The Oak Harbor City Council tabled an agreement with the state Department of Natural Resources last night for a 20-year aquatic lands lease that would have allowed the city marina to continue to operate at its current location over the next 10 years.

The Oak Harbor Marina qualified for a reduced-fee lease because of a March 2008 bill, supported by Sen. Mary Margaret Haugen and signed into law by Gov. Christine Gregoire, that cut the marina’s yearly payment by $50,000 per year for 10 years that could result in a cost savings of $500,000.

But the council chose not to immediately accept the newly proposed lease because of certain mandatory upgrades contained in the contract, the cost of which would obliterate savings from the reduced-cost lease.

According to Oak Harbor’s consulting engineer for the marina redevelopment project, the lease’s requirements could add up to $4.3 million in redevelopment costs.

“From strictly a dollars and cents standpoint, the benefits of the new state law are outweighed by the costs associated with the proposed lease,” said Steve Powers, city development services director.

As a result, the council suspended discussion on the new DNR lease offer.

The council has scheduled a special meeting on Thursday, June 4, at 6 p.m. at City Hall to discuss the newly-proposed lease agreement, presented last night, with DNR representatives.

“We have over 400 slips in this marina and we have a lot of interested people,” Mayor Jim Slowik said.

According Powers, the DNR made “major changes” to the proposed contract from the previously held lease, which raised concerns among city staff that the so-called “reduced fee” lease may cost the city more than expected.

“If it costs more that what we’re saving, we’re concerned about that,” Powers said.

“The problem is the clock is ticking,” Slowik said of the need to settle on the lease agreement with the DNR by June 12, as required by state law.

The DNR’s overall proposed lease did not sit well with the council.

“It seems odd to me to have such a detailed lease agreement. It seems to me the state doesn’t have confidence in the rest of its branches,” Councilman Eric Gerber said.

David Roberts and JoAnn Gustafson of the DNR State Aquatics Lands division defended the DNR’s offer at the tense city council meeting.

Roberts described the DNR’s role as a “landowner” in the lease agreement and equated the agency’s ability to instruct its “tenants” to conform to the agency’s wishes. To illustrate his point, Roberts explained that as a landowner the DNR can tell their tenants – in this case the city of Oak Harbor – to conform to the lease, or get out.

“You could probably tell those people to paint that warehouse pink if you want to,” he said of the extent of any landowner’s ability to control their property.

However, Roberts said the DNR’s motives aren’t frivolous, they’re an effort to preserve the environment and protect threatened and endangered species.

Councilman Jim Campbell also took a few minutes to air his frustration with a section of the lease that would require a type of grading for environmental purposes.

Campbell is concerned that the grading does not meet the Americans with Disabilities Act accessibility requirements.

Roberts could not provide details on the grading’s compliance with the ADA, but said the grading would likely conform the the act’s standards.

“No matter what position we’re in we seem to fail,” he said. “What are we supposed to do?”

The discussion intensified as Councilwoman Beth Munns blasted the DNR representatives for the agency’s alleged lack of research on the Oak Harbor Marina.

Munns said she attended a meeting last March where the DNR testified that the marina lacked public programs, when, in fact, the marina hosts a number of programs including youth sailing and the cancer survivor dragon boat team, among other others.

“I resent being trashed at a public hearing. You are treating us like little children,” she said. “It seems you are putting your thumb on us because you can.”

Roberts could not provide any answers for Munns.

Lack of timely communication from the DNR, back lease payments owned by the city to the DNR and a long-running land title question are other issues that need of resolve. According to Gustofson, the federal government incorrectly issued a land deed to Oak Harbor in the 1970s for a state-owned land parcel, but the DNR did not catch the error until it was too late.

Councilman Bob Severns questioned Roberts and Gustafson about the land’s ownership and boundaries.

“Is there a third party involved?” he asked. “Are you satisfied that you know where your property boundary is?”

Roberts responded that the possibility of a third-party owner is yet unresolved, while Gustafson assured the council that the most recent DNR boundary assessment should be “fairly accurate.”