The Oak Harbor City Council and Mayor Robert Severns voted to approve a contract allowing the Oak Harbor Yacht Club to continue leasing property the club facility sits on despite concerns that the amount is too small.

The 3-3 vote was made during a city council meeting on Dec. 19. Councilmembers Tara Hizon, Shane Hoffmire and Beth Munns voted in favor of the contract, while Councilmembers Bryan Stucky, Barbara Armes and Eric Marshall voted against its approval. After expressing his support for the club, Severns broke the tie to approve the contract.

The 10-year contract, which will begin Jan. 1, establishes that the club shall pay the city an annual concession fee of $2,881 — or $240 per month — plus taxes to rent 24,945 square feet of property in the marina that the city leases from the Department of Natural Resources.

In the new agreement, the annual concession fee will increase by the Seattle Area Consumer Price Index — or CPU. This means that if the CPI goes up, the club will have to pay more, and if it goes below zero, there will be no added costs.

Marshall found $240 per month to be “extraordinarily low for that piece of property” while the chamber of commerce pays more for the piece it rents from the school district.

Severns said he initially tried to ask the club to pay more, but then changed his mind as he thought it wouldn’t be fair to the club. He explained that, in 2003, the city allowed the club to build parking in a section that includes part of an easement with the federal government that expires in 2031.

“I would never negotiate anything like that today,” Severns said during the meeting. “When we renegotiate with the federal government for the continued use of that property, if I’m still around, I’m gonna try to lobby in favor of the yacht club.”

The mayor also acknowledged contract negotiations should have taken place months ago and not close to the end of the year.

The club’s rental payments go into the marina fund. While the club has been paying the same amount of money for years — in an interview, Commodore Cedric Niro said the club pays about $270 with taxes — Marshall has often heard complaints that the marina rates are insufficient to keep it functional. In fact, marina rates were recently increased to help with costs.

“If we’re asking more of our voters, how is it fair that we are gonna remain the same with the Yacht Club at $240?” he asked.

He believes that increasing the cost of the property is not an unreasonable request, and that it’s something the club can afford. Higher rates would help improve the marina, attracting more people and further benefiting the club, he added.

In the interview, Niro explained there have been no increases to the lease because the government has not increased the amount it charges the city. The club pays 2% of what the city pays the government for the property, he added.

“If it had, then our lease would have gone up because we pay a percentage of what the city pays,” Niro said.

Marshall also questioned why the club has been charging $150 for a gazebo when the Parks Department charges $25 for the same structure. Vice Commodore Ryan Bradley said the club’s rental fee includes services such as trash removal and setting chairs and decorations at the events. He also assured that the club pays the city $25 per event.

According to Marshall, the council hasn’t seen a financial report from the club in years. In an interview, Munns said the club was never asked for one. Marshall said he had a hard time approving the contract without seeing the reports first, an opinion echoed by Stucky and Armes.

Council members talked about the possibility of postponing the decision, but Hoffmire moved to approve the contract as presented.

Munns, who is a member of the Yacht Club but not of its board, initially questioned whether her vote would have represented a conflict of interest, but then proceeded to vote after the city attorney said it wouldn’t represent an issue because she’s not making money from being a club member.

Marshall, Armes and Stucky voted against endorsing the document, but with the mayor’s tie-breaking vote, the contract was approved as presented.

“I don’t think we’re talking about enough money to worry about this,” the mayor said.

During the meeting, Niro said the club has been financially reeling from the pandemic, but he understands the concerns raised at the meeting and agreed to provide financial records and an annual report in the near future.

State law and the state constitution prohibit a “gift of public funds”; online information from the Municipal Research and Service Center indicates that providing a lease at below market value could be considered a gift.