10/13/2008
CITY COUNCIL WORKSESSION MINUTES
CITY OF CLEARWATER
October 13, 2008
Present: Frank Hibbard Mayor
George N. Cretekos Vice-Mayor
Carlen Petersen Councilmember
John Doran 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
Patricia O. Sullivan Board Reporter
The Mayor called the meeting to order at 1:30 p.m. at City Hall.
To provide continuity for research, items are in agenda order although not
necessarily discussed in that order.
Presentations
Service Awards
Three service awards were presented to City employees.
Creighton Harvey, Clearwater Gas System, was presented the October 2008 Employee
of the Month award.
Tampa Bay Estuary - Fertilizer Presentation
Tampa Bay Estuary Executive Director Holly Greening discussed Tampa Bay water
quality. Workshop recommendations support reductions in fertilizer use and encourage lawn
care onsite supervisor licensing. Local governments will be encouraged to adopt an ordinance,
similar to Sarasota County’s. Ms. Greening estimated 20% of estuary pollution comes from
residential fertilizer; other sources are agriculture, vehicle emissions, etc. She said fertilizers
have not been found to trigger red tide, but allow it to last longer onshore. She supported
educational efforts, as enforcement is difficult. Regulatory agencies are moving in this direction.
It was recommended that Neighborhood Services disseminate fertilizer use information to
residents.
2008 Florida Natural Gas Association (FNGA) Operating Person of the Year Award - Manny
Pandelos
CGS (Clearwater Gas System) Managing Director Chuck Warrington presented Manny
Pandelos with the 2008 FNGA Operating Person of the Year Award
Council Work Session 2008-10-13 1
The City Council recessed from 2:00 to 2:01 p.m. to meet as the Pension Trustees.
Gas System
Approve new gas utility rates to become effective for all gas bills and services rendered on or
after January 1, 2009, and pass Ordinance 7998-08 on first reading.
Mr. Warrington provided a PowerPoint presentation. Black & Veatch has completed a
“Cost of Service and Rate Study” for the Clearwater Gas System (CGS). The study included a
projection of CGS’ financial position for the period 2008 - 2012, a cost of service analysis to
evaluate the cost responsibility for each of the various classes of customers served, and the
development of recommended rate charges to recover the costs of providing service from the
respective classes of customers.
Ordinance 7998-08 includes the recommendations from the study: 1) Increase customer
charges for residential and commercial customers and decrease their non-fuel energy rates
such that there is no significant change in base rate revenues from any customer class; 2)
Implement a Usage and Inflation Adjustment (UIA) to replace the existing Weather
Normalization Adjustment (WNA); 3) Replace the existing Environmental Imposition Adjustment
(EIA) with a new more broadly defined Regulatory Imposition Adjustment (RIA); 4) Increase the
Central Pasco County customer surcharge. This increase will not provide CGS with additional
margin revenues, but is intended to recoup the direct supply and transportation related cost
increases; 5) Increase labor related service charges to reflect CGS’ increase in costs as well as
rates charged by competitors; 6) Increase charges for propane service to reflect CGS’ increase
in costs as well as rates charged by competitors; and 7) Implement minor changes to Other
Commercial and Industrial Service and Air Conditioning service tariffs to be consistent with
modifications made to Residential and Commercial tariffs. Also, some minor word editing is
included in the ordinance to provide clarification. Current CGS gas rates and service charges
have been effective since April 1, 2005.
Mr. Warrington said CGS is in business to make money for the City. Most costs are
customer related; cash flow and profits are less stable under the current rate structure.
Proposed rates are in line with other utilities and will recover costs through customer charges
rather than fluctuating biometric charges. Increasing the customer charge while decreasing the
therm rate will lessen the burden to customers. The central Pasco County surcharge increase
is based on higher charges for gas flow through the People Gas/TECO gate station. The study
is conservative. Growth slowed considerably during the past two years. Finance Director
Margie Simmons said rather than funding expansion, the debt is being paid.
Concern was expressed that higher rates will penalize CGS customers. It was
commented that increased service and labor rates will only be imposed on those who use them,
and this Enterprise fund is intended to benefit Clearwater and serve more than City residents. It
was stated that CGS previously had not addressed fixed costs appropriately, with customers
using a higher number of therms subsidizing those using less.
Human Resources
Authorize a contract with CIGNA for health insurance under a fully insured funding arrangement
for the contract period of January 1, 2009, to December 31, 2009, at a total cost estimate of
Council Work Session 2008-10-13 2
$17.4 million which includes estimated City ($11 million), employee ($4.9 million), and retiree
($1.5 million) premiums.
The contract with the City’s current medical insurance provider, Humana, expires on
December 31, 2008. Based on the renewal proposal from Humana, the City’s Benefits
Committee recommended bidding the contract for the 2009 plan year. RFP (Request for
Proposals) responses were received from three carriers: CIGNA, Humana, and United.
The award to CIGNA will result in approximately a 16.6% overall increase in premium
costs, the entirety of which will be applied to employee contribution levels. The contract will
establish a plan structure consisting of a new “base” HMO plan that introduces deductibles and
co-insurances at the same premium rates as the current “standard” HMO plan and which will
result in no increase to the City’s contribution levels, along with modified HMO and POS plan
options to include only one of each plan with higher co-pays and out-of-pocket maximums than
the current plans. CIGNA will also contribute $50,000 toward City wellness initiatives, and has
guaranteed an additional 3% reduction in rates if 90% of the active members and their
dependents complete CIGNA’s online Health Risk Assessment.
For fiscal year 2009, the City has budgeted approximately $10.9 million for
approximately 1,757 full-time positions for the City’s share of medical insurance coverage
(including EAP and mental health/substance abuse). The City’s estimated share of actual
expenses for FY (Fiscal Year) 2009, which covers three months of the current contract with
Humana, nine months of this proposed contract with CIGNA and twelve months of mental
health/substance abuse coverage with Unipsych (three-year contract approved beginning
January 1, 2007) is $11.2 million. The difference between budgeted and maximum actual costs,
estimated to be $300,000, will be taken from reserves in the Central Insurance Fund. The
above numbers assume that all positions are filled at all times and that employees select the tier
of coverage (employee only, employee + 1, and employee + family) similar to the current year.
City share of costs related to the CIGNA contract for coverage for FY10, estimated to be $2.75
million, will be budgeted as part of the fiscal year 2010 budget.
Staff also recommends a modification of the current funding strategy for City
contributions to health care premiums to represent 100% of the new “Base” HMO cost for
Employee Only, 75% of the “Base” HMO cost for Employee plus One, and 68% of the “Base”
HMO cost for Employee plus Family, to be applied to the respective tiers in the new standard
HMO and POS plans.
Human Resources Manager Allen Del Prete provided a PowerPoint presentation.
Current annual City premiums total approximately $15 million. Humana’s renewal offer
increased premiums 44%. The Benefits Committee, representing the unions, management,
SAMP, and retirees reviewed RFP responses from CIGNA, Humana, and United. Aetna and
Blue Cross/Blue Shield declined to bid. All responses included significant increases in
premiums and a new plan option that includes a deductible, co-insurance, and would allow a 0%
increase in premiums versus the current standard HMO plan. The best and final proposals
includes a new base plan with lower deductibles and co-insurance. The Benefits Committee
ranked RFP finalists based on: 1) Cost; 2) Ability to Perform; 3) Adequacy of Network; 4) “AM
Best Rating”; and 5) Experience with government entities in Florida.
Council Work Session 2008-10-13 3
The Committee ranked respondents: 1) CIGNA; 2) United; and 3) Humana. CIGNA
Healthcare provided a 16.6% increase to overall cost, streamlined the HMO and POS plans,
increased co-pays and premiums, and provides a new “basic” plan at 0% increase with a
deductible and co-insurance. CIGNA will provide for City Council to authorize funding of
additional $500,000 to offset premiums if members achieve 90% participation in CIGNA HRA.
The new “Basic” Plan: 1) Deductibles of $750 individual/$1,500 family; 2) Out-of-pocket
maximum of $3,000 individual and $6,000 family; 3) Office visit co-pays of $20/$40/$60; 4) 20%
co-insurance for radiological, hospital, and outpatient services; and 5) prescription co-pays of
$20/$40/$60. For the “Basic” Plan with 100% coverage, City rates remain the same: 1) $5,100
for employee only; 2) $8,773 for employee plus 1 with 75% subsidy; and 3) $14,434 for
employee plus family with 68% subsidy.
Streamlined HMO and POS Plans: 1) Out-of-pocket maximum of $2,000 individual and
$4,000 family; 2) Office visit co-pays of $25/$35/$55; 3) $100 co-pay for radiological and
outpatient services; and 4) prescription co-pays of $15/$35/$50. For the “Standard” HMO Plan,
the annual employee subsidy will be: 1) $1,107 for employee only (total $6,107); 2) $3,926 for
employee plus 1 (total $10,506); and 3) $7,470 for employee plus family (total $17,285). Rates
are estimated to increase by $2.4 million.
The committee based their recommendation on quality, cost-effective alternatives for
employees within City budgetary expectations, aligns costs more closely with associated claims,
and maintains an adequate provider network.
Concerns were expressed that the City is switching insurance carriers again and the
burden for increased health insurance costs is being shifted to employees. It was suggested if
staff participation in the online Health Risk Assessment qualifies for a 3% return, the money,
taxed as income, should be awarded to employees.
Ms. Simmons discussed the Central Insurance Fund. The portion of the reserve from
employee contributions has been used. The Gehring Group representative said the City may
need to consider self-funding in the future. The City Manager said the City Council had sent a
clear message that the City cannot fund higher benefits. He hoped the wellness focus will
reduce claims and future costs.
The City Council recessed from 3:17 to 3:26 p.m.
Parks and Recreation
Approve First Amendment to Lease Agreement and a Contract for Purchase of Real Property by
the City of Clearwater, Florida, between the City of Clearwater and Clearwater Country Club
Management, Inc. (CCC) pursuant to the City’s acquisition of 5.7 acres owned by CCC for
$2,125,000 and authorize the appropriate officials to execute same.
The City of Clearwater and Clearwater Country Club Management, Inc. (CCC) currently
have a Lease Agreement for CCC to operate the City’s public golf course located at 525 Betty
Lane North, which will expire April 30, 2032. CCC currently owns 5.7 acres, including parking
and the clubhouse, which is surrounded by the City’s golf course, which CCC operates on
behalf of the City.
Council Work Session 2008-10-13 4
At the June 19, 2008 City Council meeting, City Council approved a term sheet for the
sale and purchase of CCC-owned property. The basic components of the First Amendment are
as follows: 1) The City to purchase the clubhouse parcel for an amount not to exceed of
$2,125,000; 2) Annual lease payments by CCC of $200,000, paid quarterly, will commence
October 1, 2009. This will allow CCC to retire current revolving line of credit and develop a
twelve-month funding strategy so as to cover all club expenses during the slower summer
months; 3) Establishment of an annual $50,000 CIP, administered by the City at its sole
discretion, effective FY 09/10; 4) The City will procure turf maintenance supplies for use at the
golf course and be reimbursed for out-of-pocket expenses; 5) Require CCC at all times, subject
to reasonable rules and regulations common to other similar facilities in the area, to make the
facilities available to the public who are not members of the Club upon payment of reasonable,
applicable fees for such use. In addition, Clearwater residents have the same right as members
to use food and beverage and restroom facilities in the same manner as members; 6) CCC
agrees to satisfy in full, current line of credit and obtain a release from Liberty Bank or have
lease terminated by City. Implementation of these two agreements will bundle all assets of the
course under one ownership and provide increased savings to the overall operation.
At the June 19, 2008 meeting, City Council gave staff direction to negotiate a contract
and a capital project was established in the amount of $2,025,000 for the purchase. CCC is
currently working to bring a Director of Golf Operations on board versed in the Tampa Bay golf
market with extensive golf marketing experience.
Assistant Parks & Recreation Director Art Kader said CCC will continue to have
members. The contract covers the bank note and outstanding notes to CCC members. It was
felt a third appraisal should have been obtained. It was noted that CCC will default on this
contract if it does not pay off its equity line before October 2009. Discussion ensued regarding
funding this purchase with Penny for Pinellas money.
Consensus was to schedule a discussion on Penny for Pinellas projects.
Approve a one-year funding agreement, in the amount of $150,000 between Jolley Trolley
Transportation of Clearwater, Inc. and the City of Clearwater for the operation of transportation
and trolley service on Clearwater Beach, Island Estates and Sand Key and authorize the
appropriate officials to execute same. (consent)
Jolley Trolley Transportation of Clearwater, Inc. (Jolley Trolley) has been operating
trolley service along the City’s beach communities and downtown for 15 years. The current
one-year funding agreement expired on September 30, 2008. Included in the 2009 City budget
is funding in the amount of $150,000 for trolley service to the beach communities. The Parks
and Recreation Department will continue to administer compliance of the agreement.
The Jolley Trolley’s history was reviewed. In response to a suggestion that PSTA
(Pinellas Suncoast Transit Authority) costs would be lower, it was stated there was significant
public dissatisfaction with equipment and service when PSTA provided this service.
Solid Waste/General Support Services
Council Work Session 2008-10-13 5
Award a contract (purchase order) for $411,264.00 to Duval Ford of Jacksonville, Florida for
(16) Ford Crown Victoria Police Cruisers in accordance with Sec. 2.564(1)(d), Code of
Ordinances - Other governmental bid, authorize lease purchase under the City's Master Lease
Purchase Agreement and authorize appropriate officials to execute same.
These automobiles will be purchased through the Florida Sheriff's Association & Florida
Association of Counties Contract #08-16-0908. These automobiles are included in the Garage
CIP Replacement List for Budget Year 2008/09 and replace G1502, G2087, G2088, G2228,
G2235, G2387, G2390, G2393, G2514, G2515, G2527, G2534, G2624, G2626, G2682, G2790.
Solid Waste/General Services Assistant Director Rick Carnley discussed problems other
police departments have experienced with the Chevrolet Malibu. Alternative fuels currently
provide insufficient power for police vehicles. This contract is bid annually.
Engineering
Approve a contract to Gulf Coast Contracting, LLC of Tarpon Springs, Florida, for the
preparation and painting of Reservoirs 1 and 3 Ground Storage Tank (GST) Coating Project
(08-0031-UT) in the amount of $114,840.00, which is the lowest responsible bid in accordance
with specifications, and authorize the appropriate officials to execute same. (consent)
The scope of work for this project involves furnishing all materials, labor, equipment,
tools, services and incidentals to complete the recoating of the exterior surfaces on three pre-
stressed composite water storage tanks located at Reservoir 1 and 3. Reservoir 1, located at
1657 Palmetto Street, has one 5-million gallon (MG) storage tank and Reservoir 3, located at
2775 State Road 580, has two 5MG storage tanks. All three 5MG storage tanks hold potable
water prior to being pumped into the water distribution system. All three tanks measure the
same dimensions, which are 175-feet in diameter and have 28-foot side wall height. All three
existing 5MG storage tanks at Reservoir 1 and 3 are in need of repainting since the existing
paint is cracking and pealing. The estimated time period for construction is 110 calendar days
to start in November 2008 and finish in February 2009. The three 5MG water storage tanks are
owned, operated, and maintained by the Public Utilities Department.
In response to a suggestion that public art be incorporated into the project, Engineering
Manager Robert Fahey reviewed the difficult process to spray paint the storage tanks.
Planning
Approve amendment to the Community Development Code to allow a reduced parking
requirement for changes of use within the Downtown (D) District where there are no existing
parking spaces or available land for their construction, and Pass Ordinance 7999-08 on first
reading.
Following the completion of the Cleveland Street Streetscape Project, there has been a
greater interest in occupying existing buildings and tenant spaces on Cleveland Street.
However, much of this interest has involved occupying the buildings and tenant spaces with
uses that are different from those previously established. As many of the building/properties in
this area have limited off-street parking or no off-street parking whatsoever, an issue has arisen
Council Work Session 2008-10-13 6
as to how conversions from office and retail uses to more parking intense uses such as
restaurants can occur.
In response to this issue, the Planning Department has proposed an amendment that
will add a footnote to the existing Tables 2-902 and 2-903 within the Community Development
Code. The footnote would read as follows: For those existing buildings/properties with frontage
on Cleveland Street that are located between Osceola Avenue and Martin Luther King, Jr.
Avenue that have no existing off-street parking spaces, nor the ability to provide any off-street
parking spaces, the use(s) of the buildings/properties may be changed without the off-street
parking that would otherwise be required for the change of use being provided.
Patrons of these establishments can use the public parking spaces available in various
locations and garages that are widely distributed through out the Downtown area. The
Community Development Board (CDB) reviewed the proposed text amendment at its pubic
hearing of September 16, 2008, and the amendment was recommended for approval without
comments.
Planning Director Michael Delk said many downtown buildings cannot meet restaurant
parking requirements; the exemption applies only to storefronts without off-site parking. This
change will shorten the process to open restaurants where parking mitigation is impossible.
Alternative uses for the second floors also need to be considered. The City Manager said public
parking is sufficient to accommodate this change. Assistant City Manager Rod Irwin said a
study is underway to determine retail and restaurant density levels that meet future needs.
Without mass transit, filling downtown office buildings is challenging.
Concern was expressed that the change could allow a use needing more parking than is
available. It was stated that businesses with significant parking requirements locate where rents
are lower and parking is plentiful. The City Attorney said limiting the exemption to a single type
of use could be considered a taking. Staff will report on the ability to limit uses that qualify for
the exemption. It was requested that staff submit a list of possible uses.
City Manager
Report on Negotiations regarding Public - Private Beach Parking Garage
In his October 10, 2008 memorandum, Assistant City Manager Rod Irwin provided an
update of beach parking garage negotiations.
Re: BRITTS (SURF STYLE)
Revised proposal reduces project price by approximately $4 million, based on proposed
terms: 1) City commit to self-fund Phase I garage construction; 2) City agree to purchase
additional 200 parking spaces at end of Hyatt agreement. (City Attorney review necessary); 3)
City willingness to consider “flex down” re on-site parking requirements for proposed retail
building, based on this adjacent parking facility; and 4) Fixed-price, “turnkey” proposal
establishes price of $12.3 million, plus $5 million, irrespective of actual construction costs or
land values. Revised figure brings land and construction cost generally in line with staff
estimates based upon sale comps from Mark Searcy and construction estimates from Haahs
Associations and Walker Parking.
Council Work Session 2008-10-13 7
Re: CHASE ASSEMBLAGE (DIGIOVANNI) CORONADO/ THIRD STREET (1.0 ac.)
Revised offer provides a one-acre parcel, exclusive of right-of-way, for $5 million. Staff
has analyzed the costs/benefits/disadvantages. The change expands the footprint of the
original offer from 0.8-acre but holds the purchase price constant.
Re: Istar/LUCCA PROPERTY (.98 ac.)
Purchase price of $4.5 million for 0.93-acre is in line with council $5 million “threshold”
and is offered fee simple, except for the right-of-first-refusal to purchase the TDRs (Transfer of
Development Rights) for a period of seven years at a mutually determined price. Proposal now
has seller assume responsibility for delinquent property taxes. Staff has concern with the lack
of a date certain by which to close the transaction, the terms and conditions of first refusal on
the TDRs, and the responsibility for closing costs. Staff anticipates a satisfactory resolution
could be achieved if the City Council wishes to pursue this option. The seller reported that a
Motion for Summary Judgment hearing has been scheduled for November 14, 2008, and
anticipated obtaining the property title in January 2009. This expectation assumes no delays.
There is a risk factor associated with this proposal due to the lack of title.
Mr. Irwin said a term sheet needs to be negotiated and appraisals obtained. Britt
reported that the grade of the ramp had been reduced. A seven level parking structure would
cover the parcel’s entire footprint and provide little room for plan redesign.
It was noted the Britt proposal is located west of Coronado and would provide 500
parking spaces for the lowest cost per space. Concerns were expressed that the City would be
required to pay $5 million for the additional spaces. It was felt that the City first should
determine parking needs, as it was felt that demand is insufficient for this type of investment. It
was stated that parking is inadequate for the City’s $30 million Beach Walk development.
Consensus was for staff to proceed with negotiations for the Britt site development.
Council Discussion Items
Letter from Alcalde and Fay
In his September 25, 2008, letter, Hector Alcade, of Alcade & Fay, expressed concern
regarding the City Council’s decision to issue a RFP (Request for Proposals). He said the City’s
nearly decade long relationship with his firm had yielded significant benefits. He said the City is
an important client and expressed a willingness to renegotiate the firm’s retainer while the City’s
budgetary crisis continued.
It was stated a Washington lobbyist had indicated services could be provided at a lower
cost with better performance. It was recommended that the current contract period be
shortened and require the lobbyist to provide Clearwater specific reports.
Consensus was for staff to renegotiate the cost of the current contract and report on
additional services that may be needed.
Council Work Session 2008-10-13 8
Letter from the Environmental Advisory Board
In his June 18, 2008, letter, EAB (Environment Advisory Board) Chair Flanery reviewed
board accomplishments and recommendations related to a Greenhouse Gas Inventory,
Neighborhood Community Gardens, Florida Green Building Coalition, Hazardous Household
Materials Recycling, a Sustainability Demonstration Site, and Sustainability Coordinator.
Environmental Manager Ed Chesney said the EAB did not want to lose momentum.
Department staff is insufficient to provide Sustainability Coordinator services. The EAB felt the
position would pay for it self. The City Manager said further investigation of the position and
other City priorities is necessary before a new position is created.
Other Council Action
Consensus was to schedule future afternoon Work Sessions at 1:00 p.m.
Councilmember Petersen requested reappointment to the TDC (Tourist Development
Council). Consensus was to reappoint Councilmember Petersen.
Adjourn
The Work Session adjourned at 5:26 p.m.
Council Work Session 2008-10-13 9