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Politics & Government

State Draining City's Liquid Assets?

Marina can't get its moorings as a money producer as long as loan payments siphon revenues, some say.

Once again, the marina did not generate enough revenue to make its annual $114,00 loan payment to the state Department of Boating and Waterways, and the city council opted to submit an interest-only offering of $71,000.

And if at least one council member had her way, the city would be making no more payments at all.

Dwindling revenues and unplanned-for expenditures left the marina enterprise fund short by $80,000 as its loan payment came due.

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The city and the state Department of Boating and Waterways struck an agreement to restructure four loans that spanned the years 1973 to 1984. They may have to renegotiate the terms to make the payments more affordable, said assistant city manager Alan Shear.

“They understand we’re trying to make a good faith effort,” he said.

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The city’s only option would have been to borrow the money from its General Fund – an option the Martinez City Council rejected.

Since 2005, the General Fund has loaned the Marina Fund more than $600,000. The Marina Fund has made annual payments to the General Fund reducing the balance owed to $474,000 in June 2011. ,

“The City Attorney interprets our existing agreements with (the Department of Boating and Waterways) that requires the City to pay them back before we pay ourselves,” says the city manager in a memo to the council.

Martinez took out a loan in 1959 to build the marina on state-owned land, but the boat basin has never generated enough revenue to repay the loan. The state last year changed the rules for the Department of Boating and Waterways, clamping down on the repayment of loans and debts.

But the high cost of repairs, upgrades and dredging consume so much money that the marina can’t get out from under long enough to turn a profit, said Councilman Mark Ross.

“While the marina is under construction, there is not much revenue coming in from rentals,” he said.

“I think all these loans should be forgiven,” said Councilwoman Lana DeLaney. “We’ve been strapped by these loans. We don’t even know what we owe the state at this time. We’ve had administrations that have been more lenient, but we have one now that is taking a hard line. It’s hard to know how to approach this.”

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