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August9,2010

Via E-mail and US. mail                              STRATEGIEggO

Commissioner Tom Albro
President Bill Bryant
Commissioner John Creighton                       Exhibn__LA"_____
Commissioner Rob Holland                         Port Commission% of
Commissioner Gail Tarleton                             Meeting of      0

CC: Tay Yoshitani

Dear Commissioners:

Whenever I talk to friends and associates around the state and share the
story of STITA's
contract dust-up with the Port of Seattle, people always have the
same reaction. It goes
something like this: "What did you expect? It's the Port of Seattle. They don't know how to
change. It's just how they do business."

I've been closely engaged in public policy issues for
more than 40 years, for eight of those as an
elected county auditor who understands public contracting
processes. There's very little I
haven't seen and even less that shocks me. So when I tell you that the Port's actions
on this taxi
concession rank right up among the most egregious violations of public trust I've
seen, please
understand that I do not say so lightly.

What happened here was that your CEO exceeded the
scope of his authority. You authorized
one contract, but he signed a severely altered document.

As you know, this contract has broad public
consequences for travelers and residents, the
tourism sector, the cab industry and the 450 STITA families who
currently serve the airport.
Staff did this in spite of two letters from STITA's lawyers informing them that the Port
was in
violation of the Open Public Meetings Act for failing to bring
a substantially altered contract back
to the elected commissioners for further review and deliberation.

The changes to that contract were substantial (and legally
material)  not minor ones as your
staff says  and the contract does not resemble the
one you voted to authorize in December
2009. STITA specically asked that this matter be brought back before
you before the contract
was signed, but the Port staff simply ignored that request, and
your CEO signed anyway.

I doubt any of you have read the version of the contract that
was signed, and it was never
considered by you in an open public meeting as required by law. The December
15, 2009
meeting concluded with an instruction to staff to award the contract to Yellow Taxi. "Award"
means ll in a few blanks, not rewrite whole sections.

Additionally, I'm deeply troubled that your staff sent a letter to the "losing" bidders dated Dec. 11
four days before they brought the choice of a vendor to
you, the elected decisionmaking body
of the Port. 80, who really made the decision here? Does this sound like
a new and transparent
era in Port dealings? (Those letters were even attached in the memo
your staff provided on
Dec. 15.)



TRATEGIES 360  I  1505 WestlakeAveN Suite 1000 Seattle, WA 98109 I T 206282-1990  F 206-282-2704 I www.5trategies360.com

In addition, crucial, damaging information has been intentionally and deliberately withheld from
the Port by Yellow Taxi. lts sister company, BYG Taxi Cooperative Association  which provides
nearly half of the marked Yellow cabs  has been fined $1.1 million in insurance premiums,
interest and penalties by the Department of Labor and Industries.

I doubt either you or Port staff were aware of that. While Puget Sound Dispatch
was
representing to you in its bid that its workers are all "independent contractors" rather than
"covered employees," it clearly knew othenNise, because L&l had determined  after
an
extensive, multi-year audit  that BYG's drivers are indeed "covered employees."

80, it's especially shocking that, in its now signed contract, rather than stating that the Port does
not take a position on the issue, your staff took the position that indeed these drivers
are
"independent contractors"  in direct contravention of the ruling by the responsible state agency.
But rather than ask for direction on this, your staff took the position on
your behalf.

Yellow omitted all of this because a ne of that size on its afliate severely jeopardizes its ability
to perform the contract as bid. Clearly Yellow has serious questions in its
own mind about
whether it can perform the contract, evidenced by their backpedaling
away from the Port's
proposed contract with multiple, substantial changes to the document.

These major changes include:

0  Yellow doesn't have to provide 210 cabs until March of 2011 and can start with only
170. This highlights that Yellow never had the cabs to begin with and always needed
more time to raid STlTA, Orange and FanNest, since that is where the remaining dual
licensed cabs are.
.  Yellow now does not have to meet the ve minute wait time until March of 2010 if they
don't yet have "committed 210 taxis to the Concession..." Although service
was
supposedly paramount in awarding the contract, the Port is giving Yellow a ve-month
pass where it can keep customers waiting as long as they want while it gures out how
to serve the Port. Small wonder staff did not want to put this version back in front of the
Commission.
.  The deadline for Yellow to make the $867,000 balance of its security deposit has been
moved to before "the effective date," which means the Port, in its innite wisdom, won't
know if it's getting the deposit until October 29, a Friday, with the contract due to start
on
Monday, Nov 1. If Yellow can't pay the deposit, then what? And how did they score the
highest in nancial strength if they need to move the date back to pay you?
c  The penalties for being more than ve minutes late to pick up a
passenger were
eviscerated with a nominal $500 daily cap (or 10 instances at $50 each) rather than the
tens of thousands of dollars in damages owed for each late pickup 
as specified in the
RFP.
.  The guarantees to minimize deadheading  a serious concern of Commissioners
were
undermined by a provision inserted by staff to have good faith efforts become the
standard for avoiding default on the contract, not real-world performance
or reduction in
deadheading.

Several times during that Dec. 15 meeting, you asked your staff to negotiate for
a better deal
with Yellow  stronger deadhead reduction, with more green cabs
sooner. Instead your staff
went the other way and negotiated a substantially better deal for Yellow that not only failed to
mitigate your concerns but actually exacerbated them.

Of course, as you have been made aware, this is only the tip of the iceberg with this contract,
which has already generated two lawsuits, well-founded allegations of collusion and
wrongful
bid evaluations, and much more.

I believe you recognize the ramications to the traveling public, the tourism industry, 450 STlTA
families and the Port's reputation if the Port doesn't get this right. Your authority has been
abused and I truly believe that the wool has been pulled over your eyes.

It's now time to pull back the curtain and ask the hard questions, notjust rely
on representations
that this is "all sewn up."




Ron Dotzauer
Founder and CEO
Strategies 360
1505 Westlake Ave. N., Suite 1000
Seattle, WA 98109