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08/10/1993 CITY COMMISSION SPECIAL WORKSESSION BUDGET SESSION August 10, 1993 The City Commission of the City of Clearwater met at the Countryside Library on Tuesday, August 10, 1993, with the following members present: Rita Garvey Mayor/Commissioner Arthur X. Deegan, II Vice-Mayor/Commissioner Richard Fitzgerald Commissioner Sue Berfield Commissioner Fred A. Thomas Commissioner Also present: Michael J. Wright City Manager Kathy S. Rice Deputy City Manager Elizabeth Deptula Assistant City Manager Tina Wilson Budget Manager Cynthia E. Goudeau City Clerk The meeting was called to order at 9:10 a.m. ITEM #2 - Role of the Budget Advisory Committee The Commission requested discussion of the role the Budget Advisory Committee (BAC) should be playing. Concerns have been expressed that the BAC was not getting the proposed budget in a timely manner in order to make recommendations to the Commission. Some suggestion was made the BAC should be reviewing the budget on an on-going basis in order to provide input. The City Manager pointed out that this year the budget was later than normal due to changes in the format being directed by the Commission. Further discussion ensued with it being indicated the BAC was also concerned because it is receiving no formal notification of action regarding its recommendations. Commissioner Thomas expressed concern the board was too small and too much was expected of this five member committee. He thought additional expertise in budgeting and financial affairs is needed on the committee. The City Manager pointed out he had tried to lead the BAC into being more project oriented. As an example, they have asked the BAC to look at issues such as; take home police car policy, new building financing, privatization of lab work, etc. Further discussion ensued with the majority agreeing five members are sufficient. There was general agreement with the City Manager's effort to have the committee be project oriented but there was also a desire to have them reviewing the budget as an on-going process. Concerns were expressed that not all BAC members were present at today's meeting and there needed to be a discussion with them regarding what they saw their role to be. Consensus was to end discussion for today and to schedule another meeting at which all BAC members could be present. It was agreed to try to set this meeting for August 20th or August 31st. Item #3 - Gas Strategic Plan Chuck Warrington, Gas System Managing Director, stated the population of North Pinellas County is 410,000. By the end of Fiscal Year 1992/93 Clearwater Gas System customers should number 11,800. These customer are divided among residential, commercial, interruptible and propane categories. The ten largest customer of the system provide fifteen percent of the revenues. Commissioner Thomas questioned why the projected growth rate remained constant when a $24,000,000 investment is being requested. Mr. Warrington indicated they tried to be conservative in the projections and only projected main line extensions and the most likely customers to connect. Mr. Warrington reported while 82% of the customers are residential, they only generate 26% of the revenues. Non-residential customer represent 17.2% of the total, generating 59.9% of the revenue. The interruptible customers generate 14% of the revenues. In response to a question from Commissioner Thomas, Mr. Warrington indicated the predominant area in the proposed Pasco County expansion will be in the non-residential category. Commissioner Thomas requested clarification regarding the interruptible category. Mr. Warrington indicated an interruptible customer gets a lower rate by agreeing to go to a back-up energy source if the gas system needs the capacity in an emergency situation or due to lack of resource availability. Mr. Warrington indicated 59.9% of the system's customers are within the Clearwater City limits, 40.9% are outside; 50% of the revenue is from non-Clearwater customers. Only 5.1% of the potential customers in the existing service area use gas. He felt there should be no reason this customer base could not be expanded within the system's current resources. Revenues are affected by the number of heating vs. cooling days; mild winters result in less revenue. However, the use of gas air conditioning is growing. The Clearwater Gas System is served by Florida Gas Transmission (FGT) and has a capacity of gas reserved through this agency. The Gas System pays FGT a demand charge plus a therm consumption rate. Only 70% of the system's reserved capacity was used this past year. The system's employee base has been fairly stable the last five years. When the System expanded into Tarpon Springs the analysis done was not as good as it should have been, and resulted in two sales people covering twice as much territory. The current employee/customer ratio is 1/174. Mr. Warrington referenced the meter change out program, indicating it is needed in order to assure the accuracy of the meters. Due to the change out program the System's gas loss rate is negligible. In response to questions it was indicated the change out program replaces meters every 10 years, has resulted in the recovery of $300,000 annually and costs $60,000. Mr. Warrington indicated there are two ways to look at a budget; cash basis or accrual basis. Two years ago, on a cash basis the gas system lost money, however, projections for future years resulted in $6.6 million more in revenue than expenditures. On an accrual basis, two years ago the system made a little money; this year will generate $1.7 million and $6.1 million by the end of the decade. Mr. Warrington reviewed the Clearwater Gas System 1993-2000 Strategic Plan dated July 19, 1993. The key approval issues for the Commission are: 1)Approve the 93/94 Clearwater Gas System Budget; 2)Approve in concept $25 million in bonding requirements over the next seven years and, in specific, a bond issue to net $12 million for FY 93/94 which is designed to cover the first two years of capital expansion requirements and 3) Approve in concept a levelized interfund contribution plan regarding the gas funds contributions to the general fund. The meeting recessed from 11:35 to 11:46 a.m.. In response to a question from Mayor Garvey, Mr. Warrington indicated there would be a 7 year return on investment. Mr. Warrington indicated the key action items to pursue the proposed strategic plan will be: initiate the bond issue; retain an attorney to work with the Pasco County agencies; enter into interlocal agreements with the Pasco County agencies; retain a Pasco County Engineering consultant to finalize route plans, look at environmental impacts and obtain State DOT permitting along the state road rights of way; order new vehicles ; select a marketing director and sales people and order computer hardware and software. The City Manager indicated the Commission needs to make a decision regarding the Pasco County expansion portion of the plan. He stated sooner or later Peoples Gas will go into Pasco County and the Public Service Commission will not allow two pipelines on the same road. If the Clearwater Gas System proceeds to install the "backbone" in the proposed expansion area that would become its territory. He stated once gas air conditioning technology reaches the point where use of residential units is practical there will be a quantum leap in gas service. Commissioner Thomas requested information regarding how Clearwater's projections compare to Peoples Gas projections. Commissioner Thomas questioned what was being done to increase the customer base in "our own backyard." Mr. Warrington indicated that was covered by strategy two, with an initial goal of increasing the 5% customer base to 8 or 9%. The City Manager stated the current system provides service to 80% of the possible commercial customers; to add to the residential customer base is slow and expensive. Commissioner Thomas questioned if residential customers will be pursued in the Pasco expansion. Mr. Warrington indicated the initial thrust will be for commercial customers because until that base is established it is not economically feasible to do residential. Commissioner Thomas questioned if five years from now residential gas air conditioning is on line would it then be economically feasible to install gas lines in Countryside and other residential areas. Mr. Warrington indicated he believed so. Commissioner Thomas referenced a press report that indicated the Pasco County Administrator resented Clearwater coming into that county and questioned if the name of the system should be changed. Mr. Warrington indicated this had been discussed but it was felt there was a long history of the Clearwater Gas System. He suggested using the CGS initials instead. Commissioner Deegan questioned if the Clearwater Gas System could operate in Pasco without a franchise. Mr. Warrington indicated bond counsel believes there should be an interlocal agreement. Mr. Wright indicated it was believed that legally the gas lines could be placed on state roads without a franchise, county roads would require a franchise. He stated however he believed it would be bad business to operate in Pasco without agreements with those governmental agencies. Mr. Warrington indicated the initial action will be, if approved by the Commission, to talk to the agencies involved and to work toward a franchise or interlocal agreement, whichever the other party desired. Commissioner Deegan requested the word "maximize" in the Mission Statement be changed to "optimize." He felt this would be more in keeping with being competitive and would help on the political issues. Commissioner Deegan questioned what guidelines were being used in the rate study currently underway. Mr. Warrington indicated a cost to service basis and comparisons with others. Commissioner Fitzgerald questioned if the Pinellas expansion would occur if we are unable to go into Pasco County. Mr. Warrington indicated it would. Mr. Wright agreed the expansion of residential service in Pinellas County would go forward whether the Pasco expansion is pursued or not. Commissioner Fitzgerald urged caution in pursuing the expansion. He stated it was important to know what the competition and risk is. The City Manager recommend the following four strategies be pursued: 1) Continue the existing level of gas service operations in Pinellas County; 2) Accelerate Existing gas services in Pinellas County; 3) Expand Existing gas services into Pasco County and 4) Develop new gas markets for Pinellas and Pasco Counties. Commissioner Thomas expressed concern that the "spine" to be installed was not in the customer area. Mr. Wright indicated there will be commercial customers in that area. Mr. Warrington elaborated that the 300 customers along the "spine" will represent the bulk of the initial revenue from the Pasco expansion. Mr. Wright further reported the "spine" will "carry the freight" for the remainder of the expansion. Commissioner Deegan noted a 15% return on investment is projected if the number of customers projected is attained. Mr. Wright reiterated that those numbers are felt to be conservative. In response to a question from Commissioner Deegan, Mr. Warrington indicated the revenue projections are based on the rate remaining the same. Commissioner Deegan questioned the plan of action should the Commission give its approval. Mr. Wright indicated negotiations with the local governments would begin this week. Work would begin on developing the necessary bond issue which will be validated. Commissioner Thomas returned to the issue of changing the name of the Clearwater Gas System. Mr. Warrington indicated that while he had liked the idea at first he had cooled off to it due to the history of the gas system and the fact that a name change would simply be a facade. Commissioner Deegan supported going to CGS as a transition. Commissioner Berfield expressed concern regarding expanding into Pasco when she has heard complaints that the current area is not being served adequately. Mr. Warrington replied that there is a need for additional staff which is included in the strategic plan. She questioned which county was being given priority. Mr. Warrington indicated 3 additional sales people are being added for Pinellas County and only 2 for Pasco. Mr. Wright pointed out that the strategic plan does call for an accelerated effort in Pinellas. He reiterated that currently there is more work being requested than current forces can handle. In response to questions it was indicated market studies are needed on residential gas air conditioning and LP vehicles. Commissioner Berfield questioned if there was any data on the success of the Municipal Gas organization. The City Manager indicated Clearwater Gas personnel are very much involved in this organization and guiding the purchasing of gas. Commissioner Deegan questioned if the bond issue would still be pursued if approval was not obtained for the Pasco expansion. Mr. Warrington indicated bonds would still be needed for the Pinellas expansion. Not all of the bonds would be issued at one time, two year increments are anticipated. Commissioner Deegan questioned other sources of funding. Mr. Wright indicated this issue stands alone as gas revenues are being used to justify the bonds. Commissioner Deegan questioned if "all hell breaks loose" and there are no revenues, would the debt fall to the City? The City Manager indicated it would. Commissioner Deegan complemented staff indicating he believed this to be a fantastic business plan. He stated he would be in favor of the expansion. Mayor Garvey agreed. Commissioner Thomas expressed concern that in the charts provided revenue projections are flat from 1994 on. Mr. Warrington indicated the chart projected the number of new customers not revenue. Revenue projections show a steady growth. The City Manager indicated if the Commission endorsed the plan there was a lot of work to be done. He requested the Commission vote to endorse the four strategies and staff would begin negotiations for the franchises and/or interlocal agreements. Commissioner Berfield questioned if equipment would be purchased. Mr. Wright indicated it may be ordered for those programs not included in the Pasco expansion. Commissioner Thomas wanted to make sure goals and performance levels are established. Mr. Warrington agreed. Commissioner Thomas moved to accept the strategic plan as presented including strategies 1 through 4. The motion was duly seconded and carried unanimously. The meeting recessed from 1:14 p.m. to 2:15 p.m. ITEM #4 - Capital Improvement Project Budget The first item to be discussed was the computer system for the Police Department. The City Manager indicated this cost is to be determined as a study is being done. Commissioner Thomas questioned when they would look at the computerization of the City as a whole. Mr. Wright indicated there would be a presentation Monday by CIS that will answer alot of the computer questions. He stated this budget includes minimal computer needs. A question was raised regarding shouldn't the debt service for the capital equipment be in the CIP. It was agreed to add this back in. Captain Egger indicated a RFP for a consultant has been issued and the final numbers are not known. In response to a question regarding for what the proposals are being sought, Captain Egger indicated it was to study the entire Police Department system. The $1.4 million in the budget is an estimate. The City Manager pointed out there is $48,000 in the budget for a portable classroom. He stated there has been some discussion regarding a new police facility and that funds will be needed no matter what is decided. He recommended these funds be left in at this time. The City Manager indicated discussions regarding vehicles for code enforcement would be delayed. In response to a question, Chief Klein indicated more time is needed to thoroughly study the take home car issue. Further discussion ensued regarding the need to bring forward a report regarding take home cars. It was also stated this was being addressed by the BAC. Commissioner Deegan requested that included in the information provided be an evaluation of the assignment of two officers per vehicle which is currently under way. Commissioner Thomas asked that costs for preparing for a new police building be included in the budget. Regarding a CIP for a microwave radio link, Chief Klein indicated a new police building would address this issue. Commissioner Thomas expressed concern that this should be something that is addressed immediately. Chief Klein indicated Bill Baird, General Services Director, was working on a suggested solution. In the Fire Department, there is an on-going CIP for refurbishment of equipment. In response to a question, Bob Lockwood, Administrative Support Officer in the Fire Department, indicated every year unforeseen things come up that must be refurbished. He stated if the money is not used, it is moved forward. Commissioner Thomas raised a question regarding CIP's for emergency medical services. Mr. Lockwood indicated capital equipment is covered and there is a ten year contract required in the CIP. Commissioner Thomas raised questions regarding if the Commission should decide to opt out of EMS, what additional equipment would be needed. Chief Davidson indicated that transportation units would be needed. Mayor Garvey pointed out the number of fire fighters would have to be increased. Commissioner Thomas pressed this issue. Mr. Lockwood indicated 6 units under contract with the County would need to be made into ambulances and currently the City uses fire fighters in a dual capacity. If the City starts its own transport, it would take away from the fire fighters' abilities. Mr. Lockwood expressed his opinion that if the City was to get out of EMS, it would be shooting itself in the foot. Mr. Wright pointed out that 9 out of 10 calls are for EMS service. In response to a question, Mr. Lockwood indicated the County gives the City $2.2 million and provides a medical director and all medical supplies. Further discussion ensued regarding the EMS system. Commissioner Thomas requested that for the next year, if the legal issue is resolved, he wanted to see an analysis of how to provide the best, most cost effective EMS service to the City of Clearwater. The next topic was Transportation CIP's. Discussion ensued regarding proposed widening of Highland Avenue. Concerns were expressed that as Keene Road is widened, the need for improvements on Highland Avenue may be less. It was agreed this should be looked at. Consensus was to leave the Highland Avenue project in the budget as it is for now, but to look at less of a widening project with an answer to be provided within 30 days. It was stated perhaps a policy statement should be developed that would provide for review of impact where other road work is being done, thereby delay some of the City's road work. It was indicated that the Drew Street widening was still the number one project after the completion of the bridge. Commissioner Deegan pointed out in the City's comprehensive plan it states at no time will more than 20% of the roads or the underdrain be rated as poor. In response to a question, Mr. Baker indicated the City does have standards and they are reviewed. In response to a question regarding Court Street, Mr. Baker indicated there is a project to improve and resurface it. Regarding the CIP for unpaved streets, Terry Jennings of the Public Works Department, indicated there is a survey to identify right-of-ways that are unopened versus unimproved. Regarding sidewalks, Commissioner Deegan questioned why there was a jump in the funding in 1997 and 1998. Tina Wilson, Budget Manager, indicated this was in a Penny for Pinellas project at that time. Regarding the bike trails, Mr. Wright pointed out the bike trail to the Long Center has been removed as staff could not find a way to connect it with the Pinellas Trail. In response to a question regarding putting sidewalks with markings, it was indicated this was not to be done. Regarding the CIP for ADA intersection improvements, it was indicated some of this has been delayed due to waiting for the Department of Transportation to set standards regarding how to treat the surface for the sight impaired. In response to a question, Mr. Wright indicated this is only ADA improvements for intersections. Mr. Wright reported PSTA is looking at the bus accesses. The meeting recessed from 4:15 p.m. to 4:25 p.m. Discussion ensued regarding changes to the Alternate 19 route. It was indicated a PD&E study is being done by the FDOT. Discussion ensued regarding stormwater CIP's. Concerns were raised regarding the Mid-Pinellas Watershed Plan taking three years to complete. It was indicated that sampling is being done now to determine the pollution load. SWFWMD has been asked for $1.3 million to help fund this project. A letter of agreement has been reviewed. Mr. Baker indicated the City is putting together a group of agencies to study this plan. Mr. Wright pointed out funds are being built up in order to spend on the projects outlined once the plan is developed. Regarding Habitat Restoration, Commissioner Thomas recommended looking at all land capable of supporting mangroves in Clearwater Bay. Concerns were expressed regarding mangroves being planted where there would block the view. It was indicated that when the Commission directed staff to remove vegetation along the causeway, it was to remove the vegetation except the mangroves. In response to questions regarding the Stevenson's Creek project, the City Manager indicated it was an existing project with $2.9 million. Permitting will be sought after the Clearwater Pass Bridge. Regarding tank removal, it was indicated the City is putting in new tanks to serve generators but the new tanks have protection devices. Regarding backflow prevention devices, Commissioner Thomas expressed concerns regarding their appearance and questioned if they had to be above ground. It was stated some are required to be above ground but where they can, they are placed under ground if the resident pays the difference. It was indicated the devices are required. The brackish water supply study was discussed with it being indicated the report has not identified a sufficient source of brackish water. A question was raised whether anything could be done to identify new sources of water. Mr. Baker indicated the City could look for new wells. Commissioner Deegan questioned if the City was trying to find a back up source. Gardner Smith indicated the City was looking for back up and protection. Regarding a project to replace the pump station at Morton Plant Hospital, Commissioner Thomas questioned how the City was covering its cost because the hospital is getting bigger and bigger. The City Manager indicated impact fees are used. In response to a question, the City Manager indicated the Solid Waste Complex will be placed on the Campbell property. Regarding projects for the Parks and Recreation Department, Commissioner Thomas questioned if the tennis courts across from the Maas Brothers property were to be moved. The City Manager indicated a decision had been made not to proceed until decisions are finalized regarding City Hall and Maas Brothers. Consensus was to move some of the park purchases out as far as they would go to the 1998-1999 fiscal year. Regarding the construction of the Countryside Community Center, Commissioner Deegan questioned how the figure of $1.2 million had been reached as he stated he had voted against this as there had been no detail. Mr. Wilson indicated a RFP will be done soon for the architect. Commissioner Deegan stated he did not think there was a need for a full gymnasium. The City Manager stated the minutes would be reviewed to see what had been approved. Regarding improvements to State Street Park, Commissioner Berfield stated she thought that was to be left in a natural state. Mr. Wilson indicated the back acreage will be left alone. The City Manager reported regarding Jack Russell Stadium improvements that the restrooms and the Press Box need to meet ADA requirements. Commissioner Thomas requested better landscaping in the parking lot. The City Manager indicated there was a possibility an elevator will be required for the Press Box. Clearwater Beach Improvement Projects were discussed with it being indicated originally concepts had been discussed for a boardwalk, etc. Since that time, $400,000 had been transferred for the renovations of Clearwater Beach Recreation Center. Commissioner Thomas questioned if a wider concrete sidewalk along the front of the parking lot had ever been considered. Mr. Wilson indicated the Police Department had looked at taking the sidewalk off the street and putting it along the sand wall. Commissioner Thomas expressed concerns that many people can not walk on the sand. Commissioner Berfield pointed out many people were not in favor of the boardwalk project and therefore it was killed. She requested a report regarding what was going on along Mandalay Avenue. Mr. Wilson will check with the Public Works Department. In response to a question, the City Manager stated some suggested projects are; a parking redevelopment plan, beautification, and a fix up of areas outside of the Alexander property. Discussion ensued regarding the dunes that are growing and causing problems with sand migration. Staff is to check if the dunes can be relocated. Projects in the Marine Department include the Island Estates Marina, which is in the permitting process. Commissioner Thomas questioned if there were plans to put in fishing piers as some are being removed. Discussion ensued regarding the need for fishing piers. It was the consensus that staff would provide a report as to what fishing areas are currently available to the public. Regarding the Beach Guard Building Renovations, Commissioner Deegan questioned why ADA requirements would have to be met if this is a lifeguard station. Mr. Held indicated it may be necessary to bring people in for treatment. Regarding a CIP for a new Main Library, concerns were expressed that the Commission had not approved a new main library. The text will be rewritten. The City Manager indicated a structural study is being done on the current building. Discussion regarding the need for a new or renovated Library will be agendaed sometime in the next year. CIP's in the garage of $1,470,000 covers alot of equipment. A question was raised regarding whether an answer had been received regarding poor maintenance for the air conditioner in the Utility Building. Mr. Wright indicated this has been resolved and the answers will be provided to the Commission. Regarding a project for a geographic information system, the City Manager stated he had reservations regarding this project. It was the consensus of the Commission to move this project to Fiscal Year 1995-96. The Commission agreed to talk about airpark improvements at a later date. The meeting adjourned at 6:09 p.m.