HERMISTON – The Hermiston City Council Monday awarded a $700,000 contract to Pioneer Construction for runway improvements.

The Pendleton firm is expected to repave Runway 4-22 this summer as part of an $850,000 project that will include raising runway lights after repaving is completed. With federal and state grants going toward the project, the city’s cost is less than $7,100, according to C. Ray Jones, assistant city administrator.

The council approved – after a public hearing at which no one spoke – applying for a $750,000 federal grant that would fund an $862,500 Economic Development Revolving Loan Fund Program. City Manager Ed Brookshier said Umatilla County has set aside $50,000 in lottery revenue for a match and the city would provide $62,500.

“We have no tools to help small businesses in terms of financial incentives,” Brookshier said. “This program would allow loans to be made to commercial-type activities as well as industrial.”

If the city receives the federal funds and begins the program, it could lend from $25,000 to $250,000 to each applicant until funds are depleted. Interest rates would be from 3 percent to 6 percent. Businesses receiving the loans must agree to provide at least one new full-time, entry-level job for each $20,000 received, he said.

In other business Monday, the council:

?Amended city ordinances to prohibit consuming alcoholic beverages in city parks and other public places, except during private events at McKenzie Park, for which hosts must obtain a permit.

?Initiated annexations of 5.36 acres south of Denny’s for A-1 Hospitality, which intends to build a hotel, and for Leticia Gutierrez’s residential lot at 1850 N.E. North St. The Planning Commission and City Council will conduct public hearings on the annexations next month.

?Accepted Councilwoman Robbie Wolfe’s resignation and set 5 p.m. June 29 as the deadline for applications to fill her Ward IV position until Dec. 31, 2010. Ward IV comprises Precinct 130, the city’s southeast quadrant.

?Initiated vacating a right-of-way west of The Cottage to accommodate building the proposed Old West Federal Credit Union at 1739 N. First St. City Planner Clint Spencer said the right-of-way was established about five years ago as a possible north-south route between West Theater Lane and Harper Road.

?Renewed the city’s jail bed contract with Umatilla County for 2007-08. The county charges the city $55 per day for one dedicated bed in the county jail. The city has used it full time during the past year, Brookshier said.