BAKER CITY - Baker County’s three-member board of commissioners voted unanimously Wednesday morning to terminate the county’s contract with Gregory Smith & Company LLC for economic development services one year after the four-year pact took effect.

Commissioners cited as a reason a significant drop in revenue from the county’s lodging tax, 25% of which goes to economic development, as required by a county ordinance.

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.

County Commission Chairman Bill Harvey last week described this as a “drastic reduction that has severely crippled our economic development abilities.”

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

The current contract, which took effect July 1, 2018, was slated to continue through June 30, 2022. The contract paid Smith’s company $96,000 per year.

The contract includes a clause allowing the county to terminate the pact, with written notice to Smith, “if county 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.”

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