Saying it is committed to creating more family-wage jobs in the city, the Portland Development Commission’s board of directors on Dec. 6 unanimously passed a resolution calling for a construction wage policy on private projects that it helps fund.

PDC is the quasi-independent development arm of the City of Portland. Since 2004 it has invested more than $200 million in private and public construction development projects, oftentimes in the form of low-interest loans, grants and on infrastructure.

For years, building trades union officials have argued that PDC-funded projects should pay workers the “prevailing wage” rate. PDC has balked, claiming that private projects (other than infrastructure) are exempt. PDC sued the Oregon Bureau of Labor and Industries (the agency that enforces the law) earlier this year after BOLI determined that a renovation project in Northeast Portland prevailed.

Under state and federal laws, 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. BOLI coordinates and enforces the state survey and the U.S. Department of Labor conducts and enforces a federal survey. The laws are meant to ensure that contractors compete based on competence and efficiency, not based on who pays workers the least.

PDC uses city tax dollars to spark private development. It divvies up tens of millions of dollars each year on projects both large (South Waterfront condos) and small (the Tin Roof renovation). Many of the projects are multi-use — meaning part of the project is for commercial use, part is for residential, and part can even be for parking — with financing coming from various entities, including private investors, city, state and/or federal tax dollars, and special low-income housing programs.

“Existing (state prevailing wage) statutes don’t clearly address public-private projects,” said Bob Shiprack, executive secretary-treasurer of the Oregon State Building and Construction Trades Council. “PDC is trying to draw a very clear line (as to when the prevailing wage law should apply)”

Commissioners directed PDC staff to develop a “draft wage policy” that outlines specific requirements for when a privately-owned project that receives PDC funding would be subject to prevailing wage rates. It also wants the wage policy to include language that will expand opportunities for minorities and women in construction.

The draft wage policy will exempt certain smaller scale forms of PDC programmatic investment such as business and tenant assistance programs and new market tax credits, as well as affordable housing projects (in accordance with a recent agreement reached between the Community Development Network and construction unions.)

At the Dec. 6 meeting, PDC Commissioner Charles Wilhoite referred to a $750,000 threshold for triggering prevailing wage requirements.

Shiprack confirmed that in meetings with PDC staff, building trades union officials tentatively agreed that if PDC’s investment in a project is less than $750,000, the project would not prevail. If more than 25 percent of a PDC project comes from public funds, the project would prevail.

“It’s a true compromise by the unions,” Shiprack said.

Under state law, a project prevails if it is more than $50,000.

Shiprack told the NY Labor Press that if the finalized PDC wage policy is acceptable, he will take it to the State Legislature for implementation.

“This public-private issue isn’t just a problem in Portland,” he said. “It’s a problem statewide,”

Earlier this month legislative leaders sent a letter to PDC commissioners encouraging them “to find a resolution regarding the application of prevailing wage rates to public/private projects.”

The PDC wage policy action is the initial result of a Construction Wage Study, which the Board began last August. The wage study included four public work sessions and nearly 20 hours of panel discussions, public testimony and input from PDC.

Many of the issues raised concerned the impacts and benefits of prevailing wage rates as it pertains to job training; construction employment and contracting opportunities; cost and quality of construction; and workforce diversity.

Participation included leaders of the Oregon Bureau of Labor and Industries , union and nonunion organizations and members, developers, contractors, minority-and women- owned business and construction workers, as well as other jurisdictions.