Portland parking meter techs win fight against outsourcing

By DON McINTOSH, Associate Editor

Six Portland parking meter technicians are about to get $28,300 each. That’s the penalty the City of Portland was ordered to pay for trampling a union contract clause that was supposed to prevent outsourcing of their work.

Laborers Local 483, the union that represents the parking meter techs, warned more than three years ago that the city would be breaking its union contract if it paid a private company to upgrade city-owned parking pay stations — work similar to what the city employees had previously done.

City Council ignored the warning and approved the outsourced upgrade in November 2006. The union filed grievances, and was vindicated in binding arbitration.

As detailed in the December 2009 arbitrator’s ruling, hearing transcripts, and interviews, Local 483 did everything it could to defend workers’ contract rights, while the city tried to hide the outsourcing from the union, and then dug in its heels with multiple and contradictory legal arguments.

Nothing smelled right about the decision to contract this work out, said Local 483 Business Manager Richard Beetle. And it smelled worse and worse when the Portland Tribune and other newspapers began scrutinizing the city parking operation in a series of articles in 2008.

The collective bargaining agreement between the City of Portland and the seven-union District Council of Trade Unions (DCTU) is a model for its strong protections against privatization. Since 1976, a clause in the contract has said the city can’t contract out work done by members of the bargaining unit, unless it can show that it will result in reduced costs. And those cost savings can’t be the result of paying private sector workers lower wages and benefits. There’s an exception: The city can contract out work that has previously been contracted out. But even then, the union has to be given 10 days notice and a reasonable opportunity to discuss the matter, allowing it to make alternate proposals on how to do the work.

None of those requirements were followed when the city outsourced an upgrade of its ultra-modern parking meters in late 2006.

For decades, in-house parking meter technicians had repaired and maintained the city’s coin-fed single-space mechanical parking meters. Then in 2002, Portland became the first U.S. city to install the new “SmartMeters” — solar-powered electronic pay stations that accept coins and debit/credit cards, and print out sticker receipts that drivers affix to vehicles. Working with manufacturer Parkeon, the city’s techs learned how to repair and maintain the new machines. They became expert enough that they completed a system-wide upgrade in 2004, ahead of schedule and under budget.

But in 2006, parking managers determined that the city could cut the bankcard fees it pays for each transaction if it replaced a firmware component in to enable real-time credit card authorization.

No one ever notified the union that the city intended to have a contractor do the work. But parking meter techs became suspicious when a manager directed one of them to deliver two meters to the premises of a private company, “so [they] could learn how to work on them.”

A workplace union steward called then-Local 483 Field Representative Michael Dehner (now a rep for Oregon AFSCME). Dehner fired off a letter Oct. 18, 2006 asking if the city was considering contracting out an upgrade. As the arbitrator later put it, “the city not only failed to notify the union … it affirmatively misled the union,” and “disingenuously claimed confusion about what the union wanted.”

Weeks later, Dehner was reading the agenda for the upcoming Nov. 14 City Council meeting when he saw an item — approval of a three-year $1.3 million contract with Toronto-based Precise ParkLink to upgrade downtown SmartMeters. A schedule conflict kept Dehner from attending, but he submitted a letter to Council, warning they would be violating the union contract if they approved the deal. No response.

Precise ParkLink was approved, and it subcontracted with a local company, FeatherLite, to do the work. FeatherLite had an existing contract with the city to store and deliver the meters’ adhesive paper, but had no special qualifications or experience working on parking meters.

“It was maddening,” Dehner said. “The city had already invested in training our people, and yet here it was attempting to take work away from highly-trained, well-qualified and dedicated public servants, and hand it to a corporate entity that was trying to do it very inexpensively.”

FeatherLite hired two workers, and got to work in Spring 2007 — removing meters, switching out components, and re-installing the meters.

City parking meter techs say problems began with the very first meter FeatherLite worked on. Re-installed machines were improperly anchored to the sidewalk, missing parts, and put back together wrong. The city techs took pictures of machines that had been certified by the contractor as in working order, and displayed them on a “wall of shame” at their workshop. An improperly installed cable in one machine prevented insertion of credit cards. In another, the paper wasn’t fed to where it could print a receipt. Protective boots on batteries were missing, putting a machine at risk of short-circuit.

And FeatherLite wasn’t returning machines to the same locations they were removed from. That rendered useless five years worth of machine-specific maintenance records the city techs had written on cards stored in each SmartMeter. It also caused confusion for customers. Machines would have stickers that said “one-hour parking” on blocks where street signs said there was three-hour parking.

The city parking meter techs protested, all six signing a letter to then-Commissioner Sam Adams complaining that they were having to spend city resources repairing work the contractors had done improperly. Union representatives set up a meeting with Adams and labor liaison Terry Richardson, at which techs showed the photographs and explained what was going on. Nothing changed. Techs were told they would be written up for insubordination if they refused to fix problems with machines installed by FeatherLite.

Worse was yet to come.

Lacking experience with SmartMeters, FeatherLite employees may also have been unaware of certain security features in the machines, features which alerted the city’s techs when $3,400 disappeared out of meters while they were in FeatherLite’s possession. The techs notified management. A police investigation went nowhere, but FeatherLite reimbursed the city for the losses.

In February 2008, Precise ParkLink terminated its contract with FeatherLite, citing “financial irregularities, incapacity or unwillingness to provide project management … and other reasons.” Precise ParkLink then sent two employees to Portland for six months to complete the upgrade.

Other unsavory details began to tumble out. Bruce Feathers, owner of FeatherLite, lawyered up and threatened the city with legal action. As detailed by Nick Budnick for the Portland Tribune, Feathers charged that city Parking Operations Division Manager Ellis McCoy had acted improperly to get Precise ParkLink to cancel its contract with FeatherLite — after Feathers declined to hire him.

The Tribune also reported that McCoy had tweaked Precise ParkLink’s bid documents before they were submitted. Precise ParkLink had been the only bidder. And it was McCoy’s suggestion that Precise ParkLink subcontract with FeatherLite; McCoy also advised Feathers how much to pay the employees who would do the work.

Before their falling out, McCoy and Feathers traveled to Toronto, where Precise ParkLink paid for meals, golfing, and fishing. McCoy also accepted meals and Blazers tickets from Feathers.

The Tribune reported that when McCoy learned of the missing money from the meters, he alerted Feathers — before police were informed. Feathers cleared his employees of wrongdoing, after they volunteered for and passed polygraph tests paid for by the company. A deputy district attorney concluded that McCoy’s actions eliminated the chance for police to catch the suspects unaware, according to a memo the Tribune obtained.

Soon after Precise ParkLink got the contract to do the upgrade, McCoy had begun negotiating a plan to sell all the city’s meters to Toronto mortgage broker Fovere Capital Management, Precise ParkLink’s financing partner, for $9.4 million; the city would then lease the meters back over five years for about $12 million, while also paying Precise ParkLink $3 million ($591,000 a year) to maintain them.

McCoy angled for FeatherLite to hire him, sending Feathers a résumé and a business plan that proposed they try to replicate the sale-and-lease-back idea in Seattle.

The sale-and-lease-back proposal was headed to City Council for approval, but the decision was delayed and then scuttled after then-city auditor Gary Blackmer expressed “significant concerns.” Blackmer’s office learned of the proposal from the Tribune's Budnick just as his office was preparing to issue an audit report on the SmartMeter program.

The revelations led the city to investigate McCoy. Two years later, McCoy remains; FeatherLite continues to do business with the city; and no managers appear to have faced any sanction for the city’s violation of the union contract.

But the union workers got their “day in court” in 2009 when their grievance protesting contracting out got to the stage of arbitration. A city attorney argued that the work had been contracted out because it was too technical for city employees to handle. But in the hearings and during the arbitrator’s visit to the city’s parking meter workshop, the integrity and professionalism of the city’s techs was evident, says Barbara Diamond, attorney for the union.

“The city was overtly and continually disrespectful to the union,” Diamond said. “They treated the process with such disdain; I think that’s partly what the arbitrator picked up on.”

The arbitrator ordered the city to cease and desist from further violations of the union contract, and pay the techs 780 hours of back pay at the overtime (time-and-a-half) rate. Since most of the group earns $24.21 an hour, the total cost to the city comes to over $200,000.

Dehner faults Adams, then commissioner, now mayor, for the fiasco. It was Adams’ bureau when the outsourcing contract was approved, and it’s his bureau now. Dehner said he and the techs pleaded with Adams for intervention, but Adams hid behind city attorneys.

“They had multiple opportunities to intervene and set this straight, and they failed,” Dehner said.

The city attorney’s office did not return Labor Press calls.

It’s not clear when the checks will be issued. As of press time, over a month had passed since the arbitrator’s Dec. 17, 2009, ruling, and Diamond was contemplating legal action to get the city to pay.