MARTINEZ -- Last month, city leaders said there was only enough cash in the marina enterprise fund to send the state $33,000 of the $113,866 loan payment due this month.
The council also rejected a proposal to borrow $80,000 in settlement funds from a 1997 Texaco pipeline leak to make up the balance of the loan payment to the state Department of Boating and Waterways.
But it turns out the marina account held an additional $49,311 set aside for an annual loan payment to the city's general fund. Since 2005, Martinez has loaned the marina $624,592. As of June 30, the marina owes the city $473,849, according to the staff.
Last week, the City Council agreed to make a $71,266 interest-only payment to the state, rather than repay the general fund.
"We should not pay ourselves back," Mayor Rob Schroder said after learning that the missed payment won't create a budget deficit.
Although she voted in favor of the proposal, initially Councilwoman Lara DeLaney argued that the interest payment wouldn't improve the city's prospects of restructuring the state loans.
"Doing without $49,000 is more of a hardship to the city of Martinez than to the state of California," DeLaney said.
According to the Department of Boating and Waterways, the city owes about $4.1 million for a series of loans dating to 1959. A department spokeswoman declined last month to comment on the possible consequences of a partial loan payment.
City leaders frequently express frustration with the Department of Boating and Waterways, which refused last November to lend Martinez any more money for the marina until the city repays more than $3 million in outstanding loans.
"How can you operate the marina if the loan payments take all the gross revenue?" Councilman Mike Menesini said last week.
Lost in the umbrage council members direct at the state is the fact that the city borrowed the money. Councilwoman Janet Kennedy reminded her colleagues of this fact last week, noting that borrowers don't make loan payments to demonstrate good faith, they do it because they're obligated to repay the debt.
Conditions at the marina have reached a tipping point where more than 100 of the 267 berths sit empty because mud chokes the area at low tide.
This fall, Martinez had planned to dredge the entrance and under docks on the western side of the marina and rebuild 27 berths using $398,275 from a regional park bond and a $500,00 donation from Shell Oil.
However, the East Bay Regional Park District has determined that the marina project isn't eligible for bond money, according to Jeff Rasmussen, grants manager for the park district. It's unclear how the city will make up the shortfall.
Lisa P. White covers Martinez and Pleasant Hill. Contact her at 925-943-8011. Follow her at Twitter.com/lisa_p_white.