gateway District that will result in the development of a vacant 2.07-acre parcel (former parking lot for the Verizon Building on Cleveland Street) and provide improved access to high-quality affordable homeownership opportunities for families at or below 120% of area median income (AMI). The 36-unit project will be a new construction, for-sale townhome complex composed of three-bedroom, 2.5-bath units with 2 car garages. The unit sizes will range from 1,312 square- feet to 1,468 square-feet of air-conditioned space. The sales price of each unit is estimated at approximately $157,500 for the “Standard” units and $163,000 for “Premium” units. The units will be sold to families with incomes: 1) 19 units to families with incomes at 80% AMI or less and 2) 17 units to families with incomes from 81% to 120% of AMI. For a family of four, income will range from, $45,200 at 80% AMI or less up to $67,800, at 120% of AMI. The project will include a pool, Jacuzzi, clubhouse, office, and exercise room with handicapped accessible bathrooms. There will be a homeowners association. The Developer also is proposing that the units be deed restricted to provide for a 30-year affordability period. The Developer has had initial discussions with a local non-profit to administer the affordability restrictions on the units. Southport, its owners, officers and affiliates have developed and operated over 13,000 dwelling units and over 135 projects in 17 states. The principals of Southport have extensive experience with the development of for-sale projects and affordable housing. Southport’s recent for-sale experience includes 21 two-family homes completed and sold in Newark, New Jersey and 10 townhouses called Ewing Place Townhomes located in Clearwater. Peter Leach, Vice President of the SP Country Club Homes LLC, presented a Consolidated Plan application for funding the acquisition costs to acquire this vacant real property. The City’s Neighborhood and Affordable Housing Advisory Board reviewed the application and recommended approval of the funding for the acquisition of the property. The source of funds for the loan is uncommitted program income from the City’s Community Development Block Grant (CDBG) Program. The developer entered into a conditional purchase agreement in March 2008 and is currently under the due diligence period that will end in mid- June. Closing is anticipated for June 17, 2008. Because the market for townhomes is currently soft, the City and Developer are proposing the business terms for this project. The loan will be a 3% interest rate on the outstanding principal balance with deferred payment of principal and interest for five years. If Council Work Session 2008-06-02 3 the Developer fails to perform any the following: 1) file an application for site plan approval of the project on or before October 31, 2008; 2) obtain site plan approval from the City on or before June 30, 2009; or 3) commence construction of the project on or before December 31, 2009, then Developer agrees, upon written demand by the City, to convey the Property to the City by Special Warranty Deed in lieu of foreclosure. If the Developer meets the timelines above, then as Certificates of Occupancy (CO) for each unit are issued in the project, the note will convert to a Grant. For each unit that receives a CO, $19,444.44 of the note shall be deemed satisfied in full with no repayment of principal or interest being payable. The Developer will be fully responsible for all costs to carry the property, obtain approvals, complete construction, and sell the units. Housing Manager Michael Holmes said use of CDBG funds cannot be limited to Clearwater residents; the City could market the project to City residents and employees. Ms. Lopez estimated homeowner association fees would be $100 a month. Staff will verify that the project will not create a non-conformity for the Verizon building. Financial Services Approve settlement of the liability claim of Knology for payment of $39,295.16. (consent) On December 5, 2007, a City Solid Waste truck unloaded at the City’s transfer station on Old Coachman Road. In order to unload, the tailgate of the truck was raised. The driver of the truck forgot to close the tailgate and when he left the transfer station, he caught, pulled down, and severed Knology fiber optic cables strung across Old Coachman Road. The cost to repair the cables was $39,295.16. The City’s limit of liability as provided by Section 768.28, Florida Statutes is $100,000. The City’s Risk Management Division and City’s Claims Committee recommend this settlement. Funding for the payment of this settlement is available in the budget for claims expense in the Central Insurance Fund. Risk Management Specialist Jon Marcin said staff has implemented a safety inspection procedure. Disciplinary action was taken. Approve increasing the residential and commercial Stormwater Utility rate to $13.04 per Equivalent Residential Unit (ERU) beginning October 1, 2011 and to $13.59 per ERU beginning October 1, 2012 and pass Ordinance 7914-08 on first reading. The City’s utility rate consultant, Burton and Associates, has completed a revenue sufficiency and financial forecast analysis following completion of a second year of operations under rates approved in 2006. At that time, due to significant increases in construction, pension, insurance costs, in addition to increased maintenance costs associated with the National Pollutant Discharge Elimination System permit, the analysis showed rate adjustments were necessary through the year 2011. On July 20, 2006, Council approved a series of 6% rate increases to be effective October 1, 2006 ($9.91), October 1, 2007 ($10.50), October 1, 2008 ($11.13), October 1, 2009 ($11.80), and October 1, 2010 ($12.51). Burton and Associates’ 2008 revenue sufficiency and financial forecast analysis shows that additional increases of 4.25% are needed for fiscal years 2012 ($13.04) and 2013 ($13.59) with no changes necessary for the approved rate increases for FY (Fiscal Year) 2009, FY 2010 and FY 2011. A primary driver for requesting the additional rate increases is the planned issuance of revenue bonds in FY 2009. Bond insurers and rating agencies prefer to have several years of approved rates providing revenues to meet the utility’s operating and project needs as well as Council Work Session 2008-06-02 4 debt service requirements. Due to the rate increases adopted in 2001 and 2006, several significant flood control and water quality projects have been completed or are underway, including: Prospect Lake Park; Myrtle Avenue Road and Drainage Improvements; Kapok Wetland & Floodplain Restoration; Glen Oaks; North Beach Drainage; Downtown Streetscape Phase I and Beach Walk. Engineering Manager Elliot Shoberg said 12 projects are planned. City costs are similar to those of other jurisdictions; some subsidize projects with Penny for Pinellas or General Fund dollars. Regulations continue to become more stringent. Finance Director Margie Simmons said using Penny for Pinellas funds would have an insignificant impact on rates. Concern was expressed that increases exceed taxpayers’ cost of living increases. It was stated by proactively maintaining infrastructure, huge future increases are averted. The City Manager said the Glen Oaks and Kapok projects were unique and he did not anticipate future large-scale projects. Council recessed from 2:26 to 2:34 p.m. Approve increasing domestic water, lawn water, wastewater collection and reclaimed water utility rates by 7% effective October 1, 2008, October 1, 2009 and October 1, 2010 with subsequent 6% increases to be effective October 1, 2011 and October 1, 2012 and pass Ordinance 7913-08 on first reading. The last rate ordinance was approved on December 16, 2004, and provided for a 7% increase effective October 1, 2005, with subsequent 6% increases to be effective October 1, 2006, October 1, 2007, and October 1, 2008. In addition, the rate ordinance established metering for reclaimed water usage with rates subject to the same increases as for water, lawn water, and wastewater usage. Burton & Associates has completed a new water, wastewater, and reclaimed water utility rate study to cover the next five years of operations. The current study covers the period FY 2009 through FY 2013 and recommends increasing the previously approved 6% increase to be effective October 1, 2008, to 7% with subsequent 7% increases to be effective October 1, 2009, and October 1, 2010, and with 6% increases to be effective October 1, 2011, and October 1, 2012. The increases are applicable to water, lawn water, wastewater and reclaimed water usage. This utility rate increase is needed to provide funding to maintain compliance with debt service coverage requirements supporting the continuation of capital improvement projects needed to sustain the City's utility infrastructure. Infrastructure improvements are needed to maintain compliance with federal, state, and district regulations concerning water supply and treatment and the wastewater collection system, maintain reliability of the water pollution control facilities due to age of the infrastructure, and to expand the reclaimed water system. Master Plans have been completed for all systems in Public Utilities and the capital improvements program has been revised to meet future infrastructure needs. A primary driver for requesting the additional rate increases is the planned issuance of revenue bonds in FY 2009. Bond insurers and rating agencies prefer to have several years of approved rates providing revenues to meet the utility’s operating and project needs as well as debt service requirements. It was remarked that while the new reverse osmosis facility will result in cost savings, expenses continue to increase. Director of Public Utilities Tracy Mercer said capital projects are the main driver behind rate increases. The City has little discretion on maintenance. The reverse osmosis plant will help expand the water system and lower production costs. Bonds to Council Work Session 2008-06-02 5 cover facility costs will be repaid with the estimated $1 million/year savings, which will result. Over the last four years, staff responsibilities have been shifted as new projects came on line. Beginning in 2009, an additional 11 FTEs (Full-time Equivalents) will be required. Construction cannot be accelerated. Engineering Manager Rob Fahey said regulations control pumping and prevent sinkholes. Additional wells are being sunk. Development pattern changes from hotel to condominium units increase water usage. Efforts are underway to encourage residents to receive reclaimed water. It was requested that staff report on the cost of rate increases for the average homeowner. Parks and Recreation Approve Amendment to Agreement between the City of Clearwater and Global Spectrum, L.P. for management services from September 30, 2009 to December 31, 2010, and that the appropriate officials be authorized to execute same. (consent) On August 4, 2005, the City Council approved a new management agreement with Global Spectrum to provide oversight and administration for the Harborview Conference Center until September 30, 2009. The new agreement has worked well over the past three years, with both the City and Global profiting from the new arrangements. Studies, being conducted on the long-term use of the Harborview property, will not be ready for action until late 2009, therefore, to continue the smooth operations of the center, the Council has directed staff to extend the current contract by 15 months, until December 15, 2010. All other terms of the agreement remain the same, with the exception of monetary items in the agreement being pro-rated for the last three months of the agreement in an equitable fashion representing 25% of the yearly amounts for the City Cash Subsidy and the maximum amount of loss Global is responsible for. Staff is in the process of trying to work out a similar agreement with Stein Mart. It was recommended this item be continued until the City Council determines the future of the Harborview Center. Assistant City Manager Rod Irwin said staff will submit a development feasibility report. The City would continue to incur costs if the Harborview Center closed, as lease agreements with SteinMart and Pickles Plus remain in effect. Consensus was to continue discussion on June 16, 2008. Approve $40,000 of increased funding for CIP 315-93265, Clearwater Beach Library/Recreation Center; and transfer funds from CIP 315-93210, Memorial Causeway Landscape Beautification Project that has been completed. (consent) On January 17, 2008, the City Council approved awarding a contract to Oakhurst Construction Company, Inc. to renovate the Clearwater Beach Recreation Center to accommodate a Beach Library. The Beach Library moved out of Pelican Walk in December 2007 and currently is operating out of a temporary trailer in the parking lot west of the recreation center. The library portion of the project will open Summer 2008. Additional funding is required to pay for several unexpected change orders, which include removing existing concrete flooring because it was too thin and lacked the necessary vapor barrier when installed 50 years ago, as well as some electrical and AC duct work modifications. The contingency for this project was reduced at award to 5% rather than the standard 10%, which would have covered most of these costs and provided enough funds for FF&E (furniture, fixtures, & equipment). Council Work Session 2008-06-02 6 Parks & Recreation Director Kevin Dunbar said when the recreation center was refurbished, the original slab was used to abide by FEMA (Federal Emergency Management Association) restrictions. Perennials planted on the Memorial Causeway take time to grow and will require low maintenance. Sod was planted on Cleveland Street as pedestrians walk on those medians. Engineering Approve a Contract for the Purchase of Real Property from Johnie Blunt, to purchase real property described as GREENWOOD PARK, Block C, Lots 17, 18 and 19 for the sum of $525,000 plus estimated expenses not to exceed $8,300 for a boundary survey and transaction closing costs, and authorize the appropriate officials to execute same, together with all documentation required to effect closing. (consent) The subject properties are located at 1317 and 1321 N. Martin Luther King, Jr. Avenue and 1104 Tangerine Street. The properties located at 1321 N. Martin Luther King, Jr. Ave. and 1104 Tangerine are vacant parcels; 1317 N. Martin Luther King, Jr. Ave. is improved with a two- story commercial building. The first floor has an operating bar (Blue Chip Bar) and a vacant restaurant. The second floor has twelve vacant boarding rooms. The full purchase price was reached through negotiations with the seller through the seller's agent. On February 1, 2008, State Certified General Real Estate Appraisers Holly B. Isaacs and Charles T. Cowart, MAI, of Isaacs Real Estate Services, appraised and valued the property in total at $458,600. The City's Brownfields program was funded from EPA Grant BF96486307, a total of $26,300 for Phase I environmental site assessment (ESA), asbestos survey, lead base screening, quality assurance project plan, soil, and groundwater activities for Phase II ESA for the subject properties. The primary purpose of the Phase II ESA is to determine if historical adjacent petroleum storage/handling and dry cleaning activities had adversely impacted either soil or groundwater within the subject properties. ESA conclusions were that the subject properties have no environmental impacts. The purchase contract provides for closing on or before June 30, 2008. The purchase and future use of these properties will remove a deteriorating and longstanding blighting impact on the North Greenwood community and continue the City's and community's efforts to revitalize the neighborhood. The future use of the subject properties is undetermined at this time. The City has begun initial discussions with several non-profit organizations regarding potential partnerships for an end use for the site. The Neighborhood and Affordable Housing Advisory Board recommended the purchase of these properties at their May 13, 2008 meeting. Ms. Lopez said staff has received no negative feedback. Staff was thanked for their efforts. Official Records and Legislative Services Provide direction regarding Airpark Advisory Board Code Sections 2.081 through 2.085 pertain to the Airpark Advisory Board. Currently, the Airpark Advisory Board is a five-member board, meeting quarterly. Items on the agendas are reports from staff regarding budget, maintenance, and planned future projects. Over the past few years, no recommendations have been forwarded to Council. The actions taken have been to request information regarding budget and FDOT (Florida Department of Transportation) grants for future construction and maintenance projects. Council Work Session 2008-06-02 7 Staff requests Council review the powers and duties of the board as contained in Code Section 2.084 and determine if changes should be made to assure the board has appropriate direction to provide advise/recommendations desired by the Council. The board has discussed its role and feels it should serve in an advisory capacity on the operations and maintenance of the airpark. A Master Plan for expansion and operation of the Airpark was adopted by Council in 2000. However, that plan cannot be completed due to the 20-year lease for the Executive Golf Course and loss of property needed for the Public Services storage yard. The possibility for expansion is now limited to 30 additional T-hangers. It also is recommended that Section 2.082 be amended to require membership to be a mix of pilots and neighborhood representatives, with neighborhoods being defined as those in the immediate vicinity and/or impacted by the flight patterns and approaches. Staff recommends Section 2.085 be deleted as it is redundant with Section 2.084. It was stated the board serves as a liaison to surrounding neighborhoods. Marine & Aviation Director Bill Morris said board attendance has been mixed, as there has been little airpark-related business recently. He suggested seeking surrounding neighborhood residents to serve on the board. Attracting members has been difficult. Consensus was to fine tune Airpark Advisory Board powers, delete Section 2.085, and ensure that a neighborhood resident serves on the board. Approve City Council Policy regarding holding City sponsored events within the City limits. Council directed a policy requiring City-sponsored events to be held inside the City limits be drafted. Following are two proposals for Council consideration: 1) City-sponsored events are to be held within the City limits of Clearwater unless an outside facility submits a bid that is at least 20% less than the lowest bid from a facility within City limits. Events sponsored by Clearwater Gas in the counties and municipalities they serve outside Clearwater City limits are exempt or 2) City-sponsored events are to be held within the City limits of Clearwater. Events sponsored by Clearwater Gas in the counties and municipalities they serve outside Clearwater City limits are exempt. The policy as approved by the Council will be under the General Administration section of the Council policies. It was commented that locating event space in the City is sometimes difficult. Concern was expressed the policy would force volunteers to find additional sponsors and event space. Consensus was to adopt Proposal 1, when the City is sole sponsor. Legal Authorize appeal of Circuit Court decision in School Board of Pinellas County v. City of Clearwater, Case 99-7479-CI-08. (consent) In 1999, the Pinellas County School Board brought suit against the City of Clearwater contending it was immune and exempt from Clearwater’s stormwater utility/user fee. It sought to have Clearwater’s stormwater utility ordinance declared void and/or to have the ordinance declared inapplicable to the School Board. The School Board also sought damages equal to all stormwater utility/user fees previously paid to Clearwater, together with prejudgment interest. Clearwater counterclaimed for unpaid stormwater utility/user fees. Council Work Session 2008-06-02 8 An order in favor of the School Board was granted partial summary judgment in August 2003, which provided that, although Clearwater’s stormwater fee was a utility/user fee, the School Board was exempt from those utility/user fees by the operation of Florida Statutes, §1013.371 and §1013.51. The Second District Court of Appeals reversed in July 2005, and found that the School Board is not exempt from paying user fees charged by Clearwater. It remanded the case for a determination as to whether Clearwater’s fee is a user fee. In December 2007, the Pinellas County Circuit Court held that Clearwater’s stormwater utility fee is a user fee. On May 23, 2008, however, that court subsequently held that the doctrine of sovereign immunity prevented the City from charging the School Board stormwater utility fees. The deadline to file a notice of appeal of this decision is on or about June 22, 2008. Assistant City Attorney Dick Hull said the School Board had requested a refund of approximately $450,000. If the City prevails, the School Board would owe the City $2.3 million. The City Attorney said the case could be handled in-house. It was remarked that the School Board is part of the community and City residents should not have to pay for services for non Clearwater residents. City Manager Verbal Reports Gulfview Improvements The City Manager said Gulfview improvements are moving forward as quickly as possible. The original schedule was based on a later completion date for Beach Walk. Engineering Director Mike Quillen anticipated completion of the last two sections would take at least six months. It was agreed that construction should be delayed until after Spring Break 2009, when no events are scheduled. Council Discussion Items Ordinance for Marine Turtle Protection - Councilmember Cretekos Concern was expressed that the media had reported incorrectly regarding the City’s lighting ban to protect turtles. It was remarked that Code Enforcement inspects and notifies homeowners regarding violations. Sand Key Beach Cleaning Mr. Dunbar said the City funds public beach raking on Clearwater beach with parking revenues, which are limited. The Sand Key Civic Association pays the City to rake the Sand Key beach. The City only provides maintenance when the City Manager declares a health and safety emergency. The County uses parking revenues from Sand Key Park for life guards and cleaning that beach. Consensus was to send a letter to the County regarding the status quo. Other Council Action Councilmember Doran reported that Bo Diddley had died. 15. Adjourn The meeting adjourned at 4:33 p.m. Council Work Session 2008-06-02 9