The unpaved portion of Theater Lane between Northeast 10th and Northeast Eighth streets will be done sooner and for less money than expected after the Hermiston City Council voted Monday to add it to the water tower project already in progress.

Premier Excavation and Anderson Perry & Associates are currently working to build a new one million gallon water tank on 10th Street and place new water mains, including one down Theater Lane.

The original plan was to place gravel back over the pipe and pave Theater Lane sometime in 2020, but assistant city manager Mark Morgan said as the timelines “grew together” and gas tax revenue came in at higher than expected rates, it made sense to combine the projects into one, using the same contractors and engineers already onsite, saving the city about $100,000 on what had been expected to be a $625,000 project. The project may be able to be completed in the fall instead of next spring, as well.

“I can’t see why we wouldn’t do that,” mayor David Drotzmann said.

Two residents and city councilor Jackie Myers expressed a desire to see the hill on Theater Lane re-graded to a slope that would increase visibility, but Morgan said that would push the project’s cost far above what the city has the budget for.

After the council met in executive session for its annual review of city manager Byron Smith’s performance, the mayor broke a rare tie vote on an amendment to Smith’s contract.

The amendment would give Smith a one-time infusion of three extra weeks of vacation time into his accrued bank of paid time off. It would also give Smith a 50% match for up to $3,000 of deferred compensation he puts toward a retirement plan. The amendment did not include an increase to Smith’s base salary.

Councilors John Kirwan, Jackie Myers, Rod Hardin and Lori Davis voted no on a motion to approve the amendment as requested, with Roy Barron, Doug Primmer, Manuel Gutierrez and Doug Smith voting yes. Drotzmann broke the tie with a yes vote, noting that Smith had gotten strong reviews on his job performance and in his five years at the helm only one department head had left the city for another job.

“I want to congratulate you on another successful year,” he said.

The council’s agenda was shorter than expected after Umatilla County’s health department asked to delay a discussion about support for a tobacco retail license that would charge retailers a fee to fund an annual inspection program.

The regular council session was preceded by a work session to hear updates from Umatilla Electric Cooperative and Hermiston Energy Services.

UEC general manager Robert Echenrode told the council that UEC was the 25th largest electric cooperative in the country out of 814 last year in terms of the amount of electricity sold. More importantly, its residential rates were in the lowest 2% in the nation. All of its rates combined were the very lowest out of all 814 electric cooperatives at 4.55 cents per kilowatt hour compared to 10.91 cents on average nationally.

However, both Echenrode and HES general manager Nate Rivera said they would likely need to raise rates in a few months after Bonneville Power Administration announces an expected rate increase for wholesale power Oct. 1.

“I cannot say we can absorb all of that again,” Echenrode said.

Rivera echoed that sentiment, noting that wholesale power made up more than half of HES’s costs. Only a small portion of HES’s costs are controlled by the municipal utility directly, Rivera said, and they had already tightened their belts as much as possible to absorb the last rate increase without passing it on to customers.

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