CLINTON — The city of Clinton is one step closer to having a marina operator on board, with City Administrator Gary Boden explaining the provisions of a pending marina operator contract between the city and Skipper Marine Development.

During a special council meeting held Tuesday afternoon, Boden presented Clinton City Council members with a draft agreement and reviewed the details of the proposed five-year contract. He said the contract states SMD acts as the operator and as such is responsible for all manner of operations, including the condition of the marina, such as system maintenance and cleaning. Boden remarked that unless specifically budgeted, the city would approve expenditures over $5,000 and added that if extreme repairs are needed, the city would be notified and at least three qualified bids for the work would be sought.

He commented that the city is paying a $45,000 management fee for the first year, and the cost would escalate each year based on the Consumer Price Index with a floor and ceiling. He offered the example of three percent inflation in a given year with the floor at a two percent increase and a ceiling of no more than five percent. He said the proposed operating budget had been amended from the original amount of $230,000 and reduced by approximately $56,000 to $184,804, which includes the management fee and is reflective of one full-time person, Marina Manager Chris Richardt, and one seasonal employee to work 14 weeks during the peak of the boating season.

Boden said SMD will provide written reports to the city, including monthly financial reports and quarterly and annual operating statements, and noted the marina budget would be subject to city approval by March 15 each year. Boden said the company is required to carry insurance of $1 million per occurrence, a $2 million aggregate for bodily injury per occurrence and a “bumper-shoot” umbrella policy of not less than $5 million per occurrence.

He said the contract outlines slip rental rates and a recommendation was being made to make no change in the rental rate for slips north of the gate this year. He said boaters would see an increase next year of approximately 10 percent. Boden stated that on the new docks being installed south of the gate, city and company officials looked at slip rental rates in Moline and Dubuque to determine what is charged at an upscale marina. He remarked the Dubuque marina rates were thrown out for being “pricey” and officials decided to price Clinton rates at 10 percent less than the Moline marina slip rental rates.

Boden said the rental rates set for slips south of the gate probably wouldn’t change next year, but if it did the change would be moderate.

He said that coupled with the revenue of the transient slips and winter storage fees, he thinks the city will cover the operating costs, but also has to pay debt service costs, which he estimated at $160,000 to $180,000 in principal in interest per year to cover the $2.7 million total cost over 15 to 20 years. Boden said the city could consider building 10 to 12 more covered slips, which offer a “pretty quick return,” and would help cover the debt service faster if a boating market is built in Clinton.

Boden said the contract would commence as soon as reasonably possible within the next week and continue through April 30, 2013. Boden said that unless notification of renewal is given by Dec. 31, 2012, the contract would expire, and effectively there is a three-year guarantee in the contract.

He said if the city gives SMD 60 days notice of contract termination after Dec. 31, 2010, the city would owe the company $22,500.

He stated that if notice is given after Dec. 21, 2011, the city owes SMD $15,000, and if notice is offered after Dec. 31, 2012 the contract will not be renewed and the city would owe SMD nothing.

SMD Vice President Mark Ellerbrock said SMD is ready to begin operating the Clinton marina and commented company officials have a lot of marketing ideas including hosting a boat show this summer. He said the event potentially would lead to tourism, boat sales and slip rentals.

He said the company would promote the Clinton marina at a boat show in Chicago in January and commence an e-mail campaign with the company’s list of registered boaters.

At-Large Councilman Ron Mallicoat noted that during a City Services Committee held April 10, Ellerbrock indicated the company would not offer mechanical or maintenance services to boaters on site. Ellerbrock said the company would offer boaters a list of approved vendors and mechanics that can work at the marina, so long as the service providers have offered SMD a copy of their certificate of insurance.

He said if use of the marina mechanical services building is required, a usage fee could be determined. Boden remarked the company would not be “like an HMO” and prescribe the service provider that can be used. Ellerbrock said the company is focused on hospitality and would serve like a concierge, hoping to offer the boaters a variety of options and make their boating experience in Clinton an easy one.

Boden said the contractual process is at the point where the council can direct the city attorney to prepare the final draft of the operating agreement for council approval. He said the council may schedule a special meeting next week to authorize the agreement, as the city needs to get the document approved as soon as possible to begin marina operations.

Boden said Thursday he expects the marina to be up and running mid-May.

Here are the proposed Clinton Marina annual rental rates; the listing includes the type of slip, rent and total slips in that order:

Slips north of the gate:

50-foot, $1,225, 7

40-foot , $1,020, 12

30-foot , $780, 9

25-foot , $645,16

Electrical hookup fees:

50 amp - $150

30 amp - $ 75

Slips south of the gate:

50-foot covered, $2,950, 9

50-foot non-covered, $2,450, 20

40-foot covered, $1,950, 11

40-foot non-covered, $1,650, 31

30-foot , $1,350, 20

20-foot , $500, 6

Note: 50 of the 71 total 50-foot to 30-foot non-covered slips will be reserved for transient boaters.

Docking fees for 50 slips reserved for transient boaters

Up to 2 hours - $5

3 to 8 hours - $5 plus an additional $1.50 per hour

8 to 24 hours - $30

daily - $30 per day for the first five days

weekly - $150 or the last two days free

Electrical hookup fees:

50 amp - $20; 30 amp - $ 5