BAKER CITY — Baker County Commission Chairman Bill Harvey and Commissioner Bruce Nichols say their decision to not extend the county’s contract with economic developer Greg Smith is based on declining revenue, not on Smith’s performance as the county’s contractor over the past several years.

Both commissioners also said they were not concerned about potential conflicts of interests based on Smith’s contracts as an economic developer with adjacent counties, or his service as a state legislator.

The Baker County Economic Development Council, which advises Harvey, Nichols and the third commissioner, Mark Bennett, voted Thursday not to renew Smith’s $96,000-per-year contract when the new fiscal year starts July 1.

The reason, both Harvey and Nichols said on Monday, is that revenue from a tax collected from guests at motels and other lodging establishments has dropped substantially over the past fiscal year.

That lodging tax revenue is the source of the money for Smith’s contract.

The contract, which took effect July 1, 2018, was slated to continue through June 30, 2022. The contract includes a clause allowing either party to cancel the agreement with 60 days written notice. That clause also allows the county to end the deal if “funding from federal, state or other sources is not obtained and continued at levels sufficient to allow for the purchase of the indicated quantity of services.”

Harvey said Smith “did very good work for us for many years.”

The county has contracted with Smith, a longtime Republican state legislator from Heppner, since 2011.

The likelihood that Smith won’t remain as the county’s economic developer is “just economics,” Harvey said.

He said the situation is not related to a story by The Malheur Enterprise newspaper in Vale, that examined Smith’s multiple contracts to oversee economic development in other counties besides Baker, including Malheur and Harney.

Both Harvey, who was elected as commission chairman in 2014, and Nichols, who was elected in 2016, said they don’t believe Smith’s simultaneous holding of contracts for economic development in those counties constituted a conflict of interest, or that Smith’s company failed to do the work for which it was hired.

“We just can’t afford that position,” Harvey said.

Baker County’s lodging tax revenue dropped from $625,000 in the 2016-17 fiscal year to $538,129 in 2017-18. The majority of that money is paid by guests at lodging establishments in Baker City.

The county is projecting a further drop in the lodging tax revenue, to $420,000, for the fiscal year that starts July 1.