SUBJECT/RECOMMENDATION:
Title
Approve the second phase of marina slip rate adjustments for recreational tenants consistent with the previously adopted Market Rate Study and affirm deferral of any additional slip rate increases for Beach Marina commercial tenants until completion of Beach Marina reconstruction and a subsequent rate study. (consent)
Body
SUMMARY:
At the August 6, 2025, Special Work Session, City Council reviewed the Marina Slip Rate Market Study prepared by Walter Duke & Partners and gave direction to implement slip rate adjustments in a phased approach. At the September 4, 2025, Council Meeting, Council approved the initial phase of a rate increases and directed staff to return later with the proposed second phase for further consideration.
The Market Rate Study, completed in Spring 2025, concluded that slip rental rates across the City’s marina system were significantly below comparable market rates. Council supported a phased implementation approach to move rates toward market alignment while minimizing impacts to tenants, allowing time for tenant transition, and providing staff the opportunity to conduct a detailed financial proforma to confirm enterprise fund sustainability.
Consistent with Council direction, staff is requesting approval of the second phase of slip rate adjustments for recreational tenants, bringing those rates to the full-market-aligned levels identified in the adopted study. Staff is not recommending any additional rate increase for the Beach Marina commercial fleet at this time due to ongoing construction impacts associated with the Beach Marina reconstruction project.
Phase 2 - Proposed for Approval
Effective October 1, 2026, staff recommend implementing the second phase of slip rate adjustments for recreational tenants as follows:
Beach Marina - Recreational Tenants
• Clearwater Resident: $23.00 per foot per month. This represents a $6.12 per foot increase or 36%.
• Non-Resident: $25.30 per foot per month. This represents a $6.12 per foot increase or 32%.
Harbor Marina- Recreational Tenants
• Clearwater Resident: $23.00 per foot per month. This represents a $5.54 per foot increase or 32%.
• Non-Resident: $25.30 per foot per month. This represents a $5.69 per foot increase or 29%.
Island Estates Marina - Recreational Tenants
• Clearwater Resident: $20.00 per foot per month. This represents a $3.84 per foot increase or 24%.
• Non-Resident: $22.00 per foot per month. This represents a $3.53 per foot increase or 19%.
These rates represent the full market-aligned rates identified in the previously accepted Market Rate Study and are consistent with the phased implementation plan reviewed by Council.
Beach Marina Commercial Tenants
While Council previously reviewed a phased commercial rate structure tied to the completion of Phase 1 of the Beach Marina reconstruction, staff recommends deferring any additional slip rate increases for Beach Marina commercial tenants at this time. The Beach Marina is currently undergoing a major reconstruction project that significantly impacts commercial operations.
Upon substantial completion of the Beach Marina reconstruction, anticipated in late 2026, staff will conduct a new marina slip rate study and return to Council with recommended commercial slip rates for consideration. This approach ensures that any future commercial rate adjustments are based on updated market conditions and reflect the completed facility, while recognizing the operational impacts of construction on existing commercial tenants.
Fiscal Impact
The proposed second phase of slip rate adjustments for recreational tenants is consistent with the previously approved marina proforma and supports the long-term financial sustainability of the marina enterprise fund. The phased rate structure is intended to be revenue neutral over time and provides the enterprise fund with the ability to fully fund operations, routine maintenance, major repairs, and long-term capital replacement without reliance on General Fund support.
The attached proforma shows the funds have a positive cash flow annually. However, once interfund payments are made to prepare for future capital expenses and repairs, the net income is negative. Additionally, depreciation expense related to marina capital assets and redevelopment projects further impacts net income, despite being a non-cash accounting expense that does not reduce available operating cash flow.
APPROPRIATION CODE AND AMOUNT: N/A
USE OF RESERVE FUNDS: N/A
STRATEGIC PRIORITY:
High Performing Government
1.2 Maintain public infrastructure, mobility systems, natural lands, environmental resources, and historic features through systematic management efforts.
Economic & Housing Opportunity
2.2 Cultivate a business climate that welcomes entrepreneurship, inspires local investment, supports eco-friendly enterprises, and encourages high-quality job growth.
2.3 Promote Clearwater as a premier destination for entertainment, cultural experiences, tourism, and national sporting events.
