Marina Bailout Planned, Fuel Prices May Rise
By Carl Wagenfohr
CLEARWATER - Just two years ago the Clearwater City Council approved a 5-year business plan for the Municipal Marina that was intended to return the crown jewel of the city's tourism industry to profitability.
On Thursday night the Council will throw a life line to the money-losing operation in the form of a $230-thousand interest-free loan, and free the business operation from the Council's sometimes politically-influenced decisions.
The Marina's shaky financial footing was exacerbated by two Council decisions in November, 2007, the first of which was to triple recreational slip rental rates for city residents by 2012, bringing those rates in line with those forecasted by a market study for the soon-to-be-built downtown marina.
The 2007's rent increase was largely absorbed by marina tenants. Those who left because of the higher rates were replaced by boaters from the marina's long wait-list. But the October 2008 increase of 31.5-percent was too much for the market to bear, resulting in a 35-percent vacancy rate and lower than forecast revenues.
The City Council made an effort in February to fill the Marina's slips, lowering rates by about 8-percent for residents and by about 20-percent for non-residents. While slips have been filling-up, 16 recreational slips remain vacant according to Harbormaster Bill Morris.
Influenced by commercial tenant accusations in November, 2007, that a proposed 28-cent increase in fuel prices was "price gouging", the Council adopted a policy of "Simple Math" that applied a markup of 20-percent to the city's wholesale fuel purchases and offered a 10-percent discount to the marina's commercial tenants.
While that pricing method covered most of the city's costs, it failed to cover the salaries and benefits of the 3.8-headcount that operated the marina's fuel dock. In 2006, that cost amounted to $163,830.
Calling the Marina's current fuel prices "grossly under market", Morris on Monday asked the Council to free him to set competitive pricing that would be just under the average pump prices at nearby marinas. The objective would be to recover all costs of operating the fuel dock, including the personnel costs that were previously not considered.
Based on Morris' latest area fuel price survey, the pump price would increase by about 31-cents per gallon for diesel fuel, and by 18-cents for gasoline. A discount of 10-cents per gallon would be offered to commercial tenants and to Boat US members.
City Manager Bill Horne asked Morris, "Are we going to get complaints from the people that usually complain to the Council about any changes in rent or fuel prices?"
"Yes, sir, we will," responded Morris, who explained that he expects some of his larger customers to "take their business to a fuel truck" rather than pay the marina's higher prices. "I can't compete with a fuel truck," Morris said.
The proposed $230-thousand interest-free loan and fuel pricing methodology will be discussed and decided at tonight's City Council meeting.
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