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06/18/2007 CITY COUNCIL WORKSESSION MINUTES CITY OF CLEARWATER June 18, 2007 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 Garry Brumback 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 FSAWWA 2007 Outstanding Class B Water Treatment Plant Award The Council recessed from 1:36 to 1:46 p.m. to meet as the Pension Trustees. Office of Management and Budget Amend the City's Fiscal Year 2006/07 Operating and Capital Improvement Budgets at Mid Year and pass Ordinances 7833-07 and 7834-07 on first reading. The Fiscal Year 2006/07 Operating and Capital Improvement Budgets were adopted in September 2006 by Ordinances 7674-06 and 7675-06. Section 2.521 of the City's Code of Ordinances requires the City Manager to prepare a quarterly report detailing income, expenditure estimates, collections, the explanation of significant variances, as well as the financial status of all capital improvement projects. The report is based on six months of activity (October, 2006 through March, 2007) in this fiscal year. The report comments on major variances, as well as documents all proposed amendments. Significant Fund amendments include: 1) General Fund - General Fund revenues and expenditure amendments reflect a net increase of $829,350. One of the major reasons for the Council Work Session 2007-06-18 1 overall General Fund expenditure increase includes the appropriation of General Fund retained earnings of $620,000 for the MSB (Municipal Services Building)/Library Hurricane Protection project. This amendment was previously approved by the City Council. Other amendments include an increase in the use of contractual services for plan and inspection review in Development Services of $110,000, an increase of inventory purchases for resale at Pier 60 for $62,000, the increase of $35,000 to the Jack Russell Stadium project for the removal of stadium seating, and a small increase of $2,350 in Public Communications related to the Beach Walk Celebration. All of these amendments are offset by related revenue increases to General Fund revenues; 2) General Fund Reserves – In order to ensure adequate reserves, the City Council’s policy reflects that General Fund unappropriated retained earnings of 8.5% of the City’s budgeted General Fund expenditures must be maintained as a reserve to guard against future emergencies. With the closing of the year-end 2006 books, and the allocation of reserves noted above, estimated General Fund reserves at mid year are approximately $19.9 million, or 16.3% of the current year’s General Fund budget, exceeding the City’s reserve policy by approximately $9.5 million. Significant amendments to other City Operating Funds are noted follows. 1) Water and Sewer Fund - At mid-year, the Water and Sewer Budget reflects an increase of $35,000 for the payout of leave benefits to the previous Public Utilities Director and Assistant Director upon their resignations. Current year fund revenues will offset this increase; 2) Gas Fund - Budget amendments to the Gas Fund reflect a decrease of almost $1.4 million primarily for decreases in the cost of fuel for resale. This is offset by a like decrease in revenues in gas sales revenue; and 3) Marine and Aviation Fund - At mid-year, the Marine and Aviation Fund recognizes an increase of $1.2 million for fuel purchases, which is offset by a like increase in anticipated revenues from gas and oil sales. Mid-year amendments to the Capital Improvement Fund reflect a decrease of $920,033, primarily due to the return of almost $1.6 million to the CRA (Community Redevelopment Agency) fund for redistribution to the new CRA projects fund. This reflects the amendments that the CRA approved in May. Project amendments include the funding of $620,000 for the MSB/Library Hurricane Protection project. These amendments include several projects totaling $183,500 for fire equipment, which is funded from salary savings within the current General Fund budget. In addition, the Beach Walk project recognizes funding from grants, developer contributions, and debt savings in the General Fund totaling $4.6 million, which will result in a decrease in next year’s bond issue for Beach Walk. Concern was expressed that the Countryside library not be reconstructed soon after money is spent on its hardening. In response to questions, Budget Director Tina Wilson reviewed City policy for one-time expenditures for planned capital projects. In regards to the contractual services in Development Services, the City contracted out rather than hire additional staff to meet temporary increased plan review activity. It was stated that reserves are used for one-time projects or emergencies, not recurring costs. Economic Development and Housing Approve an extension of the Clearwater Beach Visitor Information Center Management Agreement between the City of Clearwater and the Clearwater Regional Chamber of Commerce through September 30, 2007 to coincide with the City’s 2006-07 Fiscal Year. (consent) Council Work Session 2007-06-18 2 The City of Clearwater and the Clearwater Regional Chamber of Commerce entered into a Management Agreement to provide visitor information services at the Clearwater Beach Visitor Information Center (VIC) on July 25, 2002. The term of the agreement is five years commencing August 1, 2002 and continuing through July 31, 2007. The City owns the building located at the entrance of Pier 60 Park. The Chamber furnishes the City with quarterly reports of activities and identifies the number of clients served, cost of services, and other trends affecting the VIC. Funds received from the City are used to pay for costs and services to run an efficient and effective VIC. Excess funds are returned on a quarterly basis to the City from net profits. As the management agreement expires in July of this year, staff recommends an extension of the current management agreement through September 30, 2007, to coincide with the City's fiscal year. This length of time will allow staff to integrate these services with the Chamber's annual tourism contract. The same monthly payment schedule would apply and would increase the total five-year fee from $211,113 to $218,465, allowing for the two-month extension at $3,676 per month. The total to be added to the contract is $7,352, which will be programmed from Economic Development's Professional Services budget. In response to a question, Economic Development & Housing Director Geri Campos- Lopez said Building & Maintenance is responsible for maintenance of the VIC structure. The Visitor Information Center Management Agreement will be included in the Chamber’s annual tourism contract. Staff does not perform an annual, formal performance evaluation but does continual follow-up with the Chamber. It was requested that each capital item request identify the department responsible for overseeing maintenance. It was recommended that the City accept bids for the annual contract to ensure that the City maximizes its contribution. Staff will contact the Clearwater Beach Chamber of Commerce regarding interest in bidding for the annual contract. Financial Services Approve Actuary's Report for Retiree Health and Life Insurance Benefits for Fiscal Year Ending September 30, 2007. (consent) The Governmental Accounting Standards Board (GASB) has issued GASB Statement 45, requiring governments to accrue a liability on their financial statements for Other Post Employment Benefits (OPEB) effective with fiscal 2008. A government’s OPEB liability must be estimated via an actuarial analysis, similar to the pension plan’s liability, to be performed at least every two years. The City of Clearwater’s other post employment benefits include $1,000 of term life insurance for retirees for which the City pays the full cost. Additionally, per Florida Statutes, retirees are allowed to continue to participate in the City’s group health insurance plan. Retirees are required to pay the full group premium with no explicit contribution from the City. The ability Council Work Session 2007-06-18 3 to participate in the City’s group health insurance plan, at the average group rate, is an implicit rate subsidy, given the fact that retirees as a separate group would pay higher premium rates (due to higher medical costs of older population). The difference between a retiree’s estimated “age-adjusted premium” and the actual “subsidized” rate that he/she pays as a member of the City’s group plan is a retirement benefit that the City is now required to recognize as a liability, similar to the liability for pension benefits. For fiscal 2007, the average “age-adjusted premium” for retirees totals approximately $534/month, while the average actual premium paid by retirees via the group health insurance plan is $417/month, a difference of $117/month, or $1,398/year. This fiscal 2007 implicit rate subsidy totals approximately $450,000 for the 322 participating retirees. The actuarial valuation, prepared by PriceWaterhouseCoopers, indicates that the City’s unfunded actuarial accrued liability for OPEB as of October 1, 2006 is $21,834,600. Approximately 97.4% of this represents the medical insurance implicit rate subsidy, with the remaining 2.6% reflecting the $1,000 of term life insurance provided to retirees. The City is not required to reflect the entire unfunded actuarial accrued liability on its financial statements immediately, but is allowed to amortize the unfunded liability over a 30-year period. Consequently, the actuarially determined Annual Required Contribution (ARC) for fiscal 2007 totals $2,279,000. Of this amount, $1,016,300 reflects the “normal cost,” or the current year present value cost of the promised benefits, while the remaining $1,262,700 reflects the current year amortization of the unfunded actuarial accrued liability. The ARC of $2,279,000 is further reduced by the City’s estimated current year payment of the implicit rate subsidy. Per the actuary’s estimate, $462,300 of fiscal 2007 employer contributions will offset the ARC and result in a net OPEB obligation to be accrued on the City’s financial statements of $1,816,700 as of September 30, 2007. This liability will continue to grow over the 30-year amortization period of the $21.8 million unfunded actuarial accrued liability. The City has the option of funding all or part of the ARC with cash on an annual basis. Due to the fact that the City is providing no medical insurance benefits other than the legally required (per Florida statutes) implicit rate subsidy, City staff does not recommend funding at this time. The consequence of this “Pay-As-You-Go” basis is that there will not be monies accrued to pay the implicit rate subsidy in future years. City staff feels this is appropriate given the nature of the implicit rate subsidy and recognizes that health insurance benefits may have to be decreased in the future as employer contributions for the implicit rate subsidy increase (i.e. employee/retiree medical insurance co-pays may have to be increased, etc., to compensate as the number of retirees and related subsidies increase in future years). A concern was raised that the City would not recognize its full cost for employees if it does not fund the differential. Assistant Finance Director Jay Ravins said no Florida municipality plans to pre-fund the differential. Credit rating agencies will not penalize the City for this. Finance Director Margie Simmons said retirees now have a one-time opportunity to continue in the plan. She estimated only 20% of employees continue in the plan upon retirement. Consensus was to agenda discussion of this funding requirement at a Work Session. Parks and Recreation Council Work Session 2007-06-18 4 Approve a blanket purchase order contract to Smith Fence of Clearwater, Florida, in the amount of $300,000 for the purchase and installation of fencing at various projects throughout the City during the contract period June 21, 2007 through June 30, 2009, in accordance with Sec. 2.564 (1)(d), Code of Ordinances – Pinellas County Purchasing Cooperative Bid 045-316-B, and authorize appropriate officials to execute same. (consent) A blanket purchase order in the amount of $300,000 is being requested. The City is not obligated to use the entire amount being requested. Fencing will be installed as replacement for deteriorated fencing and for new installations at various projects throughout the City. Some of the projects may include, but not be limited to, Frank Tack, Norton ball fields, Eddie C. Moore Soccer, and Jack Russell Stadium. The Parks & Recreation Department has an annual capital improvement project for the replacement of worn out and damaged fencing, and also utilizes operating funds and other individual CIP’s for projects that require the installation of new fencing. The City is using bids solicited and approved by Pinellas County regarding fence installation (Pinellas County Purchasing Cooperative Bid 045-316-B). In response to a question, Parks & Recreation Director Kevin Dunbar said staff will report on the scheduled date for replacing City cemetery fencing. Approve renewal of a 15-year License Agreement from July 1, 2007 – June 30, 2022, between the City of Clearwater and the Clearwater Historical Society, for the purpose of providing a permanent location for the historical Plumb House and authorize the appropriate officials to execute same. (consent) The City Council approved a License Agreement between the Clearwater Historical Society (Society) and the Clearwater Neighborhood Housing Services Inc. (CNHS) in 1983 for the use of City property at Ed Wright Park for the location of the historic Plumb House. In June 1992, CNHS no longer desired to continue in the Agreement but the Society and the City wanted to continue with a new 15-year agreement, which was approved and ends on June 30, 2007. The Plumb House is a historical landmark, which has been listed as a historical house with the Department of State, Division of Archives, History and Records Management on the State of Florida Master Site file. The Society has preserved the home and kept it as a historical museum for the public to enjoy and learn from. Both the Society and City staff desire to continue the relationship that was started back in 1983 with a 15-year renewal of the License Agreement under the same terms and conditions, with the minor exception of increasing General Liability Insurance from $300,000 to $500,000; naming the City as additional insured and clarifying a section on where members could park. The Society would continue to pay for the maintenance and upkeep of the Plumb House and pay for any day-to-day costs associated with operating the museum. The City would continue to provide landscape maintenance around and adjacent to the House. The City provides no additional funding for the Society. Concern was expressed that the house is poorly maintained. Discussion ensued regarding City efforts to address vandalism and loitering at this location. It was noted the Council Work Session 2007-06-18 5 Historical Society does not have a lot of resources and doing the best it can to preserve Clearwater’s history. Staff will correct its current charge to the Historical Society for reclaimed water availability. Police Approve acceptance of an FY 2005 Economic Development Initiative (EDI) - Special Projects grant in the amount of $248,000 from the U.S. Department of Housing and Urban Development (HUD), authorize the appropriate officials to execute same and approve the transfer of $446,820 in grant funds to the Clearwater Homeless Intervention Project (CHIP). (consent) The Police Department has received official notification from HUD that the EDI – Special Projects grant has been awarded. The Police Department is now seeking City Council approval to accept the grant. The $248,000 grant will be utilized for costs associated with the construction of transitional housing and a police substation at the former CarPro Auto Body Repair & Restoration property at 1359 Cleveland Street near the Clearwater Homeless Intervention Project (CHIP) homeless emergency shelter. Annual operating costs for the police substation are projected to be less than $10,000. There will be no additional personnel associated with this project or the new substation. Special Project 181-99878 has been established to account for the grant expenditures. There is no match required for this grant. Additionally, the Police Department was awarded and accepted a HUD grant in the amount of $198,820 on January 4, 2006, to be used for the purchase of the CarPro property. Special Project 181-99278 was set up to account for those grant expenditures. No action has been taken on this grant due to the fact that the Police Department was waiting for the second grant to be awarded. City Council approval is now requested to transfer the grant funds from both of these accounts, for a grand total of $446,820, to CHIP so that that agency may purchase the property and finance the construction project. In response to questions, Police Chief Sid Klein said the proposal does not represent the entire CHIP campus plan. The project includes eight transitional housing units on the second floor. Police Chief Klein was confident that CHIP will obtain sufficient grants to fund the remainder of the $1.8 million project. Discussion ensued. It was stated there is neighborhood opposition to proposed project location. Concern was expressed that the East Gateway cannot be revitalized if CHIP remains in the area. It was stated Brownfields money will be used to clean the property’s underlying ground. If CHIP relocates, the sales proceeds would be used to pay back a portion of the grant. Engineering Award a contract for the North Greenwood Neighborhood Traffic Calming project (01-0029-EN) to MTM Contractors of Clearwater, Florida, in the amount of $2,114,271.73, which is the lowest Council Work Session 2007-06-18 6 responsible bid received in accordance with plans and specifications and authorize the appropriate officials to execute same. (consent) This agenda item provides for construction of street features in the North Greenwood Community, requested by the community through earlier planning documents (North Greenwood Commercial District & Economic Development Opportunities, 9/94, Trent Green, Florida Center for Community Design + Research; North Greenwood Commercial District General Development Plan, 9/98; Greenwood Neighborhood Study, Carr Smith Corradino; Greenwood Neighborhood Initiatives, Carr Smith Corradino, 11/98). This project involves construction of traffic calming features in the North Greenwood Community envisioned by community residents at the North Greenwood Traffic Calming Charrette and supported by a petition signed by owners of approximately 65% of the parcels in the project area. The engineering plans were reviewed for faithfulness to the charrette vision by residents belonging to the North Greenwood Traffic Calming Tech Team at the 30, 60, 90 and 100% milestones. Traffic calming features include construction of a landscaped median on Palmetto Street, Fulton Street and Fairmont Avenue, corner features at Plaza Park, and speed tables on Tangerine, Engman and LaSalle streets, as well as a modern roundabout at the intersection of Fairmont & Fulton. This project also includes safety improvements at two intersections, to be paid for out of the Intersection Improvement Fund: 1) intersection of Betty Lane & Engman Street and 2) intersection of Betty Lane and CSX Railroad. Work will commence upon award and execution of the contract and will be completed within 240 calendar days. Ongoing maintenance of the landscaping elements of the project will be provided by the Parks & Recreation Department. Street signage and pavement markings will be maintained by Traffic Operations. Staff will report on related maintenance costs and if the landscaping is designed to reduced standards. Traffic Operations Manager Paul Bertels will review transportation impact fees and other funding sources with new Councilmembers. Planning Approve the Annexation, Initial Land Use Plan Designation of Industrial Limited (IL) and Initial Zoning Atlas Designation of Industrial, Research and Technology (IRT) District for 2000 Calumet Street (Lot 8, Clearwater Industrial Park, Sec. 29-15); and Pass Ordinances 7827-07, 7828-07 and 7829-07 on first reading. (ANX2007-03009) Assistant Planning Director Gina Clayton reported that this item had been withdrawn. City Manager Verbal Reports Roadside Memorials Mr. Quillen reviewed State and County policies for roadside memorials. The City does not have a policy. Staff does not support installing roadside memorials on rights-of-way in residential areas without approval by abutting property owners and recommend limiting roadside memorials to one year, with one one-year extension. Council Work Session 2007-06-18 7 Discussion ensued. Consensus was for families to pay costs for the City to fabricate and install roadside memorials, which are to be similar in design to County and State memorials. Memorials can be installed only in proximity to where the fatal accident occurred. One year limits were supported, except in residential areas where abutting property owner permission would be required and a shorter time limit enforced. Staff will draft a policy for Council approval at a future meeting. Outstanding Gas Revenue Bonds Ms. Simmons said due to market conditions, staff has called off the bond sale. Other Council Action Consider appointing a Councilmember to the Suncoast League of Cities Board. Ms. Goudeau reported the Suncoast League of Cities Board of Directors is requesting a representative from each municipality serve on its board. She requested that a representative be appointed on Wednesday. Traffic Calming on Stewart Blvd. In Morningside - Hibbard The City Manager requested staff to identify interim steps that could be taken to calm traffic in Morningside/Meadows before the formal project occurs. Staff will poll residents regarding support of temporary speed tables that would not redirect traffic through other parts of the neighborhood. Mayor will report on a meeting he is having with the neighborhood. Mayor Hibbard reported FDOT (Florida Department of Transportation) is reviewing changes on the Memorial Causeway Bridge to increase safety. FDOT also will determine how to address weeds in the medians and touchup tire marks. Mayor Hibbard requested that the Council’s PSTA (Pinellas Suncoast Transit Authority) representative insist that the new PSTA Executive Director understand transit issues, not just buses. Councilmember Cretekos requested that staff answer at meetings questions posed during previous Citizens to be Heard. Adjourn The meeting adjourned at 4:30 p.m. Council Work Session 2007-06-18 8