City Council Deliberates Approval of Construction for Downtown Boat Slips
By Frank Dame
On March 13th of this year the citizens of Clearwater approved a referendum allowing boat slips to be built along the downtown waterfront. Subsequent to approval, the city began to work on the "Design Build" phase of the project. A request for proposal produced three bidders and two qualified. The qualifying bidders were then ranked based on the criteria outlined in the RFP. Misener Marine Construction, Inc. was ranked highest of the respondents.
In a Council Work Session held on Monday, council members discussed possible approval for construction of 132 boat slips. The original estimate of costs for the project was $10,249,718. But, because of escalating prices for commodities such as copper for wiring, transportation, concrete and steel costs, additional electric demands for larger boats, beefing up the wave attenuators on the southwest side of the project, and some additional upland improvements, the total cost for the project increased to $12,972,350.
In discussing the increased costs, Councilmember Paul Gibson stated he was disappointed that the consultant on the project, Wade Trim, did not anticipate some of these costs. While it is fair to say that no-one could have predicted the unusually high commodity prices and fuel increases over the past couple of years, the additional electrical demand required by larger vessels should have been anticipated. Gibson also reiterated his concern on the revenue side stating with higher fuel prices, there are less people boating and the $15.50 per foot anticipated for dock rent maybe more than the city could actually obtain. Councilmember John Doran observed that fuel prices for transportation have increased almost 100-percent over the past year and that the wave attenuators are coming from Finland. Mayor Frank Hibbard stated that while he was a major proponent of the boat slips, without a practical way of covering this short fall, he would not drive the city "over the cliff" to build out the project. However, Mayor Hibbard acknowledged that if the project did not move forward now, costs would continue to escalate and likely would make funding it in the future less practical. He cited the Memorial Causeway Bridge as an example. Some thought the $68 million paid for the bridge was too much but estimates today are it would likely cost $140 million. He also commented on the intrinsic value of the boat slips to downtown's redevelopment that could not be measured.
In discussing ways the city could make up the cost variance, Margie Simmons, the city's Finance Director, offered that the CRA is willing to contribute another $1 million in addition to their original $500 thousand contribution as they believe this project is vital to the downtown revitalization. Also, not included in the original revenue estimates is a $1,236,097 federal grant that the city will be receiving once the permitting is complete.
With these two additional sources of funds, the city could proceed by issuing bonds as originally proposed and not have to use any dollars from the general fund or property taxes which was a concern of Councilmember George Cretekos. Although the project remains cash flow positive, as an additional buffer, she suggested the possible utilization of monies from a Special Development Fund. This fund is a collection of funds such as Penny for Pinellas, road millage, gas taxes, etc. which earn interest. The interest is put back into the fund which earns more interest and that accumulation has a balance of approximately $4 million. She stated the city might consider utilizing approximately $2 million from this fund to reduce the debt of the project giving it a greater profit margin should boat slip rentals actually realized be less than expected. For every $1 million reduction in debt, cash flow improves by about $90 thousand per year.
In spite of increase fuel costs, current boater demand for slips remains high. Bill Morris, Director of Marine and Aviation, stated he received approximately 415 emails for his waiting list with about 100 being duplicates. Councilmember Gibson expressed concern that these people showing interest in a boat slip did not have any deposits on them and therefore, when the time came to actually rent the slips, had no obligation to do so. He stated he would like to require anyone who wants to reserve a slip to pay a non-refundable license fee or deposit to hold the slip. Knowing there was a commitment for these slips would provide him with more comfort in moving forward with the project. Council members are waiting for additional information regarding tax receipts and will likely postpone a decision until May.
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