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04/15/1991 SPECIAL MEETING Long Center Lease April 15, 1991 The City Commission of the City of Clearwater met at City Hall with the following members present: Rita Garvey Mayor/Commissioner Richard Fitzgerald Vice-Mayor/Commissioner Lee Regulski Commissioner William Nunamaker Commissioner Sue Berfield Commissioner Also present were: Michael J. Wright City Manager M. A. Galbraith, Jr. City Attorney Cynthia E. Goudeau City Clerk A special meeting was called to discuss the lease with Pinellas Center, Inc. a/k/a The Long Center (The Center Foundation). The meeting was called to order at 9:02 a.m. in the Commission Chambers. The City Manager has been negotiating with Pinellas Center, Inc. for several months to develop a revised lease for the property now known as the Long Center, formerly called the Center Foundation.. The original lease is with Clearwater Youth Recreation Center Inc.. The lease for consideration is essentially the same as that submitted on January 3, 1991, with two notable exceptions. The cost distribution formula has been significantly revised and all references to the YWCA has been removed from the document as they are no longer participating. The cost distribution formula is essentially the same formula upon which The Center based its current and first budget. The City provided the Center with an optimistic user hour requirement that when divided into the proposed budget requirement produced a user hour rate of $.50. Office rentals are a separate budget item for the same period. The only change the City would make to this cost distribution formula is to add language that establishes an "expense ceiling" to protect the City's general fund from rapidly escalating budgets in future years. The Center based its budget on projected hours of programming, whereas the City has been paying based on actual participant programming hours. The difference is a shortfall of approximately $55,000 in revenues to the Center. The Center is requesting payment from the City to cover this shortfall. Since the signing of the 1986 lease, the Center has reorganized its operations and formed a second corporation, the Pinellas Center, Inc. which is the current operating arm of the Center. The existing corporation, Clearwater Youth Recreation Center, Inc. has become essentially a fund raising organization. Both corporations will have 18 members of which the City will have two members on each board. The proposed lease also formalizes the inclusion of Safety Harbor as a sponsoring agency. If the revised lease is acceptable the following language is proposed to be added to the end of line 11, Article 10, following the phrase "operating requirements of the Project" ", subject to the appropriation of funds in the operating budget of the City for such purposes in each subsequent fiscal year of the City; provided, that the City shall not be obligated to appropriate ad valorem tax revenues for such purposes." This language satisfies the need for an expense ceiling because it limits the City's liability to the amount of money appropriated in its annual budget. It also includes two limitations which are, in the City Attorney's opinion, derived from the Florida constitution. the City Commission cannot enter into an agreement that binds future Commissions to payments that are not included in the annual budget. Also, an obligation to pay from ad valorem tax revenues may be construed as a "bond" for which referendum approval may be required. It is also recommended that the payment of $55,228 for user charges based on the assessment request from the facility from July 1, 1990 to February 28, 1991 and payment of $9,900 per month for use of the facility from March 1, 1991 to September 30, 1991, plus any payments for special event rental of the pool or gymnasium be authorized. The City has paid $13,228 for actual rental and user fees from July 1, 1990 through January 30, 1991. A budget amendment will be needed to cover an $11,289 shortfall. Additional revenues from programs held at the Center should be sufficient to offset the major portion of this shortfall. The City Manager reviewed the proposed lease. He indicated that charges based on actual hours of use would begin in October of 1991. Staff was complimented on developing a better lease than had first been proposed. Concerns were expressed regarding clarifying which board was the subject of the lease. The City Attorney indicated this would be clarified. It was requested that the additional language being proposed be further amplified by adding the City Attorney's opinion regarding the limitations provided for in the Florida Constitution. Discussion ensued regarding whether or not this language should be added. It was the consensus to do so. A question was raised regarding what would happen if the Commission appropriated less than was requested. It was reported the City would have to curtail its use of the facility. It will be the Center's responsibility to convince the Commission of the need to appropriate the funds requested. In response to questions the City Attorney indicated the added language previously discussed would apply to all subsections of Article 10. It was requested that the wording "provided that the City is not obligated to any minimum hours of usage." also be added to Article 10. Discussion ensued regarding the impact of this language. It was indicated that if the City did not fund the Center it would not be able to use it. Concern was expressed that this language might be interpreted as non-support for the Center. Consensus was to add the language. Discussion ensued regarding contributions made to the Foundation and whether or not they would be included in the endowment fund for the operation of the Center. Concerns were expressed that if the Foundation ceased to exist the endowment goes to another charity. The City Attorney indicated language regarding the contributions from the Foundation would be clarified. Questions were raised regarding the term of the lease and the deletion of the requirement for a referendum to extend the lease taking place during the first 10 years of the lease. The City Attorney explained that rather than having a "sliding" l year lease the term is now set at 15 years. The referendum is required to be held and can be any time during the term of the lease. It was requested the phrase "use best efforts" be deleted from the language regarding the referendum. Consensus was to do so. A question was raised regarding the number of representatives Clearwater would have on the Board. It was indicated this could not be changed due to agreements with other participating agencies. Staff felt it was more important to protect the City regarding its financial obligations. David Stone, Chairman of the Center Foundation, reviewed the history of the Foundation. He stated their purpose is to collect funds for the operation of the Center. He indicated some endowments are outright gifts while some may have restrictions placed upon them. He stated the language suggested by the City Manager provided the protection needed for the City. In response to a question he indicated the City would approve the Center's budget through this provision. Concern was expressed regarding the change in the language regarding the endowment fund being to "subsidize" operations rather than being "sufficient" to cover operation and maintenance. It was the consensus to change the language to "sufficient" combining the old and new language. It was indicated the Commission wanted to see the changes before formally approving the lease. Consensus was to add the lease to the Agenda of the April 18, 1991 meeting. It was suggested the Commission take action regarding the funding request. Commissioner Nunamaker moved to authorize payment of $55,228 and authorize the monthly payment of $9,900 in user charges for the use of the facility beginning March 1, 1991 for the remainder of the current fiscal year and that the appropriate officials be authorized to execute same. The motion was duly seconded. Discussion ensued regarding the fees and how they were calculated. In response to a question it was reported that Safety Harbor is paying $2,500 a month plus rent. Upon the vote being taken the Motion carried unanimously. The changes proposed to the lease were reviewed. It was the consensus to add approval of the lease with the noted changes to the agenda for April 18,1991. The meeting adjourned at 10:26 a.m.