Board continues to disagree on whether land allocation to ports is OK

BOARDMAN — The Columbia Development Authority faces an uncertain budget future after the federal government asked for its grant money back.

The CDA board, during its regular and budget meetings Tuesday afternoon, March 25, heard from its fiscal agent and member entity, the Port of Morrow, that the negotiations with the Office of Local Defense Community Cooperation regarding its more than $800,000 grant have stopped.

Port of Morrow Executive Director Lisa Mittelsdorf said the port would voluntarily terminate the grant on March 26. Voluntary termination of the grant will allow the port to still receive federal grants for other projects in the future.

Eileen Hendricks, chief financial officer for the Port of Morrow, said the port will be submitting reimbursement claims through the termination date, meaning only a portion of the original $857,330 grant would be lost — what should end up being about $274,607 after the federal government approves the reimbursements.

Board member and Confederated Tribes of the Umatilla Indian Reservation Executive Director J.D. Tovey said he thought everyone seemed too calm to hear about the loss of hundreds of thousands of dollars.

“ The loss of the existing funds is something that I don’t think we’ve taken seriously enough with the organization,” Tovey told his fellow board members.

Downsized support

In addition to the loss of the rest of the 2024-25 grant, the Office of Local Defense Community Cooperation told the Port of Morrow that even with a new fiscal agent, it’s unlikely the CDA will receive a grant for 2025-26 due to downsizing of some program areas, including the one that supports base redevelopment, the CDA’s purpose.

Mittlesdorf, reading from OLDCC correspondence, told the board: “It is unlikely that we will be able to consider any future funding requests from any entity in support of ongoing redevelopment efforts at this location.”

Because of this, Paul Rabb, budget committee chair, said there will “most likely be changes on what the revenue sources (are) going to be” in the draft budget presented in the committee meeting. He encouraged the CDA board to reach out to the OLDCC and show the efforts they’re making to improve their management system.

“They’re not saying you can’t apply for it. They’re saying they may not fund it,” he said. “Show them those internal controls that you’re putting in place, show them you have a new physical manager managing the grant that has experience with federal funding and then put in for the application.”

Basically, he said, it doesn’t hurt to try reapplying for the grant. This likely would require a new fiscal agent.

A 2014 intergovernmental agreement between the five entities comprising the CDA specifies the board will “select one of its member public entities” to serve as the fiscal agent to maintain accurate financial records, receive funds and make payments, and obtain audits per the board. Additionally, the board may ask the fiscal agent to provide employer services such as payroll and benefits.

Although the Port of Morrow is stepping down from the role, the board has not selected a replacement.

Alternate sources of revenue

While the grant application process is happening, the CDA also decided to explore other ways of gaining revenue, including the sale of a land parcel. In a 4-1 decision, the board authorized Greg Smith, CDA executive director, to negotiate terms of a sale for 100 acres on behalf of the board, though he will have to return to the board for approval of the sale.

That board assigned that land in Morrow County in a split vote in March 2024 to the Port of Morrow. As that land transfer has not yet gone through — at least in part due to Umatilla County suing the CDA board — port representatives said they would be willing to leave 100 acres off of that transfer so the CDA could sell the land and keep the revenue generated.

CDA board member and Umatilla County Commissioner John Shafer said while legal negotiations between the county and the CDA — the Port of Umatilla, in particular — are ongoing, he did not want to vote on the sale of land that should not be transferred to the Port of Morrow. However, for efficiency’s sake and to not delay finding new revenue streams, Shafer agreed to a caveat on the motion that no action would occur while the property’s ownership is in question.

Tovey was the lone opposition vote. During the discussion, he said he felt like the land had originally been taken and “distributed under duress, or under a complete disagreement” from him and others, referring to Shafer. Tovey said he felt like 1,000 acres had been taken away and the board was now meant to feel grateful to the Port of Morrow for giving them 100 acres of what should still belong to the CDA as a whole.

The 2014 intergovernmental agreement detailed a property agreement the board members disagree on the meaning of.

“All assets acquired by the (Columbia Development Authority) during the course of its operations under the terms of this Agreement shall be the assets of the (CDA) alone, and not of the Parties,” the IGA says in Section 6. “The Board may transfer or distribute all or any part of the Authority’s funds, property or assets.”

In an agreement between the U.S. Department of the Army and the CDA, signed Dec. 22, 2022 by Smith, the parties agreed “all proceeds from the sale, lease or equivalent use of the Property, or any portion thereof, received by CDA during the Reinvestment Period (of seven years after it was transferred from the Army) … shall be reinvested to support the economic redevelopment of, or related to, the Property conveyed to the CDA under the (Economic Development Conveyance of property).”

Board members disagree on whether those statements mean the board has the right to allocate the land to the two ports and, even if they can, where the revenue generated from sales goes to. Shafer said his understanding is the revenue should return to the CDA to be reinvested, but the CDA’s attorney previously said that’s not the case. Representatives from the Port of Umatilla, Port of Morrow and Morrow County agreed with her enough to vote to transfer the entire land parcels to the two ports.

Smith told the board the disagreements they’re having now should be expected as part of the process for figuring out what’s best for the region.

“When I was hired in 2014, the  board (at the time) knew these conversations were going to occur,” he said. “They knew there was gonna be a lot of arm wrestling and a lot of tugging back and forth, and I think the conversations you’re having today are indicative of what they saw.”