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The former Clearwater City Hall, vacated in 2019, still stands on the downtown bluff overlooking Clearwater Harbor. City officials moved to approve funds for a new City Hall a few blocks to the east.

CLEARWATER — The City Council has taken its biggest step in years toward building a long-awaited City Hall.

The council on March 3 approved moving $16 million of Penny for Pinellas 1-cent sales tax funding that had been slated for utilities infrastructure into the City Hall project.

Finance Director Jay Ravins said the water and sewer fund currently has $120 million in cash reserves, more than enough to cover future capital improvement costs. The $16 million Penny subsidy allocated to utilities infrastructure years ago for this decade is no longer needed, he said.

The city’s Penny funding list for 2021 through 2030 had already dedicated $6.65 million to a City Hall replacement. And Ravins said an additional $7.3 million will be allocated to the project from yet another pot of money — general fund reserves.

Together, those sources now make up the $30 million estimated is needed to build a City Hall on vacant land at Myrtle Avenue and Pierce Street, next to the municipal services building and police headquarters downtown.

Clearwater has been without a dedicated government center since January 2019, when the city vacated the old City Hall on the bluff to free it up for the downtown waterfront redevelopment project.

For the past three years, about five city departments have worked out of a sixth-floor office space in One Clearwater Tower at 600 Cleveland St. There are now about 45 employees working in the office tower and 275 at the municipal services building, according to communications director Joelle Castelli.

When City Manager Jon Jennings took over in November, he made accelerating the construction of a new City Hall one of his top priorities.

Assistant City Manager Micah Maxwell said staff used the Dunedin City Hall project, which broke ground last year, as a comparable to come up with the $30 million budget estimate. The projection includes a 20 percent buffer for cost increases.

He said the budget may be refined as the city moves into the planning and design process.

Ravins assured the council that the city was also secure in taking $7.3 million of general fund reserves for the project.

The city is required to have a minimum of $14 million in reserves. After taking away the $7.3 million for City Hall, the reserve fund still has more than $42 million, he said.