An audience burst into applause Wednesday after the Oak Harbor City Council awarded a construction contract for the redevelopment of the city’s marina.

The contract was for phase one of the project, which includes replacement of the main gangway and upgrades to the existing electrical services.

But many audience members — several of them boat owners — were concerned about funding for phase two: dredging the marina.

“If we don’t do something soon we’ll have a really nice lake and a marina we can’t access,” Dave French said.

Boat owners complained that at certain times during the year, the boats can’t exit the slips at low tide and it’s dangerous for the vessels to sit in five feet of mud.

However, funding for the dredging project isn’t secured yet.

Councilwoman Beth Munns urged the council to be proactive on this issue, saying, “We won’t earn business if the boats can’t fit in the slips.”

The money for phase one is available from the marina’s cash reserves, which totals about $1 million. The mayor signed the contract for construction Thursday with Bellingham Marine Industries in the amount of $715,900. It was the lowest of four reviewed bids.

The construction will create a new, accessible gangway that is both longer and wider than the existing one. At the bottom of the gangway, a replacement set of landing floats will feature grating to allow light penetration for fishery enhancement. The marina’s electrical capacity and potable water system will also be upgraded.

The project is said to improve safety and accessibility in the long and short-term, and enhance the capital investment the city has in the marina.

“The utility upgrades are necessary,” Hugh Jonson, owner of the 71-foot Artic Wolf, said. “As I get older, I have a tough time making it up that dock at low tide.”

The council questioned where the rest of the project funding might come from. City Development Services Director Steve Powers suggested it may be on a pay-as-you-go basis, by looking at the critical needs and cash flow, and determining what to do next.

A tentative schedule for marina dredging is set for July 2010.

For future funding, Councilman Rick Almberg asked Jonson, who owns the largest boat, if he would support a rate increase, if it would mean a first-rate marina.

“I would. It’s growing into something we desperately need,” Jonson said. “Even though in this economy, I hate to say I’m going to give you more money.”

Design for the redevelopment of the marina began last year. Mayor Jim Slowik thanked the boat owners for their patience.