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The Port of Centralia and its former executive director Kyle Heaton finalized their separation agreement Dec. 12, with the total separation pay totaling at least $403,669.07, according to documents acquired by The Chronicle through a public records request
Heaton, whose final day of his nearly 25-year career as the port executive director is Dec. 31, will receive $326,450.88 in separation payments spread out over the next 18 months, beginning in January 2026.
The separation pay is the equivalent of 18 months of Heaton’s $217,634 base salary as of the separation date. This amounts to a monthly payment of $18,136.16.
Heaton’s separation payout also includes $77,218.19 for accrued but unused vacation time, which totals 738 hours. This amount will be paid in a lump sum on the first regular payroll date following the effective date of the separation agreement.
The port will also pay Heaton’s individual Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation premiums for his medical and dental insurance directly to his health insurance provider on his behalf for 18 months following the separation date. However, the port’s obligation to pay COBRA subsidies will cease immediately upon Heaton’s acceptance of full-time employment and obtaining health care benefits under its new employer’s plan.
The Port of Centralia voted unanimously Dec. 3 to terminate Heaton’s contract following an executive session. However, Commissioner Peter Lahmann, who initially voted in favor of terminating Heaton’s contract, declared his intent to rescind his vote Dec. 17 while the commission voted to approve the minutes of the Dec. 3 meeting.
Lahmann did not sign Heaton’s separation agreement, the document shows. Port Commission President Kyle Markstrom, Commissioner Julie Shaffley and Heaton signed the document, which is dated Dec. 17.
The port has since appointed Amy Graber as the interim executive director. Graber also serves as the port’s finance and administration director.
On Dec. 20, 2017, Heaton and the port entered into an employment agreement memorializing certain terms governing Heaton’s employment as executive director. Section 7 of that employment agreement included provisions regarding Heaton’s termination from employment, including Section 7(a) which provided Heaton with a lump sum payment equal to 24 months of severance pay, 24 months of healthcare benefits, and payout of all accrued but unused vacation upon Heaton’s termination by the port without cause.
This has since changed. The port lowered the payment from 24 months to 18 months of severance pay and 18 months of health care benefits. In the separation agreement, the port clarifies this change.
“Such a lump sum payment would likely adversely affect the port’s available funds and impede its ability to invest in new economic development initiatives,” the port wrote.
The separation agreement states that the port would have paid Heaton’s regular wages through the separation date whether he signed the agreement or not, less all lawful and authorized deductions and withholding. Additionally, if Heaton has incurred any reimbursable business expenses and submits an expense report no later than 30 days after the separation date, the port will pay any reimbursable expenses in accordance with the port’s expense reimbursement policy.
Heaton’s participation in all other port benefit plans and programs ended or will end either on the separation date or on the last day of the month in which the separation date fell.
The agreement further states that while Heaton has the right to any vested benefits, he does not have claims or entitlement to additional compensation or benefits of any kind from the port past, present or future, except as set out in the agreement.
Markstrom has indicated on multiple occasions that the move to terminate Heaton’s contract comes as the commission will soon begin a “new chapter” with newly elected Commissioner Ally Pickard set to replace Shaffley in January 2026. Pickard defeated Shaffley in the November general election.
“The decision to propose terminating the contract with Executive Director Kyle Heaton is not one I bring forward lightly. Heaton has served the Port of Centralia for more than 20 years, and during that time he has been instrumental in driving economic development, attracting employees and expanding our community’s tax base,” Markstrom said during the Dec. 3 meeting. “His leadership has contributed significantly to the port’s growth and success, and he has positioned the port financially to continue providing tremendous economic benefit well into the future. I want to acknowledge and thank him for that service.”
Markstrom added on Dec. 17 that he had “significant emotional angst” about the future of the port with the incoming commission.
“It was a sad event to make that motion,” Markstrom said. “While I do have a relationship with Executive Director Heaton and all the employees of the port, as well as fellow commissioners and other members of this community, I’m truly heartbroken for this community because I see it as the end of a tenure of great success and development for my community, the community I care so much about. So many people I know are employed by the port, have made livings to support their families, and have been benefactors to the development and all of the success that the port has had over the last 20 years.
“Quite honestly, I feel like that continued success is in jeopardy,” he continued. “And for that, I have significant emotional angst.”
If the new port commission opts to do so, it can appoint a permanent executive director once Pickard is sworn into office.
Heaton had served the port as its executive director since January 2001.
