By DON McINTOSH, Associate Editor

After several fruitless years spent courting favor with the Portland Development Commission (PDC), building trades union leaders are now going around the agency. They’re taking their agenda directly to Portland City Council. Judging by recent meetings, a breakthrough may be nearing.

Construction unions have tried without success to get PDC to require contractors to pay livable wages and benefits on its projects. PDC is known as a funder of big-ticket construction projects — using public subsidies to spark private development. PDC divvies up $200 to $250 million a year, money it gets from special bonds that are repaid by a portion of the property taxes in “urban renewal” districts.

“We want to ensure that public tax dollar investment is used in ways that enrich working people’s lives, not just line the pockets of a few developers and contractors,” said Cherry Harris, organizer with Operating Engineers Local 701, at a June 7 Portland City Council meeting.

In meetings with PDC officials over the last four years, building trades union leaders have argued that PDC-funded projects should pay the “prevailing wage” rate. Under state law, workers on public construction projects can’t be paid less than the prevailing wage — the standard rate for the area, as determined by an annual wage survey conducted for the Oregon Bureau of Labor and Industries (BOLI). The law is meant to ensure that contractors compete based on competence and efficiency, not based on who pays workers the least. It’s also meant to encourage contractors to offer training and benefits to their employees.

But PDC has said that unless a project is public infrastructure, it is exempt from the prevailing wage law, arguing the law applies only if PDC contracts directly with a construction contractor or actually owns the project at its conclusion.

BOLI, charged with enforcing the prevailing wage law, ruled that the law does apply to PDC on mixed-use, private-public projects that the agency helps fund. But PDC sued in May 2005 to overturn that interpretation, and won in Multnomah County Circuit Court. BOLI is appealing that decision.

PDC’s legal action outraged construction union leaders, like Jim Pauley, president of Iron Workers Local 29. Pauley says his blood boils at the thought of PDC paying lawyers with tax dollars to sue another government agency — all to avoid paying a decent wage to construction workers.

Pauley wasn’t the only one to react that way. Portland City Commissioner Randy Leonard says he’s become increasingly exasperated by the PDC. The lawsuit shows PDC is out of sync with the current City Council, Leonard said; and City Council wasn’t consulted beforehand.

“They introduced this lawsuit basically on behalf of developers,” Leonard told the NW Labor Press.

At a June 6 City Council work session, Leonard invited Labor Commissioner Dan Gardner and PDC Executive Director Bruce Warner to explain to the council how the lawsuit came about.

Warner deferred questions to his attorney.

Gardner told the council PDC wanted the fight: He tried to resolve the dispute but his calls went unreturned. And a task force he appointed to look at how prevailing wage would apply to PDC failed to reach consensus.

Leonard says the solution is to make PDC more directly accountable to the City Council. PDC, created by Portland voters in 1958, is unusual in that it’s a semi-autonomous city department. It’s governed by its own board, whose members are appointed by the mayor and approved by City Council. City Council also must approve new bonds and the boundaries of any new urban renewal districts. Other than that, PDC — the city’s largest agency — is insulated from democratic accountability. It doesn’t need to go before City Council to approve its budget or its priorities.

That has attracted criticism, most commonly that PDC is run by and for big downtown developers, with citizen input an afterthought.

But Mayor Tom Potter is seen as less close to developer interests than his predecessor Vera Katz. And since taking office, he made his wishes very clear: That PDC change its focus to helping small businesses.

Commissioner Leonard says he hasn’t seen that change happening.

“Until recently, they argued that council couldn’t even audit their books,” Leonard says.

Last year, Leonard proposed referring to Portland voters a city charter change that would eliminate the PDC board and make PDC accountable to City Council just like other bureaus — and like development bureaus in most other cities. His proposal failed 4 to 1.

A year later, some think a proposal like that could pass.

“It’s like the sun and moon and stars got lined up and all of sudden City Council is starting to pay attention to PDC,” says Bob Shiprack, executive secretary of the Oregon State Building and Construction Trades Council.

PDC invited hundreds of residents to help weigh competing bids for a Central Eastside development project on the East end of the Burnside Bridge — and then rejected the bid that got the most public support. And last year, a series of mini-scandals over misuse of funds led to a shakeup on the PDC board and the resignation of PDC’s executive director.

So the time may be right for structural reform of PDC, Shiprack thinks.

In case City Council shrinks from the task, Shiprack’s group, made up of construction unions in the AFL-CIO labor federation, is considering a ballot initiative along the lines Leonard proposed. Shiprack said he expects to hire a pollster to test Portlanders’ receptivity to that change — or to a requirement that PDC abide by the prevailing wage law.

“We know there’s public support for family-waged jobs,” Shiprack said. In fact, a failed 1994 statewide ballot measure aimed at repealing the prevailing wage law got its strongest margin of victory in Portland.

To refer a charter change to voters, the City Council would have to act by mid August. At the June 6 meeting, Potter said he wanted to see what comes of his Charter Review Committee — a group of citizens picked by the mayor to look at the charter and propose changes. Though it hasn’t released its formal proposals, the committee has reportedly rejected the idea of bringing PDC under council authority.

If PDC were brought in, City Council could scrap the lawsuit against BOLI, and pass an ordinance settling the matter of prevailing wages.

Whether that happens or not, building trades union leaders are increasingly making their agenda part of city policy discussions, responding to what they see as a welcoming mood on the council — and council interest in policies aimed at paying working people a living wage.

On May 18, Mayor Potter met with building trades union officials at a breakfast organized by the Northwest Oregon Labor Council.

Later that day, the Metropolitan Alliance for Common Good (MACG), a coalition of churches, unions and other community groups, brought City Commissioners Leonard and Erik Sten to the stage at an assembly in the gymnasium of Concordia College — to hear the message that construction contractors should be required to provide comprehensive health care for employees and their families when public dollars are involved. Sten and Leonard said they agreed. [Last year, MACG won a non-binding commitment by PDC to increase funding for affordable housing, though its parallel demand — that the building be done by workers earning prevailing wage — was rejected.]

City Commissioner Sam Adams might well have been at the MACG assembly, too, except that a city ordinance restricts more than two council members from meeting without declaring it an official public meeting.

For his part, Adams has assigned his labor liaison Terry Richardson to work with labor leaders to craft a proposed city ordinance codifying how the city deals with contractors.

One approach being considered is a “responsible contractor” ordinance, along the lines of what the national AFL-CIO Building and Construction Trades Department calls “best value” contracting. It’s also known as competitive sealed bidding; basically, it’s a bidding process like that used by the Oregon Department of Transportation and many federal agencies — in which factors other than cost are considered in awarding contracts.

The city could require that contractors — and subcontractors — prequalify as responsible contractors before bidding on public work. For example, they could be asked to demonstrate that they offer training, have a good safety record, pay decent wages and benefits, including family health benefits, and offer opportunities for minority workers.

Richardson said the group is likely to seek support for a symbolic resolution by the end of June, and something more tangible by the end of the summer.

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