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SUCCESSES IN URBAN PROBLEM-SOLVING, MAYORAL PERSPECTIVES
=======================================================================
JOINT HEARING
before the
SUBCOMMITTEES ON THE DISTRICT OF COLUMBIA
of the
COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT
and the
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
and the
SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT
MANAGEMENT, RESTRUCTURING AND THE
DISTRICT OF COLUMBIA
of the
COMMITTEE ON GOVERNMENTAL AFFAIRS
and the
SUBCOMMITTEE ON THE DISTRICT OF COLUMBIA
of the
COMMITTEE ON APPROPRIATIONS
UNITED STATES SENATE
ONE HUNDRED FIFTH CONGRESS
FIRST SESSION
__________
MARCH 11, 1997
__________
Serial No. 105-17
__________
Printed for the use of the Committees on Government Reform and
Oversight and Appropriations of the House of Representatives and the
Committees on Governmental Affairs and Appropriations of the United
States Senate
U.S. GOVERNMENT PRINTING OFFICE
41-800 WASHINGTON : 1997
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
J. DENNIS HASTERT, Illinois TOM LANTOS, California
CONSTANCE A. MORELLA, Maryland ROBERT E. WISE, Jr., West Virginia
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
STEVEN H. SCHIFF, New Mexico EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California PAUL E. KANJORSKI, Pennsylvania
ILEANA ROS-LEHTINEN, Florida GARY A. CONDIT, California
JOHN M. McHUGH, New York CAROLYN B. MALONEY, New York
STEPHEN HORN, California THOMAS M. BARRETT, Wisconsin
JOHN L. MICA, Florida ELEANOR HOLMES NORTON, Washington,
THOMAS M. DAVIS, Virginia DC
DAVID M. McINTOSH, Indiana CHAKA FATTAH, Pennsylvania
MARK E. SOUDER, Indiana TIM HOLDEN, Pennsylvania
JOE SCARBOROUGH, Florida ELIJAH E. CUMMINGS, Maryland
JOHN SHADEGG, Arizona DENNIS KUCINICH, Ohio
STEVEN C. LaTOURETTE, Ohio ROD R. BLAGOJEVICH, Illinois
MARSHALL ``MARK'' SANFORD, South DANNY K. DAVIS, Illinois
Carolina JOHN F. TIERNEY, Massachusetts
JOHN E. SUNUNU, New Hampshire JIM TURNER, Texas
PETE SESSIONS, Texas THOMAS H. ALLEN, Maine
MIKE PAPPAS, New Jersey ------
VINCE SNOWBARGER, Kansas BERNARD SANDERS, Vermont
BOB BARR, Georgia (Independent)
------ ------
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
Judith McCoy, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on the District of Columbia
THOMAS M. DAVIS, Virginia, Chairman
CONSTANCE A. MORELLA, Maryland ELEANOR HOLMES NORTON, District of
ILEANA ROS-LEHTINEN, Florida Columbia
STEPHEN HORN, California THOMAS H. ALLEN, Maine
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Ron Hamm, Staff Director
Howie Denis, Counsel
Ellen Brown, Clerk
Cedric Hendricks, Minority Professional Staff Member
COMMITTEE ON APPROPRIATIONS
BOB LIVINGSTON, Louisiana, Chairman
JOSEPH M. McDADE, Pennsylvania DAVID R. OBEY, Wisconsin
C. W. BILL YOUNG, Florida SIDNEY R. YATES, Illinois
RALPH REGULA, Ohio LOUIS STOKES, Ohio
JERRY LEWIS, California JOHN P. MURTHA, Pennsylvania
JOHN EDWARD PORTER, Illinois NORMAN D. DICKS, Washington
HAROLD ROGERS, Kentucky MARTIN OLAV SABO, Minnesota
JOE SKEEN, New Mexico JULIAN C. DIXON, California
FRANK R. WOLF, Virginia VIC FAZIO, California
TOM DeLAY, Texas W. G. (BILL) HEFNER, North
JIM KOLBE, Arizona Carolina
RON PACKARD, California STENY H. HOYER, Maryland
SONNY CALLAHAN, Alabama ALAN B. MOLLOHAN, West Virginia
JAMES T. WALSH, New York MARCY KAPTUR, Ohio
CHARLES H. TAYLOR, North Carolina DAVID E. SKAGGS, Colorado
DAVID L. HOBSON, Ohio NANCY PELOSI, California
ERNEST J. ISTOOK, Jr., Oklahoma PETER J. VISCLOSKY, Indiana
HENRY BONILLA, Texas THOMAS M. FOGLIETTA, Pennsylvania
JOE KNOLLENBERG, Michigan ESTEBAN EDWARD TORRES, California
DAN MILLER, Florida NITA M. LOWEY, New York
JAY DICKEY, Arkansas JOSE E. SERRANO, New York
JACK KINGSTON, Georgia ROSA L. DeLAURO, Connecticut
MIKE PARKER, Mississippi JAMES P. MORAN, Virginia
RODNEY P. FRELINGHUYSEN, New Jersey JOHN W. OLVER, Massachusetts
ROGER F. WICKER, Mississippi ED PASTOR, Arizona
MICHAEL P. FORBES, New York CARRIE P. MEEK, Florida
GEORGE R. NETHERCUTT, Jr., DAVID E. PRICE, North Carolina
Washington CHET EDWARDS, Texas
MARK W. NEUMANN, Wisconsin
RANDY ``DUKE'' CUNNINGHAM,
California
TODD TIAHRT, Kansas
ZACH WAMP, Tennessee
TOM LATHAM, Iowa
ANNE M. NORTHUP, Kentucky
ROBERT B. ADERHOLT, Alabama
James W. Dyer, Clerk and Staff Director
----------
SUBCOMMITTEE ON DISTRICT OF COLUMBIA APPROPRIATIONS
CHARLES H. TAYLOR, North Carolina, Chairman
MARK W. NEUMANN, Wisconsin JAMES P. MORAN, Virginia
RANDY ``DUKE'' CUNNINGHAM, MARTIN OLAV SABO, Minnesota
California JULIAN C. DIXON, California
TODD TIAHRT, Kansas
ANNE M. NORTHUP, Kentucky
ROBERT B. ADERHOLT, Alabama
Americo S. Miconi, Staff Assistant
COMMITTEE ON GOVERNMENTAL AFFAIRS
FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware JOHN GLENN, Ohio
TED STEVENS, Alaska CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine JOSEPH I. LIEBERMAN, Connecticut
SAM BROWNBACK, Kansas DANIEL K. AKAKA, Hawaii
PETE V. DOMENICI, New Mexico RICHARD J. DURBIN, Illinois
THAD COCHRAN, Mississippi ROBERT G. TORRICELLI, New Jersey
DON NICKLES, Oklahoma MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania
Hannah S. Sistare, Staff Director and Counsel
Leonard Weiss, Minority Staff Director
Michal Sue Prosser, Chief Clerk
------
SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING AND
THE DISTRICT OF COLUMBIA
SAM BROWNBACK, Kansas, Chairman
WILLIAM V. ROTH, Jr., Delaware JOSEPH I. LIEBERMAN, Connecticut
ARLEN SPECTER, Pennsylvania MAX CLELAND, Georgia
Ron Utt, Staff Director
Laurie Rubenstein, Minority Staff Director and Chief Counsel
Esmeralda Amos, Chief Clerk
COMMITTEE ON APPROPRIATIONS
TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri PATRICK J. LEAHY, Vermont
SLADE GORTON, Washington DALE BUMPERS, Arkansas
MITCH McCONNELL, Kentucky FRANK R. LAUTENBERG, New Jersey
CONRAD BURNS, Montana TOM HARKIN, Iowa
RICHARD C. SHELBY, Alabama BARBARA A. MIKULSKI, Maryland
JUDD GREGG, New Hampshire HARRY REID, Nevada
ROBERT F. BENNETT, Utah HERB KOHL, Wisconsin
BEN NIGHTHORSE CAMPBELL, Colorado PATTY MURRAY, Washington
LARRY CRAIG, Idaho BYRON DORGAN, North Dakota
LAUCH FAIRCLOTH, North Carolina BARBARA BOXER, California
KAY BAILEY HUTCHISON, Texas
Steven J. Cortese, Staff Director
Lisa Sutherland, Deputy Staff Director
James H. English, Minority Staff Director
------
Subcommittee on the District of Columbia
LAUCH FAIRCLOTH, North Carolinam Chairman
KAY BAILEY HUTCHISON, Texas BARBARA BOXER, California
TED STEVENS, Alaska, (ex officio) ROBERT C. BYRD, West Virginia (ex
officio)
Professional Staff
Mary Beth Nethercutt
C O N T E N T S
----------
Page
Hearing held on March 11, 1997................................... 1
Statement of:
McCrory, Patrick, mayor, Charlotte, NC; Susan Golding, mayor,
San Diego, CA; Stephen Goldsmith, mayor, Indianapolis, IN;
Knox H. White, mayor, Greenville, SC; and Edward G.
Rendell, mayor, Philadelphia, PA........................... 11
Letters, statements, etc., submitted for the record by:
Cunningham, Hon. Randall, a Representative in Congress from
the State of California, prepared statement of............. 21
Faircloth, Hon. Lauch, a U.S. Senator in Congress from the
State of North Carolina, prepared statement of............. 4
Golding, Susan, mayor, San Diego, CA, prepared statement of.. 25
McCrory, Patrick, mayor, Charlotte, NC, prepared statement of 15
Morella, Hon. Constance A., a Representative in Congress from
the State of Maryland, prepared statement of............... 45
Norton, Hon. Eleanor Holmes, a Representative in Congress
from the District of Columbia, prepared statement of....... 9
Rendell, Edward G., mayor, Philadelphia, PA, prepared
statement of............................................... 52
White, Knox H., mayor, Greenville, SC, prepared statement of. 40
SUCCESSES IN URBAN PROBLEM-SOLVING, MAYORAL PERSPECTIVES
----------
TUESDAY, MARCH 11, 1997
House of Representatives, Subcommittee on the
District of Columbia, Committee on Government
Reform and Oversight, joint with Subcommittee
on the District of Columbia, Committee on
Appropriations; U.S. Senate, Subcommittee on
Oversight of Government Management,
Restructuring and the District of Columbia,
Committee on Governmental Affairs; and
Subcommittee on the District of Columbia,
Committee on Appropriations,
Washington, DC.
The subcommittees met, pursuant to notice, at 1:20 p.m., in
room 2154, Rayburn House Office Building, Hon. Charles Taylor
(chairman of the House Committee on Appropriations,
Subcommittee on the District of Columbia) presiding.
Present: Representatives Taylor, Davis, Morella,
Cunningham, Tiahrt, Northrop, Norton, Allen, Moran, Dixon, and
Senators Faircloth, Brownback, and Boxer.
Staff present: Committee on Government Reform and
Oversight, Ron Hamm, staff director; Howie Denis, counsel;
Ellen Brown, clerk; Cedric Hendricks, minority professional
staff member; and Jean Gosa, minority administrative staff.
Committee on Appropriations, Americo Miconi, clerk.
Mr. Taylor. Our ranking members, Senators Boxer, Leiberman,
and Representative Moran and Norton, are with us today.
This is the first hearing of our appropriations
subcommittee for this Congress. And I'm very pleased that it's
a joint hearing with the four congressional committees with
jurisdiction over the District of Columbia. Our purpose is to
explore how our great American cities have dealt with a variety
of problems similar to those faced by our Nation's Capital.
We all feel that this is our Capital, and we take a great
deal of pride in Washington, DC, we want to see that this city
is a model for the Nation. And the mayors who have so
graciously agreed to come are here today to make suggestions.
And we'll have an opportunity to approach it in that way. We
want to share with America's Capital how other cities have
addressed the challenges of economic development, educational
quality, infrastructure improvement, public safety and general
governmental efficiency.
We want the Nation's Capital, as I said, to be a model for
the Nation and for the world. We are pleased that this landmark
hearing brings together the congressional committees charged
with oversight of our Nation's Capital as envisioned in our
constitution. Our concern is not only for the one half million
residents of the District of Columbia, but for the 260 million
Americans across the Nation, who look to Washington as our
national symbol both at home and abroad.
We've asked the mayors, Susan Golding of San Diego, Stephen
Goldsmith of Indianapolis, Patrick McCrory of Charlotte, NC,
Mayor Rendell of Philadelphia, and Knox White of Greenville, SC
to join us today. Other mayors from across the country may make
suggestions--written suggestions--and even public comments to
help the committee as the hearings and time go on.
But we're pleased to have these mayors with us today. We'd
like each of them to make a short opening statement, and then
we'll follow with questions. Our hope is that we have more of a
round table here today, that we have an opportunity for
discussion back and forth, and a less formalized proceeding. I
understand that Mayor Goldsmith has to leave at 3:30 p.m., for
another hearing, but will be back, and Mayor Rendell from
Philadelphia will be here some time between 2:30 p.m., and 3:30
p.m.
With their busy schedules, we appreciate their effort. To
facilitate our process this afternoon, and to allow each of us
an opportunity to ask questions, I would like to follow the 5
minute rule. We have a timer here to remind us when our 5
minutes are up. And with that, I'd like to yield to the
distinguished chairman of the Senate Appropriations
Subcommittee, Lauch Faircloth, Senator Faircloth.
Senator Faircloth. I want to thank Chairman Taylor for
holding the unprecedented hearing of the four committees in the
House of Representatives and in the Senate with jurisdiction
over the Capital and the District of Columbia. It's no secret
to any of us or to anyone that the great city of Washington is
in trouble, big trouble. The city's finances are in chaos, and
infrastructure is in dire need of improvement.
Over the past several weeks--last week or two--I have met
with Mayor Barry, Representative Eleanor Holmes Norton, Dr.
Andrew Brimmer, and other members of the DC Control Board and
members of the city council from Washington, the elected city
council. I met with Police Chief Soulsby. And this morning I
met with General Julius Beckton and his staff, the
superintendent of the District's public schools.
I haven't met anyone that didn't have the same goal, the
same aspirations and the same hopes. Sometimes they approached
it from different perspectives, but, certainly, everybody would
like us to head in the same direction. And each of us pledged
to make this city, this pristine type of Capital, that not only
the people that live within the bounds of the District of
Columbia, but as Chairman Taylor said, the other 260 million
people of this Nation--plus, it's a world capital as well as a
Nation's Capital. As Capital of this country, it's a world
capital.
I will be the first to say that Congress and the American
people cannot and will not allow the city to fail and to spiral
deeper into chaos. We have a special duty to restore it to the
greatness it should always have had. There is no question, when
we hear the various mayors of the other cities, that we have to
keep in mind--Washington is a very special case. It's
different. It does not have the infrastructure of a State to
support it in many ways that are State supported.
There are many things that Charlotte or Indianapolis or San
Diego are supported by State government that the District of
Columbia does not have. And we have to always be cognizant of
that. We have to always be aware that so much of the property
is not subject to taxation. There is no chance to expand the
city limits of Washington. And there are severe and very proper
constraints on the type and size of building that can be built
here.
These are special conditions, and that is the reason that
the Federal Government is always going to have the obligation
of supplying additional money to make the city viable and to
make it work. But, of course, with that comes the--to see that
the money is properly spent and that it's used in the right
way. I want to extend a special welcome to my good friend,
Mayor Patrick McCrory of Charlotte.
Charlotte is now our Nation's second largest banking and
financial center, and a proud city of 500,000 people. I'm
proud, also, to have our former mayor here, and now
Congresswoman, Sue Myrick. Mayor McCrory has done a fine job of
carrying on the fine record of a lot of previous mayors of the
city, and Mayor McCrory, we're delighted to have you.
Mr. McCrory. Thank you very much.
Senator Faircloth. Thank you, Mr. Chairman.
[The prepared statement of Hon. Lauch Faircloth follows:]
[GRAPHIC] [TIFF OMITTED] T1800.001
Mr. Taylor. I'd like to introduce Chairman Tom Davis of
Virginia, who is chairman of the House Subcommittee on the
District of Columbia.
Mr. Davis. Thank you, Chairman Taylor. Today's joint
hearing is a historic recognition of the high priority that the
issues in the Nation's Capital are receiving from Congress and
the executive branch this year. I'm so pleased to share the
dias today with Senator Sam Brownback, Senator Lauch Faircloth,
Congressman Charles Taylor and members of the subcommittees
that they chair. All of us, authorizers and appropriators
alike, share a solemn and special responsibility for the
Nation's Capital and those who reside in this region.
The congressional leadership--both parties in both Houses
have agreed with President Clinton that the District of
Columbia is one of our top five priorities this year as we
proceed with budget negotiations. Some time this week I
anticipate an announcement from the Speaker concerning the
makeup of the leadership of the House task force to work with
the Senate and the administration on this issue.
Our subcommittee has already begun the process of hearings
on the President's proposal, and this hearing is an adjunct of
that process as we move to deal with District issues. Our next
hearing is going to be held this Thursday in a joint hearing
with our Senate counterparts led by Senator Brownback to hear
views of local leaders on the President's proposal.
I said 2 years ago, during the consideration of the control
board legislation, of which I was the chief sponsor, that we'd
need to address important underlaying issues in the structure,
form, resource base and responsibility of the District of
Columbia when we had enough good information to get good
answers to our questions and when enough good data was
available on which to base decisions.
It appears that the time has come for this discussion and
consideration. In conducting this discussion, it will be
helpful to have input from other people from around the country
who have had to deal with urban problems and issues similar to
those facing the District of Columbia. In many ways, the
District is unique and cannot be compared and contrasted with
any other city. But in many other and important ways, its
problems are familiar to all urban residents and officials.
Today's hearing is designed to gather information from
municipal leaders across the country--and we've got some of the
best--as to how they have handled concerns similar to those
that we're dealing with within our Nation's Capital. All of the
mayors who will testify shortly have great experience with
urban problems. I'm sure we'll all benefit from their
experiences as we seek to fashion further legislative
initiatives here in our Nation's Capital.
Two years ago, on March 8, 1995, our subcommittee heard
from State and local leaders who'd experienced and overcome
tough financial times. We heard from the mayors of Cleveland
and New York and Philadelphia. All of these cities had positive
experiences with financial control boards in other forms of
urban rejuvenation. We gained valuable insight as a result of
that testimony as we fashion legislation to create the control
board which is now in place in Washington, DC.
For those who live in the region, as I do, and are stake
holders in the vitality of the city--as a Congressman from
northern Virginia, a former head of the government in Fairfax
County across the river, I know that a healthy city is
necessary for a healthy region. The citizens of this region are
vital stake holders in what we do. This is not a theoretical
exercise. The establishment of the control board and the job it
is doing make it possible for us to now move into the second
phase of our reform efforts.
As we do so, it's important that we continue to address
these serious issues in a bi-partisan way. I'm grateful to the
ranking member of my subcommittee, Delegate Eleanor Holmes
Norton, for working with me in that spirit. We've gotten this
far by working in a collegial atmosphere, avoiding partisan
bickering and have thus succeeded in making great progress
toward our common objectives. This was all before the bi-
partisan retreat in Hershey last weekend.
But we can't be blind to the fact that we still have a long
way to go. We're on the right track. It's only natural that
each of us may have somewhat different views from time to time
as to how best to accomplish our objectives. But I'm optimistic
that we'll be able to work together in a constructive way.
I look forward to working with all of my colleagues in this
important matter. I assure them all that we welcome their views
in this process. We will involve them fully as we move forward.
And Chairman Taylor, I thank you, again, for calling this
hearing and instigating the idea and for you and Senator
Faircloth inviting the members from authorizing committees to
participate.
Mr. Taylor. Thank you, Chairman Davis. I want to introduce
the ranking House member from the--minority member--Jim Moran
from Virginia. Jim and I have had the pleasure of working
together on other subcommittees. And I'm glad to have him with
us today. Jim.
Mr. Moran. Well, thank you very much Mr. Taylor. I
appreciate that. Let me just say that I think the time has come
for us to recognize that a sufficient number of politicians
have advanced their own careers at the expense of the District
of Columbia.
It's important that we work with the District's own
leadership and citizens to provide sufficient resources to
bring about the economic development and the social
opportunities that other urban areas have, and the sufficient
will, perhaps, to say no to some of the interest groups that,
as well, have advantaged themselves at the expense of DC
citizens.
I think that many of these cities have some very good
suggestions for what worked in their cities. But, as was
mentioned earlier, the District of Columbia is a somewhat
unique situation.
It has more cooks crowded into the kitchen than there is
room for. And I think we have to understand that if we are not
prepared to give the kind of autonomy to the District of
Columbia that these mayors would all insist upon before they
would assume the responsibility, then we have to recognize that
there ought to be a quid pro quo. And there's going to have to
be a certain commitment of concomitant resources.
With that, let me relinquish the rest of my time because I
would like to hear the mayors and get on to this session. Thank
you for calling on me, Mr. Taylor.
Mr. Taylor. Thank you, Congressman Moran. We are pleased
today to have with us Senator Barbara Boxer, who is the ranking
member of the Senate DC Appropriations Subcommittee. I have had
the pleasure of serving with her when she was a Member of the
House. Senator Boxer.
Senator Boxer. Thank you so much, Mr. Chairman. It's nice
to be back, and in this very room where I served on the--what
was it called then? The Government Operations Committee. And
now it's changed it's name. But I was here for quite a while.
Mr. Chairman, I will ask unanimous consent that my full
statement be entered into the record.
Mr. Taylor. Without objection.
Senator Boxer. And I will summarize it so as to not to take
too much of the committee's time. I want to welcome all of our
witnesses. We are very happy to see you here. I want to extend
a very special welcome to San Diego's mayor, Susan Golding. San
Diego is a wonderful city with a vibrant and an involved
citizenry. And it's good to see you here.
Without question the District of Columbia needs our
attention. It is the Capital city of the greatest country in
the world. This country is the envy of the world. And this city
should be a shining city. This city should be a model city. And
I believe if all of us share that vision for the city, we can
help make it happen.
Right now, when we look at the crime and the streets in
disrepair and the crumbling infrastructure, we see the symbols
of a city in need of an infusion of vision and energy in
addition to the extraordinary vision and energy of Eleanor
Holmes Norton, who I think is an extraordinary leader. I want
to acknowledge the contributions of the control board. I know
that it is difficult for those people to do what they do.
They came in in an emergency and they have a daunting task.
DC, unlike any other city has financial responsibilities
typically borne by a State. Those responsibilities include
Medicaid funding, the local match for Federal aid highway
systems, the maintenance of a prison system. DC functions as a
State. And this is an issue with which we in Congress must come
to grips. Notwithstanding the District's financial burdens, I
want to make it clear that those responsibilities don't excuse
the chronic problems of the city.
The solution to the financial and management woes of DC
should be tackled now. And I am pleased that we're doing that.
And with the right spirit we're going to make a good
difference. And I'm also pleased that the President is involved
in all of this.
So, it is in that spirit of cooperation, Mr. Chairman, that
I hope the mayors here today will provide us with some strong
suggestions for the pitfalls that DC faces in today's world,
and also some ideas that they can share to make it a model
city. So, thank you Mr. Chairman. I look forward to hearing
from our witnesses.
Mr. Taylor. Thank you, Senator Boxer. We are pleased to
have Representative Norton, who is the ranking member of the
House DC authorizing subcommittee, and a very energetic
spokeswoman for the District. Representative Norton.
Ms. Norton. Thank you very much Mr. Chairman. And I want to
thank the members who have come here today to hear the mayors,
and, particular, to thank my own colleagues and the mayors who
have agreed to come today. I want to acknowledge the presence
of an elected official from the District of Columbia, Council
Member Carol Schwartz.
This hearing is the idea of the new DC appropriation
chairs, Senator Lauch Faircloth and Congressman Charles Taylor.
I appreciate the collegial relationship that has begun to
develop between these two North Carolinians and this
Washingtonian. Looking at the best practices of other cities is
a good idea, notwithstanding the considerable differences
between the District and other cities. The District is in the
throes of the largest management and operational upheaval in
more than 100 years.
It would be foolish and wasteful to reinvent the wheel,
rather than look at other wheels around the country. The
District, however, like the cities we will hear from today,
will have to decide it's own local governance structure. Given
the city's serious economic condition, neither the city nor
anyone else is in a position to make decisions about governance
today. If governance issues emerge now, the cart moves up
before the horse and we waste valuable time and energy on
needless contention and what I assure you will be a great deal
of quarrelling. At the same time, how other cities accomplish
their operational tasks and run their services can illuminate
the effort to re-engineer the management and operations of the
District government. If we ask cities like Charlotte and San
Diego or Philadelphia and Indianapolis what they would do if
they had to pay for Medicaid, a State prison, a State mental
hospital, a State university and unfunded pension liability all
by themselves, there is little they could tell us.
The District is the only city in the United States burdened
with State, county and municipal functions. We will not be able
to help the District by comparing apples and oranges. However,
there is plenty of room for discussion about the many
operations and services other cites and the District have in
common. The DC city council is beginning it's own series of
hearings on changes in local governance. The council passed a
resolution recently that reads in part, ``Any recommendations
for changes in the home rule charter regarding the structure of
municipal governance should emanate from a comprehensive
process approved by both Federal and District officials and in
which the residents of the District are full participants.''
I doubt that any American could or would care to take issue
with this statement which simply memorializes a basic American
tenet. I ask unanimous consent that the full resolution of the
DC city council be admitted to the record. I will make the
record of this hearing available to District residents and
officials, so that they may profit from the experiences that
will be shared with us today. I welcome today's witnesses and
thank them for coming.
[The prepared statement of Hon. Eleanor Holmes Norton
follows:]
[GRAPHIC] [TIFF OMITTED] T1800.002
[GRAPHIC] [TIFF OMITTED] T1800.003
Mr. Taylor. Thank you, Congresswoman Norton. And all of
their remarks will be entered into the record and will be made
available.
I'd like to recognize, too, the chairman of the DC
government affairs committee--from the city council--Carol
Schwartz, if she would stand. Also Steve Harlan and Ed
Singletary from the control board are with us. And we
appreciate you gentlemen being with us and appreciate your
cooperation that we've had.
I would like to ask our colleague Congresslady Sue Myrick
from Charlotte--herself a former mayor of Charlotte--to
introduce the mayor of the Queen City, of Charlotte, NC. Sue.
Mrs. Myrick. Thank you, Congressman Taylor. I'm delighted
to be here and say a good word about Pat, and just remind
everybody that we've done some good things in our city. When I
was mayor, I started restructuring government and literally
privatizing services for the first time. And at first it wasn't
real well accepted. But, then, then the citizens started to see
that they actually we getting increased services and saving tax
dollars, it got their attention and they agreed that we were on
the right track.
We also have good record in our city of doing public-
private partnerships to leverage tax dollars. And that's been
tremendously successful in efforts from a homeless shelter, the
HOWAY, to an NFL football stadium. So I know Pat's going to
share some of those successes with you. And he's carried on the
tradition for good government in Charlotte.
And I'm really pleased to have this opportunity to
introduce him today and just to say that I look forward to
working with you all in your committees--and anything I can do
to help to overcome some of these challenges that exist here in
DC. And if you will excuse me, I've got a Rules Committee
meeting to go to. Thank you.
Mr. Taylor. Pat. Thank you for being here with us.
STATEMENTS OF PATRICK McCRORY, MAYOR, CHARLOTTE, NC; SUSAN
GOLDING, MAYOR, SAN DIEGO, CA; STEPHEN GOLDSMITH, MAYOR,
INDIANAPOLIS, IN; KNOX H. WHITE, MAYOR, GREENVILLE, SC; AND
EDWARD G. RENDELL, MAYOR, PHILADELPHIA, PA
Mr. McCrory. Thank you very much. It's an honor to be here
today. And I'd just like to make a few personal comments. First
of all, we want to help Washington, DC. In Charlotte, NC, we
consider Washington, DC, to be the symbol for our Nation, and,
thus, a reflection, also, on our entire Nation including our
city of Charlotte. So, we're here to give any advice we can.
And I just also want to make a point that I will also plan to
learn from this session from other mayors that are here today.
That we constantly try borrowing best practices from other
cities, even during good times in Charlotte, NC because we
cannot take for granted what we have today. Because things can
change so rapidly. And during these times of change, whether
you're in the private or public sector, you constantly have to
borrow from the best. And we have, in fact, visited cities like
Indianapolis to borrow from what we consider a very well run
city.
And we borrowed some of their practices and actually have
applied them in Charlotte, NC. So, today I will be taking notes
along with you and other representatives from Washington, DC,
and their city to continue to learn from best practices, both
during good times and difficult times.
Just a brief bio of myself. I've been mayor since 1995. I
was on the city council prior to that, for 6 years. And I also
served as mayor pro temp. I also have been with Duke Power Co.
for 18 years in several management jobs during my 18 years with
Duke Power Co. in Charlotte, NC. Just a few points about
Charlotte, NC that I want to state, and then we'll just give
you some of our best practices in the few minutes that we have.
Charlotte is the largest city between Atlanta and
Washington, with a population of approximately 460,000. And
after this year, we'll be well over 500,000 people. It is the
center of the fifth largest urban center, with approximately
5.6 million people living within a 100-mile radius. And we also
have something we're very proud of, and that is the 14th
busiest airport in the United States. We also, as Senator
Faircloth mentioned, the second largest banking and financial
center. And we're extremely proud of our AAA bond rating.
We also work very closely--and this is a difference between
Washington and Charlotte--as there are many differences--with
our county government. The county government is also a very
similar run form of government in which they have part-time
public officials including the county chairmen and the county
commissioners. And I work daily with the county commissioners
and also the chairman of the county commission in which they
are responsible for the schools, social services, jails, medic,
libraries and parks and recreations, where Charlotte is
responsible for police, fire, garbage collection, the airport,
transportation, water and several other services.
We have consolidated--during the past 6 years--almost all
the services that we can between the city and county
governments. And, in fact, during the past 4 years, we are now
looking at attempting to politically consolidate the city and
county governments. Even though we are going through good
times, we're, again, constantly looking at difficult ways we
can organize our government to bring more efficiency for our
taxpayers.
You have some other information in front of you. I don't
want to repeat it all. But we do have something that I know
Senator Faircloth and Rep. Davis have asked us about, and that
is what we call the council manager form of government since
1928. I am a part-time mayor. Although I put in many, many
hours every week, and we do have an 11 member city council form
of government with 7 district representatives and 4 at-large
representatives.
I'd like to also introduce Malachi Green, who is in the
audience, who is one of our district representatives. We also
are very proud of partnerships that we have with our citizens.
We have over 300 citizens participating in boards which help
advise the city council and the mayor, and also help advise
city staff. In a business sense, basically what we are is
this--is that I serve as the chairman of the board of the city
of Charlotte for its government functions. The city council
serves as its board of directors.
We are responsible for setting the policy for the city of
Charlotte and approving all budget matters for the city of
Charlotte. We hire a professional city manager. And, in fact,
we just hired one in the past year, who is responsible for the
day to day operations of the city. She is trained in those
efforts. And, then, she is, in turn, responsible for the hiring
of the police chief, the fire chief, the CMUD directors--that's
our Charlotte Mecklenburg Utility Department--and other direct
operations that report to the city manager.
Only the city manager, the city attorney and the city clerk
report to the mayor and city council. So, it's very similar to
a business operations, where, again, we are responsible for the
overall policy of the city in Charlotte, where we hire a
professional to deal with the day to day operations for the
city of Charlotte. And that is the difference between even some
of our forms of government that we have on the table today. And
there are pros and cons to each one of those forms of
government. And I'll be glad to discuss those in more detail.
Again, we want to talk about anything we can, in Charlotte,
that may help Washington, DC, meet their own unique situations.
But, like Washington, we do have some unique challenges,
ourselves. And those unique challenges are also true in
Indianapolis, San Diego and Greenville, SC, and that is trying
to meet the ever-needing infrastructure demands while also
trying to keep the sufficient amount of revenue to pay for
those infrastructure demands. And that's--our major challenge
is trying to keep the tax rate as low as possible.
You notice in the information that you have in front of
you, that we have had a very stable property tax rate for the
past 10 years. And we also have implemented, during that time,
a 5-year, $42 million community safety plan, which we're
extremely proud of. We also have a tremendous amount of support
from the Charlotte citizens to support a bond package for
street and maintenance and schools and water/sewer, which is
drastically needed in any city to keep the needed
infrastructure up.
We also are very proud of operating what I think our city
Charlotte be run as, and that is as a business. We try to keep
the politics as much as possible out of the day to day
operations. And we let the professionals participate in those
day to day operations and let the professionals try to make the
decisions in streamlining our government. We, however, as
chairmen of the board, set very strong directive demanding that
efficiency and demanding those types of operations.
Because we also demand no tax increase in the city of
Charlotte with regards to property taxes. Therefore, in fact,
we've had 19 percent fewer city employees per 1,000 population
now than we did in 1980. And that also includes hiring--and
increase in our police department by well over 20 percent. A
key to some of our success stories, which I think you also
learn from Indianapolis and San Diego and also Philadelphia
when Mayor Rendell gets here--and that is that we are convinced
that we must provide a more competitive spirit for our city
employees.
And that best way to do that is introduce competition like
you have in the private sector. And I'll just tell two stories
with regard to that. The first is, regarding our water
operations, for the first time, the city of Charlotte bid out
to the private sector the operations of one of our water
plants--water treatment plants. We did not sell the plant, we
bid out the actual operations. The city of Charlotte won the
bid.
But in doing so, it decreased its costs by over $5 million
by introducing lessons learned from the private sector. In
other words, the introduction of competition actually brought
about more efficient government workers. And we're very proud
of that. And we have a very good relationship with our
government workers in the city of Charlotte. Another example is
where we are now privatizing and putting out for competitive
bids our sanitation collection.
We have privatized 25 percent of our sanitation, which is
now done by the private sector. We will be putting out for bids
this year--in fact the bids just went out 2 weeks ago for
another 25 percent, which is competing against the city
government versus the private sector. And we've got four bids
on the table right now, which we will be reviewing. In addition
to us reviewing that, we have a citizens committee composed of
business people, who are reviewing those competitive bids
outside of city government.
So, we actually have a third party who have business
experience. Because they are a third party and city is involved
in the bids, we have volunteers from our community who are
participating in the evaluation of those bids to make sure
they're fair in both private sector and public sector
evaluations.
Those are just a few of the examples of things we're
attempting to do in Charlotte in the few minutes that I have.
Just in brief summary, we are never satisfied with the status
quo, even during good times in Charlotte. We are constantly
looking for ways to change, because the world around us is
changing so rapidly.
And any organization that is constantly not looking for new
and better ways to do things, I do not think will be around in
the next 10 to 20 years. And that's why we're constantly asking
three questions. And we gave you a package of what we did to
reinvent government. And, again, in my few minutes, I don't
have time to review those. But we asked three basic questions.
The first question is: what business should the city of
Charlotte be in? What services should Charlotte provide?
The second question is: what is the best way to provide
those services. For example, should we have the private sector
provide those services with taxpayer assistance, or should we
have the public sector. Or should we put out competitive
bidding. And the third question we ask, which is really the
final question, is: what's the best form of organization to
implement those services? What's the best form of government
that we should have for the next 10 to 20 years to meet these
ever changing demands of high customer expectations, which are
demanding public safety, demanding good streets with no
potholes, demanding clean water, while also meeting the demand
of no tax increase.
And those are the same demands that are on the private
sector right now. And we anticipate meeting those demands in
the public sector. Again, thank you very much.
[The prepared statement of Mr. McCrory follows:]
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Mr. Taylor. Thank you Mayor McCrory. We appreciate your
comments, and we'll have some questions a little later. I'd
like to introduce a fellow member of the committee, Duke
Cunningham, the Congressman from California, who'll introduce
Mayor Golding of San Diego. Duke.
Mr. Cunningham. Thank you Mr. Chairman. I thank you for
convening this hearing. When you're hot you're hot, when you're
not you're last. So, Susan, it's not that you're last, it's
that I am last. So, we get to introduce you right now. History
has dealt the city of Washington a pretty bad hand in the past.
But the good news is that there is support from the Speaker of
the House, the President, and the District Delegate, Eleanor
Holmes Norton, all of whom have been at the forefront of this
battle.
I am a new member of the DC appropriations panel. I live in
Washington, DC. And the problem is monumental. It's
overwhelming. I lived up by the train station. And I used to
literally have to walk down the street huffed up and saying,
``I'm bad. I'm bad.'' If I was concerned about my safety, you
can imagine that defenseless, in many cases, single women
walking down the street, would feel even less safe.
Citizens do live in fear in Washington, DC. The schools,
although they have many dedicated teachers--the education
system is in shambles, in my opinion. Steve Gunderson, a Member
from the 104th Congress, tried to work to improve the school's
particular system. It's a difficult process that we have. I
think that if someone can shed a great light on DC's problem,
it is our distinguished panelist, Mayor Susan Golding of San
Diego, now serving her second term as chief executive officer
of America's finest city.
California Business Magazine named Mayor Golding's San
Diego the best California city for doing business, based on
quality of life, low crime rate, low business taxes and rapid
permit processes. Why is this significant? Mayor Golding
inherited a city from her predecessor that was in shambles. A
neglected sewage system, high crime rates, an anti-business
attitude out of the mayor's office, higher taxes, higher red
tape--and she turned all that around.
On the same things in Washington that I hear Delegate Mrs.
Norton speaking about, as far as lower taxes, and a pro-
business stance--Susan has turned that around for the better in
San Diego. Her experience and success, I think, will shed light
on how we can improve in Washington. Mayor Golding also
recently brokered a successful NFL expansion stadium agreement.
It was controversial, but--you can see her management skills.
She did well. And we're going to have the NFL championships
there next year.
Basically, Susan Golding, when she does something, it turns
out gold-ing, the way it should. And I have nothing against
Stephen or Pat or Edward or Knox. I would match her against you
or any other mayor in this United States. She's warm. She's
personable. And she's tough. And with that, Mayor Golding.
[The prepared statement of Hon. Randall Cunningham
follows:]
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Mr. Taylor. Thank you, Duke. I appreciate it. Mayor
Golding.
Ms. Golding. Thank you. Thank you, Mr. Chairman. Thank you,
Congressman Cunningham. I hope I live up to that introduction.
Mr. Cunningham. You do.
Ms. Golding. But I do appreciate it. And appreciate the
opportunity to testify before you today. Because it is true
that we all feel that Washington, DC, is our city, because it
is the Capital of our country. I am proud of what we've
achieved in San Diego. But, really the story I have to tell--
and then we can get into questions--is that every city is
different.
I think if you survey these mayors, you'd find out that
every one of us had a different type of governmental structure,
that there were differences in how the power was exerted or
could be exerted, that even the relationship between city,
county or State was different as well. But there are basic
principles that work in any situation. And as someone
previously noted, good practices fit anywhere in any city or in
any government.
And we do borrow from each other a lot. When I see a mayor
who's done something great, I'm the first to try to steal it if
I think it will work in San Diego. But you do have to adjust
any good idea to your own situation or your own city. But much
that has worked elsewhere, I believe, would work in DC, or any
city. You just have to adapt it. In addition the citizens, as
well as, the elected representatives have to believe in it.
In San Diego when I took office, we had a skyrocketing
violent crime rate that had risen about 46 percent the year
before I took office. We were in a very deep recession. The
Nation was in a recession, but in California it was even worse.
And for San Diego it was the worst at that point in time, at
the tail end of 1992. Businesses were literally leaving town.
We had lost at least 60,000 jobs. They were jobs of every
kind: blue collar, white collar jobs. There was really a
tremendous depression in--not economic, we had a recession
there--but a depression among our citizens and the feeling that
just nothing was going to work again. My job was to change the
attitude and also change the statistics as well.
The first thing I did--and one of the most popular things I
ever did--occurred when I took office, I appointed an officer
of common sense in the mayor's office. The only criticism I
received was why isn't there more than one person with common
sense in the mayor's office. But it was an individual that was
there to cut red tape, to make sense out of a lot of the rules
that were really killing us, and to make a list as people
complained, of what had to be changed.
Fortunately today we have many people of common sense, and
we've expanded that. We've started putting all employees
through customer service training. I did say at the time that I
wanted our city government to treat our citizens the way
Nordstrom's treats its customers. Because, after all, we're
supposed to be a service to the citizens. And when you walk
into a government office, you ought to be treated like you're
the guest.
And that's not the way our citizens were being treated.
And, therefore, their attitude about their government's ability
to do anything was not very good. We also started by
immediately putting a moratorium on any new business fees or
regulation until we could dig ourselves out of this hole. We
began regulatory relief days, which I started my first year and
we have continued since, to cut back on rules and regulations
that really weren't necessary, that didn't do what they were
intended to do. They cost everybody from the average home owner
on up to a business, a lot of time, money and aggravation, and
made no common sense.
We established a Business Ombudsman Program that cut red
tape for certain industries particularly high tech industries
that we believed were our future, California's. And I
established the first true regional permit assistance center.
What we did was take local, county and State permits--compare
this to Washington, DC--put them all in one place so someone
could go to just one location instead of 13 or 14 in the city
to get a permit for what they needed to do.
It took some time to put it together, but it's made a huge
difference. We cut permit processing time in half, and in some
instances more than half. And that was money to a lot of
people. Many argue that this was the worst time to cut taxes or
fees because, we were in the worst budget cycle the city had
ever had, I believe, ever. We lost millions in revenue. The
State decided to take millions of dollars from us that had been
historically the city's revenue, because the State was in
trouble.
So, in response, I cut the business tax in half the first
year and cut it in half the second year. Now, there were those
who felt that that was the worst thing I could do when our
revenue was already depressed, when property tax revenues were
going down. I argued that we had to send a signal to turn it
around. And we did just that. We made a series of cuts after
the business tax was cut by 80 percent total the first 2 years.
We made a series of other cuts that I proposed in fees. And
we did, ultimately, cause the city to be turned around. We
developed a reputation for inviting jobs rather than repelling
jobs. And we have now replaced all the jobs we lost. I'm not
talking about each individual job the same, and by at least
8,000 more than we had lost 4 years ago. Today, our business
taxes and fees are, I believe--I want to be careful when I say
this with other mayors here--lower than any other major city,
and any of the 10 largest cities in the country.
By the way, San Diego is the sixth largest city in the
country, the second largest in California. We have a population
of approximately 1.2 million people. We also have the lowest
hotel tax, the lowest real estate transfer tax, no utility tax
and no local income tax. So, my view was we had to make it a
place that you could live and produce jobs during that period.
We also brought the crime rate down dramatically. After my
first year we had a decrease in every index category of crime
for the first time in 40 years. And it has continued to go down
since then. Most recently, through a very strict new curfew
enforcement policy and a juvenile anti-loitering ordinance,
working.
And I'd like to, when I have the chance later, tell you
how. Both which are working. The juvenile violent crime rate
has gone down for the last 2 years. And that, as you know, is
the toughest, toughest part that any city in this country has
to face. And it's tough to keep it down. But we're going to
continue to do that. One other comment that I want to make
before the other mayors talk is that part of this also was to
involve our citizens.
We now have Citizens Patrols in every neighborhood of the
city. They work well. They are the eyes and ears of the police
department. And there are no problems. They are trained by the
police department in liaison with the police department. All
their equipment is provided by businesses. So, it is a
volunteer operation at no cost. They help the kids. They help
the seniors. And they help us keep the crime rate down. And we
use thousands of volunteers just assisting in the police
department.
We have called on our citizens to be full participants. And
without them we would not have been as successful as we have
been. We, too--and I think you'll hear this from many of the
mayors--introduced competition programs. I have terrific
stories to tell about ours. Competition is absolutely the best
way to reduce costs, reform government and make your own
operation more efficient, because just privatizing doesn't
assist your employees in learning how to compete and how to do
their operation better. The competitive bid process does that.
We have improved efficiency.
I put together a panel of CEOs who went through every
department in the city and made 52 recommendations for change,
all of which were adopted, and are being put into place.
They're businesses' best practices, from true benchmarking to
true performance judgments as opposed to what most governments
do--and including ours--which is just to simply say we've done
a good job because we talked to X-number of people and
processed X-number of forms.
We called that task force Change2. And it is still going.
We went to zero-based management reviews. We changed a lot of
our historic practices. And those changes are still going on.
So, our economy is now growing at the fastest rate it has in
the city's history: 4.7 percent. And I believe it's going to
continue at that rate in the future. That doesn't mean
population is increasing at that rate. We have a lower ratio
today of city employee per 1,000 population than we had in
1960.
And it has gone down every year since I've been in office,
because we have become more efficient. But I want you to know
that we may have been the only city in California during that
deep recession that didn't close libraries, that didn't cut
back on the kinds of essential services that the citizens
wanted. But we did prioritize, and that's how we did it.
I introduced a public safety ordinance that requires the
addition of police officers based on a formula of increases in
revenue. So, we've added police officers--new ones--every year
in spite of the worst recession in the city's history. And we
did that by combining a lot of these efforts.
I wish you the best of luck. Washington, DC is terribly
important to the whole country and I would be happy to help in
any way I can.
Some things work well. I'm sure you'll see that we've
adopted, we've copied from each other. So, I hope you are able
to gain some good ideas from the mayors that are sitting here.
And I know we all stand ready to help in any way we can. Thank
you.
[The prepared statement of Ms. Golding follows:]
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Mr. Taylor. Thank you, Mayor Golding. I'd like to recognize
DC City Councilwoman Hilda Mason, if she would stand. She
joined us since we started. We're delighted to have you with
us, Mrs. Mason. Mayor Goldsmith from Indianapolis, IN--we're
very pleased to have you with us today and know a great deal
about the work that you've done in your city. Please make an
opening statement.
Mr. Goldsmith. Thank you very much, Mr. Chairman. And, as
the other mayors, I'm delighted to be invited to share some
observations. I don't think any of us would suggest we know how
to make DC work, just some observations about large cities and
what's worked in our communities. Let me perhaps start with a
few observations.
First of all, I don't view Indianapolis as in competition
with Charlotte or Washington, DC, or San Diego. A large part of
our significant urban centers are in competition with their own
suburbs. And as infrastructure quality has deteriorated, taxes
have gone up, crime has increased, education has decreased.
Money is quite mobile in this country, and it moves. Wealth
moves to where it's most welcome.
It seems to me that there are some basic principles that
all of us have attempted to address to make our large cities
significant sources of investment and opportunities for our
citizens. First, we have to provide high quality, low cost
public services. Second, we have to have a taxed and regulatory
environment that's competitive. And third, we have to provide
quality education.
And let me just make a couple comments on each of those. As
both of the previous mayors mentioned, even though I was
elected on something of a privatization platform, I think the
main principle that we want to underscore here is that it's not
that private sector employees are necessarily more productive
than public sector employees, it's that public sector employees
working in monopolistic situations, work in inherently inferior
systems.
So, what we have done in an effort to produce high quality,
low cost public services, is go through each one of the
businesses that we're in--and we're in about 200 in
Indianapolis alone--find out how much we're spending for each
service--how much it costs to fill a pothole, how much it costs
to clean a sewer, how much it costs to copy a piece of paper--
and bid them out one at a time.
And over this process, we've now bid out 70 public
services, we've reduced our non-public safety work force by 45
percent, we've saved $250 million. And I think it particularly
important to underscore, in the effort to look at DC, there has
been a feeling that the only way to decrease a budget is to
decrease the quality and the quantity of a service. In fact,
our experience, like Mayor Golding's, is actually these are
inversely related, that as we have decreased our budget each
year for the last 5 years, as we've decreased our number of
public employees, in each instance, the quality and quantity of
the service is better, it's not worse.
Our water quality is better. Our golf courses are better.
Our playgrounds are better. Our roads are better, as a result
of allowing our employees, through a competitive process, to
find smarter, more effective ways to spend taxpayer dollars.
Even our unions--even though our public employee work force is
down 45 percent, our unions, given the opportunity to compete,
have competed effectively. And none of our line workers have
been laid off.
Second, with respect to effective low cost public services,
the Government needs to pay attention to the basics. Big city
governments over a number of years have tried to do too many
things. Basically, the job of mayor of Indianapolis is pretty
straightforward. We need to make sure the streets are smooth,
the sewers work, and you don't get beat up on your way to
church or work.
If we get that done, the rest of the economy will work on
its way. So, we have invested, now, with our savings, $700
million in infrastructure repair in the last 5 years alone, and
added $100 million to our public safety budget, without even
raising taxes. So, you can produce more effective, lower cost
public services and do that in a way that doesn't reflect on
the quality of the service.
Second--and I think Mayor Golding covered this, but I'd
like to emphasize it--that rather than trying to patch
together, in an environment that allows for investment, we need
to change the structural barriers to investment in large
cities. The barriers are backward. the investment flows out of
our large cities and into the suburbs. And that means that
taxes have to be competitive. Our tax rate now is the lowest
it's been since 1981, and the regulatory environment has to
say, ``Please come invest your money in our city. We want your
investment.''
We're going to reduce the regulatory barriers. We have our
own regulatory study commission which is perhaps a version of
Mayor Golding's, which says we're going to rigorously manage
down the regulations that don't produce quality in terms of
public safety. So the tax and regulatory environment is
important, as well. And last, although we're not convened to
talk about it today, especially in a welfare reform time, I
don't think we can say, as we all agree, that the path to the
future is a good job, entrap our urban children in
monopolistic, poorly performing urban school systems and
deprive the poorest residence of choice of education for their
children.
We have a privately funded voucher program in Indianapolis
called the Educational Choice Charitable Trust. It has been
evaluated by the Hudson Institute. Controlling for demographics
and parent selection, we find very encouraging results from the
children who are given the right sorts of opportunities as
defined by what their parents think is best.
In summary, Mr. Chairman and the members of the committee,
the future is bright for large urban communities around our
country. They are areas of vibrancy and diversity and
excitement. They are the psychological and economic centers of
our regional economies, and, in the case of DC, of our national
economy. Our report card after 5 years is encouraging. Our
population growth has been more robust than ever before. Our
budget balances are up by four fold. We've had 5 straight years
of budget decreases. We've invested $700 million in
infrastructure. And we've brought down about $1.5 billion in
liabilities.
But just in summary, as we go forward and we try to address
these issues, the job of a mayor, the job of people concerned
about urban communities, is to create opportunity. Opportunity
comes from good education. Opportunity comes from a good
economic playing field. I am proud of the fact that as our
public sector jobs have been reduced, our private sector jobs
have increased dramatically.
The unemployment rate has drooped from about 7 percent to
less than 3 percent. And I believe that's not because
Government is creating the jobs, but because Government is
paying attention to its core responsibilities: public safety,
infrastructure and a competitive economic environment. Thank
you very much.
Mr. Taylor. Thank you, Mayor Goldsmith. I appreciate your
statements on that record, and we'll have questions for you in
a moment. I'd like to introduce Mayor Knox White from
Greenville, SC. Mayor White has worked in Congress in a staff
position and has been an outstanding mayor in South Carolina.
Mayor White.
Mr. White. Thank you, Mr. Chairman and members of the
committee. It is a real honor and a privilege to be here today.
As the chairman mentioned, I had a chance to live in the
Washington, DC, area for many years, so it has a special place
in my heart. And I did try to, as preparing some remarks, to
try to think in terms of one or two helpful concepts that I
think are relevant even to a city like Washington that is so
much larger than my own.
Let me say up front a little bit about Greenville, SC,
since you may know the other cities here today. You may not
know Greenville. Greenville is on the Interstate 85 corridor
between Charlotte and Atlanta, which is very much an area in
the midst of an economic boom. It's a metropolitan area of
about 1 million. We also are noted by the amount of foreign
investment in the area. We have more foreign investment per
capita than any place in the country. Greenville is the home of
Michelin North America. The BMW plant is just across the county
line. Hitachi and other international companies have a large
presence in our community.
And this has, to a large degree, fueled an economic
renaissance in the upstate of South Carolina. One thing that's
quite significant, though, is the economic boom of the area has
also translated into a boom in our downtown. And we have a
classic downtown situation like so many cities in this
country--the downtown was dead and dying in the 1960's and
1970's as the department stores left. We all know that picture.
Today we have record capital investment in downtown
Greenville. We recently won a citation from the International
Downtown Association for our revitalization effort. We have the
office towers and all the usual features of big American
cities, but we also have an extraordinary tree-lined,
pedestrian friendly landscape for downtown full of restaurants,
coffee houses, a 24-hour nightlife and those kinds of nice
amenities. In fact, downtown in our area has become the
entertainment destination for the region.
Everybody goes downtown again. So it's really an
extraordinary thing and something wonderful to see. But, again,
the economy of the area has not always been this way. We were a
textile region. And you know what that can mean. The textile
industry has, of course, changed a great deal. And, again, we
had a downtown that was pretty much dead and dying at one time.
But things have turned around. The area is booming.
How this happened is, first of all, as has been mentioned
so many times now--and this is something that you just have
to--every community has to grapple with--you have to create a
pro-business climate. And that's State and local. And that
means in terms of your taxes and your regulatory climate, it
has to, indeed, be a pro-business community. And second, a
success story of so many communities in this country--
Greenville among the--is a commitment to private-public sector
partnerships. We hear that phrase a lot, but it's tried and
true, and it's been done across this country, where you use
public sector dollars to leverage private dollars to spur
development in areas where, perhaps, things are not happening
fast enough.
We began this effort about in the early 1980's with a hotel
project--a Hyatt hotel project. For instance, the lobby of the
hotel is actually a public park. And, of course, the garage is
a public facility and things like that. After the Hyatt project
of the eighties, we've moved on to a performing arts center
with a great deal of public and private investment and a $50
million arts center, a new arena project--17,000 seat arena
project is about 57 percent private.
So, we have a long-standing commitment to engaging the
public sector to work with the private sector in these kind of
large scale partnerships. Another kind of partnership that I
think is relevant to all cities in this country is a
willingness of a city to get into an area of business that you
don't normally get into--promotion of things like festivals and
special events.
Cities have always had parades, I suppose, but successful
cities have been those that have taken their areas that are not
growing or producing like they should--and that's where you
have the festival. You pick the most down and out section of
town, and that's where you do that kind of thing time and time
again. What I think cities across that country have found is
that if you bring people into areas, people, over the long
haul, induce investment in that area. And that's another
strategy of revitalization.
All of this is to say, though, is that attention to this
kind of amenities--the tree-lined downtown, the special
festivals, those kinds of amenities--show that quality of life
and economic development really go hand in hand. Let me
mention, finally, a strategy that hasn't been mentioned yet,
but I think you'll hear it a lot in the literature out there of
what's going on in urban America, and that's this--it's time to
also pay attention to the neighborhoods, to residential
neighborhoods where people live.
And a lot of cities in this country are so focused on the
9-to-5 environment, the office buildings and the development
around that, that they forget that what really makes a city,
what gives it its heart and soul is the residential component.
You've got to encourage folks to live in cities. People don't
have to live in cities. They can live in the suburbs, and
that's indeed what they do too many times. So, we're trying to
put a great deal of more attention, as we grow with our
economic development program, go back to basics, and now we're
strategizing on ways to make the residential sectors of the
city as livable as possible.
And we're doing something, again, borrowing--as you heard
many mayors state it today, we steal from each other's ideas--
and this is one of them. We have a very intense planning
process underway on the neighborhood level. We start with the
idea that the city is made up of many separate neighborhoods.
And Washington, DC, of course, is full of wonderful
neighborhoods, where if you stop someone on the street and ask
them where they live, they can tell you, ``I live in''--they
don't necessarily say Washington, they say Adams-Morgan or
something like that.
You want to first get into the neighborhoods and identify
what are the neighborhoods that people relate to. Then, we're
in the process of holding meetings in these neighborhoods--
grass roots democracy--inviting everyone to come. And in a free
flowing kind of style, trying to identify what do you like
about this area of town? Why did you choose to live here? If
you were selling a house, what would you tell somebody if they
wanted to live here. And it's important to affirm those good
things about that area, its assets.
And then you turn to what you don't like about this
neighborhood, this area of town. If you're trying to sell a
house, what would you keep people from trying to find out. It's
important to get all that out there, to get the folks on the
neighborhood, grass roots level to talk about the issues before
them, to talk about crime, their level of anxiety about crime,
to look at zoning issues and sidewalks and street lights, local
parks, whatever is on their mind, and help those folds develop
and action plan to for their own neighborhood and to get
focuses on that.
This also has the effect, frankly, beyond an action plan to
address particular issues you identify. It has the effect of
giving people a voice. And if there's anything that I think
cities need to be about these days--and all Government--it's to
try to get into the roots of people's anxieties today. People
have a sense, especially in large urban areas, that their voice
really doesn't count and that things are kind of spinning out
of control and they don't count anymore.
When you get down to the neighborhood level, you start
giving people a voice again. And that contributes to quality of
life as much as anything I know. And I think cities are in a
particular good position to do that. It's just called
democracy, grass roots democracy. Cities can do that, and also
cities can be about nourishing--nourishing not just
neighborhoods, but all private organizations. A city has a
great helper and a great friend in churches, in schools, in
civic clubs, private organizations.
They're out there. They're just waiting to be engaged. And
city can do a lot to nourish those kinds of private civic
organizations and make them part of the solution and again give
people a voice. If you do that, you give people what I think at
the end of the day is what a city is all about, and that's
giving people a dignified quality of life. And in my
definition, that's a successful city. Thank you, Mr. Chairman.
[The prepared statement of Mr. White follows:]
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Mr. Taylor. Thank you, Mayor White. We appreciate this. We
have a number of outstanding members on our various
subcommittees. And I'd like to ask if any of them have
statements they'd like to make before we begin the questioning.
Congresslady Morella.
Mrs. Morella. Thank you. Thank you, Mr. Chairman. I'd like
just to ask unanimous consent that an opening statement be
placed in the record. And I wanted to make sure that you
realize how valuable this hearing is. And I want to commend the
chairmen, all four of them, for putting it together and making
really joint, joint and even bicameral.
It shows how important the District of Columbia is to all
of us, not only those in the region, but throughout the
country. I've enjoyed hearing the panelists share some of their
experiences. I think at the root of it is community, people
involvement, partnerships, investing in something that you
believe in. And I want to thank you all for the presentation
and look forward to asking the questions. Thank you, Mr.
Chairman.
[The prepared statement of Hon. Constance A. Morella
follows:]
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Mr. Taylor. Thank you. You've been a leader, I know, in
working to make Washington, DC better, as well as the
neighboring areas, which you represent a part of that area.
What we're going to do, if we may, we'll start the questions.
Mayor Rendell, who just came, would you like a moment to pause
or would you like to go ahead and start with your statement,
sir?
Mr. Rendell. Whatever you'd like, Mr. Chairman.
Mr. Taylor. We'd be delighted to have your statement if you
are ready to go at this point.
Mr. Rendell. Sure. Absolutely.
Mr. Taylor. Thank you. We know and we appreciate your
schedule and your being able to be with us today. Our procedure
will continue with the mayor's statement and then we'll open
for questions by the members of the committee to the various
mayors.
Mr. Rendell. Well, thank you, Mr. Chairman. And it is my
pleasure to be here, because I'm sure my colleagues indicated
to you that those of us who head up cities and urban centers
have a great felling and a great empathy for others who do the
same. And it is not my goal to come here today to give advice
to Washington, DC, or to this panel or to anybody else. I
haven't had the time to read up on the financial structure or
the extent or nature of the problems that effect Washington,
DC, and I don't purport to be an expert or knowledgeable in any
way on that.
I come here to share, briefly, our experience. And if there
are things that are relevant in our experience to Washington,
DC, then I'm happy to help. And I think all of us come with the
belief that the things that we have done to help our cities'
financial situation are important and we're willing to share
them, but there are long range, inherent systemic problems
facing all American cities, even American cities that have
recovered or are credited with recovery like the five of us,
which do not lie within the power of mayors or city councils to
address.
And I think that is a very, very important factor. What we
have done is cured the financial conditions of our cities, of
our cities' budgets. We haven't been able to get at some of the
deep seeded, underlying problems that effect every American
city--Philadelphia, Washington, DC, and every American city
across the board. And I think that's an important point to
note.
When I became mayor, we started out facing a $230 million
deficit, a deficit that was calculated to grow to $1.4 billion
in the next 3 years if everything froze, including no wage
increases. We were a city that has raised taxes 19 times in 11
years before I became mayor. And we have the highest wage tax
and the highest business taxes in the United States of America.
So, a tax increase wasn't an option.
We were a city where basic services had almost reached an
all time low. So, a massive across the board lay off to balance
our budget wasn't an option either. Because, just as high taxes
drive businesses and tax paying families out of jurisdiction,
so do the collapse of municipal services. So, I believe when I
ran, and I enunciated that during the campaign, I believed that
we could cut money out of the operating budget of the city of
Philadelphia without affecting the quality of the services we
deliver, to the contrary, we could do it in a way where we
actually enhanced many of the services we deliver.
The bottom line is we were able to do so. I've been mayor
for a little over 5 years. We have cut $1.6 billion
cumulatively out of the cost of the operation of the government
of the city of Philadelphia during that time. Are city services
at a level where I'd like to see them? No. But are they
definitively improved over where they were 5 years ago?
Absolutely.
We did not lay off a single individual. Through
privatization, we have lost a net of over 1,000 jobs, but we
did that in a way so that every city worker who was, by
competitive contracting, privatized out of a job, got another
city job. We froze whenever we knew privatization was coming.
We froze for months at a time so we could transfer that city
worker into another job.
So our work force did take a hit. We had to look at our
labor costs. And about 40 percent of the savings that I've
enunciated came on the labor side, including in our first
contract, $300 million in 4 years of savings in the cost of
providing health care to our citizens. And at the end of that,
our workers still had the choice for co-pay, a choice of the
three best HMOs in the city of Philadelphia. So, we were able
to do it in a way where we cut health care costs dramatically,
but without affecting the basic security of any of our workers'
families.
We went out and looked at every facet of what we did as a
government. And I think the cumulative experience of all of us
and mayors who aren't here can tell you that there is no
government that if you examine what it does on almost a line by
line basis, we cannot effectuate significant savings. We are--
the city of Philadelphia leases almost 800,000 square feet of
space. When I became mayor, I became mayor at a down cycle in
rental values for office buildings in the city of Philadelphia.
I immediately ordered our folks to go out and renegotiate
our leases, to renegotiate all of our leases, willing to
extend, in a market where holding on to big hunks of office
space was important, willing to extend leases if we could
reduce current prices. And we saved over $5 million in just the
cost of our operating leases alone. And I could go on and tell
example after example. Double zip coding mail, something as
simple as that that we weren't doing, that racked up close to
$500,000 of savings.
We looked at every facet of what we did. We tried to put
basic principles of private enterprise at work. Privatization--
we have, to this day, privatized 41 municipal functions, which
saved us on an annual basis $30 million. Over the course of 5
years, they've saved us over $100 million. But we've also had
four instances where we did competitive contracting. We let the
municipal workers and their managers put the last bid in. And
they beat back privatization efforts in four areas.
Those four areas save us on an annualized basis, $12.7
million. Including our greatest single savings, in one of our
sludge recycling centers, where the employees and the managers
got together and beat back a privatization bid and cut the
costs by changing work rules, by being more effective in
scheduling, cut the cost from $24 million a year to operate to
$16.5 million to operate. It's a privatization that has an
enormous effect, too.
But we've also looked at revenue enhancement. When I became
mayor, the basic fee structures for the operation of our
government hadn't gone up in 10 years. We raised our fee
structures, found ways to collect taxes better. We privatized
tax collection and gave private attorneys an incentive. They
only get paid when they collected for us. And we now, on an
annualized basis, between fees and tax collection, produce
about $45 million more a year in revenue than we were
producing.
But the things that I think that we did best of all--and I
know that your time is limited--we've managed, through a whole
series of things--I'd be happy to talk about in response to
some of the questions--we managed to incentivize the
government. When you have a government like ours that was civil
service and that had a basic labor contract that restricted a
lot a management rights, it was very difficult to put
incentives for performance in the government, incentives for
cost savings, incentives for better productivity, incentives
for enhancing revenue collection.
I mean, some of the things that we did were so basic that I
would scratch my head and wonder why it wasn't done before. For
example, like Washington we run an EMS service. And we don't
ask questions when someone is in need. We don't, before we put
them in the ambulance say, ``Do you have reimbursement for
this?'' We put them in the ambulance. We never bothered to find
out the people we took to the hospital or EMS whether they had
basic health coverage that would cover the cost of
reimbursement.
By just doing that, $2.3 million in additional revenue a
year. So, there are many things that all of the mayors
assembled at this table, and many others have done, and we'd be
happy to share them with you at length.
[The prepared statement of Mr. Rendell follows:]
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Mr. Taylor. Well, thank you, Mayor. I do look forward to
asking questions. As chairman, I'm entitled to start the
questioning, but I'm going to ask--since several of our members
have pressing schedules--I'm going to ask them if they'd like
to question first and I'll save my questions to the end.
And we'll start with Chairman Davis. If you'd like to start
the questions. I understand that Mayor Goldsmith has to leave
by 3:30 p.m. Am I correct? Does anyone else have to leave
earlier? If not, if you have a question for Mayor Goldsmith, be
sure that you put it to him.
Ms. Golding. I have to leave at 3:30 p.m., also Mr.
Chairman.
Mr. Taylor. Two mayors. Mayor Golding has to leave also.
So, if we'd be sure we get the questions answered by them.
Chairman Davis.
Mr. Davis. Chairman Taylor, thank you very much. Let me say
to each of you that I think you are walking examples of what
leadership can do in troubled cities that first and foremost,
whatever the form of government, however dire the consequences,
leadership is critical to success. You've taken the bull by the
horns. You've made tough decisions. In Washington, one of the
problems has been a culture of not making decisions.
You've probably made some wrong decisions along the way and
you hear about those too. But you've got the guts to go out and
make decisions. As many of you know, I was the head of the
county government in Fairfax, which was city and county
combined, before I came here. I've admired each of you, and
have followed you through different publications. It's a real
privilege to have you here.
Mayor Rendell, the Philadelphia story is impressive,
because being a northeastern city it is similar to Washington
with regard to its labor force. You have collective bargaining
for city employees. Is that right?
Mr. Rendell. Yes.
Mr. Davis. I don't know if all the rest of you have
collective bargaining? Mayor Golding, do you have collective
bargaining?
Ms. Golding. Yes.
Mr. Davis. Mayor Goldsmith does. You don't, though, do you
Mayor McCrory?
Mr. McCrory. Only in transportation.
Mr. Davis. Mayor White, you don't either, do you?
Mr. White. No.
Mr. Davis. We didn't in Fairfax. It made a huge difference
in some of the options available. Yet you privatized 41
functions in Philadelphia. Washington, DC, has a service
contract act that applies to it so that when you privatize, you
have to pay a prevailing wage to the new employees. But every
city has nuances and difficulties that must be worked around.
I'm just wondering, do you have any unsuccessful privatization
stories? We had a great one in Fairfax.
Mr. Rendell. I'd say out of 41 different functions that
we've privatized, 40 clearly resulted in not only reduced
costs--they all resulted in reduced costs because we had a
benefit structure when I took over that we paid 55 cents in
benefits for every $1 of salary. If any private business did
that, they would be bankrupt. And we were.
So, it wasn't very hard for a private firm, given that,
even though the government, the work force didn't have to pay
taxes. So when they were fashioning their competitive bids,
taxes weren't a factor. But they just, in many cases, couldn't
or were unwilling to compete. So I'd say all 41 saved us money.
In one instance--in one instance, our nursing home--we had a
nursing home. And we still own it but we privatized management
out.
And I'd say it's a wash. The management company had some
real significant problems. We temporarily lost State
accreditation. We regained it--the management company regained
it. But, of course, the opponents of privatization railed
against that. And I pointed out that----
Mr. Davis. As a poster child, right?
Mr. Rendell. Right. But I pointed out that 2 years before
when the city work force had it, we lost accreditation too,
so--but generally, the--but I want to stress--and I know Steve
would say the same thing--one of the best things in a
government like ours in Washington, DC is, all of a sudden,
with privatization, our managers and our workers and our ship
stewards go together and said, ``Hey guys, let's figure out how
we can do this cheaper--not effecting our salaries--but how we
can do it cheaper.''
So, for the first time in our municipal government--and
this was only one of the things--but there was an incentive to
do things better, faster and cheaper. And that's really where
the payoff has been. We haven't privatized, for example, trash
collection, because the savings that the work force has made by
making concessions with the managers have cut the savings from
privatization by two-thirds.
Mr. Davis. Bottom line: deliver the best service at the
lowest cost.
Mr. Rendell. And competition.
Mr. Davis. Competition whether it's government does it--
have any of you instituted a pilot program that's a payment in
lieu of taxes for tax exempts? And I wonder if we could--let me
start, just start--Mayor Golding, have you had to do that in
Indianapolis? Mayor Goldsmith.
Mr. Goldsmith. It depends how you mean the question. What--
let me take a specific transaction--let me just gather in about
a minute a few thoughts. The goal here is to manage outcomes,
right? And the more you try to tinker with processes, the more
you preclude good employees from producing value. So, our
savings have not come from reducing the salaries of the
employees whether they are private or public, they've come from
being able to buy the best management in the world to bring
their technology to bear.
So when we privatized our waste water treatment plant,
which, at the time, was the largest waste water privatization
in the country, we saved $70 million and the water is cleaner.
Now, that was a private management contract, because we did not
want to sell the plant, we wanted to continue to control
policy. And once the management contract was entered into, then
we taxed our own plant--a payment in lieu of taxes.
And that provided a substantial amount of money--in that
case, $5 million a year that we were able to invest in police
officers. Because, essentially, there's no reason why that
plant wasn't paying a reasonable fair market tax like everyone
else is, and the same would be true of other municipal services
once they are privatized. Therefore, the difference between
whether you sell the asset or privatize the management can go
away if you are prepared to impose a payment in lieu of taxes
on the public facility once the management contract has been
entered into.
Mr. Davis. Mayor Rendell, did you have any?
Mr. Rendell. Yes. We instituted a pilot program across the
board because we're a great medical center and university
center, and a good hunk of our real estate was untaxable. It's
a payment in lieu of services. What we did is--there was a
Supreme Court case that sort of opened the door to do this--we
put the pilot level at far less than the entity would pay if
they were found to be a non-charitable institution.
And then, on top of that, we instituted something called
SILOTs. So, you can knock off--say your pilot payment was $1
million, you could knock of a third of a million dollars, a
third of it, by providing services to us. So, identify you were
a hospital and you wanted to provide doctors for a district
health center so it could be open on Saturday, you got the
monetary credit for that. And it replaced--sometimes they can
replace what would cost to us--that's $1.5 million cost--costs
to them $400,000. So, we both win by having SILOTs--Service in
Lieu of Taxes--as well as pilots.
Mr. Davis. Thank you very much. My time is up.
Mr. Taylor. Thank you. We'll try to adhere to the 5 minute
rule and then come back and have a second round of questions if
the mayors have time. Senator Boxer.
Senator Boxer. Thank you, Mr. Chairman. I will go quickly
and try to cover all of my issues. Mayor Golding, as you went
through San Diego's economic recovery, I was smiling and proud
and looking at California. We have really come back in
California from the darkest recession days in 1992, to a time
when we are moving forward. Now, we have a long way to go. We
still have to keep on moving forward. That's for sure.
But it is a good story to tell. And as I think about my
friend, Eleanor Holmes Norton, who is going to look at us and
say, ``How does this relate?'' I think about a lot of what you
said--the boom in high tech, dual use technologies, the imports
and exports, the faster pharmaceutical approvals. In our case,
the entertainment industry is really leading the way in many
ways. And tourism is very important. We had a cruise ship
revitalization act that's helping. And as I look at all of
this, I think the tourism area is one area where we can work
with the city of Washington, DC and their employees if we have
any good ideas for them.
And we've talked about that. Because the base of employment
is really quite different. On the crime rate, I wanted to just
quickly ask you each to give yes, no or don't know to the
following question. San Diego and many cities in California
have seen a lower crime rate. There are many reasons given--
changes in demography, other things, community policing. Do you
support President Clinton's proposal to add even more community
police? If we could start with Mayor Golding and go down. Yes,
no.
Ms. Golding. It depends how the final proposal is
structured.
Senator Boxer. So, you don't know?
Ms. Golding. Yes.
Senator Boxer. OK. Yes. Next?
Mr. Taylor. Well----
Senator Boxer. The reason I want to do this, sir, is
because I want to cover all my questions. And then we can come
back to explanations. But I really need to find out because
it's very important to me, because I do support it and I want
to know if the mayors support.
Mr. Taylor. Well I--just a moment, if I may. I'm not sure
what the President's program is.
Mr. Davis. I don't either.
Mr. Taylor. What about a description? Maybe they could give
us a description.
Senator Boxer. OK. Let me ask this--do you agree that we
should add more community police under the existing
Presidential program, or cancel that program and just add more
community police?
Mr. Taylor. I don't know what the program is.
Senator Boxer. Mayor Goldsmith.
Mr. Goldsmith. It depends on the details. At present I do
not know.
Senator Boxer. OK.
Mr. McCrory. I'll say the same. We're adding community
police regardless.
Senator Boxer. OK. Good.
Mr. Rendell. Yes.
Senator Boxer. OK.
Mr. Rendell. I say yes, absolutely. We need the help. We've
added--we'll add 763 police under the crime bill to a 6,100
force. So the answer is yes. We'd love more.
Senator Boxer. OK. Thank you.
Mr. White. And we're adding community police officers, as
well.
Senator Boxer. Do you support the President's community
policing program?
Mr. White. I don't know enough of the President's plan----
Senator Boxer. OK. So, we have one yes and four noes--four
don't knows at this point. OK.
My next issue has to do with bonded indebtedness. At this
particular time--and this is very important--DC is looking at
adding more debt. And as I look over all of your statistics
here--and I have a chart on each city--I want to focus in on
three cities--Washington, DC, Philadelphia and San Diego--
because they're all in a very different position. Washington,
DC's debt is about equal--it's actually less then it's annual
budget.
Its annual budget is $4.9 billion. It's outstanding debt is
$4.1 billion. San Diego's budget is $1.1 billion. It's
outstanding debt is $1.6 billion. And Philadelphia has the
lowest ratio. It has a $2.9 billion budget and a $1.8
outstanding debt. Now, the reason I raise this is because bond
ratings are different, too.
In the case of all of you. One of your cities went up in
bond rating and one went down. And so, what advice can you
give, Mayor Rendell and Mayor Golding, to the city of
Washington, DC, in terms of relationship of the amount of your
debt to your annual budget. Mayor Rendell.
Mr. Rendell. Well, obviously, you want, in an ideal
circumstance, you want to keep your debt down as low as
possible. We, when we went through this, looked at that as an
issue--and because of our bond rating, frankly, couldn't have
increased our debt under any circumstances. However, the issue
of debt in the long run, the key is whatever your debt is, is
it a manageable number.
And what you should not do, and what cities have done in
the past, is you should not fall prey to the temptation to add
debt, but backload it.
Senator Boxer. Mr. Rendell.
Mr. Rendell. You know, after you're gone, backload it so
you get the immediate kick of, ``Boy, we spent all this money
and look at--our infrastructure is better, et cetera.'' But,
you've left backloaded debt to such a degree that the city
won't be in a position to deal with it 5, 6, 7 years down the
road.
Senator Boxer. Mayor Golding, what would your advice be to
DC, to avoid a downrating of their bonds, and how should they
look at future bonded indebtedness?
Ms. Golding. Well, I would advise them not to have their
jurisdiction pass Proposition 218. Because our bond rating has
been AAA for years. It was AAA my first 4 years. And the only
reason we went down a slight amount was because of the passage
in California of Proposition 218, which says that every fee has
to be voted on and that every fee can have an initiative to
revoke it after it's passed.
And because of the uncertainty in the market this has
created this is why that happened. Through no act of any city,
there were several cities in California that were, in fact,
downgraded because of 218.
Senator Boxer. I have that list. I have the list of the
major cities. They have not gone down.
Ms. Golding. Yes they have.
Senator Boxer. Los Angeles has not gone down--stayed an AA.
San Francisco has not gone down.
Ms. Golding. Los Angeles was downgraded to an AA.
Senator Boxer. Stayed an AA.
Ms. Golding. Right.
Senator Boxer. San Francisco stayed the same. And Oakland
is under review. So, your advice--you don't have any advice to
this city in future debt? Do you think they ought to cap it? Do
you think they ought to go to the people if there's a bond
that's over a certain amount, because you proposed that in your
city? Do you recommend that?
Ms. Golding. I think it depends on the way the people of
that city feel. And I think it's important to respond to that.
But I think you have to watch bonded indebtedness and not allow
it to go too high. And it depends on what kind of bonds you're
talking about, too. Revenue bonds are different than GO bonds
at the source of revenue.
Senator Boxer. Sure.
Ms. Golding. So it's kind of hard--if you put it together
as one lump it doesn't mean as much. But I would avoid allowing
your bonded indebtedness to go exceptionally high, of course.
Senator Boxer. Thank you.
Mr. Taylor. Thank you, Senator Boxer. Congresslady Morella.
Mrs. Morella. I'd be happy to start off by yielding 1
minute of my 5 minutes to Mr. Davis.
Mr. Davis. Mayor Golding, let me make a comment. I just
want to clarify that with regard to community policing--I was
always concerned because it said you had to use the money just
for community policing. It paid for just the first 3 years.
What we needed was a block grant that would have allowed us to
spend the money as we felt needed. We could have used it for
police.
The President's plan, by the way, is not just community
policing, there's a number of different officers you could
use--but you could use it for an extended 911 system, computer
aided dispatch. Every jurisdiction is different, and the one
size fits all standard gave me some concern. The proposal, to
my knowledge, hasn't been seen in print except for a press
release.
Ms. Golding. I haven't seen it.
Mr. Davis. So I could understand why members didn't want to
put anybody on the spot where you're responding to something
that is not yet submitted legislatively. I just want to make
that clarification for everybody here. Thank you, Ms. Morella.
Mrs. Morella. A pleasure. I want to thank you all for what
I consider up-beat stories of successes. It's kind of like the
phoenix. It rose from the ashes. And we certainly hope the same
will happen with the District of Columbia. I wanted to ask a
question directed to all of you. Later today, the President is
going to announce his support for an economic development
corporation for the District of Columbia.
I wondered if you might want to express or share with us
any experiences that you have had with that kind of
corporation? I think, for instance, Mayor Rendell, I think
Philadelphia has something similar to that. And then, for the
others, if you had not had any experiences, you probably have
some feelings about it and you might want to comment on
taxation. In other words, tax reduction incentives. I know that
Mayor Golding mentioned a number of them for hotels, et cetera.
And so, maybe I'll start with Mayor Rendell and then go through
the rest of you.
Mr. Rendell. On the question of the economic development
corporation, I think it's an excellent idea. We have something
called the Philadelphia Industrial Development Corp., which is
a quasi governmental agency and, therefore, not subject to the
same restrictions and restraints and criteria and requirements
and all of that that the normal governmental entities would be.
It has been enormously helpful in helping Philadelphia
businesses to expand and helping us to attract new businesses
to the city and in the fight which all of us undergo to keep
our own businesses in place when they are looking to expand or
grow or just a way to drop their bottom line. In terms of tax
incentives for economic growth in the cities, I've long been an
advocate of using the Federal tax code to incentivize
development.
Understand, most of our cities, free market reins
unchecked, most of our cities will lose out. They will not be
able to compete, particularly the older northeastern and
midwestern cities. They will not be able to compete. We need to
use the Federal tax code to incentivize investment, capital
investment in American cities.
I have, even though I am a strong and loyal supporter of
the President, I have trouble with this treasury department,
although I think Bob Rubin is starting to come around more than
any other secretary, just like I had trouble with prior
treasury departments. They seem to have a block against using
tax incentives as a way to spur economic development.
Mrs. Morella. Thank you. Mayor Goldsmith.
Mr. Goldsmith. The mayor and I agree on this point, and I
think it is important. First of all, tax credits, tax
opportunities are a much more efficient way to help a community
than government programs, because it removes the bureaucracy.
It facilitates the flow of capital and it involves private
investment, so people are making market place decisions.
So, Washington, DC, like Philadelphia and Indianapolis and
perhaps San Diego, has these structural barriers to investment.
You can try to manage those barriers by dumping additional
government programs and government money on top of them. That
generally doesn't make the barriers go away. Or you can try to
compensate for the barriers, at least in the short run, by some
sort of tax incentive. Now, whether that's on the capital gains
side, which would be great, whether it's on the payroll tax
side, that would be great. But what it does is it evens the
playing field perhaps temporarily.
A few years ago, I proposed that we would give back all of
our Federal money to Washington if they would just give us a
payroll tax advantage or a little flatter tax than what they
would do elsewhere. Because what we're trying to do is say high
costs are added on to urban areas. But we have to use the free
market to get ourselves out of this mess. So, temporarily,
while the costs of welfare have built up urban costs, while the
environmental mandates are much higher on urban communities,
Clean Air will impose extraordinary costs, hurt the poorest
people who attempt to buy their way out.
So, the Federal Government could compensate for those with
tax advantages that would be much, much more effective. Now,
whether they go through an economic development corporation or
they go through a mayor, I think is an issue of government
relations that could vary from community to community.
Mr. McCrory. One just additional comment, too, I think is
similar, even in a modern city like Charlotte and comparing
with Philadelphia, is that we have blighted areas in Charlotte
that are bringing no tax revenue to the city in a very dynamic,
economic city. And we're looking at--and I've been to--I
visited Mayor Rendell's city and seen what they are trying to
do to revitalize these blocks of blight, where you're getting
no return on investment either in the private sector or public
sector.
So, we're looking at that inner pride zone concept and
doing anything we can. Some of our even local tax policies
discourage reinvestment and encourage a vacant building to
remain vacant or a parking lot to remain a parking lot as
opposed to encouraging investment. So, we're looking at even,
not only the Federal tax policies, but even some of our local
tax policies to encourage investment or reinvestment,
especially in these areas of blight, which tend to be your
areas of high crime, high unemployment and all the other
problems that are associated with an urban area.
Mrs. Morella. Mayor Golding.
Ms. Golding. I echo what my colleague said. In our city,
what we did was, any place that we could reasonably cut, given
the fact we were in a recession, we did. I looked at our water
and sewer capacity charges, for example. Those are the hook up
fees. There were times when that charge, for either a business
moving in or someone who was developing, was as much as the
cost of the land. And what happened was people just didn't do
it. They didn't do business.
We had a laundromat going in. I heard the story, actually,
before I was elected, of a laundromat going in in the inner
city. They had no laundromat in that community, and they needed
it desperately. But when this private business owner--using all
the capital he had, to invest in this small business--found out
what his hook up charge was going to be, he couldn't afford it.
And there was no laundromat at that time.
So, what I did was propose--we cut those fees in half. And
we cut housing trust fund fees in half. As I told you, we cut
the business tax by 80 percent and it has not hurt the business
climate. And the revenues to the city, sure, were hurt that
year, but you could start to see those turn around as well as
the attitude that business had about doing business in the city
of San Diego. They didn't want to do business in the city.
When I took office, they didn't want to call city hall in
general. And there has to be a clear partnership. We
established an incentive program and gave our staff the
flexibility to negotiate a good deal if a business was coming
into the city and was going to produce sales tax--and we have a
whole system of determining whether it's enough sales taxes--
and jobs for the citizens. We were willing to give them a break
on a lot of the fees that we were charging because they were
producing a very distinct public benefit.
And I think those are the kinds of things that make it
clear to any entity. And if you can help on the Federal level
on down, it's a tremendous incentive. I'd like to see
enterprise zones cut everything for the inner city, everything,
absolutely everything out, because the truth is many of the
blighted areas aren't producing tax revenue anyway. So, what
are we worried about losing. Why not really make taking that
risk worth while to a business or investor.
Mr. White. I just want to mention one of the sins of local
governments--I guess you need to know all the bad things too--
is everyone hues the line on trying to hold down taxes in one
door. The other door that opens is fees. And I think around the
country you'll find that local governments have been too quick
to raise fees and layer fee upon fee while the record may look
nice and clean on taxes.
Mrs. Morella. Good points. Thank you. Thank you, Mr.
Chairman.
Mr. Taylor. Thank you. Congresswoman Norton.
Ms. Norton. Thank you, Mr. Chairman. Again, may I say how
elucidating I have found all of the testimony. I think there is
something in all that you have said from which the District
could benefit. If I could say to my good friend, the chairman
of the committee, who seemed to imply that the question of the
gentlelady and senator needed some elucidation, that the
mayors, themselves, indicated that there had been an increase
in the number of police.
So I don't think it an unfair question to pick out the
community policing part of the President's plan to ask a
question about, even if there are other parts that might also
be relevant. My I ask each of you to indicate the percent of
your budget that comes from the State and Federal Government?
How much of your budget comes from local taxpayers?
Mr. Goldsmith. Our city is a donor to both the State
government and the Federal Government. We send more money to
both than we get back.
Ms. Norton. Yes. That's not my question. I asked what is
the percent of your total budget that comes from the State and
Federal Government combined?
Mr. Rendell. I think for us, if you just looked at our
operating budget, it's surprisingly small. It would be about
17-18 percent. But a lot of the money that you send us doesn't
go into our operating budget, like CDBG--Community Development
Block Grant funds.
Ms. Norton. Yes.
Mr. Rendell. That never goes into the operating budget of
the city of Philadelphia--homeless, housing with aids, et
cetera. So, it's not totally an accurate barometer.
Mr. McCrory. That's the dilemma I'm having, also, in
answering the question, because most of our budget, our budget
that I included in the numbers I gave you, are our moneys.
There's small percent that's from State. But such things as the
housing authority money--a lot of that money comes from the
Federal side, but we do not include the Federal--the housing
authority budget within our budget. So, I'd have to get you
figures of combining the two and then give you a percentage.
Ms. Norton. Yes. I asked the question--I would appreciate
your being able to do it. The reason I ask it is because the
District has been forced to put into it's budget each every
part--each and every dollar from whatever grant and whatever
source into a package that becomes its budget.
Mr. McCrory. Sure.
Ms. Norton. That, of course, makes its budget look much
larger than if its budget was budgeted the way that other
cities have.
Mr. McCrory. Sure.
Mr. Rendell. No question. You take Philadelphia--we have a
$2.3 billion operating budget. But if a talk about the crime
bill money, the money for economic conversion of our Navy base,
the housing authority, housing homeless, CDBG, it's well over
$3 billion.
Ms. Norton. And if you said put all that together and
submit it as your budget to the Congress of the United States,
it might look quite large.
Mr. Rendell. Right.
Mr. McCrory. I would like to reiterate, though--the mayor
from Indianapolis--and that is some of us are more donor--we're
donor cities to both our State government and to the Federal
Government in areas such as transportation and otherwise.
Ms. Norton. Yes. I'm sure that's the case, too. Has the
percentage of your budget that comes from the State and Federal
Governments gone up in the last 10 years, dozen years or so? Or
has it remained stable or gone down?
Mr. Rendell. Declined.
Mr. White. Declined.
Ms. Norton. Hmm?
Mr. Rendell. Declined.
Ms. Norton. The percentage of your budget from the State
government has--has the State government cut you in the amount
of money that they send to you?
Mr. Rendell. Over the course of time, yes.
Ms. Norton. How have you made up for those cuts? With the
cost of living going up, if the State government--every time
you come to the State government, you're telling me they gave
you less money than they gave you last year?
Mr. Rendell. Well, adjusted for inflation, or just straight
across the board? Adjusted for inflation--clearly less, clearly
less. In raw dollars, it's been static, slightly less. And the
way we've made up for it, Congresswoman, is some programs are
gone, our reach and the number of people we're able to put in
certain programs is diminished. And, as I said, in the 10 years
before I became mayor, we raised local taxes. You know, we
raised local taxes 19 times. I mean, it's a stunning amount.
Mr. McCrory. We've also had to, due to new regulations from
State and Federal, we've had to increase--the mayor of
Greenville is absolutely right that--our property tax rate has
not gone up, but, for example, storm water fees, we're are
increasing well over 4 percent a year to mainly meet some of
the environmental regulations from the Federal and otherwise,
which is a major, major challenge for all of us in cities
regarding storm water and other environmental issues that the
urban areas have to deal with.
Mr. Goldsmith. Can I make just a brief observation in
partial response to your questions. I don't think any of us are
comfortable with kind of macro comparisons of budgets. In fact,
I couldn't even figure out what my budget meant until we did
activity based costing for every one of the activities that
we're in. Because it's not until you say, ``Here is the cost of
picking up trash. Let's bid that against the private sector.
Here is the cost of a public hospital. Let's bid that against a
private hospital,'' that any of it makes sense.
So, I think the long pause you hear after questions is, I
wouldn't want to suggest, although I'm confident that we're
very efficient, that we're efficient, necessarily, by measuring
the size of the budget compared to the person. But I'd feel
better measuring it activity to activity. And that's one way to
drive down costs and enhance quality at the same time.
Mr. White. I want to mention, too, that as HUD dollars, in
particular, have come down or remained about static, to the
Federal Government's credit, more flexibility has been the rule
now as opposed to the past. And I think HUD, in particular, has
let local governments do things with those dollars that they
couldn't have done 10 or 15 years ago.
Mr. Rendell. Yes.
Mr. White. And we have stretched those dollars out further
than we ever did.
Ms. Norton. Have any of your cities experienced flight from
the city? What percentage of the population has been gained or
lost in the last, let's say, 10 years?
Ms. Golding. Well, I can answer that. There was a period of
time when San Diego really experienced that. The suburbs are
cheaper to live in, in general--the housing costs are lower.
Because of significant investment over the last 25 years in the
downtown and in redevelopment, people are now moving into
downtown again and living in facilities at all income levels,
from very high priced to low. So, there has been a distinct
return to the inner city--I mean to the downtown area, which,
after all, is the heart of any city. But that doesn't happen by
chance.
Ms. Norton. So, has it been a loss in population or not in
the last 10 years?
Ms. Golding. You know, I don't know where it is today. I
know that there is a reversal going on. It's a reversal going
on.
Ms. Norton. Yes. Well, I'm trying to find trends.
Ms. Golding. It is reversing.
Ms. Norton. Yes. It is reversing now?
Mr. Goldsmith. You are obviously aware, that most large
midwestern and eastern cities have suffered enormous population
losses in the last 20 years. Losses of wealth have been even
greater than losses of people.
Ms. Norton. Yes.
Mr. Goldsmith. From our center city, we lost a quarter of
our population. In the last 5 years, as we've cut taxes, cut
regulation and invested in infrastructure, we've gained in
population. And one of the things we did was took the savings
from competition and privatization and invested those savings
disproportionately in the infrastructure and policing of the
communities that had lost the greatest population, stabilizing
those communities so people felt safer living there or
investing there. And, so, we are up, now, slightly, although
there was a long historic period of flight from the center city
to the suburbs.
Ms. Norton. And the reduction in taxes helped you gained
population, you believe?
Mr. Goldsmith. I'm sorry, ma'am. I couldn't----
Ms. Norton. Reduction in taxes helped you gain population,
you believe?
Mr. Goldsmith. Yes. Let me be very careful here, because I
think the answer to this question varies in every city. I think
what helped us the most was delivering a higher quality
housing, roads, sidewalks, sewers and policing, and holding the
line on taxes. We made a decision, in fact, where we could have
lowered taxes more, but instead decided to invest that in
several hundred million dollars of roads and bridges and
streets and sidewalks and sewers and parks, because we thought
that was more important. And I think that can be played out
very differently in each community.
Ms. Norton. Mr. McCrory.
Mr. McCrory. Our growth continues to be about at a 3
percent rate. However, we are seeing flight to the outlying
suburbs where the growth rate is much greater, probably 2
percent higher in the suburbs and counties. In fact, I'm
competing with the State of South Carolina, which is right on
the Charlotte border. And South Carolina is offering tax
incentives to some industry. And we've had some industry move 2
miles down the road to South Carolina.
So, we're seeing flight in both residential, commercial and
industrial. And, I think, as the mayor said, that's probably
our greatest competition right now as a city, is to keep the
investment in Charlotte. And that's why our greatest chance for
return on investment is revitalizing the blighted areas and to
get people to move back in.
Ms. Norton. Mayor Rendell.
Mr. Rendell. We've lost about 10 percent of our population
in the last 10 years, about 140,000-150,000 people. And it's a
combination of things. And high taxes certainly is a factor.
But we were really way up there. And, second, as Mayor
Goldsmith said, it's the quality of life issues. For example,
if our public education system could be fixed overnight to be a
quality public education system, I think we would stop the
flight and begin to slowly but surely regain population.
Ms. Norton. That's a magic key. Nobody has turned the lock
yet.
Mr. Rendell. Right.
Ms. Norton. Mayor White.
Mr. White. Yes. As we continue to steal industry from
Charlotte, NC and corporate headquarters, we are continuing to
grow.
Mr. McCrory. I was afraid to mention that publicly.
Mr. White. I'm glad the mayor mentioned public education.
Because I think for all schools, issues of flight and changing
demographics, there's no doubt that the decision of people to
move into these cities, the right demographic mix with the
right ages, it's the schools that still play a crucial role.
And successful cities have successful schools.
Mr. Taylor. Thank you, Ms. Norton.
Ms. Norton. Thank you, Mr. Chairman.
Mr. Taylor. Congressman Tiahrt.
Mr. Tiahrt. Thank you, Mr. Chairman. I want to congratulate
all of you on managing your cities in an extraordinary fashion.
And that's why you're here. And we need some help coming up
with some ideas. I find it interesting that most communities
that I talk to like the concept of block grants rather than
having some bureaucrat from Washington telling you how to
structure things.
And I think that probably one very effective model of this
is community policing. I know in Wichita, KS, which I
represent, we have very effectively employed community
policing. I'm not surprised that four out of five of you didn't
recognize President Clinton's efforts for community policing,
because it's happening on its own. And even though, he's tried
to get 100,000 policemen on the street, Attorney General Janet
Reno reports that there are only 18,000 partially funded
policemen there.
Many of us have favored block grants as Representative
Davis pointed out, and I think that's probably a more effective
approach, giving you the freedom your cities needed as unique
problems come about. As you all spoke about coming up with
these new ideas, Mayor Rendell mentioned incentives for
employees. I wonder if there were some structural or policy
changes that you had to put in place in order to provide those
incentives. And I'm not sure which incentives you're referring
to.
Also, in privatization, as Mayor Goldsmith talked about,
were there structural changes or policy changes that you had to
put in place in order to privatize or provide those incentives?
And I'd like others to respond, too. And, incidentally, Mayor
Golding, I was in San Diego, it was the first time I've ever
been to California. It was last August. And I felt safe
downtown. It was a very clean city and I appreciate the job
you've done.
But I'd like you to comment on--what incentives do you
provide and what changes in policy needed to be made so that
you could provide those incentives? And the same for
privatization. Mayor Golding.
Ms. Golding. Well, I can add--we have a system of merit
pay, rewards for suggestions that actually can be documented to
have saved the city money and have allowed the service to be
provided, essentially for less cost. I have recently asked the
managers to institute a bonus for department heads who have
achieved, in actual cash percentage to the savings they
achieve, plus meeting performance goals.
Because I think it comes down to the individual supervisor
who can watch what is going on far better than anybody at the
top can possibly do. And that involves everyone in the city.
You cannot become more efficient unless everyone in the labor
force is also trying to do the same thing.
Mr. Goldsmith. Last--when I announced my privatization/
competition program, my ASFME unions did not exactly respond
with enormous enthusiasm. And I went out there on my first week
in office and told them don't worry and got pretty loudly
booed. Last week I went out and distributed $1,000 bonus checks
to each one of our mechanics in our central garage because they
had--not only had they bid against the private sector and won,
but they are performing under their bid and they're sharing in
the gain--50 percent.
It has the phenomena of them consistently producing more
and more suggestions for better productivity because they know
they're going to share in the gain. And so that has been
infused in the system. I think the enormous challenge for this
joint committee and for DC as in all of our cities, is as
bureaucrats in cities--every city over the last 40 years--have
abused their discretion, Federal Government, State government
and even local government, itself, have set up structures which
restrict the discretion. So they are tightly controlled,
autocratic, somebody telling somebody else to do, and lots of
process restrictions. We had to change State law and local law.
Sometimes we could work with it, sometimes we had to change it.
Because the systems are highly inflexible because they control
process more than outcome. So, to the extent that--and I
understand how difficult it is in the DC situation--but the
extent to which the District could be given, or any government
agency, discretion on how it accomplished a result, a very
clear auditing of the performances, and holding people
accountable at the outcome level, then that provides the
opportunity for these bonuses.
If bonuses can be connected to performance, if discretion
can be connected to performance, if audits can be on the
outcome and output side, then you can create conditions similar
to those in the private sector, which encourage enterprise.
Mr. McCrory. There is one other addition. We're doing very
similar things in Charlotte. But one area that the committee
also might want to look at--and one of our greatest increases
in costs had to do with medical benefits regarding employees--
and I'd strongly encourage this committee to look at those
costs and compare how rapidly those costs are going up in
comparison to the private sector. We saw in Charlotte that our
costs were going up dramatically, much more than the private
sector, and it was going to make us go broke within a short
period of time, so we changed a lot of our benefit policy, and
actually have a very strong benefit policy for city employees.
And our medical costs have gone down well over half at this
point in time, which is something Mayor Rendell and I were
whispering. A lot of these issues we're talking about are not
short term savings, they're long term savings. We will not see
the results of this work for probably another decade. And
that's when a lot of the real savings are going to come in
regarding a lot of the medical and other types of benefits in
the areas of competition and privatization.
Mr. Rendell. I would agree with everything that my
colleagues have said. I think, though, in addition to
incentives--and I'm not talking about one special incentive--
accountability is important. We publish a quarterly mayor's
report on city services, where we ask each and every department
to show how they're doing. This is a little chart on how much
grass in our park system, the largest in the country, is mowed
as compared to previous years.
It's unbelievable how the publication of this book causes
city managers at the top and at the mid level to really want to
put out and perform. They don't want to see those charts on the
down side. We also publish a monthly city manger's report,
which shows how you're doing on your budget.
Are you on track to come in with a balanced budget, things
like that. And last, we've done something called creation of a
productivity bank. In government--municipal, Federal and
State--often something isn't a capital expense. It's not a
capital expense, but you don't have enough money in your
operating budget to take that hunk of money and buy that new
technology. For example, our revenue department told me that
for $5.8 million purchase of software, they could save me tens
of millions of dollars of business tax--to collect better.
But they had a $41 million budget. They couldn't take $6
million out of it on an annual--on a 1-year basis. So we
created a productivity bank with city officials on it.
Departments come and borrow money from the productivity bank.
We'll give it to them if they can demonstrate that it's got
cost saving potential. They have to pay it back over the course
of 3 years with what the rate of interest is at that time, and
they can keep 50 percent of the savings they generate above the
8 percent interest, let's say.
So, if they generate an additional million dollars, they
keep $500,000 that can be reinvested. And just one last thing
on block grants. We all like block grants, because we all like
flexibility, as anyone does in the work place. But block grants
and flexibility cannot be a substitute for significantly less
money. If you want to block grant us and give us 5 percent less
money in return for the flexibility, that's great. But if you
want to block grant us and give us 25 percent less money in
return for the flexibility, that's disaster.
Mr. Tiahrt. Well, I'd just like to say that the concept of
block grants is so we can have more money available moving back
to the cities. Any comments, Mr. White? Thank you, Mr.
Chairman.
Mr. Taylor. Thank you. Congressman Allen.
Mr. Allen. Thank you, Mr. Chairman. And thank all of you
for being here today. This is a hearing of special interest to
me. I was on the Portland city council--Portland, ME--from 1989
to 1995. One of those years I served as the so-called part-time
mayor. It turned out to be pretty much the full-time job.
Mr. McCrory. We have visited your city to look at your best
practices.
Mr. Allen. I'm glad you have. In fact, what I was going to
say was that Mayor Golding began by talking about good
practices or best practices. And I think that is one half of
the coin, one half of the issue that we have to deal with. And
the other half is related to what many of you, and particularly
Mayor White, said about neighborhoods. And about making sure
that people feel they have a voice in local government, that
they are included, that they are part of that government.
If I were to try to summarize what I think you are saying,
it is on the one hand there have to be a series of incentives
to motivate public employees to want to serve the public well,
and ways of holding them accountable, and on the other hand,
the citizens need to feel that the government listens to them,
that they are part of the government, that they own the
government, that it's theirs, and it's responsive.
I want to give you a couple of examples and then ask you
for some examples form your communities. One of the things we
did in Portland was to try to motivate parks and public works
to do a better job serving our customers, was to break them up
by region of the city--one team for each district. And that
team did all of the snowplowing, all the repairing of potholes,
all of the other work in that district. They came to own the
district and feel that the district was theirs.
They were highly motivated. And once this program was in
place, we started getting letters from citizens who said, ``I
called city hall and said our sidewalk is a mess, I wish it
would be repaired. And I thought I'd be on a list and a year
and a half from now something would happen. But within 3 days
someone was out to repair the sidewalk. I never thought it
would happen in this city.''
That is the intersection between a motivated work force and
an engaged public. And when you're talking about community
policing or parks and public works or schools or whatever, any
community, whatever its form of governance--and governance
matters, but frankly, not as much as this stuff--any community
that can find that intersection, to connect its work force with
its public, I think is going to do very well. And I was
wondering--you're free to disagree--but if you had examples one
way or another that would support or challenge that view.
Mr. Goldsmith. I wonder if I could briefly answer your
question and then, with permission of the chair, to excuse
myself to go down the hall and testify. Let me just real
briefly and then, with the chair's permission--this is really a
fascinating issue and it's a result of a monopoly which is that
people, public employees need customers. And so what we ended
up with is functional specificity and geographic generality
when what we really needed is geographical specificity and
functional generality so people owned.
The same thing that makes community policing work, as you
said, is what connects the public employee--I want to make that
urban area better. And we have tried to make that conversion
possible. I just wanted to close by saying, in this
conjunction, I think all of us--and I particularly feel
strongly about this--view these tools as a way not to save
money, as a way to improve the quality of life of urban
residents.
It's not the money. It's not the savings from
privatization. It's how we create viable neighborhoods. And
that comes from both the service attitude on the part of
government, the economic opportunity that we present the
people. The quality of the chances they have to flourish in an
urban community. That's why taking the savings from
privatization and investing it in $700 million of roads and
streets and sewers and houses is important.
That's why it's important that neighborhood residents have
a chance to participate in defining what they need in their
neighborhood. That's why it's important that public bureaucrats
connect and are held responsible for customer service in those
areas. So, I appreciate your question because it allows me, I
think, to connect the dots. We spent a lot of time here talking
about the efficacy of public services, which all of us
sincerely believe, but as a way to enhance the quality of life
in our communities, not just as a way to save money. Now, with
the permission of the chair, I'd like to be excused so that I
can testify down the hall.
Mr. Taylor. Reluctantly. Thank you.
Mr. Goldsmith. Thank you very much.
Ms. Golding. If I could ask the chairman, because I will
have to follow the mayor out also, because I have to leave at
3:30 p.m. What you're saying is not only correct--I don't
think, particularly, as a city grows, that it can grow well
without both preserving and enhancing the life in the
neighborhoods. I think we've taken--I've lived in a lot of
other cities before I moved to San Diego, including New York.
And when you lose the identity of the citizen with the
location in which he or she lives, you have lost the identity
that makes someone like to live somewhere and invest in it. By
invest, I mean volunteering at the library or watching the
neighbor's house or the little things that really make life
work. So, I wanted to emphasize the neighborhoods immediately.
And we are establishing a system of neighborhood service
centers. And I'm taking some good ideas from other cities and
adapting them to San Diego, so that ultimately--and in certain
neighborhoods now, you don't even have to go downtown, you
don't even have to go to city hall, everything is connected
fiberoptically. And, so, all those things, whether it's to
apply for a permit, get information on housing, all of those
things, instead of going downtown, taking a day off from your
business or a day off from your kids, and standing in long
lines, you can now go--not in every neighborhood yet, but we
will be expanding it into every neighborhood of the city--but
those that are up and running, you can do all that at your
neighborhood service center which is not very far from your
home.
And we are moving city employees. I'm not talking about
adding. We're moving city employees out of city hall into the
neighborhoods, some on a rotating basis, because of the cost of
increasing them, which we can't do at this time. The ultimate
goal is to have--whether you call them mini city halls, I
prefer a better name that people relate to better, whether it's
a neighborhood service center, or something like that.
And we've tracked the usage of the ones we have up and
running now, and it's tremendous, the number of people who go
to use it. We first surveyed the neighborhood to find out what
the people in that neighborhood wanted. And each one is
different depending on the needs of the neighborhood. And there
is an individual who is charged with making sure the
neighborhood works such as street repairs or other things that
need to be done.
That individual is going to be in charge, not some
nameless, faceless person downtown, but someone that the
neighbors actually know. In fact, we have reorganized the city
because I saw that streets were being done and all of the
infrastructure was being done, but they didn't know what each
one was doing in that neighborhood. So, we restructured. We now
have a department of neighborhoods so that we look at things on
a neighborhood basis as opposed to street basis or sewer basis
or something like that.
I would agree that infrastructure is real important to all
the neighborhoods. And we've invested over $600 million just in
sewers alone. But it's the decay in the neighborhoods. And
that's what the community policing also turns around, because
the police officer is charged not just with catching somebody,
but if they see something wrong, whether it's a crack house or
cracked window, they'll call the owner of that building.
They'll be pro-active with the community. But all of it is
neighborhood based. And I don't believe it works otherwise.
Mr. Taylor. Thank you.
Ms. Golding. Thank you, Mr. Chairman. I'm sorry. I do have
to excuse myself.
Mr. Taylor. Thank you.
Ms. Golding. But I appreciated the opportunity to testify.
Mr. Taylor. We appreciate it. I know in the some 2\1/2\
hours we've had, it's been hard to give this much time. And we
especially appreciate it. I'd like to go ahead, perhaps, with
the remaining three witnesses, with their indulgence, to be
able to question. And I'll start with Mayor Rendell.
I was intrigued and have admired the work you've done in
Philadelphia. And you mentioned earlier in your opening
statement, you might make some more comments about the areas of
privatization and working with unions, how you put that
together to keep massive layoffs from happening, at the same
time bringing in the efficiencies you've brought to your city.
Can you comment about that, sir?
Mr. Rendell. Yes. I think it's obviously--look, all of us
believe that we ought to consider the individual people
involved in any change first, if we can. And if you manage the
privatization--and we all prefer to talk about it as
competitive contracting--but if you manage that process well,
you can require--we essentially required from our vendors that
if we were unable to place any of the workers in a function--
let's say we were closing the city print shop--if we were
unable to place those workers in the government, which was
always, because of benefits and pensions and things like that,
always the first desire of the work force--but if we were
unable to do so, the vendor was required by obtaining the
contract, the vendor was required to hire those city workers
for the expanded use that the vendor was going to undertake by
doing our contract.
And I think that won us, as Steve said about his example,
won us a lot--in the long run--a lot of grudging acceptance of
the process by the work force. We had the wonderful occasion--
you know, privatization was hated by the unions and hated by
the work force, but we had the wonderful occasion in two or
three times of having workers who were privatized out of their
city jobs in this function, been hired to do another function
at increased salaries because that level just happened to
have--in one case we privatized prison food services.
Our prison food services were awful. And we were able to
privatize and save $2 million, and have ARA, which is a
worldwide food provider, provide the resources. Well, some of
the people in prison services were able to qualify for
correctional officer jobs at $7,500 more than they were making.
So, there is no reason that the basic human sensitivity and
dignity has to be eliminated from the process.
Our city workers were never the problem. They were never
the enemy. Certain things have to be changed. And even in
benefits--we saved over $400 million a year in total benefits.
But we targeted the benefits, Congressman, that didn't affect
the security of the family. Having free--no premium--entrance
into the three best HMOs in the city of Philadelphia keeps you
in pretty good shape. Eliminating--we had a system of 14
BETAL--we ratcheted down to 9.
No one is going to suffer because they have to work those 5
days, particularly when you compare it to the private work
force. We had 20 paid sick days. We knocked it down to 15.
Still extraordinarily generous. You could get disability
pensions and workman's comp at the same time under our system.
You were getting paid more money to stay off of work than if
you returned to work.
So, we changed all of those things. But it can be done
without armageddon. People will resist change because it's
change. And you know that from the culture here. But you have
to have the political fortitude to make those changes, to
believe in the process and know in the end goal you will be
there. I'll just give you one political anecdote. My first year
in office, I was picketed everywhere I went--in parades, in
public appearances.
We opened a little sidewalk cafe outside city hall and when
we had the press conference to announce it, nobody could hear
me because the municipal workers were chanting so hard. And I
felt so sorry for the vendor. Well, 4 years later I ran for
reelection and, according to a poll we took a week before the
election, which turned out to be accurate as to the percentage
of vote I got, I got 60 percent--a little under, about 59.5
percent--of all the votes of municipal workers and their
households. If you'd have followed me in year one, you'd have
thought I'd have been lucky to get 5.9 percent of the vote in
municipal workers' households.
Mr. McCrory. He had protestors here in Washington, I think.
Mr. Rendell. Absolutely.
Mr. McCrory. I saw them.
Mr. Rendell. It's true.
Mr. McCrory. I recall.
Mr. Taylor. Your police, fire workers and so forth, do you
have a residency requirement?
Mr. Rendell. Yes. And I do believe in it. I don't know what
the pool--again, no city is, as we said, exactly the same, but
for a city of 1.6 million people, there is enough in that pool.
And think about what we said about neighborhoods and think
about the value you lose by not having police live in the
neighborhoods, the tremendous value you lose between the
relationship between city employee and the people of the
neighborhoods.
If your city police go home and they experience the same
things, it will serve as a motivation for them to protect their
own kids, just at the same level that we want all of our kids
protected.
Mr. Taylor. Sometimes there are those who say that inside
the boundaries of a city, you cannot get a quality police force
because you limit your area to pick. How would you respond to
that? Or perhaps firemen or other city employees.
Mr. Rendell. Again, in a city of 1.6 million people, we
have not found that. And, by the way, you don't have to be a
city resident at the time you're hired.
You have 6 months to move in. So, even if that were the
case--and it's not the case in Philadelphia--but the 6 month
requirement to move in obviates that as a problem.
Mr. White. I think it's particularly--for senior department
heads, no matter what size the city may be, I think there's
almost no excuse for not encouraging that strongly or having a
policy.
Mr. Taylor. If you're building a community, it's hard to
build it if your key leadership, city employees and especially
fire and police and others who are your leaders, are looked up
to in the community--it's hard to build it if they're not in
the community.
Mr. Rendell. Absolutely. And think of what it would do. And
I assume by your question that Washington doesn't have that
requirement.
Mr. Taylor. It doesn't.
Mr. Rendell. Think of what it would do to build middle
class neighborhoods back up again in Washington if you brought
those thousands of employees and said, ``You've got to live
here, guys. Men and women, you have to live here.'' All of a
sudden, you'd be building middle class neighborhoods. And it's
not the rich neighborhoods. You know, downtown Philadelphia is
doing great. We're losing 10 percent of our population and yet
you cannot rent an apartment in downtown Philadelphia. It's
gone from 72 percent to 99 percent.
But in the neighborhoods where the middle class is the
rock, we're having problems. But if I could bring--you know,
we've got 7,000 policemen and 3,000 fire--if I could bring
10,000 middle class wage earners and say, ``You've got to live
here.'' Think of what that would do for the stability of my
neighborhoods.
Mr. Taylor. Mayor McCrory, you mentioned volunteerism, and
I know that's quite a spirit. Could you elaborate on that and
how that--how do you motivate that? How have you brought that
into the communities and what type of leadership do you provide
to get that?
Mr. McCrory. One thing we're proud of in Charlotte is we're
a very open city. You don't have to have five or six
generations of blood lines to get involved in local politics or
any community or civic activities. In fact, we almost pride
ourselves, if you live in Charlotte for 6 months and you're not
in leadership, we're wondering what's wrong. So, we very much
open ourselves up to new people who are arriving in Charlotte.
But we have a very, very close relationship with our
business community and also our neighborhoods. As mayor, I meet
once a month with a chamber of commerce. And, in fact, I meet
with the chamber of commerce, and the county chairmen and
myself have a 2-hour meeting once a month. In fact, we rotate
the location of the meetings. One time it will be in my office.
The next time it will be in the chamber office. The next time
it will be in the county commission chair's office.
So, we're constantly building relationships and trading off
names to serve on committees. We try to work as one because I
know if it's good for business, it's good for Charlotte and
vice versa. We're in this game together, so we have a very open
business environment. Another thing we're very proud of, we're
a very clean city from ethical standards. And we're going to
keep that reputation. But volunteerism is probably our greatest
attribute.
In fact, today, I'm supposed to co-chair the strategic
session for our United Way strategy for the next 2 years. And
I'm here instead. But that's the involvement. The United Way
asked the mayor of Charlotte to co-chair their strategic
session for the next 2 years for the United Way. That's the
type of relationship we have with the private sector.
Mr. Taylor. Mayor White, you look like you're ready to say
something. I have a question, but would you like to comment. I
know you mentioned a lot of public/private cooperation. In
fact, for a city of your size to have the arts center, the
stadium you mentioned a moment ago, the large sports complex
that's being planned and the other things in the city. Tell us
a little bit about how you did that.
Mr. White. We have a very fine tradition--we're fortunate
to have a fine tradition of business people in town and people
across the strata who do jump in to projects, who come to the
aid when a need is enunciated and who also get involved in
whatever the latest project is the community feels is a
priority. And we sort of go from one priority to the next
priority to the next to the next.
And, obviously, that goes back, again, to whatever sense a
community can build that when people live there, they really
have a stake in the community, that it's not some place they're
just passing through. And that's something that I think is
often lacking in some communities around the country.
Mr. Taylor. You mentioned some of the downtown festivals in
some of the poorest parts of the city, the dilapidated parts,
and how you use that to renovate or put a spirit of renovation
back in. How do you get those started and how do you draw
crowds into it, protection and all the other problems that
might be involved?
Mr. White. Well, to revitalize areas I think cities around
the country have found that you've got to encourage
residential, you've got to create a 24-hour life in that sector
of the city that can't be simply a 9-to-5 kind of situation.
One way of doing that, we have found, in other communities, is
through special events and festivals. And we do, indeed, move
festivals around. If one area has been revitalized and
investment has, indeed, followed the people to that area, we'll
move it around to another side of town where we think, perhaps,
a little more vitality is in order.
Mr. McCrory. Representative Taylor, I would like to also
make one other comment, that I think you--and I know
Philadelphia and Greenville and other cities are doing this, is
that the customer is saying we can't hire anymore people except
for police officers. And public safety is a major issue. We are
having a major truancy problem, major murder rate problem in
Charlotte. We're at 115 killings in 1 year in Charlotte 5 years
ago.
We're down now to about 65, which is far too high. But
we're improving drastically. But the truancy problem is so high
that the immediate solution is let's hire truant officers.
Well, instead of hiring truant officers--because we have
limited budgets and we can only hire so many police, we've made
every single resident in the city of Charlotte. And every
police officer's major duty, now, is truancy.
And it's called the Tolerate No Truancy Program, where, if
you have someone who you see obviously belongs in school on a
school day, you call a special hotline that the police will
respond to and deal with it as an emergency call, and will take
that person to the school system and put him together with a
dropout prevention counsellor and will track down the parents.
But that's an issue, again, we couldn't hire more truant
officers, per se, we just used existing resources. And we've
had a tremendous decrease in youth crime.
Mr. Taylor. We now would like to go to the other Members if
they'd like to question. Senator Boxer.
Senator Boxer. Thank you. Thank you for your patience and
your time and your insights and your wisdom. And I would say it
seems like I hit a raw nerve when I asked about community
policing. You know, we had comments from my colleagues. That's
very unusual. So, I would like to kind of rephrase and do it in
a way that will not put you on the spot.
Because I think four of you said you're not sure if you'd
support President Clinton's proposal until you see the details.
And Mayor Rendell said although, of course, cities love block
grants, that he thinks it's a good program and he would support
it. Now, did you participate in it, Mayor McCrory, the last
time?
Mr. McCrory. Yes. We did. And, in fact, we've got a
proposal in for more Federal money this time with the
understanding--and this is the dilemma in accepting any Federal
money. For example, for the police, it's a 3-year moneys. I've
got to budget long-term and that's a situation.
Senator Boxer. I understand.
Mr. McCrory. But, you know, North Carolina, we're a donor
State--at least we think we are--and statistics prove that
point. We want to get that revenue back.
Senator Boxer. So you did apply and----
Mr. McCrory. We applied. And one thing----
Senator Boxer. Yes?
Mr. McCrory [continuing]. And my police chief would also
say this, is that give us as much flexibility as possible,
because 1 year we might need equipment versus work force. For
example, a major issue in Charlotte right now is having the
proper computers in cars.
Senator Boxer. Well, I just want to state on that point, I
think the President has determined--and now he may be changing
this next round----
Mr. McCrory. We love flexibility.
Senator Boxer [continuing]. That he wanted--but I think the
President is thinking of more police on the beat. I think he
wants to reach his goal of 100,000. But the reason I'm pressing
it is, it's a place that I could help. I can help. So I want to
know what you think.
Mr. McCrory. Right.
Senator Boxer. Did you or Mayor White apply?
Mr. McCrory. Yes. We have. And we've also----
Senator Boxer. So you participate in the program?
Mr. McCrory. Yes. And we've programmed to take it over in a
few years. Exactly right.
Senator Boxer. Fine. And I know that San Diego also has
applied and received over $10 million. I think it's important
that, although there were some reservations--I don't know about
Mayor Goldsmith, so I can't put him in the category--the vast
majority did apply. The reason I raise it is what Congresswoman
Norton said, which is, all of you, in your presentations talked
about the importance of community policing. And I am such a
champion of it that when I want to reach out to help DC, or all
the cities in the country, I'm going to do whatever I can to
make sure that it happens.
Way back in the 1970's, I was on a local board of
supervisors. And in my particular district, we started the
first tiny little substation in my district. And it was just
two little officers right there in Marin County and it was a
huge success. Way before anyone ever gave a name to it. We
called it neighborhood police. But I think it really does work.
I'm the ranking member on the DC Appropriations
Subcommittee and I want to work with all of my colleagues--in
particular Congresswoman Norton. As I listen to you all--you've
all given us ideas. I think you've given us ideas on bonded
indebtedness, to keep our eye out that you don't do too much.
You've given us ideas on involvement of the community. You've
given us ideas on the morale of city employees. All of these
things are absolutely crucial. Ways to open up competitive
bidding between the private sector and the city itself, which
is very intriguing and exciting.
And I think all of these ideas are quite relevant. I do
want to say this as the ranking member of the subcommittee, I
would hope as we look at ways to help and be a partner in doing
so, that we will always remember something that you all said,
which is how important it is to involve the people of the city.
People are dying around the world to get the opportunity to
vote.
We can't forget that. And we must be, as we look at DC,
very aware that if we don't allow the community to participate,
then we're cutting the heart out of democracy in the capital
city. So, whatever proposal we move forward, I hope we will
keep that in mind. And I just want to thank all of you and the
two mayors and the two mayors who had to leave for your
participation.
Mr. Rendell. Mr. Chairman, may I just say one thing about
what Senator Boxer said?
Mr. Taylor. Sure.
Mr. Rendell. And about our discussion on the crime bill.
Because she's absolutely right. All of us would absolutely
agree that unless we can improve the public safety of our
cities across the board, every neighborhood, every area, that
we'll never truly recover, that what we have done here is made
the dying patient feel a little more comfortable and live a
little longer. And point No. 1, it is true, as one of the
Congressmen pointed out, that these grants only last for 3
years.
But when you are planning long range--and all of us plan
long range--having that money allows you to phase in your
assumption of operating budget cost. If I had to put 753 police
officers--new police officers in Philadelphia on in 1 year, I
could never do it. The shock to the system--the saving dollars,
generating more revenue, couldn't have absorbed it in 1 year.
But thanks to the crime bill, I'll be able to phase those
officers in over about a 5\1/2\ year period.
And, as a result, I can't absorb it in my budgeting process
and plan. Would I have liked to see the Federal money go on
forever, of course I would have, because I could have taken
that one third and used it to hire more police or used it to do
something else. But it's still valuable. And second--and,
again, the Congressman who asked this question is unfortunately
no longer here--there are parts of the crime bill program--and
they all have names like Cops Ahead or Cops More or cops this
or cops that--but there are parts of that that do allow us to
use dollars for overtime.
We won a competitive grant under the cops program to use
money for overtime to go after quality of life crimes that have
a tendency to really erode neighborhoods. Not the murders and
the rapes, but the vandalism and the graffiti and things like
that. And then, second, we won, also a competitive grant for
the installation of MDTs, which the mayor of Charlotte was
talking about in our patrol cars. So, there is flexibility in
the program. It's not all money for just cops on patrol.
Mr. McCrory. I would add to that. It's also moneys for
backup support. Because sometimes, instead of hiring a police
officer--and, politically, you don't want to say I don't want
to hire a police officer--but the fact of a matter is the
police will say, well, wait a minute, each police officer also
takes amount of support--not only support within the police
department, but support within the judicial system.
And we have areas in our judicial system that don't have
copy machines to process some of the arrests. And, so, we might
want to divert the money elsewhere. And that's where we'd like
to have the authority and the flexibility to make those
decisions locally. Where Mayor Rendell may have one specific
need in Philadelphia we may have another need in Charlotte or
in San Diego. And that's what we'd like to have.
Senator Boxer. Thank you very much.
Mr. Taylor. I'd like to comment there. I think what you
gentlemen are describing is how the Congress amended the
President's program to make flexibility through block grants.
And one of the things that convinced me was the sheriff of
Greenville County, who is a Democrat and president of the
National Sheriff's Association--not now, but was a few years
ago--who did not want to participate in the program as it was,
because he was afraid of being locked into officers, and then
have to find the revenue inside the county to pay for it in the
future years.
And what you're describing, molding the two things
together, some Federal help but the flexibility where you can
work it in, you can use it on equipment, you can do the things
with it that works with your budget, I think, is what makes the
program successful. And I think that's important.
Mr. Rendell. I would agree. There's no question that from
the time the President's crime bill came out, the modifications
that Congress made, I think, did improve it. And, also, I was
the district attorney of my city, which is also a county, for 8
years. So I've been in the business for 20 years.
And make no mistake about it, the crime bill, again, a
collaborative effort of Republicans and Democrats that wouldn't
have passed without Republicans, that has been the most
meaningful thing for local crime fighting in the two decades
that I've been involved with local government. There hasn't
been anything that comes close to it.
Mr. Taylor. Thank you. Chairman Davis.
Mr. Davis. Yes. Let me just put this in context. We just
got a study back from Mr. Allen that I don't think you've had
the opportunity to see yet. It shows the city has a higher per
capita police ratio than any city in the country, over seven to
one. It's much higher than Philadelphia. The problem we have is
a deployment problem and an equipment problem.
I think, in looking at limited resources, we have to ask
ourselves where those resources can best be deployed. That is
why I favor flexibility in these issues, and, frankly, some
better management solutions, which each of you have displayed
in your own jurisdictions and which I hope the city can take
heart from.
Mayor Rendell, I wanted to ask you. I'm very, very
impressed with the job you have done over the years in a city
that was on the brink of disaster.
Mr. DeSeve of the Office of Management and Budget has
worked with us on a lot of legislation pertaining to the
District in the administration, so this will be a bipartisan
effort this year to help bring the city back. Hopefully we'll
come up with something that we can all feel some ownership and
pride in at the end of the day.
There is a proposal for an economic development corporation
in the Nation's Capital that the President is going to be
announcing in just a few minutes. It's my understanding this
has been very successful in Philadelphia. I wonder, Mayor
Rendell, if you can elaborate on that for us; tell us what has
worked about it, and where we might improve it.
Mr. Rendell. Well, our economic development corporation has
worked for a number of reasons. No. 1--and you put your finger
on the whole ball of wax--it's always had good management. It
has never been politicized. It's always had first rate
managers. It's set up in a way that the political system,
interestingly, shares 50 percent of the appointment to the
board with the chamber of commerce, a very interesting concept,
so that no mayor can come in and say, ``Boom. Out with all of
you guys. I don't care how good you did. I want those jobs and
I want those pretty decent salaries.''
The chamber would put its foot down against that approach.
so, right away, the overall management of the managers lends
itself to a non-political----
Mr. Davis. May I ask you a question?
Mr. Rendell. Sure.
Mr. Davis. Institutionally, did the Chamber of Commerce
name these--was it named as an institution or was this----
Mr. Rendell. It was in the original by-laws creating the
corporation, that half of the appointees be from the Chamber of
Commerce. I think that's a superb----
Mr. Davis. Who made the appointments? Did the Chamber make
them?
Mr. Rendell. Yes. The president of the Chamber--the CEO of
the Chamber makes half the appointments, I make half the
appointments. And, so, we can't even elect a chairman unless we
both agree.
Mr. Davis. Interesting.
Mr. Rendell. We can't hire an executive director. It's a
great way of insulating it from politics and the political
change. Second, the corporation, itself, is outside of the
ordinances and--we have a city charter--the requirements of the
city charter. And that makes it effective. Third, by being
outside of the governmental flow--there was a time when the
city of Philadelphia absolutely couldn't borrow money.
But PIDC never had any of those problems because it was
viewed as an independent agency. And it was quasi. It wasn't
totally independent, because just as I can't name a chairman
without the chamber, the chamber can't name a chairman without
me. So, I think the independence of the agency is very, very,
very important. It will get you through the fiscal hard times.
And it has a professional staff.
Right now our executive director is a man by the name of
William Hankowsky, who could leave me--he's the highest paid
person in the government, if we count him as being in the
government--and he certainly is. By far, he makes about $75,000
more than I do. And he should, because he could leave right now
and double or triple his salary. But he believes in the
professional nature of the mission. And he believes that--and
it's the whole ball of wax.
What we are talking about in managing the government better
and reducing deficits, we are talking about taking a patient
with a cancer that is potentially fatal cancer and a bullet
wound to the chest, we're talking about patching up the bullet
wound to the chest so the patient won't die in the short run.
But creating economic development and jobs, broadening that tax
base so they don't have to come back here 20 years from now,
that's the whole ball of wax. That's the cancer.
Mr. Davis. That's the chemo.
Mr. Rendell. That's the cure for the cancer.
Mr. Davis. Yes.
Mr. McCrory. Representative Davis, you might want to also
check into Charlotte's uptown development corporation, which is
a very similar set up regarding my appointment--I appoint--our
economic development chairman is a member of the uptown
development corporation, and each of our major CEOs who work in
uptown Charlotte are now members of the board of directors.
And they have their own budget. They have their own tax in
the uptown area. The uptown area of Charlotte is 10 percent of
our tax base, which is fairly substantial for us. So we have a
separate corporation and they have special street cleaning and
other things. But we have a management director for that, also.
Mr. Davis. Pat, if you could enter that--if you could send
us some information, I ask unanimous consent, Mr. Chairman,
that be entered into the record.
[Note.--The information referred to was not available at
time of printing.]
Mr. Rendell. That's called--those are called business
incentive districts or special service districts. Our downtown
is 40 percent of our tax base--of our property tax base and
about 30 percent of our wage tax base. And we have the same
thing. It's a slight surcharge on the taxes, independent
management on certain issues and a commitment from the
government that we don't go below the baseline that we had
there before they came on board.
Mr. McCrory. Our goal is to increase ours from 10 to 15 to
20.
Mr. Rendell. Right.
Mr. McCrory. Because the more investment we have, the
greater return I have to pay for other services.
Mr. Davis. I want to hear how Mayor White is stealing your
people and your businesses from you. What are they doing in
Greenville?
Mr. White. The State of South Carolina is very aggressive
on a State level, as the chairman knows.
Mr. McCrory. Very aggressive.
Mr. White. The fee in lieu of taxes and other good
incentives.
Mr. Davis. Let me just say, that after hearing all of you
testify, I notice there's a constant refrain by all. Part of it
is good management. Part of it is understanding that a
partnership between the business community and city hall is
critical to success. A good attitude in working with the
business community is critical for any comeback. Would
everybody concur with that?
Mr. White. Absolutely.
Mr. Rendell. Absolutely.
Mr. Davis. It's something that, here in the Nation's
Capital, we need to think very long and hard about to make sure
the city has the tools. Right now, the playing field is not
level. I represent a suburban district where the rents are
cheaper. More workers are out there. In my judgment, we can do
some things for the city that won't even be at the expense of
the suburbs. We can expand the pie for the whole region if it's
done correctly. That's why I'm interested in some of the models
that have worked in----
Mr. White. But every area has strain. So, you can list a
long list of negatives for the District of Columbia and every
community. But every community also has assets and strengths
and reasons why people want to be here if given a chance. And
that's what you have to focus on.
Mr. Davis. Well, Philadelphia was literally on its back not
that long ago, and it has come back. It needs constant
vigilance and attention or it may disappear as you know. You
need to give it continued focus. Mayor Rendell, let me just ask
you. You had a city that's a little close to Washington because
of some of the traditions in the northeast as opposed to the
south.
Mr. Rendell. Well, again, I don't want to paint too rosy a
picture of Philadelphia. As I said, we still have our systemic
inherent problems that all big cities do. But I also think one
thing a big city has to do--and I didn't hear Mayor White's
testimony on festivals--but if you look at cities and the age
old reasons that we had cities, they were places to do
business, for commerce.
Because the businesses had to be near their customers. And
the lawyers had to be near their clients. And the accountants
had to be near everybody. Well, as technology changes, and we
can e-mail and we can fax and we can video teleconference,
there's hardly any need for anybody to be near anybody anymore.
So, if there's going to be a rationale for cities in the
future, it has to be a number of things, but they mainly have
to be the centers of areas where people can come to have fun,
to experience art, cultural and historical experiences, and to
gather together.
And our festivals--and, again, I didn't hear Mayor White,
but assume I know what he says--cities have to be dynamic,
vibrant, fun places. And I will tell you, that's the one area
where Washington, DC, has the ability to knock everybody dead.
You should be clobbering everybody. We have a July 4th, 10-day
celebration that leads up to July 4th, where we bring 3 million
people downtown--3 million in 10 days downtown.
And we don't have half the assets that would be attractive
to people from the region. Forget tourists, you do OK with
tourists. But go around to some of your television market and
ask those people the last time they were in Washington. And
it's probably been a while ago. And every time they come, even
if they come in for a free festival, you can just see the cash
register going. Because they have to park somewhere. They have
to eat somewhere. They buy a souvenir. Boom, boom, boom.
Mr. Davis. There goes the budget right there in this town.
Mr. Rendell. That's right.
Mr. Taylor. Thank you, Chairman Davis. Ms. Norton.
Ms. Norton. Gentlemen, we have kept you too long. I will
ask you only one question. If you were to ask residents of the
District of Columbia today what was the problem that most
disturbed them, they would probably say crime.
Mr. Rendell. Right.
Ms. Norton. Has the crime rate in all of your cities gone
down in the last couple of years, and if so, what do you regard
as the major reason for the decline?
Mr. McCrory. The answer is yes. It's gone down drastically.
One area we're still having problems with is car break-ins.
But, as I said, our murder rates were decreasing every single
year. And we were having a major, serious problem with crime in
Charlotte.
Ms. Norton. So what happened?
Mr. McCrory. Well, I'd contribute three things. One is we
did hire over 225 new police officers, which helped
tremendously. We forged a relationship with our DA's office and
with the county and others to try to streamline some efforts
where people were falling through the cracks. We started
enforcing things like truancy laws, which we weren't enforcing
in the past. We have now a program called Target 100, which we
implemented last year, which we now identify as our top 100
people who are getting arrested over and over again in the city
of Charlotte, and we treat them as a customer.
Just like your top 100 customers if you were working in
business. These are the people we're going to give special VIP
treatment to. Because they're using our resources over and over
again in addition to causing havoc in our community. And we're
working with the DA and with the other people in the criminal
justice system to, again, target especially those people who
are committing--you know, been arrested 20, 30, 40, 50 times.
And other things other cities are doing also. We're
targeting the smaller crimes, too. Once you let the graffiti or
once you let minor crimes occur and you do nothing about it,
you know that's going to escalate into more serious crime. And
so we're starting at the lowest level possible and the message
is going out interviewed the city of Charlotte, and we're very
proud of that reduction in crime. Those are a few examples.
Ms. Norton. Mayor Rendell.
Mr. Rendell. Yes. All of those things that the mayor said
are correct. We have, as I said, almost 400 more police on the
street, which is a tremendous step in the right direction. All
of those law enforcement things are important. But it's also
demographics. Crime tends to reflect the number of people in
the prime crime producing age brackets, which are 15 to 26.
We've gone through a demographic trough.
We're now, unfortunately, about to enter into an up period,
where we have a lot more people in those age brackets than
we've had in the nineties. And our crime statistics are down
significantly. But the problem is, if you look at the crime
statistics nationally, Charlotte, Philadelphia, I don't know
about Greenville, but the one area where crime is increasing--
overall crime is down--violence among young people is
increasing.
And all the law enforcement in the world, all the police in
the world, all of the better streamlined courts, tougher
sentences, that's not going to make a difference. There are too
many young people in the city of Philadelphia who grow up and
look around them when 12, 13, 14--and they may even be school
dropouts, but they're awful street smart--and they see in their
neighborhood no male working other than the drug dealers.
And even the drug dealers they know end up getting shot or
thrown in jail. And that absence of hope, that absence of
visible economic opportunity does more to produce crime among
young people than any single factor that I can think of, any
single factor. It's interesting, crime among juveniles has gone
up. And we're incarcerating more juveniles.
And unless we come to grips--and those are the--when I said
I don't want to paint too rosy a picture of Philadelphia--I
could take you to neighborhoods of Philadelphia that are just--
that just have awful problems. And the biggest problem is lack
of hope in those neighborhoods. And they're not all African-
American. They're latino.
They're poor white. And unless we do something to reverse
the absence of economic opportunity, things aren't going to
change. Have you wondered why in all of this evidence, this
mountain of evidence about how smoking is terrible for you,
that among minority youth smoking is actually increasing. Well,
you try to go tell a 16 year old kid in some of my
neighborhoods, ``You better not smoke. You're going to die of
lung cancer when you're 55.''
That young kid doesn't believe he's going to be 25, no less
55. So, I think when we look at the crime problem, we can't be
too patting ourselves on the back for the national decrease,
because the increase in juvenile violence and that demographic
trend that's going to start going up are ominous figures for
us. And, again, we ought to have more police and we ought to
have stronger systems. But we've got to look at economic
opportunity.
And, to me, we need a bipartisan approach to economic
opportunity. Capital gains, absolutely. But only capital gains
that's going to produce jobs. No capital gains tax relief for
someone who buys and sells art or collects gold coins. That's
ludicrous. But if someone wants to invest in a job producing
enterprise, we ought to give them, I think, capital gains
exemption if they are going to produce jobs. And, this may be
my last chance to speak. I just want to say one more thing.
From our point, where we live--and now I'm talking more as
a citizen than as an elected official, we really want you to
act together. And we don't want it to be Republican or
Democrat. We don't want there to be winners or losers in this
process--individual winners or losers, or parties that are
winners or losers. We have real problems. Even cities that are
success stories have real problems. And we need your help and
we need your leadership.
And we need you to--once the election is over--and I am a
combative person come election time--but once that election is
over, you can't be Democrats or Republicans anymore. And I know
the chairman said that that's the approach you're going to take
to Washington, DC. And I hope you do, because this is our
Nation's Capital, and it's a great city. And we've got to save
it. And you ought to do that with Washington, but you ought to
do that with all of our problems. And if you can do that, it's
amazing how much progress I think you're going to get done.
Ms. Norton. Yes. Mayor White.
Mr. White. We've seen an improvement. I want to comment
about community policing. That's one of the ironies about
community policing is that you put officers into a neighborhood
and they become a part of the neighborhood, is that your crime
rate actually goes up. It makes sense. More reports. They see
things they didn't see before. And people feel more comfortable
coming forward with information.
So, you see that little blip up on the screen sometimes,
and I mentioned that because I don't want folks to think that
community policing raises the crime rate. But, ironically
enough, it just might in some neighborhoods for a while. But I
think it's one of the big reasons we've been able to target
high crime areas in a lot of cities, target high crime areas
with an effective weapon. And that is community policing.
Ms. Norton. If I might say, Mr. Chairman, that I don't
always learn something from every hearing. And the reason I am
particularly grateful for the appearance of you all here today
is that I can truthfully say that I have learned something from
each of you, and I think that you have, training, contributed.
To the extent that we can take what we have learned and
actualize it, that you have contributed to the revival of the
District.
I do want to say one word about Mayor Rendell, because when
the District went down, the city that most approximated where
we were going was Philadelphia--a huge city, helped build its
State. And Mayor Rendell came in to find it on its knees. You
talked about how the city employees were--that you got 60
percent of their vote. The word from Philadelphia is that, as
to the rest of them, you got your elections by acclamation,
which says to me it is possible to do tough things if one
exercises the kind of skillful and dedicated leadership you
apparently had.
Frankly, as far as I am concerned, Mayor Rendell, I distill
my view that Philadelphia wrote the book for and on cities that
have gone down. I regret that this city has not followed more
closely. I think we'd be further along. It has been the bane of
my existence. I want the control and the city to live in
Philadelphia until they absorb--instead of reinventing the
wheel here. In a real sense, Philadelphia has been there and
done that, is a role model for
cities that find themselves on the bottom and lift themselves
up.
I talked to members of your city council when our control board
statute was being written.
And to see people who would say, ``Look, we were real
doubtful about having a control board.'' And that in less than
a year, they did not believe that a control board could have
brought them back so far. We still, when I go into the
neighborhoods, people are still talking about we know where the
before is, where is the after. And we're continuing to lose
people because we are not seeing--we're not seeing change--and
we have very patient people. Even small change matters.
I just want to say to you just how smart Philadelphia has
been. It's great to see a city that was just so smart in going
at a tough problem that did not continue to engage in crisis
management reform. And I am still interested in learning more
about Philadelphia because it so approximates what we're going
through. And I am certainly not interested in reinventing the
wheel, and believe that one of the major mistakes we have made
in this city is to reinvent the wheel instead of to sit at the
wheel with Philadelphia.
And I believe that today's testimony helps us to get out of
the mode of reinventing the wheel. I may ask that--I think you
do us a great service if, beyond the testimony from your aids,
who came so generously to testify when we were setting up the
control board, if there is other written material on what you
have done in Philadelphia, whether it's been material written
about you in the popular press that describes how you did that,
or whether it is material from the inside of your government, I
would certainly want to make it part of the record.
I would want to pass it on to our own city officials and
control board. And I just want to say again, you are a role
model city as far as the District of Columbia is concerned and
I congratulate you on what you have done.
Mr. Rendell. Well, thank you Congresswoman. And the only
thing I'd say is, I think as all five of us would attest,
there's nothing that involves rocket science. It involves, as
you said, the fortitude to make tough decisions--and every one
of the five of us has done it--and leadership and bringing
everybody together, community groups, business groups, et
cetera. And that's the reason why I think there's every reason
to be hopeful that with your leadership--and if you stay on the
case and continue to apply the pressure, Washington, DC, can
come back, as well. There's no question in my mind.
Because we all borrow from each other. I have a list of
some of initiatives that we undertook, and a third of them were
borrowed from other jurisdictions, a third of them were from
comptroller's reports before I became mayor. I mean, it isn't
rocket science. And if the District hope officials have the
will, that's great. But if not, if you and the control board
can impose that will, I think it can be done.
Mr. Taylor. Thank you. I agree with several of the things
that have been said. This should not be Republican or Democrat
issue. This is America's capital. There's no question, though,
that the theme that has run through this hearing--and it's been
a very, very valuable hearing for me, and Congresslady Norton
just mentioned for her, and I'm sure for the whole staff and
members who were here--is that there needs to be a
philosophical change, certainly, in approaching the problem.
You cannot use a lot of the old methods that were ineffective,
there need to be new methods tried, whether you're dealing with
a young city that's growing, such as Charlotte or Greenville,
or Philadelphia, which has had many of the problems which
Washington, DC has.
Privatization, which I've heard throughout from all of the
mayors, done in a way that does not dump the city employees and
the talents of those employees on the street. Privatization in
a way where the competition raises the level of the departments
and allows the public departments to bid. And if they can win
the bid, then they are much better and the city is much better
for it. Cutting regulations and taxes is, as you mentioned a
moment ago, wherever possible, and especially if they're
excessive, is common sense.
People do not come to regions where they are overtaxed when
they can go to areas with much lower tax and perform the same
purpose. And the mayor pointed out, with today's technology,
you do not have to be in the center of a downtown area. You can
be outside. And, so, it's necessary to be competitive, also,
with the lower taxes and abolishing useless regulations. And,
of course, then, the quality of life: the school system, the
law enforcement agencies we have.
Here, again, the problems of crime are broad and deeply
rooted in all of our society and have to be attacked in a
variety of ways. But the basic ways I think each of you has
talked about is, first of all, having competent law enforcement
in place, enforcing the law, from juveniles all the way, so
that the example is set from beginning all the way up, and
taking repeat offenders off the streets and incarcerating them
for reasonable periods of time based on their offense.
Now, these are basic common sense practices. But they
seemed to run throughout. And, so I'd like to say to you today,
you've made a national contribution, I believe, with your
testimony and your appearance. I appreciate, as Congresslady
Norton mentioned, any other suggestions, any other programs
that you have that you weren't able to articulate today. If you
could pass them on to this committee. Mayor Golding, Mayor
Goldsmith, Mayor McCrory, Mayor Rendell, Mayor White, I
especially applaud your 3 hours plus time that you've spent
with us and the contribution you've made in what I think is a
national debate to improve the Nation's Capital. I believe that
working with the control board and with the Capital's citizens,
and the Congress working together, we can improve this city.
And I want to thank each of you for being here. I appreciate
the use of the hall from the Government Reform and Oversight
Committee. And this committee is now adjourned, subject to call
of the Chair.
[Whereupon, at 4:15 p.m., the subcommittees were adjourned,
subject to the call of the Chair.]
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