Unions, Sten mull reform of PDC

Council control of agency's budget may become ballot proposal

Commissioner Erik Sten is drafting a proposed ballot measure that would give the City Council authority over the budget of the Portland Development Commission, the city's quasi-independent urban renewal agency.

Sten said he has not yet decided whether to submit the measure to the council for placement on the November general-election ballot. The PDC spends more than $200 million a year on development projects in 11 urban renewal districts around town.

'I think the council should have control over the PDC's budget, but I want to get feedback from the rest of the council and other people involved with the PDC before I make a final decision,' he said.

Sten said he also wants to hear from the Oregon AFL-CIO, which this week began polling Portland residents about their feelings on the PDC. According to Bob Shiprack, president of the Oregon Building Trades Council, the $20,000 poll includes questions on the public perception of the agency and its spending priorities.

Among other things, the unions want the council to compel the PDC to require that developers pay state-set construction wages on agency-supported projects. A majority of the council - Sten, Sam Adams and Randy Leonard - agree but do not have the authority to make the PDC comply.

'At this point, we think the City Council should do something to make sure the PDC does what they want it to do, but we want to see what the poll shows before we talk to the council about specifics,' Shiprack said, adding that the poll should be completed in two or three weeks.

Sten said he might consider waiting until next year to place the measure on the ballot. Mayor Tom Potter has appointed a citizen Charter Review Commission that also may propose changes to the PDC. The commission is not scheduled to finish its work until early next year, however.

'I want to coordinate my effort with the mayor and might be willing to include it as part of a larger charter-reform package next year, depending on what it looks like the commission might be recommending,' Sten said.

John Doussard, Potter's press aide, said waiting until the commission completes its work is the best idea.

'The mayor doesn't think there should be competing measures. The commission's proposals deserve a fair hearing,' he said.

If Sten decides to submit a proposal for this November, he is likely to have the support of Adams and Leonard, giving him the majority he would need to place it on the ballot.

Adams has repeatedly expressed support for the council exerting more control over the PDC, especially to guarantee that more affordable housing units are included in agency-supported projects.

Leonard has gone even further, proposing a charter amendment last year to give the council control over all aspects of the PDC, not just its budget. It died for lack of other council support at that time.

The PDC board has not taken a stand on any possible charter-reform proposals, including the one being drafted by Sten. New PDC board chairman Mark Rosenbaum declined to comment on the concept of the council having control over the agency's budget until after he has seen Sten's specific measure.

'Whatever happens, I think it is important that the PDC's agenda be forward-looking,' said Rosenbaum, managing partner of Rosenbaum Financial, a local financial management firm.

Whatever is proposed must comply with state urban renewal laws. The council has until

Aug. 16 to place a charter measure on the November ballot.

Board full of new faces

Ironically, Sten is drafting the measure as Potter is on the verge of appointing his first complete PDC board of directors. When Potter took office in January 2005, the five commissioners had been appointed by his predecessor, Vera Katz. Their terms have all expired over the past 18 months, allowing Potter to appoint their replacements, including Rosenbaum, who was elected PDC board chairman Monday.

Potter appointed his fourth commissioner Wednesday: Charles Wilhoite, managing director at Willamette Management Associates, a firm specializing in financial consulting, economic analysis, and business valuation services. Until recently, Wilhoite also served as chairman of Potter's Charter Review Commission.

If confirmed by the council next week, Wilhoite will join Rosenbaum and two other Potter appointees on the board - Bertha Ferrán, a senior mortgage consultant at Windermere Mortgage Services, and Sal Kadri, owner of ValueCAD, a high-tech company.

'I think the new board is well-positioned to move the PDC forward, and to do so in close cooperation with the council,' Rosenbaum said.

Potter has not decided yet on the fifth and final commissioner, Doussard said. According to Shiprack, organized labor believes one of its own should fill that post. He is pushing John Mohlis, a bricklayer who serves as executive secretary-treasurer of the Columbia Pacific Building Trades Council.

Mohlis said he has told Nancy Hamilton, Potter's chief of staff, that he wants to serve on the PDC board.

'I'd be honored to serve on it. I have a lot of experience with construction projects. The PDC is involved in a lot of construction projects, and I think they would benefit from my perspective,' he said.

Mohlis thinks the PDC should require developers to pay state prevailing wages on agency-supported development projects. Prevailing wages are set by the state labor commissioner, based on an annual survey of construction wages conducted by the Oregon Employment Department. They tend to be the same as union wages, especially in metropolitan areas, such as Portland.

The PDC has so far resisted requiring developers to pay prevailing wages and has successfully fought the state in court over the issue. But Rosenbaum said the question of whether and when to require prevailing wages be paid is open to discussion.

'There is a lot of confusion over this issue that needs to be resolved. Whether or not a member of the labor community serves on the commission, we need to discuss the issue and resolve it,' Rosenbaum said.

Mohlis said he is interested in more than the prevailing wage rate issue, noting that he serves as a trustee on the fund of the $75 million Northwest Bricklayers Pension Trust, which has much of its money invested in real estate.

'I understand the business end of real estate deals,' he said.

Doussard said the mayor knows of Mohlis' interest and will interview him along with other potential nominees.

Mayor allows closer eye

Rosenbaum believes there are two primary reasons why the council is taking such a close look at the PDC - Portland's new mayor and the city's financial situation.

'Mayor Potter's approach to government is different than any of his predecessors. He is committed to making decisions in an open and transparent manner. Previous mayors have insulated the PDC from a lot of scrutiny. This is the first time the council has been able to ask questions about the PDC's policies and decisions, and they expect answers,' he said.

At the same time, Rosenbaum believes the council has less discretionary money to spend on public projects, especially since the federal government has cut back on the housing and transportation funds available to cities.

'The city's access to resources is just really stretched. In these circumstances, access to the piggy bank at the PDC is very tempting. There's just not a lot of money to pay for streets, parks or housing anywhere else,' he said.

Sten agrees the PDC controls a lot of redevelopment dollars, which is why he thinks the council should have a greater say over how it is spent.

'The council should be driving the PDC's agenda. At this point, the PDC is driving the city's development agenda,' Sten said.

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