BOARDMAN — The Port of Morrow may voluntarily terminate its grant agreement with a federal agency funding Columbia Development Authority staff’s salaries.

The port, in a special meeting Monday, Feb. 24, voted to request an extension regarding a request from the Office of Local Defense Community Cooperation to voluntarily terminate its grant award of almost $800,000 as fiscal agent for the Columbia Development Authority. In January, the federal agency conducted a compliance review of the Port of Morrow regarding the grant. The OLDCC eventually asked for the voluntary termination of the grant from the port.

The port, CDA and OLDCC had approved the grant last year, though the application’s budget justification inaccurately said the CDA board had approved salary increases for staff members. The grant’s error led to conflict between the Columbia Development Authority board and its staff in late 2024.

The OLDCC found the grant’s budget justification section did not accurately reflect reality. The grant, when submitted and approved by the OLDCC and the port, inaccurately said salary increases for Columbia Development Authority staff members had been approved by the CDA board.

The Office of Local Defense Community Cooperation on Friday, Jan. 21,  asked the Port of Morrow to voluntarily terminate its grant award after the federal agency found the port lacking in its role as the grant’s fiscal agent. The port’s board members voted Feb. 24 to request a 30-day extension to explore avenues to keep the grant funding. As of early Tuesday afternoon, the request had not been officially submitted.

Columbia Development Authority board members discussed the repercussions of the possible funding loss Feb. 25, during the board’s regular meeting at the Port of Morrow. Joe Taylor, Port of Morrow commissioner and representative member for the Columbia Development Authority, said the port is hopeful there could be alternatives to losing the grant entirely, like transferring the role of fiscal agent to another entity.

The port’s Chief Financial Officer Eileen Hendricks said the port would resign as fiscal agent “as soon as this gets resolved.” Taylor confirmed the statement after the meeting finished, saying “it’s what we would like” to do.

J.D. Tovey, representing the Confederated Tribes of the Umatilla Indian Reservation, said he found out about the compliance review more than 10 days after the OLDCC’s preliminary conclusions to its compliance review, to which the Port of Morrow responded Jan. 30.

“This is, like, financial impropriety, financial challenges, financial oversight,” said Tovey. “It should’ve been brought to the board’s attention immediately. I want somebody to take responsibility for it.”

Hendricks, with the port, said since the compliance review was of the Port of Morrow’s role with the grant, she didn’t initially think it was necessary or pertinent to bring the issue to the CDA board.

“We are the responsible party as far as OLDCC goes,” she said.

Greg Smith, executive director of the CDA, was one of two staff members to receive significant raises through the inaccurate grant. In a September 2024 board meeting, Smith was criticized by some members of the board for the inaccurate statement in the budget justification.

At that time, they also discussed his timekeeping, which was supposed to be overseen by the Port of Morrow, but he was self-certifying, instead, acting as both employee and approver. The timecard issue was noted by the OLDCC, as well.

If the Port of Morrow board does not receive an extension, it will voluntarily terminate the award. If it does not, the OLDCC will report the Port to a government-wide system and the mark against the port will affect its ability to receive, or even apply for, other federal grants in the future.

The letter did not specify what would happen with funds previously distributed from the grant award. After the meeting, Taylor said his understanding is the OLDCC could take the money back but it’s not a guarantee. He added that losing the grant funding would cause the board to reevaluate and adjust Smith’s salary.

Tovey said after the meeting that he wants it resolved, and this situation makes it clear that the CDA needs to improve its operations. And despite Smith and the Port of Morrow taking at least some responsibility for the inaccurate grant, he said responsibility for operations, economic development and other CDA tasks ultimately falls to the CDA board itself.

“We need to be better,” he said. “ The (potential) loss of the OLDCC grant is just indicative of our inability to operate effectively.”