Clearwater City Council Special Budget Work Session - August 11, 2026
Clearwater City Council Special Budget Work Session - August 11, 2026
The Clearwater City Council held a special work session on August 11, 2026, to review the proposed FY2026/2027 budget, receive updates on staffing and artificial intelligence, and discuss a contingency plan for potential state legislation that could significantly reduce property tax revenue. No final votes were taken; the session was primarily informational and deliberative.
Staffing Update
- Human Resources Director Tiffany Makras presented a staffing report aligned to a fiscal year framework. The full-time vacancy rate remained stable at approximately 11.2–11.3% over FY23–FY26, while part-time vacancies appeared more volatile due to a small base of 81 part-time permanent positions (45.62 FTEs).
- The turnover rate was a single-digit 5.6% through August, a positive trend compared to prior years.
- Pay as a cited reason for voluntary resignation continued to decline: 9% in 2024, 7% in 2025, and 6% in the current year.
- Overall, the staffing picture shows greater stability, with fewer hires and separations. The report aims to provide a consistent baseline for workforce decisions.
AI Update
- IT Director Daniel Mayer provided an update on artificial intelligence usage. The city uses AI in three main categories: cybersecurity and network administration, customer service and engagement (website agents, upcoming call agents for utility customer service), and employee knowledge/productivity enhancement.
- 130 employees use ChatGPT at a cost of $65,000 for 150 licenses and approximately 38,000 credits monthly. 90% of token usage is consumed by 10% of users, indicating that expanding to 150–200 active users could push token costs above $1 million annually.
- The five most common tasks for ChatGPT are communication (over 50%), how-to guidance, encoding automation, data analysis, and complex explanations.
- A community workshop poll showed 85% of residents are tolerant of AI but want the ability to reach a human.
- Observations: AI has provided individual productivity gains but is difficult to quantify for replacing positions. The city will monitor costs, expand cautiously, and may replace the current Sunny solution within 6–12 months due to accuracy and consistency issues.
Proposed FY2026/2027 Budget
- Budget Director Kayleen Kastel reviewed the proposed $800,012,476 total budget, a 5% increase over the FY25/26 amended budget.
- The tentative millage rate was set at a reduction to the rollback rate of 5.873 mills.
- General fund and capital fund adjustments include reducing ad valorem revenue by $2,120, reducing TIF transfers to CRAs, eliminating a $12 million general fund contribution to the Eddie Seymour renovation, and removing the police district one boat dock project (storm-related, to be reimbursed by FEMA).
- Expenditure reductions totaling $955,000 include savings in audit, outside counsel, council grants, supervisor of elections costs, fire department operations, library equipment warranty, public communications, and IT internal charges. Annual support to Ruth Eckerd Hall was also eliminated.
- Net general fund increase is 3%. Large increases are driven by salary and benefit costs, property/liability insurance, contract obligations, and utility costs.
- Full-time equivalent (FTE) positions: 1,904.8 total, a net increase of 9. General fund FTEs are 1,172.4 (up 11 from current year) including 9 new fire medics and a business systems analyst. Other funds decreased by 2 FTEs.
- Since the 2007 peak, the city eliminated 278 positions by 2012; since then, 154 have been added back in the general fund (still 109 below 2007) and 74.6 in other funds (59.6 above 2007).
- Community engagement workshop "Dollars to Donuts" on August 1 attracted about 200 residents; 115 participated in a budget-building exercise. Feedback showed close funding amounts across categories, and residents requested the event be repeated annually.
Contingency Plan for Potential State Homestead Exemption Referendum
- City Manager and Budget Director presented a plan in case a state referendum passes, which would reduce ad valorem revenue by $12 million in the first year and an additional $8 million in the second year (conservative estimate from Pinellas County). Other potential revenue losses include fire tax ($750,000 year 1, $331,000 year 2), EMS tax ($2 million year 1, $1.1 million year 2), and library services ($253,000 year 1, $151,000 year 2).
- The proposed contingency totals over $20 million in cuts and revenue increases over two years, including:
- Parks & Recreation: reduced rec center hours, programming, landscape maintenance; closure of beach rec center (event rental only) and one additional rec center; elimination of public art funding; transition of McMullan Tennis to third party.
- Library: permanent closure of beach branch; reduced materials, hours, and programming; eventual closure of an additional branch.
- Police: elimination of 9 vacant sworn positions, a grants manager, and civilian staff (telephone reporting unit, police aids, facility aids, administrative/investigative staff), potentially reducing proactive capacity.
- Fire: reductions in logistics/administrative staff, holding a vacant fire inspector, reduced overtime, minimum staffing on select apparatus.
- Public Works: reduced palm pruning, right-of-way maintenance, engineering supervision, and environmental programming.
- Planning & Development: elimination of funding for private property abatements, elimination of code compliance, customer service, and long-range planning positions.
- Administrative departments: positions eliminated in city manager, city clerk, finance, economic development, HR, public communications; elimination of public arts and neighborhood grants.
- Capital projects: $862,001 in annual reductions including library projects, fire equipment, police equipment, sustainability fund, Stevenson’s Creek Park improvements, and East Clearwater Resiliency Project.
- Third-party organizations: $115,000 in cuts to Clearwater Historical Society, Wood Valley/Kings Highway facilities, and Keep Pinellas Beautiful.
- Fee and revenue increases estimated at $1.6 million: increased fire reimbursement fees, credit card processing pass-through, renegotiated venue agreement, new parks user fees, increased rec card/plus pass rates, swim lesson and ball field rental price increases, summer camp discount elimination, bait house and fishing pier fee increases.
- Council discussion included concerns about the Clearwater Historical Society funding, clarifying that all general fund grants (except homeless initiatives) are proposed for elimination. A code compliance inspector position (currently vacant) would not be contracted out; duties would be redistributed. Council members emphasized the difficulty of cuts, the importance of public safety, and the need for public engagement via a planned dashboard.
Key Outcomes
- No votes or formal decisions were made; the contingency plan is a planning document for public discussion.
- A public-facing dashboard will be developed to illustrate proposed reductions and their impacts.
- The city has a soft hiring freeze in place and is preparing for potential military-related reductions (as previously discussed by council).
- Council noted that three of the five current members will remain for the upcoming budget adoption, but final decisions on contingency cuts would be made by the next council if the referendum passes.
- The two public hearings for budget adoption are scheduled for September 15 and September 21, 2026.
Meeting Transcript
This time we'll call to order the special city council work session to the Clearwater City Council for August eleventh, twenty twenty-six. And we'll move to item two point one of the agenda, and I'll call the city manager to present. So HR took a slightly different approach with this year's staffing report and compared to last year's. So for consistency, HR adapted and aligned this year's report to a fiscal year framework. And because the date and methodology changes, you may notice some of the figures are slightly different from past years. Vacancy turnover separations, reason for separations, internal advancement and hiring, and then all of this should provide a broad overall staffing picture. Okay, so with that, we'll get right into it. So in going back and looking at it at an over a year standpoint, um, what we can see is that from FY23, we've got a relatively stable full-time baseline for our vacancies, fluctuating anywhere from eleven point three to eleven point two. The part-time tells a little bit of a different story. That looks a lot more volatile, but what I would like to point out is that it's a matter of proportion. So we have 81 part-time permanent positions, which represent about 45.62 FTEs. So just the slightest fluctuation can cause the change. So that brings us to our turnover rate. What we can see over the past two years and trending into this year is that we're maintaining a single digit turnover rate, which is really phenomenal in comparison to years past. So although that 5.6 looks really spectacular, again, it is just a point in time through August. We do still have to finish out the rest of the fiscal year. But I would say that the direction that we're trending in is very encouraging. So this is the one slide where we continued with the previous methodology of the reports that were brought before you. So pay has continued to decline as a cited reason for resignation. So it was 9% in 2024, 7% in 2025, and now we're showing 6% is the reason that it's being cited for an employee voluntarily leaving. Something for HR to take a look at, these are things to be mindful of. Other than compensation still matters, but employees are citing pay as a less frequent reason as why they're leaving. And so there's been a lot of effort and emphasis on providing an internal promotional framework. And going back to what I was talking about in the vacancy rate with the part-timers, you can see the change here. There's just very few movements in the part-time permanent arena. We have a lot of variable positions in the temporary space, but as far as the part-time goes, you can see we've hired four permanent part-timers this year. But we can also see that the hiring has declined, which is another area that points to our stabilization of vacancies. So overall, I would say that our staffing is the overall staffing picture is one of greater stability than one than in years past. We definitely still have some areas that need attention. And again, just to remind you the goal of refining this report was not necessarily to produce cleaner numbers, but just to give a consistent baseline that we can use to identify trends and make better workforce decisions. And I'm happy to answer any questions. Thank you for a good report. Move to agenda item 2.2. Yes, I would like to call out Dan, our IT director. He's going to give council an update on our AI and technology for us. A little pre-planning goes a long way. Good afternoon, Mayor, Council members, and city manager. I was asked to just give a brief update of how we're using artificial intelligence within the organization now and how it's informing our path forward as we go into potentially leaner times. Just for clarity, I want to give a definition of what artificial intelligence is. We're going to use IBM's definition as an early early pioneer. It's the use of software technology that enables computers or machines to simulate human learning, comprehension, problem solving, decision making, and creativity. If it's able to perform these functions with human input, it's referred to as generative, so prompting something to produce an output. If it can do these things autonomously, it's the terminator or Sunny and i robot. It's referred to as a gentic, so it's its own conscious being. Currently, our use of AI really falls into three main categories. It's provided us a huge amount of benefit in cybersecurity and network administration. So user management and threat identification. The other area is customer service and engagement, so we have AI agents on the website. We're introducing call agents and utility customer service this year. And also able to track issues with our C click fix, so we can we can keep an eye on those things.
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