The state of Oregon will continue operating Cole Rivers Hatchery under a new one-year contract with the U.S. Army Corps of Engineers to raise and release about 2.8 million fish annually in the Rogue River Basin and not privatize the operation.

After months of negotiations, the Oregon Department of Fish and Wildlife's new $2.1 million contract with the Corps was signed last week and went into effect Friday, six months after future hatchery operation fell into limbo amid potential changes in how the Corps dealt with hatchery contracts.

Also signed was a one-year, $4.8 million contract for the ODFW to operate four Willamette Valley hatcheries that also were considered for possible privatization earlier this year.

"Besides the amount of time and energy expended by folks, we've come out whole," said Bruce McIntosh, the ODFW's deputy director of fisheries. "Basically, nothing's changed but the (funding) mechanism."

Still unsettled, however, is a contract for the ODFW to continue operating Bonneville Hatchery on the Columbia River. Corps spokeswoman Michelle Helms said the agencies expect an agreement by Nov. 1.

The new Cole Rivers contract includes the option of two one-year extensions and is slightly higher than the about $1.95 million the Corps paid the ODFW last fiscal year to raise and release fish as mitigation for wild fish lost by the Corps' construction of Lost Creek and Applegate dams.

Hatchery Manager Dave Pease said the increase accounts for higher fish-food costs and the hiring of four seasonal workers whose positions were axed in budget cuts four years ago.

"This is a slight increase to get us where we should be," Pease said.

The hatchery, along the Rogue outside of Trail, has 18 full-time employees, he said.

The contract marks the end of a whirlwind six months in which Cole Rivers' operation faced the possibility of privatization much to the chagrin of ODFW fish managers and Rogue anglers worried the shift could harm this program for providing salmon and steelhead for anglers.

For years, Cole Rivers and six other state-run hatcheries were funded by the Corps through five-year operating agreements with the ODFW.

However, an internal Corps review concluded the hatcheries should be run under one-year, competitive-bid contracts.

The Corps in February was prepping to solicit proposals from the ODFW and the public sector to run those hatcheries. However, later reviews determined the complexities of hatchery operations and ODFW expertise qualified the ODFW as a "sole-source" partner.

That resulted in last week's signed contracts and the pending Bonneville contract.

The Corps opted against offering a contract to operate Leaburg Hatchery on the McKenzie River and instead could turn it over to the state of Oregon next year, McIntosh said.

The ODFW has operated Cole Rivers since it went online in 1973.

 — Reach Mail Tribune reporter Mark Freeman at 541-776-4470 or mfreeman@mailtfribune.com. Follow him on Twitter at www.twitter.com/MTwriterFreeman.