59

Reform Plans
1. Department of Human Services

The Authority has over the course of its tenure taken many steps to address
ineffectiveness in the operations of the District's service provision in the area of
human services. in response to the management reform initiative, the
Authority's effort to assess the Department of Human Services (DHS), identify
opportunities for improvement, and prepare a management reform plan
encompassed the following DHS administrations and programs:

© the Income Maintenance Administration (IMA), having responsibility for
welfare-related programs;

© the Child Care Subsidy Program operated by the Office of Early Childhood
Development;

© the Mental Retardation and Developmental Disabilities Administration

(MRDDA);

the Rehabilitative Services Administration (RSA);

the Family Services Administration (FSA); and

Youth Services Administration.

eee

The Department of Human Services’ mission is to assist residents of the District
who, for various reasons, are unable to meet their needs for food, shelter, or other
services or to care appropriately for their dependents through their own means. It
also serves as a conduit for various types of federal funds to flow to the District
and District residents. The agency carries out its mission through numerous
administrations and offices. .

The Department of Human Services provi
carries out numerous acti
through DHS include:

s a wide array of services and
jes to assist customers. Major services provided by or

© cash assistance and work preparation services for cash assistance
recipients;

@ Food Stamp assistance for low-income individuals and families;

© child care subsidies for low-income families;

@ assessment, case management, advocacy, and treatment services for
children at risk for, or victims of, abuse or neglect;

@ assessment and case management services for adults in need of protective
services;

@ diagnostic, treatment, and case management services for individuals with
mental illness, mental retardation, or developmental disabilities;


128

skills necessary to carry out their jobs in a modern context, and
nowhere a meaningful management commitment to meeting the

expressed needs of local residents and businesses.

AFGE set to work to prepare a comprehensive response to the
consultants in writing, which I have attached to my testimony
today and which I hope the members of the Committee will regard
seriously. AFGE’s response is entitled: Service Excellence: A
Inion Vis for the Di ict of Columbia. In it we respond
specifically to the consultants reports on Emergency Medical
Services, and the Departments of Employment Services, Consumer
and Regulatory Affairs, Public Works, Health, and Housing and

Community Development. We have also responded to the so-called

ross-cutting" reports which focus on personnel management.

Our approach to the consultants reports was systematic. We
analyzed their "findings" and "recommendations" from the

perspective of whether they would further the following eight

AFGE goals and principles:

Strengthening collective bargaining in order to make
reforms effective.

2. Empowering employees and treating us with respect

Improving management accountability

4. Improving performance management

Improving the rewards system


25

DISTRICT. WE RENEW OUR CALL FOR AN ECONOMIC
DEVELOPMENT CORPORATION WHICH REPRESENTS ALL
SECTORS, INCLUDING NEIGHBORHOODS.

I BELIEVE THAT TRUE REVITALIZATION OF THE NATION’S
CAPITAL WILL OCCUR IF, AND ONLY, IF, A MORE REFINED
RELATIONSHIP IS ESTABLISHED WITH THE FEDERAL
GOVERNMENT THAT PERMITS THE DISTRICT TO GENERATE THE
REVENUES NECESSARY TO SPUR ECONOMIC GROWTH, BECOME
MORE COMPETITIVE WITH MARYLAND AND VIRGINIA AND
CONTINUE TO INSIST THAT THE FEDERAL GOVERNMENT ACT AS
OUR STATE AND FUND ADDITIONAL STATE FUNCTIONS,
MEDICAID, MENTAL HEALTH, FOOD STAMPS, ETC.

TRUE REVITALIZATION MEANS HAVING THE REVENUE STREAMS
NECESSARY TO EXPAND THE ECONOMIC BASE OF THE DISTRICT
AND USE THE FEDERAL GOVERNMENT’S PRESENCE TO
STRENGTHEN OUR ECONOMIC BASE. FURTHERMORE, TRUE
REVITALIZATION MEANS THE RETURN OF FULL SELF-
DETERMINATION BY THE LOCAL ELECTED OFFICIALS SINCE
EXPANDING THE ECONOMIC BASE CANNOT REPRESENT THE
INTERESTS OF THE CITIZENS UNLESS THEY ARE AFFORDED THE
OPPORTUNITY TO BE PART OF THE REVITALIZATION PROCESS.

FINALLY, AS I STATED IN MY WEEKLY PRESS CONFERENCE ON
WEDNESDAY, WE ARE REQUESTING A CONTINUED FEDERAL
CONTRIBUTION OF $328 MILLION FOR PAYMENT IN LIEU OF
TAXES.

AS YOU KNOW, WE LOSE $1.5 BILLION A YEAR IN TAX REVENUES
AND WE LOST AN ADDITIONAL $660 MILLION A YEAR WHEN THE
FEDERAL PAYMENT WAS CUT OUT. THIS IS NOT A SUBSIDY OR A


149

any indication, walks in one morning and is told that they have got
1 hour to clear out of the building, and they no longer work there,
what type of message does that send? It sends a message of fear,
not of accountability.

Unfortunately, that is what we have found to be the case there.
The recent examples, a bargaining agreement sits on his desk. We
found out there is a $100-and-some-odd million surplus now, and
he has been claiming for months there wasn’t the $10 million to
see that the collective bargaining agreements get implemented. It
doesn’t make any sense to us. And the communication there has
just been terrible, in spite of really the good offices of yours and
Congressman Davis.

Ms. Norton. I think that the Control Board heard us and the
CFO heard us today on the question of using part of the surplus
to implement raises that have been negotiated in a fair and demo-
cratic collective bargaining process.

Look, not to worry, not until a hearing here just before Christ-
mas were we able to stop a strike in, of all places, the schools, be-
cause for 7 years the lowest paid workers in the school system had
been without any pay raise whatsoever, even though there had
been two arbitrators’ decisions mandating a pay raise. When you
put a union in the position that a union tried to negotiate
time and time again and can’t deliver, then the union has to come
up and say, we are going to do what we have to do. Imagine what
that would have done with the schools. Yet, not until we pressed
Dr. Brimmer was there a promise to pay these people something
before Christmas. We really don’t want the city’s business up here
and certainly don’t want you to have to resort to techniques like
striking.

I want to assure you, we will do all we can to make sure that
the legacy of streamlining the government is not abrogation of col-
lective bargaining rights. That is not the intent of the statute, and,
frankly, I don’t think you can get a lick of work out of people at
a time when you are retracting their collective bargaining rights.

I have a question for you, Mr. Hicks. I am aware that AFSCME
has worked, I think your testimony may have even spoken about,
working successfully with administration—with cities who were in
the throes of management reform.

How do you compare those experiences with the experience you
have had in the District? What similarities or differences have you
found?

Mr. Hicks. Well, I think the big difference is, one, for example
in New York, when they were in trouble, that AFSCME came to
the table and they made concessions and they worked together. I
think the same thing happened in Philadelphia, and even in Indi-
ana, where that is considered one of the flagships, where they
worked together.

One of the problems here is that we don’t have the cooperation
from the authority, we don’t have the cooperation from the CFO.
As a matter of fact, after the meeting with the CFO in I think Con-
gressman Davis’ office, where he agreed to have those meetings,
there are still no meetings going on.

I think that until the Authority and the CFO, and I certainly
can’t speak for the new city manager, realize that the unions are


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 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 ELIJAH E. CUMMINGS, Maryland

JOE SCARBOROUGH, Florida DENNIS J. KUCINICH, Ohio

JOHN B. SHADEGG, Arizona ROD R. BLAGOJEVICH, Illinois

STEVEN C, LATOURETTE, Ohio DANNY K. DAVIS, Illinois

MARSHALL “MARK” SANFORD, South JOHN F. TIERNEY, Massachusetts
Carolina JIM TURNER, Texas

JOHN E. SUNUNU, New Hampshire THOMAS H. ALLEN, Maine

PETE SESSIONS, Texas HAROLD E. FORD, Jr., Tennessee

MICHAEL PAPPAS, New Jersey —

VINCE SNOWBARGER, Kansas BERNARD SANDERS, Vermont

BOB BARR, Georgia (Independent)

DAN MILLER, Florida
Kevin BINGER, Staff Director
DaNiEL R. MOLL, Deputy Staff Director
WILLIAM MOSCHELLA, Deputy Counsel and Parliamentarian
JupitH McCoy, Chief Clerk
Pui ScriLino, 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

ANNE MACK, Professional t Staff Member
ELLEN Brown, Cler

(CeDRIC HENDRICKS, Minority Profecional Staff Member

aD


119

management job or lucrative private contract. The result was the
twin crises of management and finances. There were, and still
are, too many bosses and not enough front-line workers or
equipment or spare parts to get the job done. There were, and
still are, questionable contracting practices that result in
contracts let without proper regard to the price, the quality, or

the experience of the contractor.

AFGE represents the people who actually do the everyday,
sometimes dirty, sometimes dangerous, sometimes tedious, and
almost always thankless work that makes a city run. It is we who
try to continue to deliver services to District residents and
businesses in an efficient, professional, and humane way. But as
you know, our members’ efforts and aspirations are often thwarted
by layers of redundant management, lack of training, materials,
and/or equipment. To add insult to injury, our salaries have
been reduced twice in the past 24 months, earned benefits have
been reduced or eliminated, opportunities for career advancement
have been foreclosed, and premiums for overtime, hazardous duty,

and holiday work have been severely reduced.

The institution of collective bargaining itself has been a
casualty of the Control Board era. Although it may not yet be
dead, it is certainly in "critical" condition. Indeed, it is
only as a result of the strenuous efforts of Members of this

Committee that the negotiated grievance and arbitration process -

2


68

opportunities for training and work for all citizens in the District, the enforcement of
appropriate protective standards pertaining to workers and workplaces, and the
provision of all needed services to the District’s employer community.

The Department of Employment Services has responsi
activities related to the employment of District residents:

'y for four major

1. The development and operation of training, education and employment
activities for economically disadvantaged adults, welfare recipients and
youth, including the summer youth employment program, services for
dislocated workers, and the development of school-to-work programs in
partnership with DC schools;

2. Provision of labor market information, job counseling, referral and placement
services to the general public;

3. Collection of Unemployment Insurance taxes from DC employers, and
determination and payment of Unemployment Insurance claims; and

4. Administration of a range of labor standards programs, including workers’
compensation, disability compensation, wage and hour standards, and
workplace safety and health.

The consultant’s report described a crisis-oriented agency that was
addressing all its mandated functions, but generally doing so in a weak fashion, and
through methods often contrary to national standards; agency performance ranged
from adequate through unsatisfactory to indeterminable in the case of one area
where performance data was so unreliable as to preclude assessment. The agency
has no coherent and recognized goals, nor effective mechanisms for strategic
planning; there is little orientation to meeting the needs of customers; the agency
achieves few high standards of performance, and quality control is virtually
nonexistent; management information systems, and information technology in
general, are critically deficient throughout the agency.

In addition, business involvement at the strategic and programmatic level --
hallmarks of successful workforce agencies in other localities across the U.S. -- was
strikingly limited in DOES, and the agency's generally poor reputation inhibited its
development. Deficiencies in staff quality and training levels were also noted, along
with poor communication and low morale within the agency.

The most significant opportunities for change and improvement lay in four
legislative mandates of the DOES agenda. All of these, to succeed, depend upon
visible, energetic and effective leadership by the community, and include:

© The establishment of a Workforce Enterprise Board, with a broad oversight
role regarding all aspects of employment and workforce policies, programs
and initiatives;


152

to do to get some of these lines of authority established and get
things moving.

Without objection, all written statements submitted by witnesses
will be made part of the permanent record and the record will re-
main open for 10 days.

It is the subcommittee’s intention to have further hearings on
management reform issues as we move further into the process.
The subcommittee will continue to work with all interested parties
to achieve the statutory objectives.

These proceedings are closed.

(Whereupon, at 1:57 a.m., the subcommittee was adjourned.]

O°


79

Services Division, which is responsible for management information systems,
facilities and vehicle maintenance, safety, and various support functions; and the
Office of the Fire Chief, which is responsible for the management and
administration of the Department, and its budgeting, public information, and legal
functions.

While the men and women of the Fire and EMS Department respond to an
extraordinary number of emergency responses for a population the size of D.C., the
services fall short in almost every area of responsibility, other than extinguishing
fires. The fire death rate per capita in the District is 60 percent above the national
average. Response times for advanced life support calls are extraordinarily high on
the average, and do not come close to meeting national goals.

The Department is not prepared to adequately handle the potential hazardous
materials and rescue calls that are reasonable to expect. And fundamental
problems exist: a wide array of support services are kept going by filling them in
with uniformed firefighters taken out of operations, and then substituted for using
overtime. The Department is well below average in its capability to handle
procurement, supplies, and budgeting. A major overhaul of the communications
system has been lagging for a decade. Firefighters are not all adequately equipped
for their safety, and must put up with firehouses that are often leaking and
uncomfortable if not outright dangerous (from exhaust fumes). The training facility
has literally been @ junkyard, and does not provide modern tive-burn training
capability needed to keep up skills safely.

To address the problems, management reform focuses on the following
immediate needs: emphasize prevention to prevent fires and reduce injuries; triage
the EMS demand better to siphon off non-emergency calls; put more ambulances
‘on the street, develop a more sophisticated peak demand ahd dynamic
redeployment philosophy that matches the number of units and their location more
closely with demand; rebuild the infrastructure of Department to support the
delivery of services to citizens while also improving safety for the Department
personnel; improve quality control and accountability for all services rendered;
provide more adequate fire vehicles and spares for when they go out of service,
and solve the procurement problem that has stopped the Department from being
able to make quick repairs to emergency vehicles.

The combination of management improvement projects will result in
permanent fixes to the Department's problems, and a much higher level of service
to citizens. The use of paramedic engines will get a paramedic capable of advanced
life support to the scene of a heart attack or an assault within § minutes on the
average, instead of 12 or 13 minutes, Close to 100 percent of schoolchildren
should be reached by fire safety education several times in their school careers,
versus the sporadic program at present. All potential high-life loss buildings and
‘one-third of all other buildings will be inspected each year. The fire protection



5%)

MY OWN TRANSFORMATION EFFORT MADE SUBSTANTIAL
PROGRESS IN ITS FIRST TWO YEARS FOR WHICH YOU, THE
WASHINGTON POST AND OTHER FAIL TO ACKNOWLEDGE. WE
ACCOMPLISHED MUCH AND WERE ON THE PATH OF REFORM. WE:

- REDUCED THE WORKFORCE FROM 47,000 TO 36,000;

- PRIVATIZED SEVERAL MAJOR CITY SERVICES INCLUDING
THE CORRECTIONAL TREATMENT FACILITY, FOOD SERVICES
AT ALL CORRECTIONAL FACILITIES, THE POLICE & FIRE
CLINIC, DC VILLAGE, AND OAK HILL EDUCATIONAL
ACADEMY. WE CLOSED FACILITIES AND HANDED
PROGRAMS TO THE PRIVATE SECTOR FOR COST SAVINGS
AND REVENUE ENHANCEMENT;

- ACCOMPLISHED SIGNIFICANT ORGANIZATIONAL CHANGE AS
WELL, CREATING A DEPARTMENT OF HEALTH AND A
PUBLIC BENEFITS CORPORATION THAT WILL
DRAMATICALLY IMPROVE HEALTH CARE IN THE DISTRICT,
AND WE ALSO CREATED AN INDEPENDENT, REGIONAL
WATER AND SEWER AUTHORITY;

- REDUCED AFDC BENEFITS, UNEMPLOYMENT BENEFITS AND
WORKERS COMPENSATION COSTS;

- CREATED A CENTER FOR EXCELLENCE IN MUNICIPAL
MANAGEMENT WITH GEORGE WASHINGTON UNIVERSITY TO
BETTER TRAIN OUR MANAGERS,

- LAUNCHED A_ CITYWIDE LABOR-MANAGEMENT
PARTNERSHIP PROCESS TO FOSTER COLLABORATION,
CULTURE CHANGE AND SERVICE IMPROVEMENT;


128

PRINCIPLES OF THE RELATIONSHIP

‘The LMPC members shall provide the leadership necessary to create a city-wide
Iabor-nanagement relationship based on mmutnal interests, respect, and trust.

‘Toward that end, we will strive to:

Listen to each other,
Respect cach other
‘Trost each other,
‘Take responsible risks;

a

: Create a reliable, long-term relationship.

FUNCTIONS oF THE LMPC

The main fimctions of the LMPC are to:

+ Provide a satz place for early discussion of operational problems, plans, and
Fete Stn er crm ten hd

management

Gather and share information on issues of mutual cancem;

Build consensus for a focused, achievable, joint agenda,
Research and explore new models for collaboration;

Provide training and guidance to agency partnership councils; and
Solve problems.

‘The LMPC will be selective in focusing our efforts and choose wisely among issues
that will benefit from the attention of the LMPC. On a practical level, this means
‘wo will jointly define goals, set priorities, and develop a workplan on 2 peciodic
basis. We will identity a select number of Agencies and Departments for “priority
focus,” and designate appropriate timelines, responsibilities and resources to achieve
8 prompt response. We will also develop » more long-term agenda and workplan,
‘while continuing to be responsive to emerging issues,

vvere

‘D.C. Labor-Management Partnership Council
Jone 1997 page Z


134

Mr. Davis. Mr. Hicks, you don’t have to read everything, I have
read it but we want to have you highlight what you feel you need
to highlight.

Mr. Hicks. On behalf of AFSCME, I am the acting director/presi-
dent of council 20, representing approximately 8,000 members, and
I am delighted to be here. I am pleased that you have called us
here for this meeting. I would like to thank you, Chairman Tom
Davis, for your efforts on our behalf, and, of course, Delegate Elea-
nor Holmes Norton, for her ongoing efforts in support of the men
and women who work for the District of Columbia.

Our members are the people who collect the trash, clean the sew-
ers, process our tax returns, sweep the streets, provide higher edu-
cation for our youths at the University of the District of Columbia,
and collect the fines at the libraries when the books are late. It is
our members who perform the basic functions on which D.C. resi-
dents depend upon.

Under the Control Board and Anthony Williams, the chief finan-
cial officer, our members have endured many hardships, from being
laid off after receiving good Rerformance ratings, to being stripped
of basic due process rights. Mr. Williams has expressed time and
time again that Congress has conferred such sweeping authority
upon him, that he can now disregard basic collective bargaining
rights and the Comprehensive Merit Promotion Act. We are ex-
tremely concerned that the implementation of the management re-
form program will result in further erosion of basic employee
rights, conferred by collective bargaining agreements and personnel
laws and regulations.

Like everyone else in this room, all our members take pride in
their work. They do a good job, they have done a good job, and they
want to be appreciated for it. We realize that doing a food job, we
must have training and exposure to new technology. The problem
is not that people are not working; sometimes the problem is that
workers lack the tools in order to get the job.

AFSCME members are not ignoring the problem. In fact, we are
trying, and have tried for a long time, to make fundamental work-
place changes, but our attempts have oftentimes been met with re-
sistance. We have repeatedly sat down with managers of depart-
ments and agencies to discuss how workers currently perform, how

es can be implemented in order to improve services, but all
too often management has gone off and hired a consultant for large
sums of money, only to be given the same advice that unions have
offered.

In enacting the laws creating the Control Board and the CFO, I
will respectfully suggest that Congress has inadvertently made the

foal of promoting labor-management cooperation more difficult.
'SCME has played a constructive role around the Nation in
working to improve the delivery of government services. Good em-
ployees in both the private and public sector have increasingly
come to realize that their employees have a wealth of knowledge
that, if tapped, can evolve into a higher performance workplace.

Despite excellent work records, people have been fii without
notice for being incompetent after years of receiving high perform-
ance ratings. Our union has sued the CFO on behalf of workers
and lost because the judge found that Congress has stripped the


14

its operations in a more businesslike manner, Market-based on-street parking
tates as part of an overall parking management strategy to address an obsolete
and ineffective parking program will help alleviate congestion on District streets
while also generating revenue.

© Division of Transportation: Deficiencies in management, resource, and technical
skills require elimination of functions and reconfiguration of staff to improve
decision-making, improved mechanisms for service delivery, and recruitment of
key personnel. As a result of this plan, streets, bridges, signals, lights, and
sidewalks not only will be repaired regularly and properly, a program to ensure
effective capital improvements and to manage revenue streams to support
‘ongoing maintenance will be established. Relative to neighboring jurisdictions,
the District is forgoing significant right-of-way revenues. Of particular short-term
significance is one project that will focus on removing an inventory of 5,000
dead and dangerous trees across the District.

© Fleet Management Administration (FMA): Vehicle downtime averaging around
30% of the DPW mission-critical fleet - such as trash trucks, tow trucks, street
cleaning equipment -- literally keeps DPW services from being delivered. The
Plan provides for fleet renewal and downsizing to eliminate vehicles and
equipment that are costly to maintain and perform poorly due to age. Putting
maintenance of the light duty fleet out for managed competition will provide
short-term capacity to get through the three-year transition to the renewed fleet
while establishment of a charge-back mechanism to establish FMA as a private
sector-like organization with attendant motivation and accountability to perform
cost effectively will prevent a recurrence of the current situation. Another
project will eliminate redundant fuel sites and bring remaining sites into
compliance with Federal and District regulations, reducing exposure to $1.2
million a day in fines for non-compliance with Federal underground fuel storage
tank regulations, effective in December, 1998.

«© Department-Wide Projects: Actoss the Department, deficiencies in customer
responsiveness, information systems support, performance measures, and
managerial capability undermine, rather than underpin, service delivery and
require particular attention. Regarding customer responsiveness, no formal policy
or procedure exists to ensure that action is taken on customer inquiries. OPW
requires not only full implementation of a system but training and culture change
to ensure that customers receive timely and accurate information and appropriate
responses. The Plan also includes outsourcing of information technology
services, improved management and staff capability, and a realignment of
organizations and functions not previously included in other projects.

In sum, the Plan is an integrated set of major projects that will produce
sustainable reforms. There is much to be done, however. The critical steps of


32

THAT BEING SAID, LET ME TELL YOU THE EASY PART IS OVER, THE MORE
SIGNIFICANT COURSE OF ACTION HAS YET TO BE COMPLETED - THAT IS THE
IMPLEMENTATION OF THE MANAGEMENT REFORM PLANS. THE
IMPLEMENTATION OF THE MANAGEMENT REFORM PLANS WILL REQUIRE
CONTINUED COLLABORATION AMONG ALL OF THE MANAGEMENT REFORM TEAM.
MEMBERS. THE HEAD OF EACH AFFECTED DEPARTMENT IS RESPONSIBLE FOR
THE IMPLEMENTATION OF THE MANAGEMENT REFORM PLANS. THE FINANCIAL
AUTHORITY CREATED AND FILLED THE POSITION OF CHIEF MANAGEMENT
OFFICER TO OVERSEE THE IMPLEMENTATION OF THE REFORM PLANS. IT IS
EXTREMELY IMPORTANT FOR THE COUNCIL TO CONTINUE AS A PARTNER IN THIS
PROCESS. 1 HAVE PERSONALLY MET WITH THE CHIEF MANAGEMENT OFFICER,
CAMILLE BARNETT, AND LOOK FORWARD TO WORKING WITH HER IN THE
IMPLEMENTATION OF THE REFORM PLANS.

MANY OF THE RECOMMENDATIONS ARE NOT NEW. OVER THE YEARS,
NUMEROUS STUDIES, REVIEWS, AND RECOMMENDATIONS HAVE LINED THE
SHELVES. THE IMPORTANT DIFFERENCE THIS TIME IS FUNDING FOR THE
IMPLEMENTATION OF THESE RECOMMENDED INITIATIVES.

I WANT TO RAISE TWO COUNCIL CONCERNS IN THE IMPLEMENTATION OF
THE MANAGEMENT REFORM PLANS. THE FIRST CONCERN IS THE FINANCING OF
THE MANAGEMENT REFORM PLANS. A VARIETY OF FUNDING SOURCES ARE
PROPOSED FOR THE FINANCING OF THE REFORM. THESE FUNDING SOURCES
INCLUDE EXISTING APPROPRIATED OPERATING AND CAPITAL BUDGETS, AND


103

facility. More are in the pipeline. We have encouraged the govern-
ment to look at other opportunities.

So our bias is in that direction, but we believe the actual decision
ought to turn on the objective factors which will turn up in the type
of isnelytical effort Dr. Barnett and Mr. Williams and I are under-
taking.

Mr. Horn. Thank you. Appreciate that.

I yield the balance of my time to Mrs. Morella to add to her time.

Mr. Davis. Thank you very much.

The gentlewoman fom Maryland.

Mrs. MORELLA. Thank you very much for the time.

Thank you, Mr. Chairman.

I particularly wanted to be here in order to welcome you, Dr.
Barnett. I really looked forward not only to meeting you here
today, but working with yeu in conjunction with this great team
that we have here with Dr. Brimmer and Mr. Williams. I think
you're a great trio, and so we look forward to helping you in any

ay we can.

ne of the things that you’re going to be facing, you have already
started to, has to do with the regulatory reform plans that you may
have, and the fact that the Business Regulatory Reform Commis-
sion has made some recommendations and the fact that the statute
itself talks about the concept of reform efforts.

I just wondered if you would have any comments you would
make about how you are proceeding with that, what the plans are.
And I guess the Control Board would then go to Dr. Brimmer, who
is also pone to talk about rent control and how that plan is coming

ugh.

Mr. BRIMMER. May I respond to that? Because that is a second
mandate we got in the Revitalization Act, August 5 legislation,
aside from management reform. There is a linkage between the two
mandates, for instance we do have some regulatory elements in-
volved, in the Department of Consumer and Regulatory Affairs.

We got a separate requirement from the Congress, mandating
that we look at regulations and Rermit application processes in the
city and to report to Congress. We had 6 months in which to do
that. Subsequently, we were also mandated to review the rec-
ommendations of the Business Regulatory Reform Commission. We
have done that.

We set about by assigning the project to our general counsel. He,
in turn, after a discussion with the regulatory commission people
and the legal profession, concluded that our best approach was to
engage outside assistance to enhance our capabilities. Through a
competitive process was selected a law firm, Holland & Knight,
was selected to make an examination and draft recommendations
for consideration by the Authority. That report is in our hands. It
is being docketed for review and assessment by the authority with-
in the next week or so.

We will, in fact, meet our deadline for submitting that report to
the Congress. There will be comments. There will be comments in
the Holland and Knight report on the items you identify and on the
items Congress mandated.

Mrs. MORELLA. Well, what is your timeframe, as you see it now?
You said 6 months after the legislation you will be ready to report.


39

guidance, nobody had given her any training to tell people where
this, that and this was. I happened to say, where do you go to get
a residential permit to park beyond 2 hours, et cetera? Nowhere is
there a sign posted anywhere to guide people what this thing does.
There are about five windows there.

It took me 3 hours to get to the head of the line. When I final,
asked for what I wanted, they said, oh, that isn’t here, even thoug!
three people had told me it was here. They said, you need to go
over to the Municipal Building. And I went over there, and I said,
phooey, who needs this?

You ought to have heard the people, the 90 percent black, 10 per-
cent white, standing there criticizing city government. The man-
ager of that operation was nowhere to be found, didn’t come out
and say, gee, I am sorry, we have a big pileup and so forth, we will
try to do the best we can to accommodate you. Nobody cared.

‘As I said, I was a university president. The first 2 days I was
president, students happened to be registering. There was a line of

jundreds of students. I stood out there 8 hours a day, shook hands
with everyone, asked them what was good about this place, what
was bad about this place. Believe me, at the end of 2 days, I had
an agenda if I didn’t come with one. I had come with one, too.

That is what we need is somebody that will go out and listen to
people and not just listen to the plaudits or the damnation of the
crowd, but listen to people that have very real problems working
their way through the bureaucracy.

And I guess I would ask you on this management thrust, is there
an office of management that reports to the new chief management.
officer? Does it report to the Mayor? Does it report to the council?
Who has got control of the group of people that know something
about management? I am not talking fiscal management, I am
talking organization and getting the job done and arranging people,
training people and so forth and so on?

Mayor Barry. Congressman Horn, let me certainly say what
happened to you was just terrible in terms of that kind of not
knowing where to go. I periodically go over to 301 C Street where
they issue driver’s license now. Of course, I am visible, but at least
I can still see whether or not the lines are too long, whether or not
people are being referred to the right place. And the good news is
that at that place, there is a person whose sole job is to walk the
lines and talk to people and make sure you are not in the wrong
line for registration or for this and so on.

If you go down to 301 now, you will find a facilitator, where you
would not have to stand in that line some 3 hours or 2 hours or
1 hour or half an hour before you were told you were in the wro.
Place. That person just has a blazer on and just moves around.

it person’s total job is that, and the person has the personality,
tog, to deal with that. 4 k 1

e part that I try to do in my town meetings is ask people
about what they think. Now, you don’t always get all what you
probably could get if I were as anonymous a kind of person asking,
but I do that, and I go over to where eyou went in Northeast, and
H Street, which is a horrible place. The conditions are physically
not very good. You are right, there are no signs up there to tell you
where to go, and that is one of the challenges I think that the de-


64

Agency personnel who are not in fact warranted or accountable for the
professional execution of the District's contracts.

© Slow procurement processing. The procurement service delivery chain is long
and complex. The Chief Financial Officer, Corporation Counsel, and Program
Management officials in the Executive Branch manage several links in the chain.
Currently, no one has “cradle-to-grave” responsibility for the effectiveness and
efficiency of the District's procurement operations.

The Procurement Management Reform Plan will address these problems and
position the department to deliver services into the next century. Reform efforts
are designed to:

© Centralize to effect standardization. Re-structuring procurement to a central
standard setting function, with Agency-based “Service Bureaus”, will reduce the
variability of the District's procurement process. Standardization will also
teduce the risk of supplier protests and letting of unacceptable contracts.

© Implement re-engineered processes and procurement “too! kits” to improve basic
planning and management control of the procurement service delivery chain.

* Consolidate District-wide purchases of common goods and services to gain
leverage and reduce cost. Approximately two-thirds of the District’s purchases
are for generic purchases such as food service, office supplies, office
equipment, and utilities. Establishing a smal! group of specialists centrally to
negotiate District-wide contracts for gen purchases will capture these
opportunities. Agencies would acquire individual needs by drawing against
centrally negotiated Blanket Purchase Orders.

© Establish “Pay-on-Pass” rules to facilitate the prompt payment of uncontested
portions of Supplier invoices. This will also facilitate the swift resolution of
remaining invoicing issues such that the District will be paying Suppliers
according to its stated 30-day terms. Supplier tool kits and pre-qualification
packages will further help to develop Suppliers and make it easier to do business
with the District.

° Transfer District-wide procurement budget and personnel to the CPO. The

formal transfer of responsibility for people and budgets, together with the
ment of performance standards and professional warranting, will
establish accountability for the District's procurement operations.

* Establish “cradle-to-grave” responsibility for procurements to accelerate the
process, improve the quality, and reduce the likelihood of lengthy breaks in the
service delivery chain.


148

wanted a Control Board. Without a Control Board, you could not
borrow money. If you couldn’t borrow money, you couldn’t pay your
workers. Somehow or another, you communicated that to your
workers. My only regret was that it took months for you to get a
meeting with the Control Board.

Some believed that the unions have not behaved in a grown up
fashion, and I just wanted to say for the record that when the sani-
tation trucks came out in front of the Control Board headquarters,
it was only after months of asking for a mere meeting, and the
unions did not take militant action until they could not even get
a meeting with the Control Board. Then they got them, and tl
Control Board did not even not meet with the unions because they
were trying not to meet with them. It was not paying attention to
the workers.

So I recognize that of all the parties, frankly, with all the bicker-
ing that has gone on between the Control Board and the city and
both of them, they could have behaved in a far more adult fashion
and saved us all a lot of time and effort and saved a lot of home
rule, who have not been a party to that immature behavior or the
workers of this city and the unions who represent them.

I hope you understand that the consultant process that is going
on now is no reflection on the workers at all. It is a reflection on
the absence of anything approaching good management in the city,
so that in order for workers to be able to do what workers are sup-
posed to do, somebody had to come up with some kind of state-of-
the-art knowledge.

You saw what happened in the police department. If we had that
kind of MOU, let’s work together, let’s be adult about this, not
hierarchal about this, then the agencies you represent would al-
ready be far along. Instead, because no management reform had
been initiated by the Control Board and the city at the time of the
rescue package, you had the unthinkable to happen, Congress to
say you must do management reform in the name of the Control
Board as the financial and management authority.

I just want to make it clear, the workers have simply not been
a party to this but have been victims of this. To his credit, the
chairman worked with me, worked with me very hard, when the
dispute arose in the office of the CFO. That should have been able
to be worked out, and I am sorry that what instead resulted was
litigation. Litigation should be avoided at all costs. We shouldn’t
have had the litigation on the school board, because there was a
way to transfer that power that the school board agreed to. We
shouldn’t have had to have litigation here.

Let me ask you what is the state of that litigation?

Mr. SCHLEIN. AFSCME and AFGE, of course, have the litigation
on appeal right now, and, unfortunately, there is probably more
litigation coming. But, again, the frustration is not being able to sit
down and work out some of these problems.

We understand that the CFO is a linchpin to reform in this city.
We understand that we can’t even talk about any type of pay in-
creases if we don’t get the city’s financial house in order. Bue the
type of answers that seem to be taken just do not make any sense,
when an employee who has had good records and has been an em-
ployee for 20 years, doesn’t have problems with leave, doesn’t have


35

COMMISSION'S MANDATE WAS TO IDENTIFY STATUTES AND REGULATIONS,
THAT WERE OBSOLETE, INCONSISTENT OR DUPLICATIVE, WITH PARTICULAR
ATTENTION TO THE PERMITTING AND LICENSING RELATED TO BUILDINGS AND
LAND USES, BUSINESSES, OCCUPATIONS AND PROFESSIONS. THE COMMISSION
CONSISTED OF TWELVE PUBLIC MEMBERS, REPRESENTING BUSINESSES,
OCCUPATIONS, AND PROFESSIONS REGULATED BY THE DISTRICT, AND SEVEN
GOVERNMENT MEMBERS. THE CHAIRMAN OF THE COUNCIL AND THE
CHAIRMAN OF THE COUNCIL'S COMMITTEE ON CONSUMER & REGULATORY
AFFAIRS SERVED ON THE COMMISSION.

THIS FALL, THE BUSINESS REGULATORY REFORM COMMISSION
SUBMITTED ITS FINAL REPORT TO THE MAYOR AND COUNCIL. THE COUNCIL
HELD EXTENSIVE PUBLIC HEARINGS ON THE RECOMMENDATIONS CONTAINED
IN THE REPORT, OVER THREE DAYS AND 21 HOURS OF TESTIMONY. IN
ADDITION, THE COUNCIL RECEIVED HUNDREDS OF WRITTEN COMMENTS ON THE
LEGISLATION FROM INTERESTED PARTIES. THE FINAL LEGISLATION, APPROVED
BY THE COUNCIL, REFLECTS THE CONCERNS AND COMMENTS RAISED BY
DISTRICT RESIDENTS AT THOSE HEARINGS.

THE OMNIBUS LEGISLATION ADDRESSES A NUMBER OF REGULATORY
REFORMS INCLUDING BUSINESS LICENSING; INSURANCE PREMIUM TAX; HEALTH
REGULATIONS; ELIMINATION OF OBSOLETE AND REDUNDANT BOARDS AND
COMMISSIONS; BUILDING AND LAND REGULATIONS; AND VENDING

REGULATIONS.


67

of regulations that DCRA is responsible for enforcing is too complex,
sometimes self-contradictory and often not balanced in terms of private costs
and public benefits. This barrier is largely outside the Department’s control.
Second, the basic components of a well functioning organization are either
inadequate or missing entirely, such as strategic planning, performance
measures, appropriate organizational units, information technology and
telecommunications infrastructure.

Specific management projects will improve customer service and
business processes, while simultaneously building the management and
organizational capacity of DCRA. Furthermore, to succeed, DCRA must
develop its information technology infrastructure, redesign and automate
processes, and build organizational capacity. Implementation of the
Management Reform Plan will benefit tens of thousands of businesses,
professionals and citizens who interact with the Department each year.

The Management Reform Plan for DCRA includes the following important
steps:

Develop information technology infrastructure

© Develop information technology standards

* Assess Department needs

‘© Implement new information technology infrastructure

Redesign and automate processes
* Develop customer service program
© Redesign business processes and implement new technology

Build management and organizational capacity

* Apply principles of strategic management

* Create key organizational units

© Hire key management staff

© Improve human resource management
Successful execution of the DCRA Management Reform Plan requires

immediate and significant actions in allocating the necessary budgetary

resources, amending or repealing selected statutes and regulations, building

organizational capacity at DCRA and changing the customer service

orientation of the agency to a more customer-friendly atmosphere.

IV. Department of Employment Services
The Department of Employment Services has as its core mission workforce

development and employer support services for the District. This mission is meant
to ensure continuing enhancement of the District workforce, expanded


104

Mr. BRIMMER. The report will be submitted February 6, 1998.

Mrs. MoRELLA. OK, so that is like the end of next week.

Mr. BRIMMER. Next week.

Mrs. MoRELLA. Exactly. Thank you.

Dr. Barnett, what is your involvement with this? Will you share
with Dr. Brimmer what progress has been made and give it your
imprimatur, or how do you work that out on the recommendations
for regulatory changes?

Ms. BARNETT. Well, I will expect to look over the recommenda-
tions that are coming in the report, and my efforts now are to try
to implement those recommendations.

Mrs. MorELLa. OK, so then you carry on as soon as he gets the
recommendations to you and reports to Congress on it, too?

Ms. BARNETT. That's correct.

Mrs. MORELLA. We will be apprised of that.

I wanted to ask you, Dr. Brimmer, at our last hearing, or one of
the last hearings, we talked about the Medicaid contracts. And as
you may remember, I have had some communication with compa-
nies that had been most concerned. And it was just before Christ-
mas that you indicated that these contracts would be taken care of
by the beginning of this new year, which we are now in and com-
pleting our first month of the new year. I wondered if you would

e kind enough to provide an update of what’s happening with
those Medicaid contracts. _

Mr. BRIMMER. Congresswoman Morella, you might recall there
was a division of opinion. There had been seven bidders. The De-
partment of Human Services had selected four; some or all of the
three remaining ones had sued. The result of the courts action was
that the three were added to the list, so all seven of those bidders
are now able to receive and administer applicants and participants
in the program. So in the very near future, the next few days, there
will be an announcement as to the details of that arrangement.

But the bottom line is that no bidder has been excluded. Medic-
aid recipients will be able to seek the services of any one of the
seven.

Mrs. MORELLA. You know, there have been some concerns ex-
pressed about this procurement process. Do you think it is a com-
petent procurement process? Is this something we should look into
with the idea of changing for efficiency, fairness and other at-
tributes?

Mr. BRIMMER. Clearly, that process which resulted in the letting
of those contracts to the four was flawed. That was admitted from
the very beginning when we began to look at it.

The reform of procurement has gone quite far. This particular ex-
perience is one of the examples that has spurred that reform. And

should also say that procurement is one of the four city-wide
crosscutting functions which Congress mandated we look at as a
part of management reform. The others were personnel, informa-
tion technology, and asset management.

The project to integrate and report centrally on procurement has
been delegated by us to the chief procurement officer, he will be
putting in place revised city-wide procurement rules and regula-
tions. r he has done that and the new rules have had a change
to work, we can then evaluate the new rules’ success.


126
owed to each bargaining unit member may seem like a paltry sum,
but to working families in the District with household incomes

under $30,000, this promised payment is valuable and important.

Thank you for your time and consideration. I would be happy to

answer any questions you may have.

48 273 © 198


45

cess simply by results. I mean, the crime came down after the
MOU process began and after the consultants came in and it was
going up before, and I don’t have any other evidence to go on. It
may be a lot of other things that contributed to it, but I am glad
to give the city credit for the way in which the before and after
oo]

Now, under ordinary circumstances, with this bifurcation that
has developed, your proposal to have concurrent and bilateral re-
sponsibility, where everybody—you know, this side gives up some-
thing and that side gives up something, in a world of ordinary
grown-up people, who wanted to streamline the government, that
would have been a slam-dunk and that would have been the end
of it. So I have to ask you: What is the status of the proposal, what
has been the response of the control board, and have you pressed
it further than writing them about it?

Mayor Barry. Ms. Norton, I tried to lay out a memorandum of
understanding that began to clarify a lot of the roles and respon-
sibilities, so—as it was done in Philadelphia. As you know, one of
the first things that the Control Bo: did in Philadelphia was
have a memorandum of understanding between the mayor and the
city council, and I also will tell you it worked that way.

TI sent this over to the Control Board. Dr. Brimmer said there
wasn’t much interest in it. He and I talked further about it, and
the last conversation we had was at least we ought to have a dialog
on it before you just reject that out of hand.

Ms. Norton. Has there been any dialog on it since then?

Mayor Barry. No, there has not been.

Ms, Norton. See, the concern that the Congress would have
would not only—would not only be about the awkwardness, but ob-
viously it is going to cost some money, and this is where I lose pa-
tience altogether. You now have come forward with a proposal that.
you need somebody to administer the agencies you have, and they
have somebody to administer the agencies that they have, and I
can understand that if people can’t get together and share respon-
sibility for everybody doing it together.

And I have to tell everybody, including the control board, you all
can continue to operate that way if you want to but that is—what
is it, your nose to spite your face? I mean, the notion—with the
control board having substantial responsibility I am not sure what
in the world there would be to lose. But I have to ask you, there
is something in—the budget does—the charter does allow you to
hire a city administrator. Do you truly intend to go forward and
hire a $110,000, or whatever is the amount, administrator in order
to administer a few agencies or is there some hope that this ex-
penditure could be avoided by discussions with somebody with any
sense over in the Control Board?

Mayor BarrRY. Ms. Norton, part of the difficulty here is that—I
said earlier in my statement that the ideal situation would have
been last August, the most workable situation.

Well, first of all, let me preface this by saying that this govern-
ment structure is the worst anywhere around. I mean, it is terrible,
very inefficient. What the control board, in my view, should have
done in August 1997, was to adopt the MOU process for all those


87

hand in hand with the BPR projects in increasing productivity, efficiency and
customer service.

The management improvement projects presented are a comprehensive and
coherent set of reforms that can result in long lasting and continuously improving
results, An ongoing strategic planning capability and process will enable DOH staff
to regularly assess their own performance, identify new challenges and adjust their
objectives and strategies. Such a process can energize and focus staff and other
resources and prevent the problems that are caused by lack of leadership and
misapplication of resources.

Although process re-design/improvement projects can sometimes result in
long lasting improvements, it is much more important that teams are identified to
take ownership of the key business processes, monitor their performance and
design the improvements as needed.

The revenue generation and improved grants management projects will
greatly assist in producing additional budgetary resources which will enable many
of the funds used for the improvement projects to be replaced and to be available
for similar efforts in the future, such as continued technology upgrading and
updating.

The transformation of the Department of Health to a high performing,
customer-oriented public health agency will be a long journey. The improvement
projects recommended for implementation are designed to help pave the road -- to
make this transformation a success. These projects, whether directed at removing
impediments to quick fixes or contributing to the redesign and improvement of core
business and support work processes that will result in more fundamental change,
are necessary for sustaining the current activities of the agency and moving it
toward transformation.


8

I ask this help today for another reason. I do not intend to wait
4 years to seek to recapture democracy for the city. After a town
meeting on democracy and self-government in the District next
Thursday, I intend to submit a series of bills designed to incremen-
tally return and expand democracy in this city. This strategy, of a
rapid, step-by-step return of self-government, will not work, unless
I can point to substantial improvements in the operations and
management of the D.C. government.

In the end, I want the management reform to succeed quickly for
a far more important reason, however: District taxpayers deserve
far better than they have gotten. From 1990 to 1995, the District
lost 46,000 residents, more than in the entire 1980’s, and astonish-
ingly, in only 2 years since 1995, the District has lost as many resi-
dents as it lost during the entire 10-year period of the 1980's.

Since 1990, the District has lost 78,000 residents and has
reached its lowest population since the Depression. Those residents
who have stuck with us deserve an immediate turnaround in serv-
ices they are paying taxes to receive. District residents deserve
what every American expects, both good government and citizen
control.

At the time Congress enacted the Control Board statute, elected
officials had virtually all the power they had before the act was
passed. District officials were left in the same position as New York
city officials when the Control Board was enacted for that city.

‘his was a hard fought home rule victory that began with this
subcommittee when Chairman Davis and I negotiated a statute
that left elected democratic control intact. However, anyone who
doubts the willingness of Congress to ren on democracy need
only recall the substantial loss of control by elected officials
through appropriation subcommittee enactments in the ensuing
years. District officials had already lost substantial control throug’
sweeping language in appropriation statutes when much of what
was left was stripped by the Faircloth provision. We must provide
no excuses and no reasons, real or manufactured, for delay in re-
turning democratic control.

I would be the first to agree that linking self-government to a
particular administration’s management of operations is an out-
rageous exception to democracy as it has always been practiced in
this country. However, it is not sufficient to rail on the House floor
or at 1 Judiciary Square. I want to do more than get mad; I want
to get even. With the help of elected and appointed officials, we
. I a are “Al of today’ d, I thank Mi

welcome of 's witnesses, and, again, yu, Mr.
Chairman. my

Mr. Davis. Thank you, Ms. Norton.

Would anyone else care to make a statement?

If not, Members will be given 5 days to put anything in the
record they desire.

I would ask our first witnesses to come up and testify. Our first
panel will consist of the Honorable Mayor ‘Marion Barry, and the
District Council Chair, Linda Cropp.

As you know, it is the policy o! committee to be sworn before
you testify, so if you would just rise.

(Witnesses sworn.]


MANAGEMENT REFORM—COST, SAVINGS, NET

FRIDAY, JANUARY 380, 1998

HOusE OF REPRESENTATIVES,
SUBCOMMITTEE ON THE DISTRICT OF COLUMBIA,
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT,
Washington, DC.

The subcommittee met, pursuant to notice, at 9:35 a.m., in room
2154, Rayburn House Office Building, Hon. Thomas M. Davis
(chairman of the subcommittee) presiding.

Present: Representatives Davis, Morella, Horn and Norton.

Staff present: Ron Hamm, staff director; Howard Denis, counsel;
Anne Mack, professional staff member; Ellen Brown, clerk; and
Cedric Hendricks, minority professional staff member.

Mr. Davis. The meeting will come to order.

Good morning and welcome. This is a continuation of the hearing
held by this subcommittee on December 19. At that time, we began
our review of the management reforms mandated by Congress for
the District of Columbia. I announced then that additional Fearings
would be held to review the issues in greater detail, and that is our
intention today.

Subsequent to our last hearing, the Control Board sent its man-
agement reform plans to Congress and appointed Dr. Camille
Barnett to be chief management officer for the city. Dr. Barnett’s
first day on the job was January 15, 1998. Today marks her first
appearance before Congress, so a special welcome to Dr. Barnett.
I note that Dr. Barnett was quoted as urging an executive team to
focus on improving the services to citizens. it is exactly what we
are all striving to achieve.

When Congress created the Control Board in 1995, the District
was faced with a spending and management crisis of epic propor-
tions. We embarked then on a critically important process to ad-
dress these serious issues in a truly bipartisan way. I am, as al-
ways, grateful to the ranking member, Delegate Eleanor Holmes
Norton, the vice chair of the subcommittee, Connie Morella, Speak-
er Gingrich, Representative Horn, who has had three generations
born here in this city, the congressional leadership and the execu-
tive branch, for working together through so many difficult issues.

With patience and perseverance, much needed fiscal discipline
has been instilled in the city’s complex budget process. I thank
each and every member of city government and the Control Board
and the respective staff working for Congress for helping to achieve
so many positive results under such difficult circumstances.

Though I am not always satisfied with the pace of action and the
results, we should not overlook the progress that has been made.

qd)


150

a vital part of this city, that we have information that, that we
share information, and we have know-how and expertise to help
make the city work, that until there is a continued effort from this
committee, from your committee, to ensure that they include us in
the process, I think we will continue to be eliminated.

I think the difference was that the other control boards wanted
to work with the unions. They realized the value of having the
unions there to work together.

Ms. Norton. Thank you, Mr. Chairman.

Mr. Davis. Thank you for your questioning.

I just want to assure you this committee will do everything we
can to try to continue implementing what we agreed to with Mr.
Williams in terms of having regular meetings.

Mr. Hicks. In closing, I would like to say this becomes so impor-
tant in terms of employees’ morale, to see that workers are being
considered, that workers are a part of this, of looking at what the
problems are.

Mr. Davis. It is important to get the right answers, too.

Mr. Horn.

Mr. Horn. Thank you, Mr. Chairman.

I enjoyed the opportunity to read both of your statements. Maybe
you could educate me how the collective bargaining system works
within the city government. Could you tell me what the structure
is and with whom do you have to deal? Is there a special office on
labor relations or what and who does it report to and so forth?

Mr. SCHLEIN. I can tell you how it used to work. It used to work
that we negotiated with Mayor, the Mayor then was required
to submit our contracts, anything having to do with economics to
the city council for approval, and, once that was done, the contracts
were implemented.

Right now the process doesn’t seem to be working. The theo:
that is supposed to be out there right now is that the Mayor still
negotiates with us. It then goes to the CFO, who is supposed to
then bless it in some form. It is then supposed to go to the Control
Board for their review and ratification, and then to the city council
for their review and ratification.

Part of the problem we have is that we have the Mayor negotiat-
ing a contract with really no authority or accountability for seeing
that it really gets implemented.

Now, the Control rd gave guidance when these negotiations
were going on. They set parameters that we knew we had to meet.
The CFO was involved at the table. But what we are finding is,
again, the process just is breaking down. So that is for the eco-
nomic conditions.

On the day-to-day operations, mechanisms to try to bring
changes in what is going on in the work of the city, quite honestly,
without the Control Board being really actively a part of support-
ing that these changes have to take place, there is no incentive for
management to make it a Briority.

Mr. Horn. When the Mayor was the negotiator, or at least
signed off on it, did he have a special office of negotiation or labor
management employee relations, however he defines it?

Mr. Hicks. Yes; ice of Labor Relations.

Mr. Horn. Was that headed by a director?


42

employees. It is not their fault that they haven’t been trained on
certain procedures and processes, and so I think you are going to
see a more motivated work force and therefore a better product at
the end.

Ms. Cropp. Congressman Horn.

Mr. Horn. How many—excuse me. Let me just ask one question
related to this, and then fine. How many | professional st people
are in your office that could deal with—deal with citywide problems
or specific problems?

ayor BARRY. In my office?

Mr. Horn. In your office, as Mayor.

Mayor Barry. Probably less than 15.

Mr. Horn. OK. That is the total Office of the Mayor?

Mayor Barry. City administrator’s office and the Mayor's office,

yes.

Mr. Horn. That also includes the city administrator?

Mayor BaRRY. Yes. We have—I have a small office called the Of-
fice of Ombudsman, but that office had some people—until the
budget was cut we had four people who really basically handle
complaints. They are not the thinkers and the visionaries who are
saying we ought to be looking at best practices and doing this kind
of thing. What they are doing is when all else fails——

Mr. Horn. Because I would think they would be the people who
would have their ear to the ground and they would be very helpful
in getting those new ideas that you are talking about that needs
to be done.

Pardon me. Go ahead.

Ms. Cropp. Yes. Congressman, you raised an issue that, quite
frankly, has been a concern of many of us trying to turn this gov-
ernment around to perform better, and that has to do with regard
to training of our work force. We have not had the appropriate type
of training in order for our work force to function and do the jobs
that they need to do. However, in this year’s budget, money was
placed in there to train our work force and, in fact, many of the
managers, since this summer, have been going through a training
program on management.

We have been joined with the corporate world and universities
to help in this whole training process, and they go through a very
comprehensive series that will put them through a whole training
thing to deal with management and to come back, to share it with
the extra individuals in the work force. Then another group of
workers go through this whole process of training. We anticipate
that we will see a great difference in what we are doing in the city
because of this process and other training initiatives that have
started and will continue.

Mr. Horn. I am glad to hear that.

Let me just make two last suggestions. One is: The best thing,
I think, I ever did to shape up an organization was to get our trust-
ees, and it was a systemwide effort, to tie pay to performance, to
get rid of some of the idiotic classifications that had been done.
When we started this system in 1961, they hired two people from
the U.S. Civil Service Commission. That was the mistake of their

fe.


73

to the District households interviewed were street repair, trash pick-up, street litter
pick-up, and parking. These same four services also, as it turns out, were
mentioned most frequently in “most need of improvement” by those surveyed.*

The Management Reform program balances a mix of intervention projects
that, when implemented in concert, focuses on critical service delivery areas where
the greatest sustainable impact can be achieved in the shortest amount of time.
DPW itself, which once was considered a leader and role model in public works
service, will have the capability and the capacity to regain that status.

In short, DPW requires a wholesale reconstruction that will:

e Stabilize daily operations during “reconstruction;”

e Rationalize to whom and how services are delivered to achieve world-
class customer service;

e Rebuild infrastructure and fix processes that will ensure sustainable
improvements.

The Department as a whole will be transformed into a customer-focused
organization. The outcome from this Plan will be noticeable service improvements
by this fiscal year’s end in each of the critical functions identified through the
surveys with continuing service delivery improvements in the outyears. Substantial
cost savings and significant revenue generation trend upward from fiscal 1998 to
fiscal 2000.

© Solid Waste Management Administration: Difficulties in nearly every facet of
SWMA’s operations will be addressed through the transformation of SWMA from
a multi-layered hierarchy of uncoordinated functions to geographically based
teams. Each “Service District” team will be accountable for overai! cleanliness of
streets and sidewalks in its 1, providing appropriate services to the area
customeis’ unique needs. The goal is dramatic improvement in the cleanliness of
streets and sidewalks through a project that addresses process, structural, and
educational issues simultaneously. In addition, cost savings or revenues will be
generated by projects to reduce trash operator overtime and to address SWMA’s
obsolescent waste-transfer facilities operating at less than 40% capacity. The
SWMA reforms are primarily focused on significant improvement in customer
satisfaction with trash collection, street cleaning, and other SWMA activities.

* Division of Motor Vehicles (DMV): By fixing and eventually replacing DMV's
information systems, instituting a one-stop shopping approach to motor vehicle
service delivery and streamlining the organization, DMV will be able to conduct

‘* Results from telephone interview with 541 DC households conducted by the Greater Washington Consumer
Survey, Inc. during the first three weeks of October, 1997. The margin of error for this sample is + 5% at the 95%
confidence level.


82

receive credit when things go right. However, we believe that by focusing on their
clients, DCOP can establish itself as a source of customer support and service.

XI. Information Management

The District's Information Resources Management (IRM) function is
decentralized and fragmented. The information Resource Management
Administration (IRMA) has not been positioned or staffed to perform the functions
of an effective central IT management organization. IRMA has 34 staff, of whom
about 12 are dedicated to IT-related activities. The consultant’s assessment
concluded that there are significant problems in the strict’s IRM function. These
problems are centered in five major components: infrastructure, organization,
planning and control, applications and performance measurement. These
deficiencies have resulted from the following factors:

the District has been operating for years without an IT vision and strategy and
has not had an effective central IT function to guide or control IT efforts;

the District.is unable to manage IT spending because all IT expenditures cannot
be identified in existing accounting processes;

agencies have developed IT functions and purchased services and equipment that
serve singular purposes resulting in stovepipe systems that are incompatible;

* IT resources have not been leveraged to mest alt stakeholder needs and serve
common functional requirements;

District dollars are wasted because the purchasing power of the District has been
diluted as agencies work independently to purchase IT equipment and services;
and

The lack of District-wide planning and commitment to major IT initiatives has
caused false starts, work stoppages, delays, and budget overruns.

.

.

Some, but by no means all, of the specific issues that the Management
Reform Initiative is designed to address include:

© District Systems Are Not Year 2000 Compliant-- District systems are unable to
handle Year 2000 data processing. While this is essentially the biggest risk
facing the District, planning efforts are behind schedule and not funded. Year
2000 system failures are likely to in 1998. These failures will impact health,
safety, provision of social service benefits, and the ability to collect and generate
revenue, This issue will bring the District’s systems and infrastructure to a halt
if not dealt with immediately. The ramifications of not addressing this issue will
cost the District far more than the current estimate of $45.5 million required to
make systems Year 2000 compliant. The District must make systems Year 2000
compliant to avoid a shutdown of District business. Without an accelerated
assessment of District systems and a fast-track plan to obtain conversion
assistance, the District is at extraordinary risk.



MANAGEMENT REFORM—COST, SAVINGS, NET

HEARING

BEFORE THE

SUBCOMMITTEE ON THE
DISTRICT OF COLUMBIA

OF THE

COMMITTEE ON
GOVERNMENT REFORM
AND OVERSIGHT
HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS
SECOND SESSION

JANUARY 30, 1998

Serial No. 105-108

Printed for the use of the Committee on Government Reform and Oversight

cs

U.S. GOVERNMENT PRINTING OFFICE
48-278 WASHINGTON : 1998

For sale by the U.S. Government Printing Office
‘Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-057072-7
3



108

Mr. Horn. Thank you.

Mr. Davis. I have a few other quick items, then I would yield to
Ms. Norton.

On the management reforms, the administration had suggested
this year in their $100 million that they wanted to put in the budg-
et, I had made a suggestion, but whether we get that money or not,
I am concerned about the security situation with the prison guards
at this point. Because of the fact that we know Lorton is going to
be closed, you have people quitting, we are not able to hire people
because of the career path issues. We need to see that addressed.

You don’t need to answer that now, but that’s a concern, where
we may have to put some short-term resources in there to make
sure the public is protected. The guards now are wor! overtime,
and it is something that has to be addressed outside the scope of
how we originally envisioned it.

Mr. BRIMMER. I am delighted you flagged that, Mr. Chairman,
and it is one reason why I had it in my opening statement. That
was an add-on for my statement.

Included in our proposal was $18.3 million for 1999. About $14.8
million of that was designed to stabilize the correction officer situa-
tion. Once the decision was announced that the Federal Govern-
ment would be taking over the responsibility eventually, turnover
has doubled and tripled. The Corrections Department is losi:
guards at an enormous rate. They have concluded that they ne
to adjust compensation as an incentive for guards to remain with
the department.

During our discussion of management reform the corrections
trustee understood the need to retain corrections officers and we
expected that he would request these funds in the Federal budget.
Since this has not been done, it was not included in the President’s
budget, and I talked with the Director of Office of Management and
Budget this week about that, before the announcement of the Dis-
trict’s portion of the Federal budget. The consensus District budget
which will be coming to Congress later this spring will be a request
for funds to make up that shortfall.

Mr. Davis. Great. Thank «You. Just two other quick comments.
You don’t need to respond unless you feel a need to.

Td like you to submit to the subcommittee, Dr. Brimmer, the doc-
umentation for the delegation of authority to the CMO, just so we
will have that; OK?

{The information referred to follows:]


131

MrEmincs

‘No less than one meeting per month will be scheduled. It is anticipated thet, curing
the early stages of this project, it will be necessary to meet more frequently. To the
extent possible, the meetings will be held during normal working hours. Employees
will not be charged leave for time spent on LMPC activities.

MERA

‘The co-chairs of the LMPC will serve as official spokespersons and ‘ill agree on
statements to the media on the joint work of the LMPC. It is understood and
agreed that any other representative of either management or labor will confer with
the co-chairs prior to any media release which cancems the work of the LMPC.

RESOURCES
DOL and FMCS staffing resources, as outlined above, will be committed at no cost

to the parties. Should the parties agree to seek other specialized services for which
payment is required, joint payment will be negotiated on a case by case basis.

‘D.C. Labor-Management Partnership Counc
Jane 1997 page 5




109

On August 5, 1998, the President signed the National Capital
Revitalization and Self Government Improvement Act (Act), which, in part,
directed that the District of Columbia Financial Responsibility and Management
Assistance Authority (Authority) implement a management reform program in
nine agencies and in four cross-cutting functions. Through the Act, the Authority
also became responsible for the day-to-day operating functions of the
designated management reform agencies.

To comply with the Act, the Authority on August 5, 1998, held a public
meeting in which it issued an Order appointing individuals to government
department vacancies created by the legislation. The Authority indicated at the
public meeting that it would appoint a Chief Management Officer (CMO) to
oversee management reform and the agencies’ daily operations. The Authority
indicated that the CMO would be responsible for exercising its powers under the
Act.

Shortly thereafter, the Authority engaged a public sector recruiting firm to
lead a nation-wide search for the CMO. In September, 1997, interested parties
were invited to submit resumes, and in October, 1997, resumes were received
and evaluated. The Authority interviewed several finalists and, on December 22,
1997, announced the selection of Camille Cates Bamett as the CMO. Dr.
Bamett began a five-year term contract as CMO in January, 1998.


30

TESTIMONY OF
CHAIRMAN LINDA W. CROPP
COUNCIL OF THE DISTRICT OF COLUMBIA
BEFORE THE
U.S. HOUSE OF REPRESENTATIVES
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT'S
SUBCOMMITTEE ON THE DISTRICT OF COLUMBIA
ON
MANAGEMENT AND REGULATORY REFORMS

JANUARY 30, 1998

GOOD MORNING. CONGRESSMAN DAVIS AND MEMBERS OF THE
SUBCOMMITTEE, I AM LINDA W. CROPP, CHAIRMAN OF THE COUNCIL OF THE
DISTRICT OF COLUMBIA. ON BEHALF OF THE COUNCIL, I AM PLEASED TO APPEAR
BEFORE YOU TODAY TO TESTIFY ON THE MANAGEMENT AND REGULATORY
REFORM INITIATIVES MANDATED BY THE NATIONAL CAPITAL REVITALIZATION
ACT OF 1997.

PURSUANT TO THE REVITALIZATION ACT, I, ALONG WITH THE MAYOR, THE
(CHAIR OF THE FINANCIAL AUTHORITY, AND HEADS OF THE AFFECTED
GOVERNMENT DEPARTMENTS SERVE ON THE MANAGEMENT REFORM TEAMS. IN
THE BEGINNING OF THE MANAGEMENT REFORM PROCESS, THE COUNCIL HAD
CONCERN REGARDING THE FAILURE OF THE FINANCIAL AUTHORITY TO.
CONSULT WITH THE COUNCIL REGARDING THE SELECTION AND COST OF THE
CONSULTANTS. THE COUNCIL COULD HAVE PROVIDED VALUABLE INPUT IN
CRAFTING THE SCOPE OF WORK IN THE REQUEST FOR PROPOSALS PRIOR TO THE
AWARD THE CONTRACTS. THIS WOULD HAVE ELIMINATED SIGNIFICANT ISSUES
THAT WERE MISSED IN THE CONSULTANT'S REPORTS. HOWEVER, AFTER THESE


89

every agency in the government and the vast majority of citizens
that—services that affect our citizens.

The authority has already instructed the department heads to
implement these reform plans, those that can be effected imme-
diately and the projects that require additional scheduling, coordi-
nation, and planning. In conjunction with the chief financial officer,
I have requested that budget and implementation plans come from
each of the agencies, and we will be reviewing those in the next
couple of weeks to assure that the transformation is in conform-
ance with the budget and with the reform programs.

I want you to know that I am optimistic that the kinds of prob-
lems that we have found and that have been inhibiting service de-
livery can be solved through a sustained and coordinated reform ef-
fort that is both customer driven and accountable. I believe that
there are sufficient resources that will be available to finance these
reform projects, and I believe that we can build the kind of institu-
tional capacity that’s necessary for their implementation.

Implementation strategies for these reform plans need to build
institutional capacity. We need to create a city government struc-
ture in which people, systems, and processes can together support
service delivery.

We may also want to consider competition and outsourcing of
some government services as useful alternatives to current meth-
ods of service delivery. In some cases we will also need outside as-
sistance such as to establish the centrally managed automated
project tracking system for monitoring the implementation of the
management reform Plans. But these kinds of initiatives, where ap-
propriate, must not detract from building the institutional capacity
and must always be done with sensitivity to the current work force.

It is important also that information about management reform
plans and the progress on them is readily available to Congress,
the Authority, the Mayor, and council and to the public. We will
use multiple methods to communicated with customers and other
stakeholders. Where appropriate, we will use the Internet and
other means, including public briefings, to inform citizens of the
status of management reform efforts. We will incorporate the re-
sults of various citizen surveys in our measurement of service de-
livery. What matters most is that all stakeholders gain through
personal experience confidence that services will be improved. I
think the city’s future depends on it.

So in conclusion, I want to thank you, Mr. Chairman, and the
subcommittee, for your leadership and your interest in the revital-
ization of the District of Columbia. I look forward to working with
you. It won’t be easy, but I think the results will be worth the ef-
fort. Thank you.

Mr. Davis. Thank you very much.

Mr. Williams.

Mr. WILLIAMS. Yes, Mr. Chairman and members of the commit-
tee, thank you for the opportunity to be here today and testify on
the financial aspects of management reform in the District govern-
ment. I am particularly pleased that Congressman Horn is here be-
cause he has been a big supporter of financial managers in the
Federal Government and worked closely with the CFO council, and
I am glad he is here today.


first, establishing @ reliable data communications infrastructure to support inter-
agency and District-wide IT applications. Second, the District will need to
require agencies to consolidate existing WANs into an improved, expanded
District-wide backbone to promote data sharing, leveraging of resources, and
cost reduction.

For the District to improve IT planning and control, there must be an

effective organizational structure in the Office of the Chief Technology Officer, to:

conduct IT strategic planning;
select and oversee major IT initiative implementations and special projects;
establish and enforce relevant IT standards;

conduct IT contract audits;

establish and enforce a standard IT project management methodology;

develop IT strategies for economic development, public/private partnerships, and
grants management;

Streamline JT procurement processes;

provide consulting support to agencies; and

manage IT resources such as telecommunications, systems inventories, office
automation, data communications, and printing.

eee eee

ene

At the same time, because there are urgent IT infrastructure issues facing
the District, we expect to build a solid foundation upon which the District will be
able to build future service delivery improvements. These projects are required to
be implemented for the District to have any chance at all of implementing chang
the future. While improvements in infrastructure and organization are critical to set
the stage for the District’s future, there are several application issues that must be
addressed to ensure that major revenue generating systems do not fail and actions
are taken to reduce costs and improve performance for District-wide IT functions.

The District has an opportunity to correct IRM deficiencies, build a
foundation for future success, and begin to deploy technology to make service
delivery and performance improvements by implementing the IRM Management
Reform Plan. This Plan will address the root causes of the IRM function preblems,
apply permanent fixes, and position the District for future service delivery and IT
performance improvements.

Xil, Department of Health

The problems facing the Department of Health are similar to those in other
District agencies, although being a new agency has, in many respects, compounded
some of these problems. Frequent changes in the Commissioner for Health and
unfilled senior positions in some of the divisions have resulted in a lack of
consistency in leadership, vision and communication. This has also created
confusion end anxiety in staff.


12

plowing fees and license revenues back into the agency to fund
these initiatives.

I want to certainly commend Mr. Brazil and Mrs. Cropp and
other members of the council for moving expeditiously to review
these antiquated regulations and bring us into the 21st century.

I have instructed the corporation counsel to move vigorously and
forthrightly to review the rulemaking process and make sure that
regulations are quickly promulgated to implement this law.

There was some philosophical and problematic differences
around environmental and health and rental housing accommoda-
tions. The council accommodated those differences, and I think
most of us are very, very satisfied with that.

On the other hand, I was disturbed, as has been other members
of the council, as the $800,000 that the Control Board spent to get
a study done which really just sort of duplicated what the Business
Regulatory Commission had done. This was unnecessary study, in
my view, and a waste of money.

inally, Mr. Chairman, I think we need to look to the future, and
use the 1999 budget as a way of finding ways to deal with economic
development. We can have the best managed government in the
world and the most efficient government in the world. Unless we
find a way to expand our tax base, to expand our employment base,
and to be more competitive, we are not going to be on stable
ground for very, very long.

In 1995, I put out some proposals that were not quickly grabbed
onto. So I put out some for 1999 involving the Federal Government
continuing to take over some of our State functions, like mental
health, 100 percent of Medicaid, a continued Federal contribution.
If we get $750 million of revenue enhancements, we can then cut
our taxes in half, sales taxes and personal income taxes and cor-
porate taxes and commercial property taxes, and taxes in the tour-
ist area, where we would become competitive to Maryland and Vir-
ginia. That is our next step. I know it is sort of maybe a little
ahead of its time, but I ask us to look at that as we also look at
the continuation of these management reforms.

I feel good about where we are. Our city is in much better shape
today than it was this time last year. It is cleaner, it is safer, and
it is being managed better.

ik you.
Mr. Davis. Mr. Mayor, thank you very much.
[The prepared statement of Mayor Barry follows:]


54

cal year 1998 to fund the shortfall in the Department of Correc-
tion’s budget for the cost of the sentenced felons. For fiscal year
1999, we estimate that the shortfall would be at least $40 million.
That is a problem. We will have to work on it, and I wanted to
mention it to the committee at this time.

Mr. Davis. Thank you.

Mr. BRIMMER. Now, looking down the road, we have, as I said,
already set out to implement the management reform projects with
respect to the activities of the reform teams, and one of the pre-
vious witnesses, in fact both witnesses, mentioned that activity.

Let me say that the teams are being activated. I have asked my
staff to canvass to see whether we could have a meeting of the
management reform team next week. We will be doing this very
quickly. We have also set out and adopted a number of steps for
implementation.

Now, Dr. Barnett will describe these in greater detail.

Mr. Davis. Thank you.

Mr. BRIMMER. But let me repeat, we are active and the process
is under way. No one is asleep on the job. Thank you, Mr. Chair-
man.

Mr. Davis. Thank you. Dr. Brimmer, thank you very much.

[The prepared statement of Mr. Brimmer follows:]


96

Although the primary purpose of management reform is to improve services, many
projects are also projected to either increase revenue or create cost avoidance. We must
ensure that projected savings and revenues actually materialize or clearly identify funds
to pay for needed reforms. The Chief Management Officer and I will work closely

together to track progress in cost reductions and revenue enhancement.

In our December report we identified projects that needed further analysis to confirm
cost estimates. ] am particularly concerned about the estimated cost savings for FY

1998. Particularly those associated with proposed employee reductions in force. Our

preliminary analysis indicates that these savings may not be realized in this fiscal year.
As such, we stand ready to work with the Financial Authority, the Mayor, and the Chief

Management Officer to conduct the necessary analysis to monitor savings.

Conclusion

In closing, a properly financed management reform plan will provide immediate and
visible benefits to the citizens of the District. We all recognize that management reform
should be part of a broader strategy of revitalizing the District: Economic development,
tax relief, and long term financial stability are equally vital components of the District’s
recovery, as is deficit reduction. If the District acts responsibly it will be possible to

improve basic services and reduce excessive taxes.

Thank you and I am pleased to answer any questions the Committee may have.


xi)

‘engaging all Department personnel, partnering with stakeholders, and working with
customers is where the hard work really begins.

Vil, Department of Housing and Community Development

The management reform plan is designed to transform the Department of
Housing and Community Development (DHCD) into a more focused, financially
sound, and efficiently managed organization. DHCD falls far short of achieving its
objectives. DHCD performance problems include:

© Failure of some programs to achieve performance goals;
© Slow spending rate, which jeopardizes HUD funding;

© High loan default rate;

* Suspension of HUD economic development funding;

* Lack of credibility with external stakeholders.

As part of the Management Reform Initiative, the contractor identified the
root causes of these performance problems, including:

© Unclear goals and strategy - DHCD lacks a well-articulated and publicly-
supported plan for meeting housing and community development needs

* Inefficient organization - The current organizational structure has too many
layers of supervision, the number of staff in some areas is inconsistent with
workload, and many DHCD functions could be done more efficiently and
effectively by for-profit or non-profit organizations

© Lethargic culture - DHCD’s slow decision-making culture does not adequately
‘support the time-sensitive business of housing and community development

* Weak loan underwriting and monitoring procedures - Poor financial records and
high loan default rates jeopardize program performance and future funding

* Limited accountability - Performance measures at the program and individual
staff level are ill-defined and staff are not held accountable for results

+ Inefficient processes - Cumbersome business processes create unnecessary
client service delays and unclear approval points

© Antiquated and unused technology - Available personal computer technology is
both out-of-date and not adequately used to facilitate efficient workflow

‘The Management Reform Plan is based on a vision of a DHCD that performs
better because it:

© Focuses more on planning, outreach and monitoring

* Relies more on the management capabilities and community’ outreach of for-
profit and non-profit providers and contractors

© Partners more with community organizations serving local needs


36

THIS IS NOT THE END TO THE COUNCIL'S BUSINESS REGULATORY REFORM
EFFORTS. OTHER LEGISLATION HAS BEEN INTRODUCED IN THE COUNCIL WHICH
WILL LOWER THE COST OF DOING BUSINESS IN THE DISTRICT, AND THE FINAL.
REPORT OF THE TAX REVISION COMMISSION, ESTABLISHED BY THE COUNCIL,
WILL BE RELEASED THIS APRIL. ALL OF THESE EFFORTS REFLECT THE
COUNCIL'S RECOGNITION OF THE NEED TO ESTABLISH A MORE BUSINESS,
FRIENDLY ENVIRONMENT IN THE DISTRICT, WHILE PROTECTING THE HEALTH,
SAFETY, AND WELFARE OF DISTRICT RESIDENTS AND VISITORS.

IN CONCLUSION, THE REVITALIZATION ACT PROVIDED A GOOD FIRST STEP
IN CORRECTING THE STRUCTURAL INEQUITIES IN THE RELATIONSHIP BETWEEN
THE DISTRICT AND FEDERAL GOVERNMENTS. HOWEVER, THE GAINS REALIZED
BY THE ACT CAME AT THE COST OF THE FURTHER EROSION OF THE DISTRICT'S
LIMITED HOME RULE. MY CONCERN IN THIS REGARD IS GREAT. THE COUNCIL
LOOKS FORWARD TO COOPERATING AND WORKING WITH THE CONGRESS AND
THE PRESIDENT IN RESTRUCTURING THE DISTRICT AND FEDERAL GOVERNMENTS’
RELATIONSHIP BY CREATING ECONOMIC GROWTH AND RESTORING THE.
DEMOCRATIC RIGHTS OF DISTRICT RESIDENTS.


48

eight unions, and what has held up me sending it to the City Coun-
cil was funding.

Mr. Williams was looking at various ways of identifying about
$10.6 million. I just say—I told Tony this, and I will tell this com-
mittee, I intend to recommend that since we do have additional
revenues that we fund this $10.6 million pay increase. At the same
time we ought to look at our nonunionized workers. They have not
had an increase since 1994. They are not represented by anybody,
except me, in terms of trying to advocate to give them the same
package that the union had.

The police got 10 percent, as you know; fire is getting 5.9 per-
cent, and there is a controversy about nurses and doctors at D.C.
General. So that’s basically where we are. I intend to, by the end
of the next week, have a whole comprehensive package, how much
it would cost for all of our workers to get some modest increase in
1998, 1999, I think 2.7 percent, and then the year 2000.

Ms. Cropp. Congresswoman.

Mayor Barry. I don’t intend to advocate that we use all of this
surplus for that but we certainly have got to use a little bit of it
to pay for these. These workers deserve to be paid.

Also, Ms. Norton, I think that——

Ms. NorTON. I think workers deserve to be paid, especially when
some workers get bonuses.

Mayor Barry. It is terrible, I mean to give people sign-on bo-
nuses.

Ms. NorTon. Then the rest of the workers ought to at least get
their annual increases and ought to be assured that each year
something that they have bargained for is going to happen or is not
going to Rappen. You cannot reform this government. People have
to be assured of that.

Mayor Barry. I was going to say, we have got to insist on similar
pay for similar work. I mean, it is discouraging for a worker who
is doing the same thing. I am doing what Ms. Cropp is doing and
she gets a third more pay than I get, that’s not right.

Ms. Norton. That is not right?

Mayor Barry. No, it’s not right.

Ms. Cropp. I just wish it was true that I would get a third more.

Mayor Barry. You get the point, though.

Ms. CropP. Yes, I get the point.

Let me say that the council joins with the Mayor for the need
for us to increase the compensation for our workers. Over the past
several years, our workers have been drained. They are really de-
moralized to a great extent, for many reasons. We have reduced the
work force significantly in the city over the past several years. But
while we have reduced the work force, the demand that we have
put on the remaining work force has increased. Individuals have to
do more money with fewer people—more work with fewer people,
and in some instances it has been with less pay from time to time


117

Mr. Chairman, thank you very much for having us. Of course, I
will be happy to answer any questions.

Mr. Davis. Mr. Schlein, thank you very much.

(NoTE.—A copy of “Service Excellence—A Union Vision for the
District of Columbia,” may be found in subcommittee files.]

[The prepared statement of Mr. Schlein follows:]


53

mony, because it, in fact, supplements much of what I will say and
I will not need to go over that.

Mr. Davis. Without objection, that will be put in the record.

Mr. BRIMMER. Thank you very much.

Let me mention a few items that have been raised by previous
witnesses, and I will comment on them very quickly. First, the pro-
cedures which we went through to select the project that would be
finally implemented, did in fact include collaboration and participa-
tion by the team, and I note that the management reform team
consisted of the Mayor, the chair of the council and the chair of the
Authority.

Very early in our deliberations, we, the principals, decided that
we would serve on each of the teams. I want to. The statute said
that the principals could name alternates, if they chose. Neither
one of us chose to do that. Instead, we selected principal alternates,
those who would serve in our absence. For the chair of the council,
the chairs of the council committees became principal alternates.
The Mayor named his senior staff.

At the Authority, I asked those board members who already have
oversight for certain departments and agencies to serve as prin-
cipal alternates. They did and they were an integral part of the
team in everything.

Now, at the end of the process, we ended up with 340 manage-
ment reform project recommendations. Of those recommendations
for implementation, we have now given instructions and the imple-
mentation is already under way. We are highly confident that we
will have the funds to finance the implementation of the manage-
ment reform projects.

Let me say very quickly that the cost of implementation is in the
neighborhood of $185 million; $185.

e existing budget for fiscal year 1998 contains approximately
$44.4 million that can be applied to management reforms and have
been so earmarked. We had an $8 million direct Federal appropria-
tion, and we have said that we would use a part of the planned
borrowing, of up to $50 million for new capital. We will use another
$30 million of that benefit for implementation of management re-
form. Those three sources amount to $82.4 million.

We also anticipate that cost savings or revenue increases as a re-
sult of the implementation of the management reform project
would generate about $140 million in fiscal year 1998. Therefore,
we have in sight, with an assured availability, of some $222 mil-

ion.

If we were to do that, we would still have available from that net
benefit a substantial amount to enable us to make a sizable reduc-
tion in the accumulated deficit.

Mr. Chairman, I would mention one piece of the Revitalization
Act that is causing concern. The committee will recall that under
the Revitalization Act the Federal Government assumed the re-
sponsibility for sentenced felons. It was also anticipated that the

‘ederal Government, until it took over responsibility for housing
sentenced felons in 2001, would assume the cost of the District’s
sentenced felon population.

Unfortunately, tt has not been done, and it is a source of a
shortfall that would cause us to find as much as $30 million in fis-


138

trash truck run was on back order or because the map of the route they
were assigned skipped this block by mistake. The problem is not that
people aren’t working. The problem is that the workers either lack the

tools or the authority to get the job done.

AFSCME members are not ignoring the problem. In fact, we are
trying and have tried for a long time to make fundamental workplace
changes. But our attempts have been met with resistance. We have
repeatedly sat down with the managers of departments and agencies to
discuss how work is currently performed and how changes can be
implemented. This is not a fun process. No one likes to be criticized.
That is true no matter who you are. But that is one of the things that
unions do. We not only represent our members in negotiating better pay
and benefits, but we also help provide a forum for improving the delivery
of basic public services, This is not a new concept. AFSCME has played
a constructive role around the nation in working to improve the delivery
of government services. Moreover, a law that encourages and requires
communication between labor and management forces us to sit down and

work these things out. But when we are closed out of the process, the


49

because of a furlough day. When they had been furloughed in the
past, it was actually money that was lost.

And then when the workers see where certain groups within the
government have received increases, high increases, 10 percent, as
was cited by the Mayor with the police department, you have other
areas where individuals have received high salaries—and let me go
on record and say that I think our salaries for our managers are
low and we do need to increase those also. But I do believe that
we need to take a comprehensive approach and not just give ex-
tremely high salaries to one level and not give any raises whatso-
ever to those who have to carry out the mandate of the policy-
makers and the managers, and not only not give them an increase
at this point but they have not had one for many years and we de-
mand more of them.

It is extremely important for us to train our work force, to make
sure that our work force will do what they are responsible for
doing, but it is also important for us to compensate them for a job
well done.

If we want to turn this city around and really implement these
management reforms, all of us can say whatever we want to say
but it will be up to the workers to carry out that charge. And we
cannot do that with a demoralized work force. It is extremely im-
portant for us to do better in that regard.

Ms. NorTON. Ms. Cropp, I was pleased to—that in your testi-
mony, you said that since the initial RFPs for contracts, there had
been a collaborative process. First of all, I will say that I don’t
think the Control Board, and you say so in your testimony, had a
lot of choice in terms of waiting around for everybody to get to-
gether and choose a contractor.

Ms. Cropp. Uh-huh.

Ms. Norton. Because the Congress was very concerned that this
process would not get off the ground and they really put, and I con-
curred, in placing very strong timeframes on. I also think that a
lot of the hue and cry about contracts in the first place doesn’t lie
in the mouth of anybody in the District.

For example, nothing happened in the police department until
the contractor came in there. Nobody believes that the police de-
partment would have begun to move if the contractor had not un-
covered what he uncovered.

So we have to be very careful, because I think that the workers
are sitting there without state-of-the-art knowledge and the man-
agers are sitting there without state-of-the-art knowledge. So if the
council and the Mayor, who didn’t have the resources to do this be-
fore, and didn’t do it, say we also don’t want contractors who may
have state-of-the-art knowledge, then in a real sense you would be
stuck on stupid, because the fact is the government stood there for
years and nothing happened. And if the police department is an;
indication, part of the reason was that People who had some know!l-
edge of best practices simply were not there.

It doesn’t—it is not very credible to say let us do it, and your tes-
timony says that. I think what you should say is, let us have—and
you say the contractors should come in and then get out. I am glad
that the police contractor is still there. And I believe that if you
want home rule back, given the absence of state-of-the-art manage-


78

© Centralization of management responsibility and accountability

© Creation of integrated cash and real property management processes and
systems

@ Emphasis on core services and performance

Implementation of the asset management reforms will result in permanent
solutions and will enable the District to meet the challenges of the next century
while providing the capability for continuous improvement. The reforms will result
in increased realization of revenue, improvement in operating efficiencies, maximum
utilization of assets, a more attractive investment environment, significant cost
savings and enhanced performance. The management reforms are interrelated. For
example, it will be difficult, if not impossible, to successfully implement any of the
real property asset management reforms without establishing a District-wide real
property asset management strategy. The reforms are also comprehensive, covering
all real property and financial assets of the District of Columbia.

If and when the District expands its financial assets or real property holdings,
the reforms presented will remain intact. Any changes in the real property and
financial assets, both anticipated and unanticipated, will be accommodated by the
organization and processes resulting from these reforms.

The reforms presented will result in significant cost savings and revenue
enhancements. These reforms will allow the District to use limited financial
resources most productively as well as generate revenue to fund additional reforms.
In all instances, the reforms will dramatically improve the operations of the District
asset management function and are sustainable into the future.

IX. Fire and Emergency Services

The Fire and Emergency Medical Services Department is responsible for
preventing and mitigating human and property losses from fires; providing
emergency medical services, including emergency transport to hospitals; a variety
of technical rescue services (water rescue, building and trench collapse rescue, high
angle rescue, etc.); dealing with hazardous materials incidents; providing safety for
special events; participating in safeguarding the President and foreign and domestic
government officials; and preparing to mitigate effects of terrorism.

The major organizational units of the Fire and EMS Department are the
Operations Division, which currently includes special operations, prevention,
training, fire suppression, and first responder EMS; the Emergency Medical Services
Division, which is responsible for the basic and advanced life support ambulances; a


88

Mr. Davis. Dr. Barnett. Welcome.

Ms. BARNETT. Thank you.

Mr. Davis. Let me just tell you how it works. The green light
means you may begin, The orange light means you have 1 minute
to sum up. The red light indicates your time is up.

Ms. BARNETT. Great, thanks. It is good to be here. My name is
Camille Cates Barnett. I am the chief management officer for the
District of Columbia, and I appreciate the opportunity to talk to
you about management reform.

T have been here about 2 weeks, so I am getting to know the city
and the reform process. You know a little about my background so
what I would like to do is to talk about how I see the management
reform efforts.

I believe that the District of Columbia is at an important and,
indeed, historic crossroads. The authority and the chief financial of-
ficer working with the Mayor and council have made considerable
strides in the financial recovery of the District. Now, we need to
improve customer service and we need to build institutional capac-
ity so that those service improvements can last.

I think the Revitalization Act provides an effective vehicle for be-
ginning to ensure that that institutional capacity is built for pro-
viding good services, and I want you to know that I am very
pleased to be a part of this effort.

My focus, as I begin, because there are many things to focus on,
so I want to tell you what I have told the agency heads and have
told everyone else, that I want us to focus on a vision, values, and
goals.

The vision that we have for the District of Columbia is. that it
will be a model for the very best of American cities. I believe we
can do that, and I think there is every imperative that we do.

There are two values that are going to reform the management
reform and also the management of the city, and that is customer
service and accountability. And I have three goals for 1998. One is
to improve customer service. The second is to implement manage-
ment reform. And the third is to meet our budget targets.

Today I would specifically like to talk about management reform.
One thing I think is important to remember is that management
reform is not ticking off a list of 269 projects. Management reform
is a multiyear process. It is systemic change if it is going to be suc-
cessful. It also needs to be a collaborative process but it needs to
be a collaborative process that’s driven by a sense of urgency, and
we need to be able to achieve results along the way.

The credibility of any long-term change process is built on real
results that citizens care about. Better housing, a more responsive
regulatory environment, greater access to health care, improved
sanitation, street repairs, are just a few of the improvements that
citizens can expect, and deserve, with the implementation of man-
agement reform over the next years.

To achieve these results, we must, in many cases, change man-
agement systems and'improve management capacity, which sup-
ports these city services. Systems and capacity improvements
translate into things like cleaner streets, more attentive govern-
ment employees, and swifter tax refunds and immediate responses
on emergency services. Management reform will ultimately touch


43

They brought in all the nonsense that had been carried over with
no new thought for 50 years. And what we did, and it turned the
place around in no time, if you identified your management
group—and I had about 110 executives starting with the supervisor
of maybe 80 to 100 janitors—you work your way right up through
vice president and you tied it to—you got rid of all the civil service
classifications for managers and you have had four overlapping
groups, where the salary range was maybe $20,000 overlapping ei-
ther way, and you tied it to a contract on what has to be accom-
plished in a 6-month period, in a 1-year period.

And that’s exactly what the New Zealand Government has done.
And believe me, people start paying attention as managers when
you have got them tied down to a contract they have signed on the
dotted line and this is what we are going to accomplish and don’t
give me any excuses. If so, get out of here.

Ms. Cropp. You may be interested to know that as the Mayor
stated, the council has required performance measures for our work
force and we, in fact, will be holding a series of hearings starting
in February, with each and every department, where we will go
down through the performance measures that have been identified,
the time lines in which they were to have accomplished it, and we
will be looking to see whether or not they have met them, what
their performance measures will be for next year, and we are—plan
on holding individuals accountable for those performance measures.

The council feels very strongly that it is a very, very important
and good step to make sure that we make this government work

etter.

Mayor Barry. Congressman, also there are a number of depart-
ments, notably the Department of Public Works, where the director
or the administrators and the deputy administrators have signed
a performance measure contract with very specific performance
measures and timeframes, and these are being evaluated right now
as to see whether or not people are on track.

But what happened in this city, because of the bifurcation with
the control board, with the city council, with the Mayor and with
the school system, there is an inequity and disparity in how pay
is achieved. My own view, that similar work ought to be paid simi-
lar pay, but you have situations where in one entity, say the con-
trol board, where similar work and similar pay is different than
over in the council or in the Mayor’s office or in other parts of the
government. That’s very discouraging to employees who see this
disparity where you have someone making this amount of money
with less work than somebody else.

Mr. Horn. One idea, Mr. Chairman, and then I am done, I
thought at the time of the Disney effort to take over the battlefield
in Virginia how it was obviously, I thought, wrong headed, and I
thought people come to this area and they don’t have to go out to
a battlefield and see artificial history. But it would be wonderful
if a Disney-type group came right here to the District of Columbia,
where history is made, and history is all around us, and got about
20 block square of dilapidated housing, where you could put in that
kind of an operation and you would provide jobs for thousands of

people.


129

Mawannsipr op THe LMPC

‘The members of the LMPC will consist of representatives of management,
including the office of the Mayor, office of the City Administrator, the Council of
the District of Columbia, the DC Financial Authority, an Agency Administrator, ons
middle manager, and the management co-chair of the State/Local Government
‘Labor-Management Committee, Labor will be represented by Leadership from four
unions, specifically AFSCME, AFGE, SEIU, the Nurses Association, the President

Deputy:
De eine (DOL) all feline cane

The LMPC will have two co-chairs, one from labor and one from management,
who will chair our meetings on an altemating basis.

‘No alternates or substitutes for permanent members will be allowed, unless the co-
chairs make an exception to this mile prior to a scheduled meeting. A periodic
changing of designated members may also bs considered by the LMPC.

Additional resource people may be invited to attend meetings for informational
purposes, but will not participate in decision-making by the members of the LMPC.

‘STAFFING

‘The work of the LMPC will be supported by staff from management and labor who
‘shall work under the direction of the co-chairs, and from FMCS and the DOL who
shall work under the direction of the facilitators. Labor/management support staff
will be responsible for the production and distribution of meeting agendas and
materials, and for logistical facilitation for meetings. Support staff provided by
FMCS and the DOL shail be responsible for training and ensuring that we, as well
ts Agency labor-management partnership councils that will be created, have the
shared knowledge, tools, and skills to carry out the functions outlined in this
agreement.

‘DiC Labor-Management Parmership Councll
Sune 1997 page 3


113

Mr. Davis. All right.

Ms. Norton. The proposals we understood, as reported in the
paper, talked about concurrent responsibility. And, again, you can
put a counterproposal on the table to try to see what you can work
out. That’s all I’m trying to clarify.

Mr. BRIMMER. That’s unacceptable.

Mr. Horn. Mr. Chairman, may I get my 3 cents in before we
shift panels here?

Mr. Davis. Sure.

Mr. Horn. The main thing we’ve got to do is make sure we have
clear lines of authority and clear goals to meet and that the chief
management officer should not be reporting to the Mayor under
this condition. She should continue to report to the Control Board.
And when this city gets straightened out and we end the corrupt
government we've had in many bureaus, then is the time to think
about who reports to whom.

But I wouldn’t—this is not a collective bargaining negotiation.
This is governmental responsibility. I sounded like I’m in an aca-
demic senate or something here for a minute. You have to keep
those authority lines clear and don’t let anybody up here tell you
otherwise.

Ms. Norton. Reclaiming my time.

Mr. Horn. Because the majority is very clear.

Ms. Norton. Reclaiming my time. Reclaiming my time. This is
my time.

Mr. Davis. Actually, everybody’s time has expired.

Ms. NorTOoN. Wait. My time—there were three Republicans who
have asked questions when it should have been back and forth. I
am reclaiming my time.

And I will—I take seriously the obligation—no one is saying that
the Control Board should give up any power. And the fact that the
Control Board has all the power should make negotiation very
easy. And I repeat, as the person who represents this city, I repeat
that I would like this matter negotiated.

Now, I have a question for Ms. Barnett. You have indicated, I
think quite appropriately, that you wanted to improve customer
service. I wonder if you have had time to reflect on what that may
mean.

We heard that from you, and it is not clear to me how it is relat-
ed to operations, whether you see it as part of a systematic reform
of the government out of which customer service is improved or
whether you are picking particular services to show progress on. I
don’t understand the modus operandi you will be adopting.

Ms. BARNETT. Customer service is something I think will trans-
form the entire city government. It is not meant to say that specific
services are included and specific other services are excluded. In
government, our principal job is to serve citizens. So you're either
directly serving the citizens or you're helping those who do. So all
of the administrative reform, all the management system reform,
ought to result ultimately in better customer service.

low you do that is a series of reforms that I think business prac-
tice, reengineering, total quality management, those are some of
the types of tools that are used in terms of restructuring the sys-


122

applied for a grant from the Federal Mediation and Conciliation
Service (FMCS) to establish a labor-management pilot program at
the Fleet Maintenance Division at the Department of Public Works.
The project has already yielded impressive results in improving
efficiency and labor management relations. Furthermore, the
grant required that a city-wide labor-management partnership
committee be established. Both FMCS and the Department of Labor
have generously donated resources and expertise to make the
project a success. Over a year ago we agreed to a charter (a
copy is attached to my testimony) and established other pilot
programs in other agencies. The successes achieved by this
project as well as its historic successes in the federal
government and other cities such as Philadelphia, Cincinnati,

Indianapolis, Fort Lauderdale, etc. gives us reason for hope.

We are tremendously glad to be here today to comment on the
reports by various business consultants hired by the Authority to
analyze shortcomings in the management, operations, and
structures of the agencies under its direct operating authority.
When the consultants released their first reports, AFGE locals
immediately began to analyze and respond to the findings. In
most cases, our members found much to agree with. Broadly
speaking, the consultants’ impressions were accurate: They had
found agencies lacking in any coherent strategic plans, outdated,
dysfunctional, or non-existent computer equipment, a widespread

failure to train either managers or front-line workers in new


127

D.C, LABOR-MANAGEMENT PARTNERSHIP COUNCIL

AGREEMENT
Jane 1997

‘STATEMENT OF PURPOSE,

The D.C. Labor-Management Partnership Council! will be a forum for
communication and cooperation in support of our joint mission to deliver high
quality, cost effective service to the residents of and visitors to the District of
Columbis, while maintaining 2 bigh quality wotk environment far employees of the
District government.

‘The members of the LMPC acknowledge that both labor and management bring

value, talent, and resources necessary to provide excellent public service to our
customers,

The LMIPC wil promote a joint understanding ofthe unique problems, challenges,
and opportunities facing the District of Columbia, its unions and management, and
will seck ways to jointly and responsibly address these issues. The LMPC

possesses the will and the authority to make decisions end solve problems that arise
in the course of its work.

‘This agreement is consistent with the following mutual interests:
To improve our labor-management relationship;

To provide a supportive, productive, challenging, high quality work
Ree ak Gh cones ce renee rah dignty cad respect and
are valued for their individual and team contributions;

‘To generate gains in efficiency, effectiveness, and accountability in service

delivery through policies and programs that are economically foasible and
justifiable. _

As we strive to achieve cur mutual interosts, make progress and instimte changes,
the farm and substance of this document may change over time.

‘The D.C. Labor-Management Partnership Coun] will bo refwrred to as LMIPC thronghout (his donment.


151

Mr. Hicks. Yes.

Mr. Horn. Reported directly to the Mayor?

Mr. Hicks. Yes.

Mr. Horn. So I assume that is the person who really negotiated
for the administration.

Mr. SCHLEIN. It was both he and the city administrator.

Mr. Horn. They both sat in on the negotiations?

Mr. SCHLEIN. Directly involved at the critical stages, yes.

Mr. Horn. Did they deal with you, the two unions, on separate
bases, or were ie there at the same time?

ir. Hicks. We were there at the same time, along with six oth-
ers.

Mr. SCHLEIN. There were 10,000 workers that were normally
under the Mayor, our front line workers, come together in one set
of negotiations. So all of the unions, in doing your regular day-to-
day work within the city. Now, the police, the fire, the teachers,
they are all in separate negotiations. But basically most of them
under the authority of the Mayor are in one set of negotiations.

Mr. Horn. Now, under this new arrangement of a chief manage-
ment officer, what has happened to this function? Has it gone
under her jurisdiction or what?

Mr. SCHLEIN. We don’t know.

Mr. HICKS. We are unclear.

Mr. Horn. I could ask for an organization chart.

Ms. Norton. The Office of Labor Relations continues to be under
the Mayor’s jurisdiction.

Mr. Horn. I must say, thinking in terms of professional things,
the mayor in any city is the last one I would have that group re-
porting to. Let’s face it, they are candidates for election. They are
thinking only about their reelection. They are not thinking about
the good of the city or the good of the workers or anything else.
They will tell you they are, but it seems to me that function ought
to be under the chief management officer, and you get some profes-
sionals in there.

I agree with you completely, workers have a major role to play
in ideas. They are on the firing line. The only reason organizations,
be they corporations, universities, city corporations, whatever, hire
outside consultants, is because their own managers are not walking
around and listening to people. If they walked around and listened
to people, they shouldn’t need outside consultants, because all the
consultant does is go around, talk to the workers, write it up, and
send a bill. It seems to me you have got to do as you are suggesting
in your written statement, have these committees, but they
shouldn't be bargaining committees, they should be idea and how
do we improve our service committees.

Mr. SCHLEIN. Absolutely. That is why it is so valuable to have
the help of FMCS and the Labor Department. They are teaching
our front line workers new techniques. We are not talking about
adversarial bargaining in these meetings. We are talking about un-
derstanding what the problems are and how to get them fixed and
techniques for doing that.

Mr. Horn. You are absolutely correct. Thank you.

Mr. Davis. Thank you very much. I thank the panel for letting
the committee know where things are. We clearly have some work


CONTENTS

Hearing held on January 30, 1998 ..
Statement of:
Barry, Marion, Mayor, District of Columbia; and Linda Cropp, Council
Chair, District of Columbia City Council.
Brimmer, Andrew, chairman, D.C. Financial Responsibility ‘and Manage-
ment Assistance Authority; Camille Barnett, chief management officer,
District of Columbia; and Anthony Williams, chief financial officer,
District of Columbia
Schlein, David, national vice president, district 14, American Federation
of Government Employees; and Chuck Hicks, president and acting
executive director, council 20, American Federation of State, County
and Municipal Employees
Letters, statements, etc., submitted for the record by:
Barry, Marion, ‘Mayor, District of Combi, prepared statement of ...........
Brimmer, Andrew, chairman, D.C. Financial Responsibility and Manage-
ment Assistance Authority:
Information concerning delegation of authori
Information con amount allocated to Y2K
Prepared statement of
eae , Council Chair, District of Columbia City Council, prepared
it

52

30
‘a Representative in Congress from the State
of Virginia, prepared statement of 3
Hicks, Chuck, president and acting executive director, council 20, ‘Amer-
ican Federation of State, County and Municipal Employees, prepared
statement of . 136
, David, national vice president, district 14, American Federation
of Government Employees, prepared Statement of 118

Williams, Anthony, hiet financial officer, District of Columbia,
statement of ..........

dip


145

10

Thank you for your time and attention to this matter. I would be

pleased to answer any questions you may have.


106

Among the projects, there are 10 or 12 that go directly to the
issue you have just described. The District has been alerted to that
and, in fact, one of the assignments that Mr. Hernon got when he
was brought in last year was to tackle that issue.

In my private consulting business, I have spent a Good bit of my
time working with companies who are trying to solve their own
year 2000 problem.

Mr. HorN. Could you file for the record, say in the next 5 days,
how much money you have allocated them?

Mr. BRIMMER. Yes.

Mr. Horn. Our basic position that we agree on between Director
Raines, myself and others up here, is to reprogram end-of-the-year
money. Don’t just diddle around through another budget process,
because time is a-wasting.

Mr. BRIMMER. Yes, I would be fia to do that, Mr. Congressman.

(The information referred to follows:]


66

As a project primarily focused on quality assurance and performance measurement,
the objective is to assess the early progress of reform implementation, correct
deficiencies, and initiate the engagement of non-Procurement stakeholders.

Train Elementary Tool Kit
The objective is to teach Procurement personnel the practical “hows” of their work.

Build Advanced Tool Kit

This project is primarily focused on process reform, and the objective is to develop
and introduce advanced tools to help evolve DC’s procurement potential from
“tudimentary life support” to “professional viability”.

Assess and Communicate Progress -- 2
This project will focus on quality assurance, and has as its objective an assessment
of reform implementation. The purpose is to correct deficiencies, and broaden the
engagement and integration of all supply chain “partners”.

Train Advanced Tool Kit
The objective is to teach Procurement personnel and non-Procurement stakeholders
the applications of the advanced tools, and expectations of “professional”
operations.

The cumulative impact of these eight projects will be the re-establishment of
a sustainable, viable Procurement infrastructure able to fully support the District's
wide-ranging service delivery commitments to its diverse constituency. The effect
of implementing these reforms will be the restoration of the District’s procurement
integrity and effectiveness. {t will also allow Agencies to return their focus to the
fulfillment of their core mission: the specification and delivery of goods and services
to the District's constituents.

Il, The Department of Consumer and Regulatory Affairs

The mission of the Department of Consumer and Regulatory Affairs is to
protect the health, safety and welfare of District residents. For Fiscal Year
1996, the Department employed a staff of 522 and managed a budget of
nearly $28 million to accomplish these goals. Over the same period, DCRA
collected over $25 million in revenue, primarily from permit and license fees.
More than half of this revenue was generated by three of the six Agency
administrations: Building and Land Regulation, Occupational and Professional
Licensing and Business Regulation.

Although the challenges at DCRA are significant, there is much
opportunity to improve DCRA’s services to the business community,
professionals and the public. in the Organizational and Program Assessment,
contractors identified two major obstacles to improvement. First, the body



52

testify first, Dr. Brimmer, then Dr. Barnett, and last, Mr. Williams.
hank you all for being patient.

[Witnesses sworn.]

Mr. Davis. I ask unanimous consent that any written statements
be made a part of the permanent record.

As I mentioned in my opening statement, this is Dr. Barnett’s
first appearance before Congress in her new capacity as the CMO.
So a special welcome to you, Dr. Barnett. You have an impressive
background. You appear to have gotten off to a very good start.

I would ask all witnesses to try to limit their testimony to 5 min-
utes. We have read the testimony, so if you could highlight it, stay
within the 5-minute limit, then I am going to enforce the 5 minutes
on Members, at least for the first round and then we will do an-
other round to try to make sure that we can get everybody to tes-
tify and be out of here by about 12:40.

e will begin with Dr. Brimmer and then follow with Dr.
Barnett and Mr. Williams.

STATEMENTS OF ANDREW BRIMMER, CHAIRMAN, D.C. FINAN-
CIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE AU-
THORITY; CAMILLE BARNETT, CHIEF MANAGEMENT OFFI-
CER, DISTRICT OF COLUMBIA; AND ANTHONY WILLIAMS,
CHIEF FINANCIAL OFFICER, DISTRICT OF COLUMBIA

Mr. BRIMMER. Thank you very much, Mr. Chairman, and mem-
bers of the committee. You have my statement in front of you so
I will not read it. I will hit a few highlights. I am delighted that
I am able to appear here today with Dr. Barnett, who is the new
chief management officer.

The history of the management reform effort is spelled out in
great detail in tne record ady, so I will not go through that. I
would say that with the transfer to the Authority of the respon-
sibility to oversee the activities of nine departments and four cost-
cutting functions, along with the activities of the schools and the
Police Department, we now have responsibility for about 90 to 95
percent of the government.

I want to stress that. So while the focus of management reform
is on nine departments and four cost-cutting functions, de facto we
have responsibility for management reform in the District govern-
ment. I want to stress that.

The way we went about selecting the consultants, and according
to Congress’ mandated, have been spelied out in great detail in ear-
lier testimony and I will not repeat it here.

Let me say, however, that the selection of the consultants was
done within the framework established by the Congress. It was a
competitive selection. We sent out solicitations to 133 potential con-
sultants. Seventy-one ° proposals were received, and on September 4,
1997, within the 30-day statutory requirement, we were able to
award management reform contracts to the consultants, at a cost
of about $6.6 million.

As required by the legislation, we were able, within the 120 days
of issuing the contracts to the consultants, to submit our report to
Congress, which we did on January 2, 1998.

Mr. Chairman, I would request that the committee include the
summary, the first volume of that report, as a part of my testi-


101

So there are a number of activities in the Federal Government
which generate revenue—in this District government which gen-
erate revenue, and the government, up to now, has not been maxi-
mizing those opportunities.

So, again, Ms. Norton——

Ms. Norton. On my count, I just hope that the conservative and
prudent forecasts that produced the surplus this year are continu-
ing, because by my count, when you go 40 and 50, and we get the
82.5, we're still talking $182 million; and all these things are sup-
posed to happen, better tax collections and the rest of it.

It is the kind of thing that when city officials came up and said
that, that kind of thing drew great skepticism from the Congress.
And I don’t know why we should feel that these things automati-
cally happen when you have to put a financial management system
in place and you have got most of your reform work of your govern-
ment to do.

I don’t know. I can understand what you're saying. It doesn’t
sound unreasonable. I just hope that whenever—let me put it this
way. Whenever paying for something specific—and here we're talk-
ing about paying for management reforms—is contingent upon pro-
ducing savings, the history of this government and every other gov-
ernment is that they fall short. So I hope that you are bearing in
mind what that history is, whatever the government you work for,
whether you work for the Federal Government as well as the gov-
ernment you work for now, Mr. Williams.

Mr. BRIMMER. The implementation of the management reform
projects does not depend on the generation of $140 million.

Ms. Norton. You just said you’d have to go into your surplus if
you did not do it, and I understand you would. You could end up
using all our surplus this way.

Mr. BRIMMER. It does not depend on it. Moreover, the $140 mil-
lion is a deep discount on the amount that is anticipated. We did
not count every dollar that is anticipated. This is the residual,
deeply discounted. We are highly confident that it will come.

And by the way, as I indicated, we will be coming here quarter
by quarter. We will be reporting to you quarter by quarter. Please
ask us during the year how we're doing.

Mr. Davis. Thank you.

Mr. Horn.

Mr. Horn. Thank you very much, Mr. Chairman.

Welcome to all three of you. I think each of you is doing a won-
derful job in this area, and we thank you for coming to save the
world’s greatest city.

Let me note that in my past profession it was considered the uni-
versity president’s idea of hell to find that he had two medical
schools, and I will say to you, Dr. Barnett, that I suspect a similar
thing might be said about having three city councils—the city coun-
cil, the Control Board and us. But I want to thank you for coming
here. You have a splendid reputation in your past public service
areas,

I would just like, as my first question, to say, could you compare
the authority you had as city manager of Austin and the authority
your colleagues had as city manager of Dallas and/or Houston with


26

BAILOUT BUT THAT WHICH IS LEGITIMATELY OWED TO D.C.
CITIZENS. WITH THIS TREMENDOUS LOSS IN REVENUES LET US
SAY THE CITY IS BEING LAND-LOCKED, OUR ECONOMIC BASE
CANNOT EXPAND.

BUT THE PRESIDENT HAS THE OPPORTUNITY TO CORRECT THIS
FLAW IN THE FY99 BUDGET CYCLE BY MERELY TRANSFERRING
COSTS BORNE BY THE DISTRICT IN SUCH AREAS AS MENTAL
HEALTH SERVICES, HIGHWAY FUNDS AND FULL MEDICAID
FUNDING, FOR EXAMPLE. BY TRANSFERRING THESE STATE
COSTS TO THE FEDERAL GOVERNMENT AND RECEIVING AN
EQUITABLE FEDERAL CONTRIBUTION, WE CAN COMPETE MORE
EFFECTIVELY WITH OUR REGIONAL NEIGHBORS AND ATTRACT
AND RETAIN MORE RESIDENTS AND BUSINESSES.

THANK YOU FOR THE OPPORTUNITY TO ADDRESS YOU TODAY.
I WILL NOW ANSWER ANY QUESTIONS YOU MAY HAVE.


22

FEW OF THE REFORMS HAVE ACTUALLY STARTED. EVEN
THOUGH THE MANAGEMENT REFORM TEAMS HAVE MADE FINAL
RECOMMENDATIONS TO SUPPORT 270 PROJECTS, THE
IMPLEMENTATION OF THE FUNDING OF THIS PROCESS, TO MY
KNOWLEDGE, HAS YET TO BEGIN. THESE 270 PROJECTS WERE
WELL THOUGHT OUT AND PRESENTED OUR BEST EFFORTS.

THE MANAGEMENT REFORM PROCESS, HOWEVER THOROUGH,
IS TWO MONTHS BEHIND SCHEDULE. CONGRESS AND THE
FINANCIAL AUTHORITY HAVE SET UP EXPECTATIONS. THE
PUBLIC WANTS AND EXPECTS MANAGEMENT REFORM PROGRESS,
BUT THAT IS NOT APPARENT EVEN AT THIS LATE DATE.

FOR THE FUTURE, LET US AGREE ON THIS: CONFERRING
EXCLUSIVE AUTHORITY TO THE FINANCIAL AUTHORITY IS NOT
A MODEL FOR SUCCESS. WE NEED TO LOOK AT THE “MOU”
PROCESS USED FOR THE POLICE DEPARTMENT, WHICH HAS A
PROVEN TRACK RECORD AND IS INCLUSIVE OF ALL
STAKEHOLDERS, ELECTED AND APPOINTED.

AN MOU GROUP CAN BE FORMED AND CAN MEET EACH MONTH
TO MAKE SURE MANAGEMENT REFORM IS ON TRACK, ISSUES ARE
RESOLVED, FUNDS ARE PROPERLY EXPENDED AND PROJECTS
ARE COMPLETED IN A PRIORITY FASHION. STAFF FROM EACH
MOU PARTNER SHOULD BE ACTIVELY INVOLVED WITH
IMPLEMENTATION AND MONITORING. THIS HAS NOT OCCURRED
TO DATE UNDER THE FINANCIAL AUTHORITY.


105

Mrs. MORELLA. We would like to see it with all deliberate speed,
but indeed, I think we both agree that something needs to be done

out it.

I know my time is just about up. I wanted to tell you the next
panel is going to have representation from AFGE and from
AFSCME. They are going to ask about the fact—and it is too bad
we cannot all be together; they are going to ask how they can be
involved. Do you have plans for involving them in the process?
Since they deal with the employees, they know a lot from their ex-
pertise about government and its management.

Mr. BRIMMER. Our mandate to the CMO and to the agency heads
requires that they seek the participation of all of the stakeholders.
I mentioned this in my testimony; Dr. Barnett has mentioned it.
The answer is, yes, there will be outreach and inclusion.

Mrs. MoRELLA. OK, great. We would like to in the future know
about how you piece them in and in what way. It would be very

helpful.

My time is up. I will wait for the next round.

Thank you, Mr. Chairman.

Thank you, Mr. Horn.

Mr. Davis. I want to pick up on that. I know my office has been
in communication with all of you on a few of those issues and on
the way the control board is interpreting the legislation things that
we did in this subcommittee. We want to have those things worked
out to the extent we can, or we will have to come back and revisit
it legislatively. We would prefer not to.

Mrs. Morella and Mrs. Norton and I all feel strongly about it. We
are making progress, and the panel is going to testify. Read their
testimony, and if you have any questions, let us come back and
work these areas out.

Mr. Horn. Mr. Chairman, I have one question, if I might, of the
chief financial officer. We have about 700 days to go before January
1, 2000. How are the district computers coming in adjusting to the
year 2000 problem?

Mr. WILLIAMS. Co: ssman Horn, one of the crosscutting issues
is information technology, and that actually is the responsibility of
Dr. Barnett, so she can speak to that question.

Mr. Horn, OK.

Ms. BARNETT. And the answer is I don’t know.

Mr. BRIMMER. Well, let me say something on that.

Mr. Horn. Why don’t you check it and supply a statement for the
record.

Ms. BARNETT. I will. I know it is one of the chief concerns in the
information technology crosscutting functions, but it is not one I
have personally looked at at this point.

Mr. BRIMMER. Mr. Congressman, I can say something about that.
One of the areas I mentioned for crosscutting is information tech-
nology.

Mr. Horn. Right.

Mr. BRIMMER. That responsibility has been delegated to Mr. Mi-
chael Hernon, the chief technology officer. There is, among the
projects in that area for management reform, the year 2000 prob-
lem. Funds have been allocated for that purpose.


34

ALTHOUGH THE FURTHER USE OF CONSULTANTS WILL BE NECESSARY FC
SOME PROJECTS, WE MUST ALSO PROVIDE EXISTING GOVERNMENT EMPLOYEES
THE NECESSARY TRAINING AND RESOURCES SO THAT THEY HAVE THE ABILITY
TO EXECUTE THE REFORM MEASURES LONG AFTER THE CONSULTANTS ARE
GONE.

UNLIKE PREVIOUS STUDIES AND REPORTS, THIS MANAGEMENT REFORM
PLAN WILL HAVE THE NECESSARY RESOURCES AVAILABLE TO MAKE.
SIGNIFICANT IMPROVEMENTS. THIS IS A UNIQUE OPPORTUNITY. THE COUNCIL
LOOKS FORWARD TO PARTICIPATING IN REAL AND SIGNIFICANT MANAGEMENT
REFORM INITIATIVES TO CORRECT LONG-STANDING DEFICIENCIES IN
MANAGEMENT AND PROGRAM OPERATIONS.

ONE AREA WHERE THE COUNCIL HAS TAKEN THE LEAD IS IN BUSINESS
REGULATORY REFORM. I AM PLEASED TO REPORT THAT, EARLIER THIS MONT)
THE COUNCIL APPROVED COMPREHENSIVE BUSINESS REGULATORY REFORM
LEGISLATION. THIS LEGISLATIVE INITIATIVE IS PART OF THE COUNCIL'S ON-
GOING EFFORTS TO ADDRESS REGULATIONS WHICH UNNECESSARILY AND
INAPPROPRIATELY IMPAIR ECONOMIC DEVELOPMENT IN THE DISTRICT. THE
COUNCIL'S INITIATIVE IN THIS AREA BEGAN PRIOR TO, BUT IS NOT
INCONSISTENT WITH, THE MANDATE TO THE FINANCIAL AUTHORITY
CONTAINED IN THE REVITALIZATION ACT.

TN DECEMBER OF 1994, THE COUNCIL APPROVED LEGISLATION

ESTABLISHING A BUSINESS REGULATORY REFORM COMMISSION. THE


115

solve them by cutting the pay, benefits, and jobs of frontline service
delivery workers. Those with direct power over the city’s spending
and contracting refused to face what, to all of us, was the urgent
and glaring crisis in management which had caused the financial
crisis.

AFGE represents the people who actually do the everyday, some-
times dirty, sometimes dangerous, sometimes tedious, and almost
always thankless work that makes this city run. But as you know,
our members’ efforts and lack of aspirations are often thwarted by
layers of redundant management, lack of training, materials, and/
or equipment. To add insult to injury, our salaries have been re-
duced twice in the past 24 months, earned benefits have been re-
duced or eliminated, opportunities for career advancement have
been foreclosed and premiums for overtime hazardous duty and
holiday work have been severely reduced.

The institution of collective bargaining itself has been a casualty
of the Control Board era. Although it may not yet be dead, it is cer-
tainly in critical condition. Indeed, it is only as a result of the
strenuous efforts of the members of this committee that the nego-
tiated grievance and arbitration process, the very heart and soul of
collective bargaining, survived the threat of annihilation. But the
collective bargaining process itself remains under siege.

One important cause is the absence of clear lines of authority
and management accountability in bargaining. With whom are the
unions to bargain? What entity is legally able to represent manage-
ment in the city? Is it the Mayor, the CFO, the Control Board, the
council, the Office of Labor Relations and Collective Bargaining,
the new chief management officer, the Congress, or all or some of
the above?

The very modest agreements our new union negotiated with this
city, which were ratified in July 1997, have yet to go into effect.
They languish as the Mayor, the chief financial officer and the au-
thorities blame one another for the delay. Meanwhile, unionized
frontline workers of the city wait in vain for the modest salary ad-
justments agreed to through the collective bargaining process more
than 7 months ago.

The authority’s apparent refusal to carry out responsibilities re-
garding the collective bargaining process is confounding. As the
city’s more than 10,000 frontline unionized workers continue to do
their jobs, despite furloughs and salary and benefit reductions, they
wait for the authority and the CFO to deign to give their collective
bargaining agreement an audience. Few if any contracts which fall
under the authority's purview affect the well-being of so many Dis-
trict residents and taxpayers. Why has the ratified contract not
been signed or implemented? AFGE urges the members of this
committee to assist us in holding these appointed city officials ac-
countable for their behavior.

Weekly, our members hear tales of management bonuses and ex-
ecutive pay raises while a $100 lump sum bonus payment for our
members is lost in the bickering between the Mayor, the CFO and
the Control Board. A court-mediated settlement from previous
comp 1 and 2 negotiations agreed to months ago waits for Control
Board approval. And the CFO has earned a prominent place in la-


136

Mr. Chairman and distinguished members of the
Subcommittee, I am Charles Hicks, President and Acting Executive
Director of Council 20 of the American Federation of State, County and
Municipal Employees (AFSCME) representing eight thousand employees
who work for the District of Columbia (D.C.) government. On behalf of
AFSCME, I would like to thank the members of the House Government
Reform and Oversight Subcommittee on the District of Columbia for the
invitation to come before you today. We are pleased to have this
opportunity to share our views on the management reform programs in the
National Capital Revitalization Act of 1997. And we would particularly
like to thank Chairman Tom Davis for his efforts on our behalf and of
course Delegate Eleanor Holmes Norton for her ongoing efforts in support

of the men and women who work for the District of Columbia.

Our members are the people who collect the trash, process the tax
returns, fix traffic lights when they are broken, sweep the streets, repair
broken chairs and torn carpet at the University of the District of
Columbia (UDC), collect the fines at the library when books are late and

keep the storm and sewer pipes open. It is our members who perform the


58

As this report indicates, the Authority has exercised the option to submit
the management reform plans within the 120 days provided by law. The
extension allowed for a concerted review of the plans, as well as an opportunity
to reconvene the management reform teams in order to obtain their counsel.
This document is a product of our completed review.

The Authority notes that all Team Members agreed that the process of
reform should not wait until the formal adoption of the plans, but should
‘commence upon the identification of opportunities to address management and
performance problems that have plagued public service delivery. Indeed, we see
immediate opportunities to address performance problems, to obtain gains in
productivity, to yield increased revenues, and to improve service delivery. Thus,
projects representing immediate improvement opportunities have already been
developed and reviewed. Since none of the projects will require additional
budgetary resources, we have accepted them for immediate implementation.
These projects -- which range from stabilizing the Motor Vehicle Information
System at the Department of Public Works to strengthening the Special
Operations Function of the Fire Department -- are indicated within the plans.

The Authority is poised to implement all of the selected reform plans, both
those which can be effected immediately, and projects which first require additional
fesources and coordination. Based on the collaborative process of the management
reform teams, the Authority has, according to statute, selected the other projects
and will ensure that necessary funding is available to support their implement
The Authority will then instruct the department heads to begin implementation of
the plans, which we will monitor. To assist the Authority in this effort, we have
created and, after an extensive search filled, the position of Chief Management
Officer (CMO). This individual is charged with overseeing the implementation of
the plans and working on a daily basis with agency directors. The appointment of
the CMO was announced on December 22, 1997. Dr. Camille Barnett, a former
City Manager of Austin, Texas, will begin her employment effective January 15,
1998. The CMO reports to the Authority through the Chairman, and is appointed
for a fixed term of five years.

As the Authority stated in its initial communications to the Government
Departments upon the assumption of its responsibilities for these agencies, we
expect that (through the leadership of the directors) agencies will produce swift and
sustained improvements to the quality of life of District residents and visitors --
positive change that our citizens can measure and support on their own.



112

How can you stop at the ones under his control? The fact is that
he put something on the table. He testified that he hasn’t been able
to get the Control Board much interested in it.

think this may simply become a matter of not a lot of commu-
nication, but your answer is just the kind of response that is not
calculated to get an accommodation. The man has said, hey, why
don’t I put mine over with yours and let’s see what we can wor!
out together.

Tm just going to ask you here whether you and Dr. Barnett,
since apparently he understands that these people would also be
administered by you, whether you would agree to sit down and
have discussions about whether something could be worked out so
that the answer would not simply be, Mr. Mayor, you don’t have
enough to warrant anybody, because we have most of it.

It’s not the way to engage in a negotiation and accommodation
when the man has come and said, OK, take mine. Then I would
expect that the grown-up answer would be, “OK, let’s see what I
can work out.” And as I say, since you are all powerful anyway, I
don’t understand why you wouldn’t be sitting down and seeing
what accommodations should be reached.

And if I may say so, the Congress expects that we shouldn’t have
to encourage this kind of discussion and negotiation. Grown-up peo-
ple in the world do this without Congress saying it. And when the
Mayor comes forward and says something like, “Look, I’m willing
to give mine up. Let’s see what I can do.” If you don’t like what
his Proposal is you can put your own proposal up. You are holding
all the cards anyway. Don’t get into a fight.

I can see it now. There’s going to be a fight when he’s going to
finally say, I want somebody to administer mine, too, and you’re
going to say, oh, no, you can’t, because you don’t have enough. And
then people are going t line up on both sides. And we don’t need
that crap anymore. So, would somebody just sit down with him
next week and see what you can work out?

Mr. BRIMMER. Ms. Norton.

Mr. Davis. Is that a yes?

Mr. BRIMMER. Not only, yes; we have been.

Mr. Davis. A yes. OK.

Mr. BRIMMER. Ms. Norton, I don’t know what the Mayor said to
you, but the Mayor and I have had at least a half a dozen discus-
sions of this subject. We were both sitting down at the time. These
were extensive discussions. It is not simply a question of putting
together—perhaps the Mayor didn’t tell you the other part of the
discussion.

Ms. Norton. We don’t even want to hear it. We think you can
work it out.

Mr. Davis. She said she just wants you to meet with him and
work it out. .

Ms. Norton. I’m sure there will be disagreement about how to
do it and that he will come up with a proposal that you would want
in another way.

Mr. BRIMMER. I’m sorry to take your time, but the point is this
is on the table and we need to understand it.

The Mayor asked that the CMO report to him, and I just want
to say that that is unacceptable.


%

* Spends more money for programs because less is required for overhead
« Holds staff and providers directly accountable for results
« Ensures that procedures are in place for sound lending and effective monitoring

« Maintains streamlined processes that focus on results and customer
satisfaction.

The Management Reform Plan involves implementation of improvement
projects to address each of the organizational elements that determine DHCD's
overall performance: Strategic Planning, Organization, Management Processes, and
Operations. While improvements in DHCD's planning capacity will somewhat
increase its spending rate and ability to leverage private and other public resources,
dramatic performance gains can only be made if DHCD increases its ability to
translate plans into effective action. To this end, the reform plan includes a full
range of projects targeted at DHCD organization, management processes, and
operations, including:
© Streamfining and reorganizing all existing units to better align them with mission,

strategy and workload
‘* Recapitalizing the existing loan portfolio and improving lending and portfolio
management practices to avoid future problem loans

* Implementing strong staff accountability measures

‘© Potentially outsourcing major service delivery functions, including loan
origination for HUD-funded rehabilitation and economic development programs,
‘construction analysis, legal services, and environmental reviews

* Streamlining remaining DHCD processes
‘* Developing standardized subrecipient monitoring and HUD compliance practices
‘© Increasing the level and use of technology to increase operational efficiency

« Moving DHCD to collocate with other 0.C. agencies involved in economic
development to reduce costs and improve customer service.

When implemented, the projects will energize the Department and make it a
leading player in the District's housing and economic development scene. As the
planning capabilities of DHCD and the wider District government improve, OHCD
will be able to focus its resources on projects with the greatest potential impact on
jobs, housing supply, and the city’s tax base. At the same time, it will better
leverage the energies and resources of other D.C. agencies and community
organizations. Its credibility and long-term effectiveness will increase as DHCD
improves its ability to manage and account for its resources, make more of its
resources available for loans and grants, and deliver its services faster and in a
more customer friendly way. The successful implementation of the Management
Reform Plan will lead to permanent improvement in DHCD’s ability to facilitate



28

negatively affect the District's budget. The management reform
teams must work closely with the chief financial officer to ensure
that the implementation of the reforms is consistent with our fiscal
budget and our multiyear financial plan and does not jeopardize
our financial recovery. The worst nightmare could be that cost
overruns and other costs that would be associated with this would
prolong the years in which the financial authority would stay in ex-
istence.

The second concern is the use and cost of the consultants. The
management reform teams must ensure that wherever and when-
ever it is cost effective and appropriate, that the implementation of
the reform projects be done by existing government personnel.
Some of the consultants built into their recommendations contin-
ued work. The consultants’ charge should be to analyze the prob-
lem, start the implementation plan based on the recommendations
and the findings, and monitor the projects’ progress. The consult-
ants’ participation should be short-lived and not looked upon as a
substitute for government personnel and functions.

We have already spent millions and millions of dollars on con-
sultants to date. Although the further use of consultants will be
necessary for some projects, we must also provide the existing gov-
ernment employees the necessary training and resources so that
they have the ability to execute the reform measures long after
consultants are gone. This is to be a temporary effort, and, if that
is the case, we should not build in longevity, and we should make
sure our work force is trained to continue the efforts.

One area in which the council has taken the lead is in the busi-
ness and regulatory reform area. I am pleased to report earlier this
month the council approved the comprehensive business regulatory
reform legislation. This legislative initiative is part of the council’s
ongoing efforts to address regulations which are unnecessarily and
inappropriately impairing economic development in the District.
The council’s initiative in this area began prior to, but is not incon-
sistent with, the mandate to the financial authority contained in
the Revitalization Act.

In December 1994, the council approved legislation establishing
a business regulatory reform commission. The commission’s man-
date was to identify statutes and regulations that were obsolete, in-
consistent, or duplicative, with particular attention to permitting
and licensing related to buildings and land uses, businesses, occu-
pations and professions.

commission consisted of 12 public members representin;
business occupations and professions regulated by the District, an
seven Government members. The chairman of the council and the
chairman of the council’s Committee on Consumer and Regulatory
Reforms served on the commission.

This fall, the commission submitted its final report to the Mayor
and the council. The council held extensive public hearings on the
recommendations contained in the report, over 3 days of hearings,
more than 21 hours of testimony.

In addition, the council received hundreds of written comments
on the legislation from interested parties. The final legislation ap-
proved reflects the concerns and comments raised by District resi-
dents at those hearings.


94

© The Controller’s Office has made tremendous strides in rebuilding our financial

infrastructure.

Our financial team gives the District stakeholders the institutional capacity to implement

management reform. Working closely with the new Chief Management Officer, we can

now ensure that the District connects resources with results.

‘undi

One of the most important issues regarding management reform is funding: where will the
money come from. The starting point should be the FY 1998 consensus budget. Our initial
analysis of the management reform proposals indicated that it would be possible to
implement a substantial management reform program. We provided the Financial
Authority with a scenario which identified resources for implementing as much as $126
million in management reform projects in FY 1998. The following table details the

possible sources of this funding:

FY 98 Operating FY 98 Capital Total
Budget Budget

Dollar value of proposals already funded in som. 329M 838M

approved budget

Amount of funding available for reform in $38M $50M sssM

FY 1998 consensus budget

Totals $47TMM. $79M S126M



9

Mr. Davis. I would ask unanimous consent that your written
statements be made part of the record. If you could limit your oral
statements to 5 minutes, we will have time for questions. The
members of the committee have had an opportunity to read your
statements. Try to highlight what is important, and anything you
feel you need to put in the record, then we will go right to the ques-
tions.

We very much appreciate both of you being here today and being
part of the team. Thank you.

STATEMENTS OF MARION BARRY, MAYOR, DISTRICT OF CO-
LUMBIA; AND LINDA CROPP, COUNCIL CHAIR, DISTRICT OF
COLUMBIA CITY COUNCIL

Mayor Barry. Good morning, Mr. Chairman, members. I would
like to thank you for the opportunity to testify on the National
Capital Revitalization Act of 1997 and my participation in manage-
ment reform of the District of Columbia government.

Mr. Chairman, you may recall my first appearance before this
committee was in February 1995, soon after you had become chair
of this subcommittee. At that time, I requested increased Federal
share of Medicaid, Federal insurance of our capital debt, assump-
tion of the unfunded pension liability, taxing authority on non-
resident income, and Federal assumption of various State func-
tions.

This was an idea whose time had come, and I am thankful that
many of these ideas and suggestions ended up as part of the Revi-
talization Act last July.

Mr. Chairman, before I continue, let me thank you and Mrs. Nor-
ton and Mr. Horn and other members of this subcommittee for the
hard and constructive work you did to get the Revitalization Act
passed by the House of Representatives. However, as Mrs. Norton
has alluded, it was in the Senate where Senator Faircloth was suc-
cessful in getting the Senate and the House to agree to what I con-
sider immoral and antidemocratic so-called management reform
measures. More on that later.

Just for the record, Mr. Chairman, let me just indicate that it
was almost 3 years ago that I identified a possible $722 million
shortfall. That is what started this entire discussion. We couldn’t
go to the bond market to borrow short-term or long-term.

But we didn’t just talk about that. We did something about it,
even before the legislation was passed establishing the financial
management system of authority. We took drastic measures back
in those days. We went from a $335 million deficit in 1994 to a $54
million deficit in 1995.

Also, Mr. Chairman, as you all may recall, we presented a well
thought out transformation strategy that was to form the basis of
governmentwide restructuring. We continued to work as hard as
we could on that. In my statement there are a number of activities
that happened, and one or two I would just like to point out.

Our work force was reduced from 47,000 to 36,000 in less than
2 years, a phenomenal event. No other city had done that. New
York City took 4 years to get to a 25 percent reduction. We did it
in 2 years.


7

housing and economic opportunities for District residents - the core DHCD mission.
The projects outlined here will result in measurable increases in jobs, housing, and
the D.C. tax base by reducing DHCD overhead, enabling DHCD to select better
projects and deliver services more effectively, and aligning DHCD with a well-
articulated and coordinated city-wide economic development strategy.

Vill, Asset Management

The consultant’s work addressed two distinct functions: real property asset
management and financial asset management. Unlike most areas currently under
review, the real property and financial assets cross District government agencies
and authorities. Therefore, in addition to reviewing the specific organization within
the District of Columbia involved in asset management, the flows and the
felationships between organizations involved in asset management have also been
reviewed.

The Asset Management Reforms outline numerous initiatives addressing real
property and financial asset management within the District Government. Each
initiative is designed to: (1) realign resources to improve service delivery: (2)
increase revenue through maximization of opportunities; (3) decrease expenditures
through enhanced resource productivity. Currently, these initiatives cut across at
least 15 agencies. The present asset management system is highly decentralized
and fragmented, which results in duplication of services, weak administration and
support functions, @ lack of accountability, wasted space and equipment, numerous
uncoordinated service contracts, lack information and planning, risk management
and controls.

One of the primary real property management recommendations is the
creation of a centralized real property office, headed by a Chief Real Property
Officer. The remainder of the initiatives address the creation of an overall real
property asset management strategy, creation of a comprehensive property
inventory and management system, centralization of real property-related functions,
assessment of personnel needs and existing competencies and revising real
property legis

The major financial asset management reform recommendation is the
centralization of cash management into the OCFO Treasurer. This reform is
designed to enhance revenue. The other financial initiatives address cash
management functions such as cashiering, revenue realization {accounts
receivable), unclaimed property, pension plan and loss prevention.

All asset management reforms focus on three themes that address the root
causes of District asset management issues:


.

The District’s Telephone System Does Not Work --Fundamental communication
needs are unmet due to @ failing and archaic telephone system. Staff
productivity is diminished and citizen and government communication is thwarted
which negatively impacts service delivery and increases the cost of doing
business. Forty percent of the phones are rotary and many lack telephone
features such as voicemail and transfer capabilities. The District’s current
‘standard for voice communications (ISDN) is very costly and not required to meet
the requirements of all District voice communications. The District has an
opportunity to evaluate, select, and implement a cost-effective voice
communication solution that meets District short and long-term requirements.
There is an opportunity to reduce the current estimated cost of $29 million for,
the implementation of an ISDN solution by selecting a solution that fits the
communications needs of the District without implementing a “total” ISDN
solution.

An_ Effect 1_{T Organization Does Not Exist “Most of the problems
identified by the IRM assessment are caused or influenced by the lack of an
effective central information resource management function. An opportunity
exists to establish the Office of the Chief Technology Officer to guide the
District's technology efforts, improve technology management and performance,
reduce technology costs, and realize information sharing between agencies.

Independent_Management_of_IT_ Reform Plans Will Perpetuate “Stovepipe”

i ibility --The District is about to embark on implementing a
variety of management reform plans that include {T-related improvement projects
for every agency under review. Should the District choose to implement these
projects independently without central planning standards and oversight, the
District will merely perpetuate past practices that have resulted in so many
“stovepipe” systems that are incompatible and lose the opportunity to leverage
dollars and resources for common projects. Careful planning, management, and
oversight of all IT management reform plans will ensure adequate deployment of
resources; avoid duplication of effort; avoid the implementation of more
“stovepipe” solutions, and ensure the application of technology standards
adopted by the Chief Technology Officer to protect the city’s investment in
management reform plans.

Ds innot Be Sharer e to Disparate Data Net --The District has about
80 data communication networks in place yet agencies are unable to share data
essential to their every day business because of incompatible data networks and
systems. The duplication of networks and human resources to operate and
maintain them indicates that costs are higher than necessary. The fact that
agencies within the same department, as well as between departments, are
virtually unable to share data requires individual agencies to develop and maintain
duplicate data repositories and applications, thereby increasing the costs of
District IT services. The District has an opportunity to expand the DC WAN by


to the District’s future.

Because so many of the issues addressed in the Revitalization Act
were time-sensitive, passage of a consistent City Budget was essential.
This was done.

Information, systems, and the right personnel must be in place
before progress can be made in any endeavor. In the District we have
now had 2 and a half years of investigations, data collection, and
analysis by the Control Board. Spending controls, systems, consultants
reports and recommendations are in place. And now we have an
experienced operational manager ready to implement reform and
revitalization of services and process.

I look forward not only to the testimony but to the results that must
follow.

Today we will continue our review of the progress that has been
made and assess the timetable for implementation of the management
reforms. I am interested in learning how the Management Plans were
decided upon, what role the “teams” mandated by the statute played in
the process, the scheduling and sequencing of implementation, the costs
over time, and the role to be played by the Chief Management Officer.

Some concern has been expressed about the process being

followed for decision-making and implementation. The Subcommittee
looks forward to hearing any such concerns.

Talso look forward to assessing the prospects for regulatory
reform, another key area addressed in the Revitalization Act.

So while I acknowledge the historic accomplishments which have

3


111

Now, Mayor Barry proposed that there be a sharing of respon-
sibility, including giving over the agencies left under his direction
so that the government is administered under a central direction.
Tm intrigued by that proposal for two reasons: One is that absent
a move of that kind, he is going to duplicate the administrative
structure, or at least try to duplicate it. And while he may not suc-
ceed, it seems to me that he is correct to try to administer the
agencies he has. And if he doesn’t get to administer them with the
proper support, then I think we send a message to those employ-
ees, well, you know, however you all get administered is just fine,
do the best you can, we will administer these others according to
a more structured process.

I would like to ask you what would be lost, given the enormous
and absolute control you have over the government and your ability
to overrule foolishness, should it occur lower in the government,
what is to be lost by bringing these agencies together, the nine you
have, the number he has, some of which are particularly important,
like labor relations, wrapping them all together and sharing the
way in which decisions are made?

Mr. BRIMMER. First, we need to sort out what is behind the pro-
posal to bring together the oversight of the agencies for the purpose
of policymaking.

As I mentioned in my testimony, we now, at the Authority, have
responsibility for oversight and direction not only of the nine agen-
cies, but the four crosscutting functions. And because of the exer-
cise of our responsibilities in two other areas, essentially we have
the schools and, through our new partners, the police department.
In combination—I want to stress this. In combination, those re-
sponsibilities account for 90 to 95 percent of the expenditures and
a similar proportion of employees.

I did propose to the Mayor the suggestion that for operation pur-
poses, for operation purposes, the agencies under his direction
should also report to the CMO. The Mayor said let us think about
that again once we have the CMO. I raised the matter with the
Mayor recently, once we had the CMO on board, and he said,
again, let us look at it.

With respect to the coordination function, the Mayor has the po-
sition of city administrator, and that position was there when the
Mayor had oversight and direction of the entire government,
though that is no longer the case. We have raised the question with
the Mayor as to the need for a city administrator of the nature that
there is in the Home Rule Act. But, frankly, we believe that the
task, the responsibilities of the city administrator, have been
shaved to the degree where those activities do not justify the ex-
penditure of city money at the level required to support that office.

That office had a $4 million budget for this year. And so we be-
lieve—

Ms. Norton. In light of my time, just let me indicate, Dr. Brim-
mer, that I understand exactly what you're saying. Your points are
well taken, particularly given, as you say, the crosscutting nature
of some of the functions that are of the most important variety, like
procurement and personnel.


81

A major issue that must be confronted is the effect of downsizing. The
Personnel Office has been downsized from more than 300 employees to less than
200, and yet no work has been eliminated or redesigned. This problem has been
exacerbated by the fact that many experienced DCOP staff left due to early
retirement windows or RIFs (up to 50%), and the remaining staff has not been
formally trained in their new or revised position responsibilities. Therefore, the
Department has not been set up for the most efficient processing.

DCOP must evaluate and reengineer the core personnel processes, including
the forms used in each process. In recognition that there are technology inhibitors
to workflow and workload redistribution, such as the lack of a common e-mail
system or the ability of the Agencies to input data directly into the personnel
system, it may be necessary to conduct process redesign in multiple stages. Initial
process improvements would be based on manual processes, with long-term
improvements identified for future implementation in a more automated
environment. The initial process identified for reengineering should be the
Recruiting Process, as the ability to hire and promote qualified employees has been
identified by the Agencies as their most pressing need.

In order to assure that restructuring/reorganization within the Agencies
follows District policies, there is a need to incorporate DCOP resources on ail
Agency planning and redesign teams. The presence of DCOP staff in the Agencies,
and the presence of DCOP consultants to facilitate Agency changes, should provide
DCOP the opportunity to ensure that participation occurs. The primary benefits of
DCOP staff participation would be that their involvement in Agency restructuring
efforts and the availability of DCOP consultants to facilitate agency changes, could
reduce grievances and appeals related to restructuring.

In addition, there is an immediate need to develop a standard, extensive
personnel module for orientation which the Agencies can incorporate into their
specific orientation programs. Other reform initiatives include a need for improved
training, which should include a skills assessment to identify the functions and staff
that will benefit most from cross training. From this, a schedule can be developed
to allow for cross training integrated into the daily working environment for those
employees where the need is the greatest, either due to skill level, imminent
retirement, of lack of expertise. A more effective policy manual made available to
managers, a more consistent approach to compensation, revitalization of the
technology program, and a focused effort to improve data and documentation on all
personnel are vital to future endeavors and success in the personnel reform effort.

Changing the image of DCOP from that of a paper-pushing bureaucracy to a
consultative organization leading the way in changing how the District conduct
business will not be easy. Personnel functions in most organizations tend to be
blamed by both management and employees when things go wrong, and rarely


107

The District of Columbia has allocated $1.1 million to the Year 2000
Compliance (Y2K) problem. The Y2K problem is one of the District's top
priorities, and has been included in the management reform projects. The CMO
and Chief Technology Officer (CTO) are in the process of further assessing the
District's Y2K problem and once that assessment is complete we anticipate that
substantial funds will be allocated in fiscal years 1998 and 1999.

By way of background, the Y2K program office was established in the
summer of 1997 within the Office of the City Administrator. The initial schedule
of work has slipped. Upon the arrival of the CTO the responsibility for the Y2K
program office was moved to that office.

The Y2K office has developed a pian for assessing, remediating and
testing Y2K efforts. This plan has been reviewed and supported by the District's
information technology management reform consultant, and Y2K specialists
within the Federal Office of Management and Budget.

Cost estimates from the program office for remediation of the Y2K
problem range from $18 million to $25 million, however, more conservative
estimates from the consultant place the cost as high as $45 million. The
differences in these estimates concern whether the replacement schedule of
major systems, including the financial management and comprehensive
personnel systems, occur on time.

The U.S. Department of Labor has provided federal funds to the District's
Department of Employment Services to remediate the DOES Y2K problem.
Other funding sources are being explored for other District agencies.


92

Chairman Davis, Congresswoman Norton, members of the committee. My name is
Anthony A. Williams and I am the Chief Financial Officer for the District of Columbia.
Thank you for this opportunity to testify on the issue of management reform in the District,
specifically with respect to the financing of these reforms and its associated affect on the

District's financial and fiscal stability.

We recognize the need for management reform. However, we must also recognize the need
to implement reform in a financially responsible manner. Management reform must be
brought about at the same time the District’s accumulated deficit is reduced. District
stakeholders must maintain the financial health that we have worked so hard to restore,

while continuing to improve.

Our analysis indicates that it will be possible to implement a management reform program
of approximately $126 million in FY 1998. The outlines of this program were included in
the FY 1998 consensus budget. 1 strongly urge all stakeholders to remain consistent with

the overall consensus budget framework.


60

© assessment, vocational rehabilitation, and case management services for
individuals with physical or mental disabilities,

© juvenile justice and related services;

© paternity determination and child support enforcement services.

The management reform project has taken place at a critical time for the
Department of Human Services. Several component administrations are currently in
receivership, and the agency must respond effectively to changes in federal welfare
law, policies, and funding that have major implications for several DHS programs.
At the same time, turnover in senior management positions, budget and staff
teductions, and a general inadequacy in automated support of agency programs
collectively have undercut the Department's ability to respond effectively to its
recent challenges.

The Department of Human Services has not yet taken many of the steps
necessary to bring the mission of the welfare program into line with the federal
welfare reforms enacted last year. Although DHS has adopted much of the federal
welfare reform language on paper, relatively little has been done to date to
“operationalize” many of the policy revisions with respect to either staff or
recipients. Examples of how the DHS effort to shift from the old entitlement focus
in welfare to the new temporary assistance focus has fallen short include the
following:

© There has been no meaningful effort to train staff on new welfare reform
policies and procedures or to develop appropriate forms to support the new
policies and procedures. Field staff expressed a lack of awareness of, or
confusion about, many new policies under which the welfare program was
supposed to already be operating.

© There currently is neither an effective process for tracking and following up
on individuals referred for work participation nor any process for sanctioning
those who fail to participate without good cause. Individuals who simply
fail to follow-through on a referral to a work program or miss appointments
suffer no negative repercussions at this time.

@ The Department's welfare-to-work effort still largely reflects an out-of-date
“training” focus rather than a contemporary “labor force attachment” focus,
and its welfare-to-work service providers are not operating under
arrangements that provide any particular incentive for them to succeed in
placing recipients into permanent, paid employment.

© Unlike many other states, the District has not developed any type of
diversion program directed at keeping families off of welfare by providing a
lump-sum payment, short-term child care assistance, child support


56

and approved by the Authority. The management reform teams consist of the
Chairman of the Authority, the Mayor, the Chair of the Council of the District of
Columbia, and the head of the affected department. To ensure that the
management reform teams are knowledgeable about the plans and projects prior to
their implementation, and to facilitate the participation of the elected leadership of
the District in the development of the plans, teams were convened early in the
reform process.

The legislation required the Authority to obtain consultants within 30 days,
or at its option within 60 days, of enactment. On August 20, 1997, the Authority
issued a solicitation requesting proposals for assessing, developing, and
implementing management reform plans. One hundred and thirty-three solicitations
were distributed and 71 proposals were received and evaluated. By September 4,
1997, within the 30 day requirement, contracts were awarded to management and
Program experts. The total cost was $6.6 million.

As the first step in the development of the management reform plans, the
consultants conducted an assessment of the management and program operations
of eight agencies and four District wide functions.’ The assessment entailed the
review of strategic plans, organizational structures, service delivery systems and
Processes, and the actual delivery of services to citizens. The assessments
documented serious deficiencies in how the agencies were delivering services and
their effect on District residents and visitors. The findings ranged from the lack of
capable staff with the requisite skills to do their jobs; the presence of outdated and,
in some instances, obsolete technology to support service delivery; inadequate
business practices; and an absence of effective cost reduction methods. Among
the consultants’ cited examples of management failures were the following:

* The Department of Employment Services has no clear goals, nor any effective
mechanisms for strategic planning or direction-setting. The functions of major
divisions within the Department are rarely coordinated.

© The Department of Housing and Community Development's loan underwriting

processes unnecessarily duplicate many steps performed by the private lending

participants.

The District has a fire death rate averaging more than 60 percent above the

national average and has one of the highest per capita fire death rates among

American cities.

In the Department of Health, at a time of scarce resources, an average of 25

percent of grant funds were not expended in fiscal years 1991 through 1997.

The Office of Personne! has lost experienced managers and specialists, and the

institutional memory and expertise they represented have not been replaced.

.

"No contract was let 0 examine the Department of Administrative Services because much of its activity was
covered by the review of District-wide functions.


18

WHAT WAS INTENDED TO BE A FEDERAL GOVERNMENT
ASSUMPTION OF ITS PENSION AND MEDICAID RESPONSIBILITIES
AND OF CERTAIN STATE FUNCTIONS, TURNED INTO A SAD AND
HISTORIC EPISODE OF CONGRESSIONAL MICROMANAGEMENT OF
LOCAL GOVERNMENT OPERATIONS. ULTIMATELY, IT LED TO
SENATOR FAIRCLOTH AND CONGRESS DISRESPECTING THE
CITIZENS OF WASHINGTON, D.C. AND TAKING A MEASURE OF
DEMOCRACY FROM DISTRICT RESIDENTS.

IN ADDITION TO FURTHER ERODING DEMOCRACY, THE
FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE
AUTHORITY WENT EVEN FURTHER THAN THE CONGRESS AND
WAS MORE ANTI-DEMOCRATIC IN THEIR AUGUST ORDER
DIRECTING NINE DEPARTMENTS TO REPORT SOLELY TO THEM.
(IN READING THE REVITALIZATION ACT ONE CAN FIND NO BASIS
FOR THIS). THUS THE FINANCIAL AUTHORITY HAS CREATED A
A FRACTURED GOVERNANCE STRUCTURE OF UNEQUAL.
UNELECTED, INDEPENDENT PARTS.

THE AUGUST ORDER ISSUED BY THE FINANCIAL AUTHORITY IS A
MUCH MORE AUTOCRATIC PROCESS IN WHICH THE FINANCIAL
AUTHORITY, WITHOUT ANY CONSULTATION WITH ELECTED
OFFICIALS OR MEMBERS OF THIS SUBCOMMITTEE, AND WITHOUT
PUBLIC HEARINGS, TOOK CONTROL OVER NINE AGENCIES AND
FOUR CROSS-CUTTING FUNCTIONS. ,


47

memorandum of understanding between the Control Board, be-
cause also that memorandum has a relationship with the council,
too. I mean, all of us have been sort of cut out of this, and despite
the very structure, it is not working very, very well and I think we
ought to revisit how we make it work.

Ms. Norton. I just think you ought to revisit. I mean, hap-
pened I can understand your concern about what happened be-
fore. But, again, I think everybody around the table is reasonable.
If you keep pressing, I think something will come of it.

was concerned about your answer on your relationship with the
staff member who has been hired by the Control Board to help
them manage the nine agencies. I would like to know how you are
ing to go about forming a working relationship with Dr. Camille
jarnett which might facilitate the kinds of things you and I have
just been talking about.

Mayor Barry. One of the first things that we agreed to do, she
had a meeting last Friday with the agency directors that’s in that
Control Board | operation, and she asked me if the agency directors
under my specific control could be a party to that. I agreed. They
went to the meeting. They were all part of it. I also suggested to
her that those agency heads that report to the control board ought
to come to my cabinet meetings so at least we can at that level give
the view that there is no—well, two separate things over here. And
she and I will discuss further operationally how we make things
work, what kind of information do we share with each other, how
do we express various management concerns that I may have or
she may have. And we are going to work on that.

So we have not yet come back together on it but we intend to.
Even though I disagree with the structure and the board, I am
committed to trying to do all I can to make this wrong-headed ani-
mal work better.

Ms. Norton. Thank you. And I think that is right. I think it is
our obligation. What they give us is all we have got.

Mayor Barry. It is a wrong head, Chairman Davis. It is terrible.

Ms. Norton. Mr. Mayor, do labor contracts continue to be under
your purview, the negotiating of labor contracts?

Mayor Barry. Well, the Office of Labor Relations is—we have
been working directly with them to develop a citywide labor strat-
egy. And technically what happens is that once negotiations have
been concluded and ratified by labor unions, I then have the obliga-
tion to identify the funding for that and send it to the City Council.

Ms. Norton. I see, but your office continues to have respons‘bil-
ity for the negotiating of labor?

Mayor BarRY. The Office of Labor Relations, yes.

Ms. NorTON. What is the status of the contracts at the moment?

Mayor Barry. Several things.

Ms. Norton. And what effect will they have on any possible sur-
plus?

Mayor Barry. The—there is something called compensation
units one and two. This covers the general workers, the clerical
workers, workers in DHS and the correctional offices, a whole
range of workers, about 10,000 workers, representing eight unions.

Last summer, these unions came to an agreement with the city
on a proposed 1998, 1999 and 2000 package, ratified by six of those


51

But unless the District is planning to continue to pay these Her-
culean shares, there must be this training component with the con-
sultants to work with the District employees, to enable the District
government to be able to do that so that at some point the consult-
ants can get out. They come in, they analyze, they look, they work
with us, they recommend, they monitor.

Ms. NorTON. We have no disagreement on this. My only caution
is that I don’t think the Control Board has any reason to want to
keep consultants in there any longer than hecessary. The Control
Board, as far as the Congress is concerned, does not lack credibility
on the question of consultants. No one in the Congress thinks that
the Control Board is lining their pockets or trying to keep consult-
ants in there longer than necessary.

And let me tell you something, the control—the Congress looks
at the police department. The Congress does not believe that if the
consultants left everythi. ig would just be hunky-dory. We still see,
for example, that you don’t have—you have got lots of officers out
on the street and there are a lot of them that it is going to take
management reform in order for them to get out on the streets. So
I don’t think we have any disagreement. I couldn’t want our people
to be in charge more.

Mayor Barry. Ms. Norton, let me say that——

Mr. Davis. Mr. Mayor.

Mayor Barry [continuing]. In terms of this election of the con-
tractors, if Ms. Cropp and myself had been involved, it wouldn’t
have delayed this process at all. I mean, it wasn’t that difficult. Be-
cause once we got our management reform team together, we
worked rather rapidly on that. That’s what she and I were con-
cerned about.

Also, what she was concerned about, about the contractors and
consultants in some instances had built in a role for them that had
not been decided by the decisionmakers, that’s what I think she
was saying.

Mr. Davis. Mr. Mayor, thank you.

I have tried to give everybody ample time but we have to hear
from two other panels. Certainly, if you would take questions, if
Members have other questions they would like to submit to you, I
would give you an opportunity to answer those and keep those in
the record.

So I want to thank this panel for appearing, and we will allow
you to supplement anything you would like to put forward within
the next 10 days.

Mayor Barry. Thank you, Mr. Davis.

Let me say in closing that when I came into the hearing room
somebody asked me about my right eye. It is a little puffy because
T have been fighting so hard for self-determination.

Mr. Davis. OK. nk you so much.

I would like to call our second panel to testify now. It will consist
of Dr. Andrew Brimmer, chairman of the Control Board; Dr.
Camille Barnett, the chief management officer for the District of
Columbia; Mr. Anthony Williams, the chief financial officer.

I think each of you know it is the policy of the committee that
all witnesses be sworn before they can testify. So if you would step
forward and raise your right hands, we will swear you in. You will


80

aspects of all new building plans would be reviewed by fire protection engineers,
with adequate technical capability to respond quickly to the building community,
and help to assure that long-term fire safety is built into buildings in the first place.
The employees of the Department will all have access to personal computers to do
their paperwork; carbon paper will be retired. Computerized supply and property
systems will keep track of assets. A new communications system will more
efficiently dispatch fire and EMS units, and enable them to communicate
everywhere in the District, including in buildings and tunnels, and with neighboring
fire departments - not always feasible at present.

In short, the goal is to change the Fire and EMS Department from among the
most problem-filled in the nation to a world-class department again.

X. Office of Personnel

The current DC Office of Personnel (DCOP) organi n is paper driven and not
efficient; the-overlap in functions and the centralization of employees results in
bottlenecks, multiple hand-offs of forms, and wasted time spent transferring paper
back and forth between Agencies and departments within DCOP. The focus of
DCOP is on transactions, not results, as evidenced by the fact that current
measures relate to volumes, not to client service.

The primary clients of DCOP are the Agencies. Most of the Agencies have liaison
personnel, who are not DCOP employees, but are doing DCOP work related to
forms processing in the field. Little or no training has been provided to the liaisons,
80 the degree of support provided generally relates to the employee's tenure in that
position. In addition, some of the Agencies have an additional “personnel”
employee to supplement the services provided by DCOP, and as a result, DCOP and
the Agencies duplicate roles.

The Personnel Office must restructure, and incorporate improved functioning
in the following areas: with a centralized services model for benefits, compensation,
systems/data base support, strategy, policies and procedures, and training; and
decentralized employee relations resident at the Agencies for recruiting, employee
relations, and performance management. This should include evaluating the
responsibilities of each position and the skills of each staff member to assure the
greatest opportunity for both departmental and individual success, with customer
service delivery in mind.

The key benefits to this organizational structure will be a more customer
focused and more efficiently organized DCOP. This organizational design is flexible
enough to respond to changing DCOP needs over the next 2 to 5 years, as well as
changing Agency needs. It also positions DCOP to provide internal consulting
resources for Agency restructuring, which could replace more costly external
consulting support.


142

A second example is that some District managers have been given
unlimited discretion to fire employees. Employees who have been given
excellent ratings by the District in the past 10 years, some with
promotions pending, have been fired. Despite excellent work records,
people have been fired without notice for being “incompetent” after years
of receiving high performance ratings. Our union sued the CFO on
behalf of workers and lost because the judge found that Congress had
stripped the workers of any right to challenge the basis for their discharge.
In the past, the workers would have had a right to a meeting with their
department director to hear and rebut the allegations against them and a
neutral third party would have looked at the allegations and rendered a
binding decision. The effect of these changes has been to instill fear and
further undermine morale for many workers and convince others that
their primary goal should be to please their department director, regardless
of whether this will advance the goals of the department or District

government.

In short, many District employees live in fear, and the District is

not being properly served. Let me give you an example of what has


135

workers of any rights to challenge the basis for their discharge. In
the past, the workers have had a right to meet with the depart-
ment director, to hear and rebut the allegations against them, and
a neutral third party would have looked at the allegations and ren-
dered a binding decision.

I am here today to ask you to ensure that when you reform the
operations of the District of Columbia and the District government,
you give due regard to the workers, those who do the work, and
for the organizations they have elected to speak for them. Our
voices will only be heard if by statute or regulation managers and
individuals in charge with running the city is required to include
us in the process.

I would like to conclude by saying the men and women who work
for the District are hard-working people who should not be serving
as scapegoats for all the problems facing the city. We are well
aware that the time has come for re. We have been ready to
actively participate in this process for a long time. However, we do
not expect—we did not expect when Congress and the administra-
tion finally decided to make changes, that the workers would be
swept under the table or told that we are the liabilities and a
hinderance to progress. This is the message often being sent to us,
the rank and file. Reform should not mean that men and women
who are on the front line as front line workers should have the
basic workplace rights taken away.

We renew our pledge to work with the new city manager, the
Control Board, the city council, the Mayor and the Congress in
making the necessary changes which will make Washington, DC,
the great city which we all know it can be.

This is where we work. This is where we live. This is our city,
also. We want to be proud of how our city government works.

I will be happy to answer any questions. Thank you.

(The prepared statement of Mr. Hicks follows:]


13

GOOD MORNING MR. CHAIRMAN AND MEMBERS OF THE
SUBCOMMITTEE. THANK YOU FOR THE OPPORTUNITY TO
TESTIFY ON THE NATIONAL CAPITAL REVITALIZATION ACT OF
1997 AND MY PARTICIPATION IN MANAGEMENT REFORM OF THE
DISTRICT OF COLUMBIA GOVERNMENT.

YOU MAY RECALL MY TESTIMONY BEFORE YOU IN FEBRUARY
1995, WHERE I REQUESTED:

- INCREASED FEDERAL SHARE OF MEDICAID;

- FEDERAL INSURANCE OF OUR CAPITAL DEBT;

- ASSUMPTION OF THE UNFUNDED PENSION LIABILITY;

- TAXING AUTHORITY ON NON-RESIDENT INCOME; AND

- FEDERAL ASSUMPTION OF VARIOUS STATE FUNCTIONS.

I ASKED FOR THESE THINGS TO HELP INSURE THE FINANCIAL
STABILITY OF OUR CAPITAL CITY, TO BETTER ALLOCATE
RESPONSIBILITY FOR CERTAIN STATE AND MUNICIPAL
FUNCTIONS, AND TO IMPROVE THE ECONOMIC VIABILITY OF THE
DISTRICT. SOME, BUT NOT ALL, OF THESE ISSUES WERE
INCORPORATED INTO THE REVITALIZATION ACT LAST JULY.
THE FINAL VERSION AND ITS MANAGEMENT REFORM PROVISIONS
SURPRISED ALL OF US AND EXACTED A TOLL ON DEMOCRACY.

MR. CHAIRMAN, BEFORE I CONTINUE, LET ME THANK YOU FOR
THE HARD AND CONSTRUCTIVE WORK YOU DID TO GET THE
REVITALIZATION ACT PASSED BY THE HOUSE OF
REPRESENTATIVES. HOWEVER, IT WAS IN THE SENATE WHERE
SENATOR FAIRCLOTH WAS SUCCESSFUL IN GETTING THE SENATE
AND THE HOUSE TO AGREE TO HIS IMMORAL AND ANTI-
DEMOCRATIC-SO-CALLED MANAGEMENT REFORM. MORE ON
THAT LATER.


137

basic functions which D.C. residents depend upon. Under the D.C.
Control Board and Anthony Williams, the Chief Financial Officer (CFO),
our members have endured many hardships, from being laid off to being
stripped of basic due process rights. Mr. Williams has expressed time and
time again that Congress has conferred such sweeping authority upon him
that he can now disregard basic collective bargaining rights and the
Comprehensive Merit Protection Act (CMPA). We are extremely
concerned that the implementation of the management reform plans will
result in further erosion of basic employee rights, conferred by collective

bargaining agreements, and personnel laws and regulations.

Like everyone else in this room today, our members take pride in
their work. They want to do a good job. They have done a good job and
they want to be appreciated for doing so. There is probably no one in
this city who is as frustrated and angry when things don’t work in the
District than our members because it reflects so directly on them. While
everyone in this room is disappointed or upset when they drive past an
overflowing trash bin, it is far worse for the man or woman who was

supposed to clean it, but couldn’t because a part necessary to make their


55

In accordance with Section 11103 of Public Law 105-33, The National
Capital Revitalization and Self-Government Improvement Act (Revitalization Act),
the District of Columbia Financial Responsibility and Management Assistance
Authority (Authority), submits to Congress its report of Management Reform plans
to improve services delivery in the District Government.

The Introduction and Summary of this report provides a brief introduction to
the legal requirements of the statute and the process by which the Authority
obtained consultants and reviewed management reform proposals. The Summary
also provides a discussion of the major reform projects selected by the Authority for
implementation, with the assistance and counsel of the management reform teams.

Volume II of this report, Projects and Implementation Plans, provides the
detailed implementation plans for the management reform projects, provides an
estimate of net benefits and potential for revenue generation, and establishes
timetables and officials accountable for effective implementation.

Introduction

The Revitalization Act, which was signed by the President on August 5,
1997, required that the Authority engage consultants to develop and to implement
management reform plans to improve public services for the following departments
and government-wide functions: Administrative Services; Consumer and Regulatory
Affairs; Corrections; Employment Services; Fire and Emergency Services; Housing
and Community Development; Human Services; Public Health; Public Works; Asset
Management; Information Resources Management; Personnel Management; and
Procurement. Additionally, through actions taken by the Authority prior to the
passage of the Revitalization Act, the Emergency Transitional Education Board of
Trustees of the D.C. Public Schools and the Metropolitan Police Department have
also developed and are currently implementing plans for major management
reforms. Volume ll provides details on these projects.

Since the passage of the Revitalization Act, the Authority has moved
aggressively to implement the first phase of management reform--the development
of the management reform plans. We are pleased to report that this work been
completed. The consultants have identified the most significant deficiencies
hampering effec public service provision in the District government.
Furthermore, at our direction, they have documented the current state of agencies
and their capacity to undertake needed reforms, and designed management
improvement projects to address those deficiencies.

As required under the Act, management reform teams have been created and
charged with the implementation of reform plans recommended by the consultants


2

Without the control board, we would not have been in a position
to pass and see signed into law last year the D.C. Revitalization
Act and related measures. The result has been a basic restructur-
ing of the relationship between the Federal Government and the
District of Columbia.

Key elements of the Revitalization Act include Federal assump-
tion of certain functions performed by State governments and in-
centives for economic development and private sector jobs. The Dis-
trict’s financial and managerial tasks were reduced through cost
avoidance of some of the fastest growing parts of its budget. Au-
thorization of any funds was conditioned on specific budget and
management reforms. The Federal Government is making signifi-
cant investment in many key areas. Tax incentives were also in-
cluded in the equally historic Tax Reform Act of 1997.

The management reforms were not motivated by a desire to con-
fer or remove specific power from existing governmental entities.
Rather, it sprang naturally from a strong desire to provide direc-
tion to the Control Board and the city. I am convinced that man-
agement reform is the key to the District’s future.

Because so many of the issues addressed in the Revitalization
Act were time sensitive, passage of a consistent city budget was es-
sential, and this was done.

Information, systems, and the right personnel must be in place
before progress can be made in any endeavor. In the District, we
now have had 2¥2 years of investigations, data collection, and anal-
ysis by the control board. Spending controls, systems, consultant’s
reports and recommendations are in place. Now we have an experi-
enced operational manager ready to implement reform and revital-
ization of city services and process.

I look forward not only to the testimony but to the results that
must follow. Today we will continue our review of the progress that
has been made and assess the timetable for implementation of the
management reforms. I am interested in learning how the manage-
ment plans were decided upon, what role the teams mandated by
the statute played in the process, the scheduling and sequencing of
implementation, the costs over time, and the role to be played by
the chief management officer.

Some concern has been expressed about the process being fol-
lowed for decisionmaking ang implementation. The subcommittee
looks forward to hearing any such concerns.

I also look forward to assessing the prospects for regulatory re-
form, another key area addressed in the Revitalization Act.

So while I acknowledge the historic accomplishments which have
been achieved, it is clear that many serious issues remain, and the
momentum must be maintained.

I look forward, as always, to working with my colleagues, the
control board, the controller, the city government, and all those
who can help us build on the progress we have made.

I now yield to Delegate Norton, the ranking member of the sub-
committee, for an opening statement.

[The prepared statement of Hon. Thomas M. Davis follows:]


12

facilities to house them should be completed. Volume II describes the phase-out
plan elements addressing the various aspects of transferring felons from the DC
DOC to the FBOP.

VI. Department of Public Works

The Department of Public Works (OPW) consists of five major operating units,
providing the following services:

e Solid Waste Management Administration (SWMA) -- trash collection
and street cleaning;

° Division of Motor Vehicles (DMV) - parking management, department
‘of motor vehicle functions and traffic, parking, and solid waste ticket
adjudication;

e Division of Transportation (DOT)? -- design and construction services
for most District government-owned buildings and for transportation
systems; maintenance of streets, bridges, traffic signals, street trees,
and signs; environmental, transportation, and facilities planning and
policy support; capital programming; and coordination with the
regional mass transit authority and oversight of the school transit
subsidy and other related transit programs;

e Fleet Management Administration (FMA) - maintenance of DPW’s
vehicle fleet and the District's non-emergency fleet;

e Facilities Operation and Maintenance Administration (FOMA) --
maintenance for most District government buildings.

A survey of 1,201 District households last Spring revealed the depth of
dissatisfaction with District services. in particular, street repair and maintenance
garnered the worst rating of all District services: 77% of respondents rated street
repair and maintenance “poor” or “very poor.” Trash collection was rated “fair” or
“poor” by 50% of citizens surveyed — and this was the best rating for any of the
DPW services.”

A closer look at DPW services in an October, 1997, survey showed that the
four most frequently mentioned public works services said to be “most important”

2 Formerly the Design Engineering and Construction Administation (DECA), the Office of Policy and Planning
(OPP), and the Office of Mass Transit (OMT). .

“Washington, DC, Residents Study,” a Spring, 1997, telephone survey of 1,201 adult residents conducted forthe
District of Columbia Financial Responsibility and Management Assistance Authority, July 17, 1997.



27

Mr. Davis. Chairman Cropp.

Ms. Cropp. Good morning, Co! ssman Davis and members of
the subcommittee. I am Linda W. Cropp, chair of the Council of the
District of Columbia. On behalf of the council, I am pleased to ap-
pear before you today to testify on the management and regulatory
reform initiatives mandated by the National Capital Revitalization
Act of 1997.

I join the Mayor in thanking you for your interest in the District.
I concur with our own Congresswoman, Eleanor Holmes Norton,
that we all need to work together in an effort—and do those things
that are necessary, in an effort to expedite the return of democracy
to the citizens of the District of Columbia.

In the beginning of the management reform process, the council
had concern re; arding the failure of the financial authority to con-
sult the council and the Mayor regarding the selection and cost of
the consultants. The council could have provided valuable input in
crafting the scope of work in the request for proposals prior to the
award of the contracts. This would have eliminated significant
issues that were missed in the consultant's report.

However, after these initial concerns, due primarily to the short
time period the financial authority had to obtain the consultants
and complete the necessary tasks, the preparation and selection of
the management reform initiatives was a collaborative process with
all of us being involved.

Accepted projects which required no additional budget resources
were immediately implemented, or they were continued. For other
recommendations, the team applied a cost-benefit analysis of all of
the projects, examining the costs of the projects, potential revenue
that would be generated, and the benefits to the customers served.
The teams closely examined the crosscutting issues and initiatives,
personnel, procurement, information technology and asset manage-
ment to ensure the initiatives would complement one another.

That being said, let me tell you the easy part is over. The more
significant course of action has yet to be completed; that is, the im-
plementation of the management reforms. implementation of
these reforms will require continued collaboration among all of the
members of the management team with adequate input from each
team member.

Many of the recommendations are not new. Quite frankly, over
the years numerous studies, reviews, and recommendations have
lined the shelves. The important difference this time is funding for
the implementation of these recommended initiatives.

I want to raise two council concerns in the implementation of
these plans. The first concern is the financing of the management
reform. A variety of funding sources are proposed for its financing.
These funding sources include existing appropriated operating and
capital budgets and initiatives that will generate cost savings and
increase revenues which can be reinvested in the management re-
form.

The council is concerned that some of the costs associated with
the reforms are underestimated, or it is unclear exactly how the
costs will be obtained. Further analysis is needed prior to imple-
mentation. Without such further analysis, there exists the possibil-
ity of uncompleted projects or, even worse, cost overruns that could


10

also require that a Corrections Trustee be appointed by the Attorney General of the
United States to oversee the financial operations of the DC DOC until such time as
all sentenced felons have been transferred to the FBOP.

The major problems identified during the assessment phase of the
Management Reform Initiative follow:

Numerous court orders address issues, facility by facility, but not in a
systemwide manner. These have resulted in a disproportionate distribution
of services, resources, and staff among the eight facilities within the DC
Doc.

Staffing problems include low morale because of job insecurity,
understaffing in some facilities compensated for by an inordinate use of
‘overtime, abuse of sick leave because annual leave was not being
allowed, and staff leaving at an alarming rate since the announcement of
the future closure of the Lorton complex.

Facilities were poorly maintained over an extended period of time and
need fairly extensive capital improvements to appropriately house and
secure inmates until the Lorton complex is phased out.

Perpetual reactive crisis management of the DOC due to limited
resources, political interference or indifference, and a management
information system that does not provide accurate, timely data from
which rational management decisions can be made.

Policies and procedures regarding all operational aspects of the DOC that
for the most part are totally outdated and inappropriate. Without these
relevant criteria, operational efficiency is difficult to evaluate in a manner
that holds staff responsible for their actions or inactions.

Medical and mental health services are inadequate at the Lorton facilities
due to the lack of full-time medical management and an inadequate
medical budget. The medical budgetary resources are now vastly
disproportionate between the facilities located in the District and at
Lorton, partly because of a court order that placed the detention facility
medical services into receivership but did not address medical services in
a systemwide manner.

An inadequate and outdated inmate classification system has been
modified on numerous occasions. Two types of classification systems are
needed: one for pretrial detainees and sentenced misdemeanants, and
another for the sentenced felon inmates to be transferred to the FBOP.


146

Mr. Davis. First of all, thank you both for sitting through pre-
vious testimony. I think you saw some of the concerns of Mem!
about some of the issues you have addressed here. We want to con-
tinue to address them.

I might add, we have staff from the Senate Appropriations with
us here today, and we all want to see some of these issues resolved
ina way they haven't been today.

I don’t think there was anything in the Revitalization Act that
in any way abrogates or was intended to abrogate existing labor-
management contracts. As you know, I have stated that in writing.
Other members of the committee have done that, too. We have reit-
erated our position at our last hearing on December 19. Given that,
what is the status of this matter between your unions and the Con-
trol Board?

Mr. SCHLEIN. First of all, I really want to thank you, Mrs. Nor-
ton and Mrs. Morella, for the strong action that you have taken on
this matter. It really has made a big difference.

As I understand it, at this point, in terms of the grievance arbi-
tration process, the Control Board has decided not to issue the
rules that they were going to issue, that they are going to draft
some new rules. We have a commitment from them that they are
going to be working with us in fashioning them in a way that
meets the intent of the act but still doesn’t violate the collective
bargaining agreements. We will be working with them on that.

lam also proud to say that Tuesday the city council will be doing
the first reading of the Comprehensive Merit Personnel Act provi-
sions, which streamlines the appeals process in the District consid-
erably, but still provides for collective bargaining rights, and we be-
lieve that it provides the basis for permanent solutions to the prob-
lems that have been raised about that.

Mr. Davis. Mr. Hicks, any comment?

Mr. Hicks. I concur with what David just said. We certainly
wanted to thank you, Chairman Davis and Congresswoman
Morella, for the urging that you have put forth in terms of your in-
tent of the legislation. I think certainly when the authority begins
to understand the intent of the legislation to come back and recon-
sider it, it has pleased us.

Mr. Davis. Let me just ask my last question, what has labor’s
involvement been in selection process and has there been dis-
cussion of labor’s role in the implementation process? You sort of
addressed it in your testimony, but is this still on the table? Do you
know where you stand? Clearly, on the salary issue, you are caught
betwixt and between. We want to help to get that resolved. Are you
satisfied with your role in the implementation process to date, or
are there still some question marks?

Mr. SCHLEIN. There are a lot of question marks. I would say that
institutionally we have pretty much been shut out of the implemen-
tation process. There were efforts by Mrs. Neuman, certainly, in
the Control Board to direct the consultants to get input from
unions. Some did, some didn’t. As we stated in our testimony, we
thought that those that did get employees involved really did much
better reports. It really had a good handle on what was involved.
We are now asking—we have requested a meeting with Mrs.
Barnett and members of the Control Board to further go over this.


63

savings or revenue enhancement, improved service quality and customer
satisfaction, increased operational efficiency throughout DHS.

Il. District wide Procurement Operations

Reports issued by the Authority during fiscal year 1997, further
substantiated by consultants’ reviews, have confirmed that the District's
procurement operations are in crisis and do not provide effective public services.

Currently, there are two major organizational units of Procurement: Central
Procurement (OCP) and Agency-based procurement personnel. The OCP has
approximately 49 people, reporting to the Chief Procurement Officer (CPO), who
recently established a quality assurance auditing function for the District's
contracts. Approximately 200 Agency-based procurement staff report to Agency
heads and, together with Program Management, have had primary responsibility for
development of the District's contracts. Responsibility for packaging and execution
of contract authority has been granted to the Agencies by various authorities and
legislative mechanisms. Some Agencies are subject to the Procurement Practices
Act, while others are exempt.

The major problems and opportunities for improving service delivery and
instituting permanent management reform in the D.C. procurement process are
described as follows:

* Variability. Currently, contracts are developed in the Agencies without benefit
of a District-wide Procurement Policy and Procedure Manual or any common
quality assurance standards. Performance based Statements of Work, objective
comparison of bids, and effective contract management are of poor quality or
frequently nonexistent. The lack of standards makes it time consuming and
expensive to do business with the District, and risks supplier protests, which in
turn disrupt contract executions.

* Cost, District procurement operations are not organized to deliver effective or
efficient services. Compared to benchmark municipalities, the District pays too
much for its goods and services, employs too many people, and takes too long.

* Slow payment. In the past, vendors were not paid, or paid after long delays.
Many good vendors now refuse to do business with the District. Agencies note
fewer and fewer good quality responses to bid offers. *

* Lack of accountability for procurement by any one other than the CPO. The
majority of Procurement staff in the District report not to the CPO, but to the
Agency heads. The CPO currently re-delegates certain contracting authority to


20

AUTHORITY IS THE ULTIMATE DECIDER OF POLICY. IT IS BEING
MANAGED LIKE NO OTHER GOVERNMENT IN THE FREE WORLD.
APPOINTED AND ELECTED OFFICIALS.... RECEIVERS...
CONSULTANTS..... THIS FRACTURED MANAGEMENT STRUCTURE
HAS NEVER BEEN TRIED OR TESTED. IT IS NOT BEING TAUGHT IN
PUBLIC ADMINISTRATION CLASSES, I CAN ASSURE YOU OF THAT.
IT HAS CREATED CONFUSION. MANAGEMENT CHAOS.
DUPLICITY. COMPETITION. DISRESPECT. LOW MORALE. WE
MUST WORK TO CORRECT THIS INJUSTICE THROUGH THE BUDGET
PROCESS.

SEVEN MONTH HAVE PASSED AND I HAVE SEEN AND FELT AND
HEARD A NEGATIVE IMPACT AND IJ AM MAKING AN APPEAL TO
YOU NOW TO CORRECT THIS TRAVESTY.

I URGE YOU TODAY TO INITIATE A “MEMORANDUM OF
UNDERSTANDING” SIMILAR TO THE METROPOLITAN POLICE
DEPARTMENT TO MANAGE DISTRICT GOVERNMENT AGENCIES
AND TO FACILITATE THE REFORM PROCESS. AGAIN, I REPEAT IT
SHOULD BE MUCH LIKE THE ONE USED FOR THE METROPOLITAN
POLICE DEPARTMENT, WHICH IS A COLLABORATIVE PROCESS
INCLUDING STAKE HOLDERS WORKING TOGETHER FOR THE
COMMON GOOD. THE METHOD HAS WORKED WELL WITH THE
METROPOLITAN POLICE DEPARTMENT , IN THAT REFORM HAS
OCCURRED AND CRIME HAS BEEN GREATLY REDUCED. IN 1997,
OVERALL, CRIME DECLINED 20% WHILE HOMICIDES ARE THE
LOWEST IN 10 YEARS, AND THE POLICE DEPARTMENT DOES NOT
REPORT DIRECTLY TO THE FINANCIAL MANAGEMENT
AUTHORITY, NOR DID THE FINANCIAL AUTHORITY SOLELY
DIRECT THE MOU REFORMS. IMPROVEMENT OF THE POLICE
DEPARTMENT IS BEING IMPLEMENTED AND MONITORED BY
HIGH-LEVEL STAKEHOLDERS WORKING COLLABORATIVELY.


37

Mr. Davis. I wanted to ask one quick question and will turn it
over to Mr. Horn for questioning. You both have touched on the
regulatory reform, the fact you have had a very comprehensive
package, the business community has been involved, you have held
hearings, you have passed some legislation. Have either of you seen
the Holland and Knight report?

Ms. Cropp. I have seen excerpts from it. I have not seen the en-
tire report. I have been briefed. It seems to a certain extent to con-
tain a lot of the work that had been done in the commission’s re-
port, and thereby our concern was raised even more that $800,000
would be paid to duplicate an effort.

Beyond that, when you have members of your community who
come and volunteer their services in a pro bono measure or effort,
it sort of undercuts the potential for that occurring again. You may
have some other individuals who you would like to come and do pro
bono work, but their answer could be, we need $800,000 or $1 mil-
lion in order to do it, particularly when it is a duplication or a lot
of the work may be almost what they had done in the first place.

Mayor Barry. Mr. Chairman, I have seen the report. I have not
read it cover to cover, but a lot of what was contained in the report
was already known or had been done by the Business Regulatory
Commission. That is why I said earlier in my statement that the
Control Board should have not paid $800,000 to get that kind of
information.

Mr. Davis. I understand. Let me say this. I have not read the
report. I understand there may be some additional things. The fact
they put in some items that our people recommended and held
hearings on is a validation of what your people have done.

When the report is released, I would ask you to supplement any
comments and send them here. I am going to reserve judgment
over whether this is a good or bad idea until I have seen the report.
I would ask you to do the same. The committee is really interested
in if there are additional ideas that come out of this report, so
please send your comments up to us so we can sit down and ad-
dress what is doable in the political process.

Mayor Barry. Let me say the Board of Trade and political coun-
cil and other organizations were very happy, very satisfied with the
breadth and comprehensiveness of what the council passed. Of
course, there was some concern the council didn’t deal with the
whole question of rent control or the Environmental Policy Act, but
those were the only two areas where I think there was some dis-
agreement between the business community and Mayor and City

ouncil.

Mr. Davis. When the total report comes out, read it, then supple-
ment your comments, so we can sit down and continue with discus-
sion. We are clearly moving in the right direction with what you
have done, even without that report. I will concede that. When the
total report is written, my understanding is there are some addi-
tional ideas that you might want to entertain, and we can learn
from each other. I would be happy to hear your comments at that
point.

Let me recognize the gentleman from California.

Mr. Horn. Thank you very much, Mr. Chairman.


57

There is an immediate need for training to restore this expertise so that the
District can more effectively manage its public sector workforce.

The procurement system is largely ineffective. A lack of planning and confusion
cover the responsibilities of all the participants have hindered the procurement of
vital services.

The average age of the Public Works fleet of sanitation trucks and plows is 7.8
years, twice as old as the industry standard. Less than one-fifth of vehicle
repairs are completed within 48 hours, the industry standard.

The second step in developing the management reform plans consisted of the
identification of management improvement projects that could address the many
deficiencies cited by the contractors during the assessment phase. On October 25,
1997, the consultants submitted recommended improvement projects. Then, on
November 25, 1997, the consultants, within 90 days of being hired, submitted the
final management reform plans.

The Authority has reviewed proposed projects -- those submitted by the
consultants through the reform teams, as well as additional projects presented by
the Council. A data base was assembled to assist in the review, and final decisions
took into affect all relevant factors and stakeholders. Nearly 400 projects were
originally identified, both through the Management Team process and the additional
recommendations received by the Authority from the Council and elsewhere. Staff
developed decision criteria to aid in the selection process. Among them were
revenue generation, cost reduction, customer impact, and the likelihood of
successful implementation. Additionally, projects were considered with respect to
their impact on improving public health and safety and their effect on multiple
government programs or functions. Using these criteria, the Authority selected
269 projects for implementation. .

lt is important to note that sufficient resources exist to support
implementation of the management reform projects, whose estimated costs are
$184.9 million, included in the Management Reform Plans. To fund the projects, a
variety of sources will be used. There is $44.4 million in the existing fiscal year
1998 appropriated operating and capital budgets to support some of the projects.
In addition, the projects will generate an estimated $140 million in cost savings and
increased revenues, which can be used to support the projects. We have also
anticipated using $30 million in new capital authority. The fiscal year 1998 District
‘of Columbia Appropriations Act contained a direct appropriation of $8 million in
Federal funds for this purpose. And finally, in accordance with statute, we will
expend funds from the net benefit (surplus) generated by the Revitalization Act's
implementation. These various sources will enable projects to go forward without
affecting the Authority’s commitment to substantially reduce the deficit by the end
of fiscal year 1998.


23

THIS IS MY RECOMMENDATION ON MANAGEMENT REFORM,
GOING FORWARD: AN AGREEMENT MUST BE REACHED AMONG
THE PARTNERS, SIGNED AND MODELED AFTER THE POLICE MOU
PROCESS.

>

I WILL NOW ADDRESS REGULATORY REFORM. ON WEDNESDAY,
JANUARY TWENTY-FIRST I SIGNED LEGISLATION IMPLEMENTING
SOME OF THE RECOMMENDATIONS OF THE _ BUSINESS
REGULATORY REFORM COMMISSION, WHICH I APPOINTED TO
EXAMINE REGULATORY AND BUSINESS PERMIT REFORM. THIS
LEGISLATION WILL PROVE VALUABLE TO THE FUTURE
ECONOMIC DEVELOPMENT OF THE DISTRICT OF COLUMBIA.

THE BUSINESS AND REGULATORY REFORM COMMISSION
DEVOTED 4,000 HOURS OF UNCOMPENSATED TIME AND
DEVELOPED 120 SUBSTANTIVE RECOMMENDATIONS. DESPITE
THEIR HERCULEAN EFFORTS, THE FINANCIAL AUTHORITY
DUPLICATED THEIR EFFORTS BY SPENDING MORE THAN $800,000
ON A CONSULTANT TO STUDY REGULATORY REFORM.

THE COMMISSION FOUND AN OVERRIDING NEED FOR
TECHNOLOGY, AUTOMATION AND TRAINING AT DCRA. IT
RECOMMENDED PLOWING FEES AND LICENSE REVENUES BACK
INTO THE AGENCY TO FUND THESE INITIATIVES. THE
CORPORATION COUNSEL WILL RIGOROUSLY REVIEW THE
RULEMAKING PROCESS TO ENSURE THAT ALL D.C. LAWS THE
COUNCIL PASSES HAVE RULES WHICH ARE WRITTEN, APPROVED
AND ENACTED.


144

all of us, particularly the front line workers and their representatives in

the process of reforming the way the City is run.

I would like to conclude by saying that the men and women who
work for the District of Columbia are hard working people who should
not serve as scapegoats for all of the problems facing this City. We are
well aware that the time for change has come. We have been ready to
actively participate in this process for a long time. However, we did not
expect that when the Congress and the Administration finally decided to
make changes that the workers would be swept under the table, or told
that we are a liability and a hindrance to progress. But this is the message
which has been sent down the ranks to us. Reform should not mean that
the men and women who are the front line workers should have their
basic workplace rights taken away. We renew our pledge to work with
the new City Manager, the Control Board, the City Council, the Mayor

- and the Congress in making the necessary changes which will make
Washington , D.C. the great capital city which we all know it can be.
This is where we work. This is where we live. We want to be proud of

how the city government operates.


90

Mr. Horn. Thank you.

Mr. WILLIAMS. Mr. Chairman, just a few brief remarks.

I think we are all aware now of the better financial performance
in the District government. We have talked about better revenue
collection. This better revenue collection basically comes in three
parts: Better tax collection, whether it be auditing and processing
on our part; better compliance by District taxpayers who know now
that we are serious about our collection efforts, and are complying
much more probably than they did before; and a better economy.
And so this better revenue collection, along with a serious effort
with the support of the authority, the support of the Mayor and the
council, a serious effort at spending control, has brought us now
substantial progress that we have realized in not only 1998 but
1997, where I am pleased to say I checked with the home office
earlier this morning, that at a minimum now we will realize, a
minimum surplus in 1997 of $100 million. And this is not including
the sale of the Correctional Treatment Facility, which could bring
this number up. And this is an accounting question.

Mr. Davis. That was a surplus in fiscal year 1997?

Mr. WILLIAMS. Of at least $100 million. And so things are mov-
ing in the right direction.

Mr. Davis. Not to interrupt you, but the original projection for
fiscal year 1997 was what?

Mr. WILLIAMS. The original projection was a deficit the other
way, a deficit of $74 million.

Mr. Davis. Excellent. Thank you.

Mr. WILLIAMS. Again, with the support of the Authority, which
I like to think of as the offensive line clearing the way, we have
also made progress now with the financial markets, with the credit
markets, and I believe that the District will continue to realize a
lower cost of borrowing month by month, year by year.

And I think that as Congresswoman Norton recognized, we
achieved a consensus budget for 1998 ultimately, and I think we
are on our way in terms of a process in 1999, moving toward a con-
sensus budget.

Now, Mr. Chairman, I believe very strongly that there are funds
available along the lines that both Dr. Brimmer and Dr. Barnett
discussed; there are funds available in 1998 to cover management
reform projects.

I say this for a number of reasons: No. 1, a number of the
projects I think will ultimately be paid for by cost avoidance and
revenue generation; No. 2, as I will outline in a second, we have
increased revenue that we are now making a preliminary estimate
of for 1998; and I think, No. 3, as we all look at the spending plans
and the action plans for the agencies, we all realize that when we
talk about these projects we are, in fact, in many instances talking
about a multiyear agenda, that given all the issues in the District
government, that many of these projects will actually unfold over
a multiyear period. So I am quite confident in saying that there
will be funds available for the very aggressive and ambitious man-
agement reform agenda that Dr. Brimmer outlined while at the
same time maintaining the commitment that I think all of the
stakeholders have had for the last 2% years at deficit reduction.


44

And these could be jobs where if they have no skills you could
be training them as long as they are—they can relate to people and
so forth. And I just wonder if, as an economic development matter,
it seems to me the city ought to be thinking about something like
that.

Ms. Cropp. Congressman, we are extremely excited about a new
economic development corporation and also we have the ability to
deal with TIFF’s in the city, to look at those areas where we have
had absolutely no development. We have cooperation between the
business community, between the government. We are getting
neighborhoods that are actually excited and for the first time you
really see neighborhoods that are interested and are competing to
try to bring economic development into their community because in
the past it has been not in my backyard.

So we are looking forward to opportunities with the EDC, the
Economic Development Corp., with our TIFF legislation to be able
to possibly do some of the things that you just articulated.

Mayor Barry. Also, Congressman, you mentioned _professional-
ism. | am happy to report that we do have in our planning office
a highly skilled, highly trained professional planner who runs it,
Jill Dennis. We also have in the Department of Housing and Com-
munity Development a very professional director, Richard
Monteilh. He was the executive director for all of the construction
of the Olympics in Atlanta, so he managed over $2 billion of con-
struction. So we now have him here in Washington thinking about
downtown housing, which we need, thinking about the ideas you
had about trying to get Disney or someone to come in and do a
major kind of development.

fe have a very controversial project but it is the National Chil-
dren’s Island over at the Anacostia River. I would like to get with
you privately just to further discuss some of your ideas about eco-
nomic development and reforming government and sort of pick
your brain about that.

Mr. Horn. Thank you.

Mayor Barry. Your ideas.

Mr. Horn. Chair Cropp and Mayor Barry.

Mr. Davis. Thank you, Mr. Horn.

Ms. Norton.

Ms. Norton. Thank you, Mr. Chairman.

I would like to acknowledge that councilmember Hilda Mason
has arrived and to welcome her to this hearing.

Mayor Barry, let me—as you might—as you might have heard
from my opening statement, I regret that we have layer upon layer
of government and it hasn’t worked very well very often. Your tes-
timony indicates that the MOU process is working; it probably is
the best example in the present government structure for some-
thing that has worked reasonably well.

This isn’t a structure that you invented. It is a structure that
Congress imposed while proclaiming nevertheless the desire for
more efficient government.

Congress transferred nine agencies and left you with several oth-
ers. You wrote the Control Board with an interesting proposition
some months ago, and I would like to question you about that prop-
osition given the success of the MOU process, and I judge that suc-


85

The changing role of the federal government and the way in which health
care is being financed has forced local public health departments to examine their
roles and responsibilities and to ask themselves not only “Are we doing things
right?” but “Are we doing the right things.” The DOH has not yet gone through
this exercise and does not have an institutionalized strategic planning process. As
a result, there is not an appropriate alignment of its goals, objectives, functions,
staffing and budgets.

In the DOH, inconsistent leadership and weak strategic planning has also
resulted in weak policy development and advocacy. Much greater collaboration
with the community is needed in developing and advocating policies and legislation
which will impact on the major health problems, especially among the most needy.

The consultant's assessment report detailed a number of serious staffing
problems ranging from cumbersome recruiting, unclear job descriptions and
reporting relationships, weak supervision, lack of staff development and training,
and flawed promotion processes. These, in turn, have often ted to problems of
poor morale, lack of required competence and poor performance.

The assessment report also detailed a host of business processes that need
improvement or re-engineering. Examples include:

procurement of equipment and supplies,
contracts with service providers,

grant applic
assuring the use of all grant funds,

assuring the use of appropriated funds,

staff recruiting and hiring,

revenue generation,

performance measurement,

claims processing

and fraud detection by the Health Financing Care Division.

ee rey

The DOH needs to develop the capacity to undertake business process
improvement on a continuing basis, primarily using its own staff, although there
will be times when outside consultant help will be cost effective.

As is true for many of the District's agencies, the DOH is far behind in the
technology that it needs to function efficiently or to position itself to be a leading
public health department in the next century. Improved automation is not a luxury.
It is essential to enable it to process the work required by other city or by federal
agencies, such as HCFA, and to create the efficiencies and productivity necessary
to meet its objectives within budgetary constraints. The department lacks
computers, data bases, local area networks, connection to the Internet and modern


62

Management Reform actions will address DHS' failure to effectively reform the
District's welfare program to reflect short-term assistance, work participation focus
and to convey this to staff and recipients alike. It entails changes in the agency's
work-related programs, effective implementation of new welfare-related policies
within {MA and in key related programs, such as the child care subsidy program. It
also calls for the use of formal change management techniques in recognition of the
complexity and scope of changes required to carry out this action.

We will also take advantage of opportunities to consolidate DHS components
and field offices, and to reassign staff to improve the agency's ability to carry out
its mission effectively and at the lowest possible administrative cost. Our work will
also include steps to establish appropriate operating policies and procedures, as
well as measures to ensure on-going evaluation of the effectiveness and
appropriateness of DHS office operations and correction of operational weaknesses.

A DHS automated systems plan and implementation priorities will also be
developed. This action is directed at imposing a structure on DHS automated
systems acquisitions, funding, and implementation activities to ensure that the best
decisions are made and, once made, are appropriately supported. It entails
requirements analyses, prioritization of needs, delineation of financing options, and
development of overall standards and guidelines for systems-related acquisitions
across DHS.

The Authority also recognizes the need for a three-part effort to bring DHS the
maximum allowable in federal funding. One part of the effort is intended to
ameliorate the impact of past practices that have left available federal funds
untapped by establishing retroactive claims under various entitlement programs as
well as making claims under those programs on an on-going basis. Other parts of
this effort involve obtaining new federal welfare-to-work grant funds, and
developing a sophisticated approach to documenting TANF maintenance-of-effort
expenditures in order to free-up District funds no longer needed to operate the
welfare program because of caseload reductions.

Finally, we will seek to establish and implement policies, standards and
practices to improve provider management and control across DHS programs. This
action is directed at imposing effective DHS controls over the hundreds of
community-based providers used to deliver various types of services to DHS
customers. It encompasses changes in contracting requirements and language,
establishment of standards for provider management and monitoring, development
of uniform ratesetting practices, and imposition of requirements for outcome-based
reporting by service providers.

We believe that the implementation of the Department of Human Services
Management Reform Plan will confer numerous benefits, including significant cost


86

phone systems. This has resulted in inadequate management information, inability
to track budgets and expenditures, difficulties in analyzing health information and
tracking public health problems, and poor customer service.

The Authority expects that the DOH will implement a comprehensive
strategic planning process and assume a much more proactive policy development
role in close collaboration with community stakeholders. The most important
‘outcomes of policy development will be in new legislation and programs. Other
outcomes will result in changes in DOH policies and programs. We have proposed
a large number of management reforms project to improve staffing and staff
performance. The most important outlines a comprehensive workforce analysis
that would take place after the strategic planning exercise. This could result in the
elimination of unnecessary staff positions and the re-assignment or re-training of
affected staff. A skills inventory and needs assessment is also necessary to
provide the training necessary to get staff up to the needed competency levels.

Several projects are designed to improve the hiring process, identify staffing
gaps and recruit needed staff. Another is directed at measuring staff performance.
Projects related to business process re-engineering (BPR) have the greatest potential
to improve performance while at the same time reducing costs. A large number of
projects are of the BPR type. They should be carried out in such a way that DOH
staff develop the capacity to conduct BPR in the future “on their own” with no or
minimal consultant help.

The strategic planning, leadership and policy development projects benefit
the District's population because they identify the health priorities, engage the
stakeholders and direct scarce resources into programs and strategies that will be
most effective in achieving health goals and satisfying the departments clients. If
done well, they will put the DOH in the position of being a national leader among
local health departments, ready to tackle the difficult public health problems that it
will face now and in the 21st century. They will also facilitate the analysis and re-
design of the department's infrastructure so that organizational structure, staff,
work processes and desired outcomes are aligned.

The projects aimed at improving staffing and staff performance will improve
customer service and program outcomes. The planning projects and the specific
performance measurement improvement projects will result in performance
measures that include not only customer satisfaction but also improvement in
health indices.

The business process re-engineering (BPR) projects increase revenue which
increases the funds that can be applied to improving or expanding service delivery.
By increasing productivity and efficiency they also result in faster, better service
and in improved client satisfaction. Additional technology and automation will go



121

As the City’s more than 10,000 front-line unionized workers
continue to do their jobs despite furloughs and salary and
benefit reductions, they wait for the Authority and the CFO to
deign to give their collective bargaining agreement an audience.
Few if any contracts which fall under the authority’s purview
affect the well-being of so many District residents and
taxpayers. Why has the ratified contract not been signed or
implemented? AFGE urges the members of this committee to assist
us in holding these appointed City officials accountable for

their bewildering behavior.

Weekly our members hear tales of management bonus and executive
pay raises while a $100 lump sum bonus payment for our members is
lost in the bickering between the Mayor, CFO and Control Board.
A court mediated settlement from previous Comp 1 and 2
negotiators agreed to months ago still waits for Control Board
approval. The CFO has earned a prominent place in labor’s Hall
of Infamy for his union-busting tactics and his abuse of

employees.

Yet we have persevered. We understand that our members’ futures
are dependent on resolving the city’s ongoing financial and
management crisis. We also know that it is the front-line
employees who do the city’s work who must be in the center of any
effort to fix the city’s delivery of services. That is why over

two and a half years ago AFGE, AFSCME and the City successfully


124

6 Flatten and modernize the management hierarchy
7. Support the development and use of skill

8. Create Service Excellence.

Number eight is last, but certainly not least, as we believe the

preceding seven to be its necessary conditions.

Our findings at this point indicate that where union leaders and
members have been actively engaged in the process of analyzing
agencies’ strengths and weaknesses, and formulating reform
proposals, the consultants findings are more accurate and the

ideas for restructuring are seen by workers as more likely to be

effective.

Unfortunately, we have little indication that as agency’s move to
implement recommendations, that employees through their unions

will be involved.

Our report makes several recommendations which we hope will be

implemented:

1. Accelerate the development to the city-wide labor management
committees. The Authority needs to make a strong commitment

to the process.

2. Establish labor-management committees in each department.


31

TNITIAL CONCERNS, DUE PRIMARILY TO THE SHORT TIME PERIOD THE FINANCIAL
AUTHORITY HAD TO OBTAIN THE CONSULTANTS AND COMPLETE 1HE
NECESSARY TASKS, THE PREPARATION AND SELECTION OF THE MANAGEMENT
REFORM INITIATIVES WAS A COLLABORATIVE PROCESS.

THE CONSULTANTS IN THEIR REPORTS ASSESSED THE MANAGEMENT AND
PROGRAM OPERATIONS OF THE AFFECTED AGENCIES, IDENTIFIED IMPROVEMENT
PROJECTS AND PROPOSED MANAGEMENT REFORM PLANS. THE MANAGEMENT
REFORM TEAMS THEN REVIEWED ALL OF THE CONSULTANT
RECOMMENDATIONS, AS WELL AS ADDITIONAL PROJECTS RECOMMENDED BY
THE COUNCIL. MANY OF THE RECOMMENDATIONS WERE FAMILIAR AS THEY
HAD APPEARED IN PAST COUNCIL REPORTS OR EXECUTIVE INITIATIVES.

ACCEPTED PROJECTS WHICH REQUIRED NO ADDITIONAL BUDGET
RESOURCES WERE IMMEDIATELY IMPLEMENTED OR WERE CONTINUED. FOR THE
OTHER RECOMMENDATIONS, THE TEAMS APPLIED A COST BENEFIT ANALYSIS TO.
ALL OF THE PROJECTS, EXAMINING THE COST OF THE PROJECTS, POTENTIAL
REVENUE THAT WOULD BE GENERATED, AND THE BENEFITS TO THE CUSTOMERS
SERVED. THE TEAMS CLOSELY EXAMINED THE CROSS-CUTTING INITIATIVES:
PERSONNEL, PROCUREMENT, INFORMATION TECHNOLOGY, AND ASSET
MANAGEMENT TO ENSURE THE INITIATIVES WOULD COMPLEMENT ONE
ANOTHER. THE RESULT IS AMANAGEMENT REFORM PLAN CONTAINING 269
PROJECTS COVERING EIGHT DISTRICT GOVERNMENT AGENCIES AND FOUR
GOVERNMENT-WIDE FUNCTIONS, AT AN ESTIMATED COST OF $184.9 MILLION.


7

Ms. Norton. Thank you, Mr. Chairman.

Mr. Chairman, I very much appreciate this oversight hearing on
the implementation of management reform in the District govern-
ment because so much is riding on improved services. To be spe-
cific, the stakes are tied to the in of residents which has acceler-
ated rather than abated, the direct needs of our disillusioned, high-
paying taxpayers, and the future of self-government for the capital
of the United States.

Elected officials and the Control Board have already dem-
onstrated that they know how to do it and that they can do it. They
produced a consensus balanced budget a year ahead of statutory re-
quirements, and earned the $1 billion lifesaving President’s rescue
package as a result. The work of Chairman Davis and this sub-
committee on both the Control Board statute and the rescue pack-
age, and of Mayor Barry, the City Council, the Control Board and
the chief financial officer on the budget, is finally bearing fruit. The
District’s problems have not been entirely self-inflicted, but the
city’s repair must be completely self-generated.

The initiative taken by the Congress on management reform was
not the place to begin last summer, and it is not the place to begin
now. The city can be successfully reformed only by a joint venture
of elected officials, the Control Board, and appointed officials.

I appreciate that the Control Board lost no time in complying
with the requirements to implement the reforms that were man-
dated by Congress. I realize that at least some deficiencies in raj
idly produced consultant reports may result in part from the tight
timeframes Congress imposed. Congress was concerned that with-
out these time lines, the process would not get under way fast
enough or be rapid enough to address urgent operational problems.

form is burdened by the District’s multilayered set of officials.
Tronically, while Congress seeks an efficient government, Congress
has imposed a highly inefficient structure to do the job. Neverthe-
less, even the present cumbersome structure can operate far more
efficiently than it has.

For example, nothing in the Control Board’s statute or subse-
quent enactments require sequential decisionmaking. When power
must be shared, decisions and information must always be shared.
The best way to assure efficiency in such a jerry-built govern-
mental structure is to get everyone in the same room at the same
time, rather than operating sequentially in quarrelsome layers.
Collegial decisionmaking for the most part has worked to produce
improved results in the Metropolitan Police Department, for exam-

le.
P Unselfish and mature collaboration is the only way to hasten the
management reform essential to return democracy to the District.
The only way to assure that Congress keeps its promise to return
democracy r 4 years of balanced budgets is to do more than bal-
ance the budget. If the city looks like it does today, I will have a
major fight on my hands to enforce the 4-year provision. I will fight
bare-knuckled, if I have to.

But today I ask elected and appointed officials alike, and resi-
dents as well, to do what is necessary to assure that democracy re-
turns easily, without yet another battle.


139

knowledge we have regarding program inefficiencies and constructive
suggestions we have to make improvements are never heard. Agency
heads should openly endorse the concept of Labor/Management

Committees.

When I was the President of a local union, I routinely met with
managers to discuss how my agency was running. I knew I could stand up
and speak the truth. If a supervisor had made a mistake or an order from a
manager or department official made no sense when applied on the
ground, I could speak out because I was protected by the union and by
the law. My supervisors could only fire me if I engaged in misconduct or
if I did not do my job. He could not fire me because I told him that the
trucks weren’t going out because we lacked the correct spare parts or the
scheduler had created an inefficient route map for the garbage trucks to

follow.

For the past two years we have tried to make labor-management
cooperation and integral part of the District government. I have been

meeting with union officials, representatives of the Mayor’s office, the


147

We would like to see, as I pointed out, the citywide labor-man-
agement committee actually be given some real teeth to move for-
ward. That committee has already shown that it can work. There
have been great results in reforming, for example, of the fleet
maintenance division at the Department of Public Works.

With what is happening now is this limbo, is there is no pressure
or commitment from the top to tell other agencies that they need
to move forward. It really pained me to hear Congressman Horn’s
example, not just because I have experienced it myself, but because

e have recommended to the Department of Public Works to set
up a labor-management committee project at the Bureau of Motor
Vehicles, because we know that our members have great ideas on
how that work can be done better. But management at this point
has been resistant to doing it, basically saying, well, you know, we
have our computerization going on, and we just don’t have the

time.
Well, there is always things to go on, but if making the city im-
prove is not a priority, we are just going to get around the edges.

0 we hope, again, that it gets pushed to a labor-management com-
mittee established. We have gotten great support certainly from
your office and Mrs. Norton on this, as well as resources being put
forward by the administration. The Labor Department has as-
signed people, as has SMCS, to work with us on these matters. At
this point resources are not being well used.

Mr. Hicks. I think what you said, Congressman Davis, that
when you ask the authority to keep you informed in the role that
the union is going to play in the implementation of this, it is key.
I think that as long as there is concern and genuine effort that the
unions are involved in this process and that you are concerned
about the process, the role that we play in this, that that will en-
courage the authority, that will encourage perhaps even the CFO
to be more sensitive to the role that the unions need to be involved
in this whole process. Because certainly if it is to happen and if it
is to happen correctly, the workers have to be involved in it.

Mr. Davis. Thank you. I certainly agree. Let me note Senator
Faircloth hoped to join us this morning but he is tied up with a
committee in the Senate. He has staff here as well. We have ex-
pressed the concerns to them, and with Senator Stevens, chairman
of Appropriations. We want to work as close as we can to try to
get the solutions enacted.

You are part of the solution, not part of the problems in the city.
We look forward to continue to work with you and get the input
of your members who are on the front lines every day and probably
understand this situation in many cases better than all the consult-
ants you could ever hire. Thank you.

Ms. Norton.

Ms. Norton. Thank you, Mr. Chairman.

First of all, I want to commend the unions in this town for really
the very grown up way in which they have responded ever since
the District went down.

Unions have been very sophisticated. At the same time they have
been very militant in the protection of the rights of their members.
The unions understood, for example, as a handful of citizens did
not, that there had to be a Control Board, even though nobody


46

agencies, not seize power, seize control, say I am in charge of all
of this, and we would have had a better structure.

On the other hand, for me to voluntarily say you ought to trans-
fer those agencies over to the Control Board would be giving up
home rule. I mean, that would beh—

Ms. Norton. You can’t do it unless—there is no such thing as
a win/lose here.

Mayor Barry. It is like putting the bullet in the gun and shoot
you.

Ms. Norton. I just want to know one other thing. I think your
proposal, particularly given the fact that the Control Board has the
supreme authority, I think your proposal was a reasonable one,
and at any point that it didn’t work, then, of course, they could al-
ways pull back from it.

I can tell you this much: I don’t think that the taxpayers of the
District of Columbia should have to pay for two administrators, one
who is very high cost that has just been brought in and another
one that has come in under the charter. I don’t think we should
ask people to pay for that, surplus notwithstanding. We have a lot
of things to spend that money on. So I want to encourage you to
continue to press that notion forward.

Let me—

Mayor Barry. Ms. Norton, also in recognition of this bifurcation
here, I am proposing a downsized, restructured city administrator’s
office. I mean, it doesn’t make sense to have a budget the same as
it was before we had these agencies transferred, but there is a lot
of work to be done in the other agencies.

Also, Mrs. Norton——

Ms. NorTON. See, so in the real world of negotiation, the Control
Board should have seized the opportunity to negotiate a downsizing
of your office and of whatever was necessary to save money, so that
all of us could have saved money. See, I don’t understand—and I
understand the negotiations were difficult and, you know, and for
awhile dictatorship works better but ultimately it is costing us
money, and I know that it is—that, you know, you put it forward
and it doesn’t fly, I can only urge you to keep pressing it if for no
other reason in the name of saving money and streamlining the
process.

I also must say that for workers, I resent the notion that there
may be two classes of workers. People may consider that there are
two classes of workers in the District of Columbia. There are not
two classes of workers. There are not some workers who are more
important than others. There are not some workers who should get
the attention of one set of people who have authority and others
who are not deserving of that kind of attention.

And, again, we—as frustrating as it may be, if you get pushed
back on one occasion, I urge you to push forward with them. And,
Ms. Cropp, I urge you to push with them, too. I mean, you are pay-
ing for this, too. If, in fact, you all essentially sanction two govern-
ments within a government—of course, some would say there are
five or six governments within a government.

Go ahead, Mr. Barry.

Mayor Barry. Again, Ms. Norton, I appreciate what you are say-
ing, and I will again press forward on trying to get a more—a


been achieved, it is clear that many serious issues remain and that
momentum must be maintained. I look forward, as always, to working
with my colleagues, the Control Board, the City Government, and all
those who can help us build on the progress we have made.


40

partment has is to make sure that there are signs up, that they
are customer-friendly, the kinds of activities going on there.

Another concern I have is that we can sit in these management
reform meetings and decide policy, but there has to be a commit-
ment on down to the lowest worker that we are going to do these
kind of things, that the customer comes first, so that is the chal-
lenge.

Because of this bifurcated system, where you have the manage-
ment reform teams meeting, you have the city administrator who
has some responsibility for some agencies, and you have the Con-
trol Board responsible for other agencies, you do not have what you
just suggested.

Mr. Horn. In other words, the office of management, where they
could go around and help department heads look at their operation,
given good experience themselves, who maybe have been managers
but also know where best practices are, we don’t have that in the
District?

Mayor Barry. I don’t think so.

Mr. Horn. You see, we have an Office of Management and Budg-
et in the Federal Government. When President Nixon combined the
management function or gave it at least visibility, they had had a
management function with budget. I thought that was a terrific
idea because we get budget clout to have the administrators of pro-
grams pay attention also to the management question. I was dead
wrong.

It is not a good idea, and I am going to be offering legislation
shortly to remedy the problem with a separate Office of Manage-
ment, the director reporting directly to the President. Because any-
body, it doesn’t matter what administration, what ideology, they ei-
ther appoint an economist down there, they appoint an ex-account-
ant or they appoint—they don’t appoint somebody who knows a
thing about management. Rarely—we can get at least a little atten-
tion.

I think that is usually also the experience in a lot of other places
and you need some group that can advise the Mayor, chief manage-
ment officer, other key city officials on, look, here is how we solve
that problem. It isn’t hard. Let’s just arrange some of this and, as
you say, educate people, get them sensitive to what the citizen
wants, the resident wants, out of their government, and get what
we are trying to do nationally, a results-oriented government.

There is only one in the United States, the State of Oregon.
There are about three in the world. Two of them are New Zealand
and Australia, where you tie the pay of the executives to the con-
tractual results they say they are going to deliver.

Mayor Barry. On the other hand, Congressman, we do have a
performance management movement that’s going on. We are begin-
ning to tie the pay, not the initial pay but the pay raises to per-
formance. In fact, the council has five or six of my nominees now
over there where they sat for 4 or 5 hours and were asked in very
specific detail, what are your performance measures as a manager,
what are the department’s performance measures and how close to
those have you come?


120

- the very heart and soul of collective bargaining - survived the
threat of annihilation. But the collective bargaining process

itself remains under siege.

One important cause is the absence of clear lines of authority
and management accountability in bargaining. With whom are the
unions to bargain? What entity is legally able to represent
Management and the City? Is it the Mayor, the CFO, the Control
Board, the Council, the Office of Labor Relations and Collective
Bargaining, the new CMO, the Congress or all or some of the
above? The very modest agreements our union negotiated with the
City, which were ratified in July, 1997, have yet to go into
effect. They languish as the Mayor, the Chief Financial Officer
(CFO), and the Authority blame one another for the delay.
Meanwhile, the unionized front-line workers of the city wait in
vain for the modest salary adjustments agreed to through the

collective bargaining process more than seven months ago.

The Authority’s apparent refusal to carry out its
responsibilities regarding the collective bargaining process is
confounding. While it sent representatives to the bargaining and
arbitration sessions, and was not at all reticent about forcing
negotiators to stay within the financial and operational
boundaries that the Authority itself defined, it has inexplicably
failed to exercise its statutory duty to review the resulting

agreement, which complies with all its stated requirements. why?


19

IT WAS MY UNDERSTANDING THAT WHAT YOU AND OTHER
MEMBERS OF THE SUBCOMMITTEE HAD IN MIND WAS AN “MOU”
PROCESS WHICH MIRRORED THE COLLABORATIVE PARTNERSHIP
USED WITH THE METROPOLITAN POLICE DEPARTMENT.
PARTNERS IN THAT PROCESS ENGAGE IN POLICY DECISIONS AND
THE AGENCY AND THE AGENCY DIRECTOR ARE RESPONSIBLE
FOR IMPLEMENTING THEM.

1 BELIEVE THAT THE FINANCIAL AUTHORITY MISREPRESENTED
BOTH THE SPIRIT AND THE LETTER OF THE REVITALIZATION ACT
AND ITS OWN CHARTER AS AMENDED, WHEN IT ASSUMED
MANAGEMENT CONTROL OF THESE AGENCIES. THIS IS
RESOUNDINGLY SIMILAR TO ITS ACTIONS IN REMOVING POWER
FROM THE LOCALLY-ELECTED SCHOOL BOARD AND CREATING
AN EMERGENCY BOARD OF TRUSTEES TO OVERSEE THE CITY’S
SCHOOL SYSTEM. AS YOU KNOW, THE APPEALS COURT OF THE
DISTRICT OF COLUMBIA RECENTLY RULED THESE ACTIONS TO BE
ILLEGAL.

I FIRMLY BELIEVE THAT ANY GOVERNMENTAL RESTRUCTURING
MUST ABIDE BY BOTH THE PROVISIONS OF LAW AND THE INTENT
OF CONGRESS. THE FINANCIAL AUTHORITY HAS OVERSTEPPED
BOTH OF THESE, IN MORE THAN ONE INSTANCE.

SPECIFICALLY, BOTH GOVERNANCE CHANGES AND
REORGANIZATIONS REQUIRE REVIEW AND ACTION BY THE
COUNCIL, AND IN SOME CASES, ACTION BY CONGRESS. THESE
PROCEDURES WERE NOT FOLLOWED.

THE GOVERNANCE STRUCTURE OF THIS CITY IS SPLINTERED.
FRACTURED. IT IS A “MANY-HEADED BEAST” WHERE EVERYONE
HAS SOME POWER AND THE FINANCIAL MANAGEMENT


14

WHEN I TOOK OFFICE THREE YEARS AGO, I DISCOVERED AND
ANNOUNCED TO THE CITIZENS THE DESPERATE AND SORRY
STATE OF THE DISTRICT’S FINANCES: THE PREVIOUS
ADMINISTRATION HAD OVERSPENT BY $335 MILLION THAT, IT
WAS AN AMOUNT THAT IF LEFT UNCHECKED, WOULD HAVE
SPIRALED INTO A $722 MILLION SHORTFALL.

IN THE REMAINING MONTHS OF FISCAL YEAR 1995, WE MOVED
TO AVERT THIS CALAMITY BY TAKING DRASTIC MEASURES.
AMONG THE STEPS TAKEN WAS CUTTING ACTUAL SPENDING BY
$151 MILLION -- A FEAT OF MONUMENTAL PROPORTIONS AND
BECAUSE OF MY LEADERSHIP WE REDUCED THE POTENTIAL $722
MILLION DEFICIT TO A MERE $54 MILLION, WITHOUT MUCH HELP
FROM THE FINANCIAL MANAGEMENT ASSISTANCE AUTHORITY.

A YEAR LATER, I PRESENTED A WELL-THOUGHT OUT
TRANSFORMATION STRATEGY THAT WAS TO FORM THE BASIS
FOR  GOVERNMENT-WIDE RESTRUCTURING. THE
TRANSFORMATION CALLED FOR BUILDING A CULTURE OF
ACCOMPLISHMENT AND BETTER SERVICE, AGENCY-BY-AGENCY.
HOWEVER, OUR EFFORTS WERE ULTIMATELY HAMPERED BY
LACK OF FUNDING, AND THE FAILURE OF THE COUNCIL TO
ENACT THE FIRST SET OF REORGANIZATION PLANS, FOR
BUSINESS SERVICES AND ECONOMIC DEVELOPMENT (BSED) AND
PUBLIC PROTECTION. DESPITE THESE SETBACKS, WE MADE
CONSIDERABLE PROGRESS. WE CONTRIBUTED TO BALANCING
THE BUDGET, AND SET THE STAGE FOR MANAGEMENT REFORMS
BEING DISCUSSED TODAY.


i

i
4
i

ONE RMORED FFTH CONDAESE

Congress of the United States

House of Representatives
‘COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
2157 Ravan Hovee Ornce Bunning
WasnaoTon, OC 20615-6149

li
i
f

"

m
ia
ii

Tn
na
}

i

REP. TOM DAVIS
CHAIRMAN, D.C. SUBCOMMITTEE
JANUARY 30, 1998
OPENING STATEMENT

Good morning and welcome. This is a continuation of the Hearing
held by this Subcommittee on December 19, 1997. At that time we
began our review of the management reforms mandated by Congress for
the District of Columbia. I announced then that additional hearings
would be held to review the issues in greater detail. That is our intention
today.

Subsequent to our last hearing, the Control Board sent its
Management Reform Plans to Congress and appointed Dr. Camille Cates
Barnett to be Chief Management Officer for the City. Dr. Barnett’s first
day on the job was January 15, 1998. Today marks her first appearance
before Congress. So a special welcome to Dr. Barnett. I note that Dr.
Barnett was quoted as urging an executive team to focus on “improving
the services to citizens.” That is exactly what we are all striving to
achieve.

When Congress created the Control Board in 1995, the District of
Columbia faced a spending and management crisis of epic proportions.
We embarked then on a critically important process to address these
serious issues in a truly bi-partisan way. I am, as always, grateful to


182

PARTICIPATION

Participation in this or Agency/Department labor-management partnership councils
does not constitute a waiver, by any party, of collective bargaining and arbitration
rights, However, any information or proposal not in the public domain, shared in

‘the work of this committee will not be used in any arbitration proceeding, unless
mutually agreed.

Agreed to this__day of “""*_ 1997 by the undersigned

Sie ee

Labor Co-Chai, State and Leael Goverment ty,

DCDept
‘Tom Weoktnr
‘DC Nurses Association
Moere”
sa
D.C. Labor Management Pastoership Counall °
June 1997


110

Mr. BRIMMER. Fine.

Mr. Davis. Finally, I would say on the regulatory reform piece,
I haven’t seen the Holland & Knight study, but I understand it will
be more than just a rehash of what has gone before. The Control
Board has a mandate for regulatory and permitting reform.

We heard Mr. Horn talk earlier about some of the nightmares.
This is a mandate. You're required to do it, as you know, and we're
just very supportive and insistent that you adhere to this mandate
and we’re looking forward to some innovation on this.

We certainly applaud what the Mayor and council have done to
date, but if we can add value to this in the consultant study, as
I believe it will, I think this is one of the most outward appear-
ances of how the city can cl e, of attracting business, maintain-
ing businesses in the city and the tax base in the city over the long
term that we can do. And it will be a symbol to a lot of the groups
who have been fleeing the city that we are changing the culture
and that it is a more customer-friendly, business-friendly city. I
think that’s important.

My time is up.

Mr. BRIMMER. Well, Mr. Chairman, we take that mandate seri-
ously. I would also mention that we were not mandated simply to
study, we were mandated to take action.

Mr. Davis. Exactly.

Mr. BRIMMER. If we conclude that action is necessary. And we
are prepared to do that.

Mr. Davis. Thank you very much. I now will yield to Ms. Norton.

Ms. Norton. Thank you, Mr. Chairman. I just want to say, Dr.
Brimmer, that I am concerned that this $40 million shortfall that
apparently comes out of administration estimates, the budget for
the corrections trustee came from the administration, and so I’m
going to ask the President for a $40 million supplemental.

I don’t see why the District should have to make up for this. And
we have some information that there could be a shortfall for the
corrections trustee even this year. Any shortfall in the budget of
the corrections trustee, it seems to me, fairly, to be fair, ought to
come in the form of a supplemental to the District of Columbia.
What surplus you have worked hard to get certainly shouldn’t be
used up on what is now a Federal responsibility, and when we are
relying on Federal figures.

| hope that the chairman will join me in this, and I’m sure he
will.

Mr. BRIMMER. Yes, Mrs. Norton, you are absolutely right. We an-
ticipate a shortfall this fiscal year of some $30 million.

Ms. Norton. This is untenable. I can understand how it could
happen, because you can’t always project correctly. But now that
it has happened, that is what the supplemental process is for and
all about..

Dr. Brimmer, let me ask you a question that I asked Mayor
Barry. He apparently proposed—well, first, let me preface this by
saying you are working under a structure that is not of your mak-
ing, and you have had, you and the elected officials and Dr.
Barnett and Mr. Williams, somehow have to work with this struc-
ture that puts a lot of decisionmakers in play.


69

. The implementation of a system of “one-stop career centers,” geared toward
“user-friendly” provision of career services, employment information, job-
seeking help and related services to all residents of the District;

* The development of effective strategies and services to move welfare
recipients into unsubsidized jobs, to be designed and implemented jointly
with the Department of Human Services, using a “one-stop” service center
configuration with blended staff;

Systemically addressing these goals, using their interrelated character as a
catalyst for leveraged improvement, and making their joint achievement the core
goals for the agency to adopt and pursue, will ensure effective change.

This approach, though it will represent marked changes in the operating
culture of DOES, offers enormous opportunity to transform service delivery and
service quality for District residents, and to equip DOES to plan and provide high-
quality services over the next decade. It will make service to the DC community --
whether job seekers or firms -- the overriding priority. This strategy will widen
access to productive career options for DC residents, strengthen investment in the
DC workforce, and thus make the District a more attractive place for business and
new residents. It will lead naturally to the adoption of a performance and outcomes
emphasis within DOES. Management reform will also expand opportunities for the
District's most disadvantaged citizens -- welfare recipients, low-skilled, unemployed
workers, unskilled youth -- to obtain training, career help and eventual placement in
jobs.

The Authority anticipates that the Management Reform plan will measurably
transform the Department of Employment Services; significantly improve the level
of services it provides to residents and businesses in the District: and build the
agency's stability and capacity to respond effectively to its changing environment
and its customer base. While we anticipate that up to three years will be needed
for these goals to be fully achieved, we believe they represent a wise and sound
investment in the District government's ability to better serve its citizens and make
@ contribution to the economic health and vitality of the District.

V._ Department of Corre: 1S

The Department of Corrections (DOC) in the District of Columbia is currently
responsible for the incarceration of, and services to, approximately 1,020 pretrial
detainees, 382 sentenced misdemeanants, and 7,828 DC code sentenced felons.
The majority of pretrial detainees and sentenced misdemeanants are housed in
facilities within the District, and most of the felons are housed in facilities in Lorton,
Virginia.

Provisions in the Revitalization Act mandate that the DC code felons be
transferred to the Federal Bureau of Prisons (FBOP) by December 31, 2001. They


24

CERTAIN PROPOSALS REGARDING ENVIRONMENTAL AND RENTAL
HOUSING REGULATION WERE REMOVED FROM THE COUNCIL
LEGISLATION. THIS OCCURRED AFTER A PUBLIC OUTCRY FROM
ALL PARTS OF THE CITY. THE CITIZENS OF THE DISTRICT SPOKE
OUT FORCEFULLY ON THESE ISSUES. THEIR VOICES MUST BE
RESPECTED BY CONTROL BOARD AND THE CONGRESS. NO
FURTHER ACTION SHOULD BE TAKEN TO FURTHER DISREGARD
THE WILL OF THE PEOPLE IN THIS COMMUNITY.

ANY CHANGE TO THE ENVIRONMENTAL AND RENTAL POLICIES
OF THIS CITY MUST COME THROUGH OUR LEGISLATIVE PROCESS
WITH PARTICIPATION FROM THOSE AFFECTED BY THESE
CHANGES. UNILATERAL DECISIONS MUST NOT BE IMPOSED ON
THE GOOD PEOPLE OF THE DISTRICT OF COLUMBIA. YOU WOULD
NOT SIT STILL FOR SUCH AN IMPOSITION UPON YOUR
CONSTITUENTS. AS MAYOR, I DO NOT EXPECT YOU TO IMPOSE
YOUR WILL UPON THE PEOPLE OF THE DISTRICT OF COLUMBIA.

AS I STATED EARLIER, THE FY99 BUDGET SHOULD BE A VEHICLE
THROUGH WHICH THE INEQUITIES OF THE REVITALIZATION ACT
ARE ADDRESSED. THE FINANCIAL AUTHORITY'S CHARTER
SHOULD BE AMENDED TO INCLUDE THE MAYOR AND THE CHAIR
OF THE D.C. COUNCIL AS EX-OFFICIO MEMBERS.
CONGRESSIONAL ACTION IS NEEDED TO MANDATE THE
CREATION OF AN MOU PROCESS TO BETTER MANAGE THE
REFORM PROCESS AND RESTORE DEMOCRACY TO THE DISTRICT.

ONE OF MY MAIN FOCUSES IS FINDING WAYS TO FUEL ECONOMIC
REVITALIZATION IN THE DISTRICT. I HAVE PROPOSED AN
REVITALIZATION PLAN PART II, WHICH IS IMPORTANT WHEN
COUPLED WITH THE INITIAL ATTEMPTS OF THE PRESIDENT’S
REVITALIZATION ACT TO FOSTER ECONOMIC VITALITY IN THE


143

occurred as a result of some of the employee dismissals. The Office of Tax
and Revenue is unable to do an efficient job of assessing property values in
the City. Such haste and lack of planning was used when firing assessors,
auditors and revenue officers that now the agency does not have a
sufficient number of qualified people to properly access property value in
the District. Without the checks and balances of old, a bad decision has

gone forward and made matters worse, not better.

This makes absolutely no sense to me. The District will only be
able to reform itself if the front line workers actively participate in the
process. And workers will only speak the truth if they can do so without
fear of retaliation. I am here today to ask you to insure that when you
reform the operation of the District government, you give due regard for
the voice of those who do the work and for the organization they have
elected to speak for them. Our voices will only be heard if by statute or
regulation, managers and the individuals charged with running the City
are required to include us in the process.

Tam not asking for much. I think that what I am asking for is

central to the American form of government. The better way is to engage


10

We also privatized major city services, including the Correctional
Treatment Facility, food services, D.C. Village, Oak Hill, and oth-
ers, and also we reduced AFDC benefits and others to make our
government more in line with surrounding jurisdictions.

This brings us to the present. There has been a great deal of dis-
cussion about the 1997 audit results. Even though we don’t have
the official audit, the preliminary audit anticipates the District
having a balanced budget for fi year 1997, a full 2 years ahead
of what was anticipated in the legislation and what we all thought.

Mr. Chairman, let me just point out, so we don’t get this surplus
confused with what we are going to talk about today, this surplus
occurred because expenditures were closely monitored. Almost
every department of the D.C. government came in under their ap-
proved 1997 budget, which meant that we have brought budget dis-
cipline to the District of Columbia government.

The other part of this is that, in my view, the revenue estimators
had been rather conservative in their estimates, which was good.
There has been improved tax collection, which Mr. Williams will
talk about later. But, more importantly, it was the discipline and
hard work of the D.C. government employees that helped bring it
about. The Revitalization Act had no influence on these results, be-
cause it had not even been enacted and implemented until October
1 of this year, as well as the reforms were not an integral part of
this. I wanted to say this so people will not think we just sort of
took advantage of all these ideas and didn’t do it. I wanted to com-
mend Mr. Williams, his staff, and other budget managers and de-
partment heads who brought this about.

It does not mean we should rest on our laurels, just because that
happened, but to continue this discipline, continue this balanced
budget approach, continue the sacrifices that we have made in the

t.

past.

Mr. Chairman, let me just talk about a few other items here. I
have been very disturbed, so it is no secret I am going to speak
about this in terms of Senator Faircloth going too far in terms of
taking what you all had was a good idea and eroding democracy,
and I am always going to stand up and say that wherever I am.

But also in my view, and I said this to the Control Board, they
went even further than the Congress had anticipated. In August,
they ordered nine departments to report to them. That was not, in
my view, the intention of the legislation. The model we wanted to
use was the police department model. The police department does
not report to the Control Board.

We have a memorandum of understanding with seven of us in
a very efficient and effective way in that room at the same time,
and there is—everyone is making decisions collectively and to-
gether, not hierarchically, where somebody makes one and some-

ly makes-another and somebody makes another. That is the way
these other agencies ought to be operated, but they are not oper-
ated that way, so we have a bifurcated system. You have jot a gov-
ernance which is splintered, fractured, it is a many-headed beast,
where everyone has some power and the Financial Management
Assistance Authority is the ultimate decider of policy.

It is being managed like no other government in the free world,
appointed and elected officials, receivers, consultants. This man-


141

goal of promoting labor-management cooperation more difficult. You
have taken the front line workers and their elected representatives out of
the process of reforming the District of Columbia and you have
concentrated power in the hands of the managers of the District agencies.
Now, when these individuals make mistakes, there is little or no
protection for the rank and file worker who sees these errors and seeks to

correct them. The checks and balances are gone.

This is true in both how the law treats unions and how it treats
union members. Here are a couple of examples. First, Congress has
amended D.C. law to remove the right of unions to represent their
members in important ways. The Management Reform Act of 1997 gives
department directors the power to eliminate positions and sets no
standards, criteria or review for those decisions. A director can pick and
chose people to let go and can arbitrarily change their department’s
organizational structure to achieve that end. The law has eliminated the
statutory or collective bargaining limits to a manager’s powers.
Increasingly, his word is law, whether it is based on sound reason or a

manager’s personal comfort.


29

This is not the end of the council’s business regulatory reform ef-
forts. Other legislation has been introduced in the council which
will lower the cost of doing business in the District, and the final
report of the tax revision commission established by the council
will be released this April.

All of these efforts reflect the council’s recognition of the need to
establish a more business-friendly environment in the District
while protecting the health, safety, and welfare of District residents
and visitors.

In conclusion, we have provided a good first step in working
within the Revitalization Act in correcting the structural inequities
in the relationship between the District and Federal Government.
However, the gains realized by the act came at a cost of the further
erosion of the District’s limited home rule. My concern in that re-
gard is extremely great.

The council looks forward to cooperating and working with Con-
gress and the President in restructuring the District and the Fed-
eral Government’s relationship by creating economic growth and
restoring the democratic rights of District residents.

you for this opportunity.

Mr. Davis. Chairman Cropp, thank you very much for your testi-
mony.

[The prepared statement of Ms. Cropp follows:]


98

Mr. BRIMMER. I am not seeing any, Mr. Chairman, partly be-
cause we have not done an assessment of these new credits.

Ms. Norton. Would the gentleman yield? They went into effect
only January 1, so I don’t think you would see it quite yet.

Mr. Davis. You see some preliminarily. You see it kind of at the
grass-roots, but you wouldn’t have any measurable data yet.

Mr. BRIMMER. No, we would not.

Mr. Davis. OK. How about information about the Federal tax
breaks. Are they on your website?

Bet you didn’t e: that question.

Mr. BRIMMER. I do not know the answer. I can find out.

Mr. Davis. We'd like to find out. I think that’s a good place to
put it. You put it on your website at www.DCFRA gov., and maybe
it will attract suburbanites and maybe everybody else who will be
looking for good real estate buys.

I recommend you do that. You can report back to us later.

Dr. Barnett, I appreciate your coming up before Congress. You
gave me your initial goals. When you come here a year from now,
what do you want to be telling us?

Ms. BARNETT. When I come here a year from now, I hope I don’t
have to tell you, I hope I will summarize a book you have already
read. I hope you will see some customer service improvements.

Mr. Davis. The kind Mr. Horn described to you.

Ms. BARNETT. At least that. At least that. And we will also be
able to tell you that we’ve done this within the budget targets. And
I hope we will be able to report a significant increase in institu-
tional capacity, particularly management systems and capacity.

Mr. Davis. Thank you. That doesn’t mean you have a year Before
you come back here. We may have you back here before that.

Ms. BARNETT. I didn’t mean that.

Mr. Davis. A 1-year Boal. I think that’s what we're looking at.
I want to go back to Mr. Williams.

Mr. BRIMMER. Mr. Chairman, may I say something?

Mr. Davis. Please.

Mr. BRIMMER. On the question of reporting to Congress, we plan
to submit a quarterly report to the Congress on the progress of
management reform, and we would anticipate that once you have
that report, you might want to have us back here in person.

Mr. Davis. We will, and I appreciate that. What we will py to
do is work with some of the other committees to have you all here
before us at one time.

Mr. Williams, let me go back to the fact that we are in a budget
surplus for this year. You lained the reasons, but did we have
any agencies overspend their budget in fiscal year 1997? Did every-
one come within their budget targets?

Mr. WILLIAMS. I think there may be one or two cases. There are
certainly no big issues that I'm aware of. I think actually one of
the issues now facing the District government—and I shared this
with Dr. Brimmer and the Mayor and the council chairman—is
that we have a number of agencies actually underspending. And
while we want our agencies to meet their budget targets, I think
all of us would be concerned if agencies aren’t actually putti out
for our citizens all the resources they have available for real re-
sults.


140

City Council, and the Control Board in the attempt to establish labor-
management committees at the agency and sub-agency level to solve the
problems that prevent the efficient delivery of services in the District. I
want to emphasize that this is not something that we have been directed
to do by Congress or the Control Board or anyone else. This is
something we have chosen to do because we care about the District and

want to make it work better.

For decades, good employers in both the private and public sectors
have increasingly come to realize that their employees have a wealth of
knowledge that, if tapped, can generate increases in productivity,
efficiency, and employee satisfaction. But in D.C., we seem to be
ignoring these important lessons. Instead, managers would have no duty
to meet with workers, hear their ideas and confer over proposed cost-
cutting plans. All of this is abandoned in favor of unilateral and arbitrary

decision making, which is not only unfair, but unwise.

In enacting the laws creating the Control Board and the CFO, I

would respectfully suggest that the Congress has inadvertently made the


91

One final word about just the estimates of revenue that we are
seeing, because I think they play into this picture. The estimated
local revenue now is $2.7 billion. This is around $121 million over
the original local estimate made in 1997.

For 1998, our estimates are now at $2.8 billion and this is $160
million over the estimate in the approved budget. In 1999, we are
looking at an estimate now that’s $171 million over the previous
forecasts that was part of the multiyear model that was contained
in the consensus budget.

So to make a long story short, Mr. Chairman, I am confident that
there are the funds available for aggressive management reform.
But having said that, I think we must always pay attention to a
couple of things: One, that we not use management reform to in-
crease the overall District’s operating budget, and I don’t believe
that this is the case, focus on management reform, and I think this
has happened on structural and capital improvements, and I think
we must, and I think the Authority shares this concern, ensure
that we maintain a rigorous accounting of any claimed revenue en-
hancements and cost savings because we have been there, done
that in the past, with initiatives on the revenue and the cost sav-
ings side, and want to be very, very careful as we move forward
in that regard.

And so thank you, Mr. Chairman, for the opportunity to make
these brief remarks. I will be happy to answer any of your ques-
tions.

Mr. Davis. Thank you very much. As I said, your statement will
be in the record.

{The prepared statement of Mr. Williams follows:]


11

agement structure has certainly caused confusion. Sometimes man-
agement chaos, sometimes competition, sometimes disrespect, and,
more importantly, low morale among our employees. We must work
to correct this situation. It is terrible in terms of what our D.C.
government employees have to endure, not knowing who is in
charge from one week to another. So as Mrs. Norton pointed out,
we need to move back to a point of a memorandum of understand-
ing, similar to the Metropolitan Police Department.

et me say that has worked because crime has declined by over
20 percent last year, which is among the leading reductions in the
Nation. Homicides are the lowest in 10 years. And all of this did
work, and the police department did not report direcily to the Man-
agement Assistance Authority. It is wrong to keep that process
going.

In terms of the management reforms, Mrs. Cropp will allude to
this. Initially, elected officials were not actively involved at the be-
ginning of the process. We should have been involved with the se-
lection of the consultants. We were not involved with that. We
think we could have had some input into that process.

Also, in my view, the act should have included the new CFO, be-
cause I think the CFO being at the table as we discuss these man-
agement reforms could have given us much more instant budget in-
formation about the budgetary impact of these situations.

Also, another concern I had, and I would question Dr. Brimmer,
the five members of the Control Board had other schedules from
time to time, so we had to in some instances schedule our meetings
around their schedules as opposed to when we all were available.
Mrs. Cropp and I sat in on all 12 management reform teams, all
of them, each and every one of them, and we came up with 270
projects which cost about $183 million that there was almost unan-
imous agreement on what those projects ought to be.

But on the other hand, because of the scheduling of the Control
Board members, I suspect that we are, in my view, a couple
months behind. We now have the projects, have the recommenda-
tions. The funding has not yet been completely identified, and we
need to get on with the business of starting the recommendations
being implemented that need funding. Some of them that didn’t
need funding have already started, but they were probably less
than 10 or 15 percent of the whole package.

Again, I would urge this Congress to re-look at how the manage-
ment reform situation is structured. Let’s take away the antidemo-
cratic part of it, where these agencies are reporting to the control
board, and let’s put them back into a collegial relationship.

Mr. Chairman, let me speak briefly about management reform as
it relates to regulatory reform. On Wednesday, January 21, I
signed legislation implementing some of the recommendations of
the Business Regulatory Reform Commission, which was appointed
to examine regulatory and business permit reforms. I think this
legislation will prove valuable to the future economic development
of the District.

The Business Regulatory Reform Commission devoted over 4,000
hours to this effort. The commission found an overriding need for
technology, automation, and training at DCRA. It recommended


97

Mr. Davis. We will start the clock at 5 minutes. I want to give
everybody an opportunity to ask a few questions.

Mr. Williams, let me just start with what you have come up
with, which is the surplus for fiscal year 1997. This does a number
of things, as I understand it. It will allow the city to quickly
produce its accumulated operating deficit, which means that you
will save interest costs, and you will improve the city’s bond rating
faster than anything else you could do. Is that a fair comment?

Mr. WILLIAMS. That’s correct, Mr. Chairman. There is some pres-
sure on the other side of what we call a restatement, because in
cleaning up around $70,000 accounts, for example, in business tax
receivables, we have had to actually go back and amend revenue
in previous years. And this is actually operating to increase the
deficit, but on a net basis this clearly brings the accumulated defi-
cit down.

Mr. Davis. I think you know that you get a lot of credit for that.
Getting the city on a financial footing where you are not just wor-
ried about paying the bills day to day allows the city to focus on
some of the other things. It will allow Dr. Barnett now to imple-
ment some changes by working with the Mayor and the council to
focus on the things we ought to be focusing on, which is making
the city government run better. But if you don’t have your finances
straight, we have found for the first 2 years you can’t do much else
right. You are just spending all your time juggling the books. So
I think this is very welcome news and at a time when every little
scandal and everything else seems to be headlines. This is a piece
of good news because it shows that some of the reforms undertaken.
by us but implemented by you in a cooperative mode with the
Mayor and council, is moving the city ahead. Still, it is a long way
from where we all want it to be but this shows great progress.

Let me ask Dr. Brimmer, the Control Board was directed by Con-
gress to evaluate medical malpractice reform and to report back by
March 1, 1998, with recommendations. What is the plan to comply
with the statutory provision? Will you meet that deadline?

Mr. BRIMMER. We will. The assessment is under way.

Mr. Davis. Thank you.

Mr. BRIMMER. We will show it the very same way with respect
to the regulatory reform work, that the deadline for that, we would.
meet that as well.

Mr. Davis. Let me just add that Congress almost undertook this
last year. We feel this ought to be handled by the city. I have very
strong feelings on this particular issue, but I think, putting my
feelings aside, this is a city issue we want the city to resolve. Your
recommendations, as we move this through, are going to be very
critical in helping us to move in an area where I think change
ought to be happening. I await your recommendations at that point
as to what is going to happen.

Now, the 5,000 Federal income tax exemption for first-time
homebuyers appears to be a great success from my vantage point.
Is the business community also responding to the Federal tax cred-
its which Congress offered to businesses that hired D.C. residents
in poverty zones; and is the zero cap gains—are we seeing any ac-
tivity in those areas?


102

your current role as chief management officer? Where are the dif-
ferences? Where are the-—

Ms. BARNETT. Yes, I would, and, in fact, that was one of the
things I had a lot of discussions with the Control Board about be-
fore accepting the position. I’m confident that I have their dele-
gated authority to manage these operations.

The one area where there is not a unified management structure,
of course, is in the agencies that are not reporting directly to the
Control Board.

Mr. Horn. Could you tell us, just for the record—I know all this,
but some don’t—and that is, what is the authority a typical city
manager has over agency heads that report to that city manager?

Ms. BaRNETT. The city manager is the chief executive officer of
the city and has responsibilities for the day-to-day operations, in
that regard, has daily operational control, the ability to hire and
fire agency heads, set standards of performance, recommend the
budget, recommend policy actions to the council.

ir. HORN. Exactly. And, of course, the solution is, if the city
council doesn’t like what is going on, in this case the Control
Board, they fire the city manager.

Ms. BARNETT. That is true.

Mr. Horn. And they can get a new one.

Ms. BARNETT. That is true.

Mr. Horn. When I built the School of Public Administration, I
saved three slots of outstanding city managers to rotate through
until they found a new job. When you are one vote short, that’s it.

Let me ask you—I don’t know; it is probably too early, Dr.
Barnett, for you to answer this, but maybe Dr. Brimmer can an-
swer it—what’s the timetable for privatizing additional District
functions; and have you thought through a timetable of what might
happen when?

laybe you’d like to answer it, Dr. Brimmer.

Ms. BARNETT. I can tell you what we're doing. The specific thing
that has been referred to in both my testimony and the other wit-
nesses on this panel is a review process that the chief financial offi-
cer and I are going through right now with the agencies, which has
to do with both spending plans for the management reform as well
as implementation plans, making sure they match. And once we go
through that, then we will have a more specific schedule for all of
the management reforms.

ants the general answer. Maybe Dr. Brimmer can be more spe-
cific.

Mr. BRIMMER. Congressman Horn, that is precisely where we
stand. But we have had a posture vis-a-vis privatization or
outsourcing, since we have been at the Authority, and that is that
outsourcing, and privatization, are not, a panacea.

We believe there are various methods of delivering service, and
each one ought to be evaluated on the basis of the costs and bene-
fits each one might yield. But, on balance, our bias has been to look
more closely at privatization and outsourcing than had been done

fore.

A good deal has already been done. For example, in the correc-
tions area, there is now a significant number of the sentenced fel-
ons that have been transferred to a privately operated correctional


118

Mr. Chairman and Members of the Subcommittee: My name is David
Schlein, and I am the 14th District National Vice President of
the American Federation of Government Employees, AFL-CIO (AFGE).
On behalf of the nearly six thousand employees of the District of
Columbia and several of its independent Authorities represented

by AFGE, I thank you for the opportunity to testify here today.

As I prepared for today’s hearing, I recalled the many
conversations I and other AFGE representatives have had with
Representative Eleanor Holmes Norton, Representative Tom Davis,
and other prominent City leaders throughout the last several
years about the profound mistake that the Mayor and some members
of the City Council were making by focusing only on the financial
crises of the day and attempting to "solve" them by cutting the
pay, benefits, and jobs of front-line, service-delivery workers.
Those with direct power over the City’s spending and contracting
refused to face what to all of us was the urgent and glaring

crisis in management which had caused the financial crisis.

To Representatives Norton, Davis, Morella, and to the workers
AFGE represents, there was no mystery behind the financial
crisis. The cause was clearly not that rank and file City
workers were overpaid, or that there were too many people hired
to pave the roads, fix the school boilers and roofs, renew
licenses, maintain water and sewer lines, clean up the parks, or

process the paperwork. Political patronage had come to mean a


65

Improvement in the cost, quality and timing of Procurement operations
translates into a better use of taxpayer dollars -- both in terms of the operational
efficiency of the District, as well as the value of the goods and services delivered to
its citizens. For example, centralization of responsibility for the procurement of
goods and services used across the District by multiple Agencies (i.e., non-unique
requirements such as office supplies, security guards, janitorial services, etc.), not
only allows each Agency to focus its efforts on unique requirements, but provides
the District with greater negotiating leverage inherent in large, block purchases.
Negotiating a very conservative price reduction of 2% versus current levels will
result in a more than $5 million savings every year for the District.

Procurement is a critical, cross-cutting support function; as such, it directly
impacts the most fundamental service delivery capability of every Agency, including
those delivering public health, safety and basic infrastructure services such as
Police, Fire & Emergency Medical Services and the Department of Public Works.
implementing comprehensive procurement reform will ensure that the most vital
Public services no longer face the risks inherent in today’s separate and conflicting
processes.

Since it has been widely documented that Procurement’s “house” has
sufficiently collapsed, it is clear that a major re-building is required. The
Management Reform projects represent eight interdependent “bricks” which must
be re-laid in a sequentially critical order. The absence of any project will result in
an incomplete, compromised structure. The projects and the problems they
address are described below:

Organize for Reform

As a project primarily focused on organizational structure retorm, the objective is to
provide the CPO with the tangible resources (“the instruments of authority”) to
support the Procurement Act’s intent regarding centralization of procurement
responsibility.

Structural Reform
As a project primarily focused on strategic planning and performance measurement,
the objective is to develop a “roadmap” for defining District-wide rules and
accountabilities by which all procurement activities will be governed, going forward.

Build Elementary Too! Kit

The objective is to develop and introduce into District government elementary
procurement tools to help guide Procurement personnel through their day-to-day
work.

Assess and Communicate Progress -- 1


1

To ameliorate the problems identified by the consultants, the following
reform plan has been developed:

¢ STAFF RETENTION AND RECRUITMENT: elements in this plan should
help alleviate the potential of a depletion of staff at the Lorton facilities
that could lead to critical security problems.

* CAPITAL OUTLAY PROJECTS: Currently $7.1 million in Federal funds and
$2.3 million in District of Columbia capital outlay funds are available to
begin the Priority | capital outlay projects to improve facilities. The plan
outlines the Priority 1 capital improvement projects needed to minimally
maintain the facilities at Lorton until they are closed ($6.9 million), make
capital improvements at the Central Detention Facility ($2.2 million), and
undertake environmental projects at each location ($4.2 million).

* MANAGEMENT AND ORGANIZATION: This section addresses the major
problems discussed in the assessment phase. They include plans for
implementing such things as a: Quality Management Team; Transition
Organizational Plan; Post-Transition Organizational Plan; Management and
Technology Plan; Information Requirements Analysis; Integrated
Departmental Information System Plan; and a Policy and Procedure
Development plan.

* MEDICAL AND MENTAL HEALTH SERVICES: The majority of
recommended improvement projects for medical services are directed at
upgrading and improving patient care. They included bringing medical care
to the patient as opposed to taking the patient out for medical care.
Medical management onsite produces a higher quality of patient care,
minimizes delays in rendering care, and is more cost effective.

Other important projects will improve information flow between DOC and
Court agencies, create a pretrial classification plan, expand classification data on
certain detainees, improve staffing at the central detention facility, and update the
community release plan.

Additionally, the plans detail the phasing out of facilities, services, industries,
and staff between January |, 1998 and December 31, 2001. The phase-out plan
makes basic assumptions and relies heavily on the FBOP’s ability to develop
facilities and also contract for private facilities over the next 4 years to house
approximately 7,500 DC code sentenced felons.

In essence, FBOP will be able to accept females and minimum- and low-
security inmates during 1998 and 1999. The medium and maximum-security
inmates will not be phased into the FBOP until the latter part of 2001, when new


16

-  INSTITUTED CITYWIDE PERFORMANCE MEASUREMENT;

- TOOK THE LEAD IN TACKLING THE DISTRICT’S “YEAR 2000"
PROBLEM;

- INITIATED REAL ESTATE MANAGEMENT, REGULATOR AND
PERSONNEL REFORM; AND

- DETERMINED CITYWIDE TELECOMMUNICATION NEEDS .

THIS BRINGS US TO THE PRESENT. THERE HAS BEEN A GREAT
DEAL OF DISCUSSION ABOUT 1997 RESULTS. THE PRELIMINARY
AUDIT ANTICIPATES THE DISTRICT HAVING A BALANCED
BUDGET FOR FISCAL YEAR 1997. WE TURNED AROUND AN
ANTICIPATED $74 MILLION DEFICIT INTO A MAJOR SURPLUS.

FOR 1997 OPERATING REVENUES EXCEEDED OPERATING COSTS
SIGNIFICANTLY. MR. CHAIRMAN, THIS OCCURRED BECAUSE
EXPENDITURES WERE CLOSELY MONITORED TO ENSURE THAT
EVERYONE STAYED WITHIN THEIR BUDGET OR BELOW; BECAUSE
OF CONSERVATIVE REVENUE ESTIMATES, IMPROVED TAX
COLLECTIONS...AND THE DISCIPLINE AND HARD WORK OF THE
ADMINISTRATION AND EMPLOYEES.

MR. CHAIRMAN, LET ME MAKE IT VERY CLEAR THAT THIS
TURNAROUND HAPPENED WITHOUT THE BENEFIT OF THE
REVITALIZATION ACT OR THESE SO-CALLED MANAGEMENT
REFORMS. AGAIN, I WANT TO CONGRATULATE THE FINANCIAL
AND PROGRAM MANAGERS OF THE DISTRICT OF COLUMBIA FOR.
BALANCING THE DISTRICT BUDGET TWO YEARS AHEAD OF
SCHEDULE.


99

And so that’s one of the reasons why at last week’s hearing I
pledged to this committee that one of our overarching goals now,
in the coming year, is to support with Dr. Barnett with the man-
agement reform agenda.

Mr. Davis. I guess the only other thing is, we have had problems
in the past with the procurements going out and being spent quick-
ly and efficiently. Do you see a marked change in that?

Mr. WILLIAMS. Well, Mr. Chairman, we’ve improved cash man-
agement, cash drawdown, but we’re not going to get any national
awards for cash drawdown. What we're trying to do is build in the
agencies the capacity to handle these financial matters as part of
their broader management agenda. And so the CFO’s and the agen-
cies now will have the responsibility to intelligently administer and
manage, indeed optimize, the flow of resources with the agency di-
rector through their agency.
not Davis. Thank you very much. I’m going to now yield to Ms.

orton.

Ms. Norton. Thank you, Mr. Chairman. Dr. Brimmer and Mr.
Williams, with both of you here, perhaps we could reconcile dif-
ferences that you may have in the cost of management reforms.
Mr. Williams apparently testifies that he advises that there may
be as much as $126 million in funds available. The authority says
it plans to spend $185 million.

What I suppose I am most puzzled about is that the authority
says $140 million will come from efficiencies. I’d like to know what
those efficiencies are and whether the difference between even the
$126 million and the $185 million has been reconciled by you;
whether you have,.in fact, come to any agreement on what the ac-
tual figure is, both of you.

Mr. BRIMMER. First, the estimates we gave are the estimates we
developed at the authority. I gave the sources of those in summary
in my testimony.

Ms. Norton. What makes us a little nervous is that $140 million
of $185 million is supposed to come from efficiencies that result
from the management reforms.

Mr. BRIMMER. What I said was that the implementation of man-
agement reform projects will result in either cost savings or reve-
nue enhancement, and the $140 million is the result of the com-
bined effects of cost savings or revenue enhancement.

The details on where the $140 million will come from are spelled
out in great detail in the summary of our report submitted for the
record.

Ms. Norton. Suppose I ask Mr. Williams, then, to comment on
this $140 million and his $126 million figure.

Mr. WILLIAMS. The $126 million figure is a figure for the sources
available for management reform. Dr. Brimmer outlined $182 mil-
lion to be available.

So actually in terms of sources we're saying there are a higher
number available. So I don’t see a problem there in terms of fiscal
prudence.

Regarding the $140 million, I think Dr. Brimmer is saying on a
net basis in terms of both cost avoidance and revenue generation
the projects will generate $140 million.

Ms. Norton. And you agree with that?


21

A LOGICAL EXTENSION OF THIS COLLABORATIVE PROCESS
WOULD BE INCLUSION OF THE MAYOR AND CHAIRMAN OF THE
COUNCIL AS EX-OFFICIO AND VOTING MEMBERS OF THE
FINANCIAL AUTHORITY.

THE MANAGEMENT REFORM TEAMS PROVIDE AN INTERESTING
CONTRAST TO THE SUCCESS OF THE MOU PROCESS. I WAS
INTEGRALLY INVOLVED ON ALL TWELVE TEAMS AND I
PERSONALLY ATTENDED THE VAST MAJORITY OF MEETINGS. LET
ME SAY FOR THE RECORD THAT THE MANAGEMENT REFORM.
PROCESS PRODUCED SOME GOOD RESULTS, BUT IT COULD HAVE
BEEN IMPROVED IN A NUMBER OF IMPORTANT WAYS.

- ELECTED OFFICIALS WERE EVENTUALLY INVOLVED IN THE
PROCESS. THE ACT SHOULD HAVE INCLUDED THE CHIEF
FINANCIAL OFFICER AS A MEMBER OF THE MANAGEMENT
REFORM TEAMS. THE CHIEF FINANCIAL OFFICER’S
INCLUSION AND PARTICIPATION WOULD HAVE SERVED TO
ELIMINATE MANY OF THE UNANSWERED QUESTIONS
RELATING TO THE COSTS AND FUNDING OF ALMOST $200
MILLION WORTH OF REFORM PROJECTS.

- THE CONSULTANTS WHO WERE USED WERE SELECTED
UNILATERALLY BY THE FINANCIAL AUTHORITY. ALL TEAM
MEMBERS OUGHT TO HAVE BEEN INVOLVED IN THE
STRATEGY AND THE SUBSTANCE OF THE EFFORT RIGHT
FROM THE START.

- | MANAGEMENT REFORM TEAM MEETINGS WERE SCHEDULED
AT THE CONVENIENCE OF FINANCIAL AUTHORITY
MEMBERS. THE SCHEDULING OF FINANCIAL AUTHORITY
MEMBERS SOMEWHAT IMPEDED THE PROCESS.


50

ment knowledge and state-of-the-art technology, that you are better
served by having contractors in there long enough to keep progress
going, rather than throwing it back to workers who you have not

id time to train and who are left with no better tools than they
had before the contractors were in.

I couldn’t agree with you more that we wouldn’t want to leave
them dependent on contractors, but it scares me a little bit to think
that a contractor could come in and go out, and if my experience
with the D.C. government is any guide, have the thing revert to
type, then bye-bye home rule. So I think everybody has to under-
stand that while it is a craw in all of our throats to have this situa-
tion, we have got to find the best way to get it out.

Now, we got a letter from five members of the City Council that
protested exclusion from not the contracting process but from work
on the consultant teams. I would like you to describe how the col-
lective—how the collaborative process is working if you are satis-
fied with it, because five members of your council wrote directly to
us and were not.

Ms. Cropp. Well, I think from the letter that you received, I
think it does include of the RFP process with the council mem-
bers. In addition to that, there was great concern that as we were
going through the process of dealing with the initiatives, the con-
sultants, to some extent, did not talk with council members.

There was a desire for some council members for the consultants
to talk through a hearing process, to find out about different issues.
There were many reports that had been developed by the council,
information that had been obtained in the t ry the council, that
it was felt was left out of some of the consultants’ reports and that,
in fact, everyone would be served better if the consultants had had
an opportunity to hear all of that.

As we look at the truncated process by which, quite frankly, as
you had said and my testimony had said, the Authority had to get
a report back to Congress, it really did not allow for an ongoing dis-
cussion that in some instances it was felt was needed.

I think that some of the concerns are possibly resolved if, in fact,
as we go through the implementation process, that there is ongoing
dialog and involvement with all members of the team and not just
done by dictate, that particular part can be resolved.

Let me also respond to what you had suggested my testimony
said with regard to contracts—contractors. I want to be clear.

Further in my testimony, it clearly states that in some aspects
we will need to have contractors to do the work. I have been one
who understands clearly that we don’t have the capacity to do all
of it within the District government, but I must keep my resolve
and great concern. When you look at some of the reports that have
come back from some of the consultants, you have where it has
been built in, ongoing work for the consultants. We may need to
do that. But prior to just accepting that, it seems to me that we
need to do an analysis as to which would be the most cost-effective
way and approach for the government to do it.

The further—further in my testimony, I state that we need the
consultants to continue with monitoring and evaluation, because in
many instances they have the expertise that we may be lacking in
the District to do that and we understand the need for that.


95

The funds identified in agency budgets are based on existing spending plans. It is possible
to increase the funding available for management reform even further by reducing spending

for current programs.

As we move forward with management reform, it is important that the District make
progress in reducing the District’s accumulated deficit. I believe that all the stakeholders
have this priority at the forefront. The following principles may serve as a useful

framework for discussion:

«The District should live within its approved FY 1998 budget. Management reform
funds must only be used for approved projects, not diverted to fund agency operations.
To ensure that this happens, the Chief Management Officer and I are requiring agencies
to develop detailed spending plans for each project. After the plans are approved, we
recommend that management reform funds be placed in separate accounts to track
projected expenses and progress. We will show the District’s residents exactly how

much was spent for each project and exactly what results each project achieved.

© Management reform should be directed towards one-time expenses. Projects which
have significant continuing costs should be implemented through the regular budget

process.


33

INITIATIVES THAT WILL GENERATE COST SAVINGS AND INCREASED REVENUES.
WHICH CAN BE REINVESTED IN MANAGEMENT REFORM.

THE COUNCIL IS CONCERNED THAT SOME OF THE COSTS ASSOCIATED WITH.
THE REFORMS IS UNDERESTIMATED OR UNCLEAR. FURTHER ANALYSIS IS.
NEEDED BEFORE IMPLEMENTATION. WITHOUT SUCH FURTHER ANALYSIS,
THERE EXISTS THE POSSIBILITY OF UNCOMPLETED PROJECTS OR EVEN WORSE,
COST OVERRUNS THAT COULD NEGATIVELY AFFECT THE DISTRICT'S BUDGET.
THE MANAGEMENT REFORM TEAMS MUST WORK CLOSELY WITH THE CHIEF
FINANCIAL OFFICER TO ENSURE THAT THE IMPLEMENTATION OF THE REFORMS IS-
CONSISTENT WITH OUR FISCAL BUDGET AND MULTI-YEAR FINANCIAL PLAN AND
DOES NOT JEOPARDIZE OUR FINANCIAL RECOVERY.

THE SECOND CONCERN IS THE USE AND COST OF CONSULTANTS. THE
MANAGEMENT REFORM TEAMS MUST ENSURE THAT WHEREVER AND WHENEVER
IT IS COST EFFECTIVE AND APPROPRIATE THAT THE IMPLEMENTATION OF THE
REFORM PROJECTS BE DONE BY EXISTING GOVERNMENT PERSONNEL. SOME OF
THE CONSULTANTS BUILT INTO THEIR RECOMMENDATIONS CONTINUED WORK
FOR THEMSELVES. THE CONSULTANT'S CHARGE SHOULD BE TO ANALYZE THE
PROBLEM, START THE IMPLEMENTATION PLAN WITH SPECIFIC
RECOMMENDATIONS, AND MONITOR THE PROJECT'S PROGRESS. THE
CONSULTANTS PARTICIPATION SHOULD BE SHORT LIVED AND NOT LOOKED
UPON AS A SUBSTITUTE FOR GOVERNMENT PERSONNEL AND FUNCTIONS. WE

ALREADY HAVE SPENT MILLIONS OF DOLLARS ON CONSULTANTS TO DATE.


133

David J. schlein
AFGE National Vice President

David J. Sebledn 1 waa elected AFGE District Fourte: 2 National
Vice President in 981 District represent: Ly
Goo active manbery within 70° locals throughout the Metropolitan

Scblein’s mother vas a public employee of New York State and a
member of the American Federation of State, County, and Municipal

1S He first carried a union card as a aeaber of Local 600
f ed Auto Workers while working for the Ford Motor Company
$5 Bearborne. Michigans

Schiein received his undergraduate degree from Michigan state
eS ers in Economics at
rade where | he also eravghe, economics and
ia support work with several anions including the United Food
Workers Union; the Oil, Chemical and Atomic Workers Union; and the
Amalgamated Clothing ‘and Textile Workers Union.

waving Colorads in 1977, fchisin came to Washington. DC and
joined ArCd focal 12 at the U.3. tof Labor. The

ie’a steward, chief steward und head steward for the local.
riddition. Schiein wes a aeaber of the locals execucive bocrdy
rved as treasurer, and worked for six months as a fulltime
bbyist. leading 2 successful campeign against Reagan
Administration budget cuts

Prior to hia election to District National Vice President in
y9es, Schlein served aa president for the Council of Federal Locals
jashington metropolitan area.

In addition to his involvemaat with AFB, Schleia is active in
the Free South Africa movement, bas served on the Advisory
Neighborhood Commission {ANC~6B), chaired the Ward 6 Community

ivisory Committee for the Ward Plan, and was a member of the
Nashingzon Area Labor Committee for Denocracy and Human Rights in
Central America. He is also a delegate to the AFL-CIO Metro
Washington Central Labor Council.

Schlein and his wife, Barbara, and their son, Eric, live in
Washington, D.C.

The Fourteenth District Office address is: 40 F Street, NW,
Washington, OC. 20001. The business phone umber Ls: (202) 347-

Le
-30-

AMERIGAN FEDERATION OF GOVERNVENT EVIPLOYEES AR_-Ck
QQ F STRFFT NW WASHINGTON. D.C. 20001/ 639-6419 or 639-642



7

IN MARCH OF LAST YEAR, I TESTIFIED BEFORE THIS
SUBCOMMITTEE ON THE WHITE HOUSE PROPOSAL, THE
REVITALIZATION ACT. WE SUPPORTED THE FEDERAL
ASSUMPTION OF THE DISTRICT’S UNFUNDED PENSION LIABILITY,
THE TAKEOVER OF THE PRISON SYSTEM, AN INCREASED
FEDERAL SHARE OF THE MEDICAID PAYMENTS, ESTABLISHMENT
OF A NEW ECONOMIC DEVELOPMENT CORPORATION, AND TAX
CREDITS.

WE ASKED FOR, BUT DID NOT RECEIVE, A CONTINUED FEDERAL
PAYMENT, AND ECONOMIC RELIEF FOR OUR STATE MENTAL
HEALTH SYSTEM.

WE DID NOT EXPECT, AS PART OF THE REVITALIZATION ACT,
THE LOSS OF SOME HOME RULE. SO LET ME SAY AT THE
OUTSET, AS I HAVE SAID MANY TIMES SINCE JULY 1997, IT IS
CLEAR TO ME THAT THESE SO-CALLED-ANTI-DEMOCRATIC
REFORMS WENT WAY BEYOND WHAT I BELIEVE WAS ENVISIONED
BY THE MEMBERS OF THIS SUBCOMMITTEE, THE WHITE HOUSE,
AND CERTAINLY WHAT WAS DISCUSSED WITH THE ELECTED
LEADERSHIP OF WASHINGTON, DC.

THROUGHOUT THE NEGOTIATIONS ON THIS BILL, AND IN MY
CONVERSATIONS WITH SENATOR FAIRCLOTH, THERE WAS NO
INDICATION THE ACT WOULD GO AS FAR AS IT DID IN REMOVING
HOME RULE. THE FINAL VERSION OF THE ACT WAS A FAR CRY
FROM WHAT YOU REPRESENTED TO ME AS THE SUBSTANCE OF
WHAT WAS BEING DISCUSSED BETWEEN THE HOUSE AND THE
SENATE. THE FINAL BILL WAS LITERALLY CRAFTED BY SENATOR
FAIRCLOTH AND THE HOUSE LEADERSHIP “IN DARK OF NIGHT”.


61

enforcement assistance, or other types of help that eliminate the need for
cash assistance.

@ There has been no revision to the forms and procedures used by the welfare
program or to the policies of related programs that are critical to the
success of welfare reform, such as child care and rehabilitative services, to
ensure adequate support for welfare reform efforts.

Moreover, there are a number of weaknesses in agency operations relating to
core eligibility determination, cas management, and quality assurance functions.
These weaknesses were most obvious in local IMA service center operations, but
questions about the appropriateness of case management and quality assurance
activities also arose from our review of the child care subsidy program, the
MRDDA, and the RSA.

Contractors also found that the management of contract service providers was
consistently weak across DHS programs. Virtually no DHS program has in place
provider contracts or agreements that require outcome-based reporting by service
providers or that support aggressive provider performance monitoring by the
agency. Nor does any of the programs appear to have adequate resources for
monitoring activities.

Additionally, the consultant found problems with respect to the use of
automated systems within the Department of Human Services at both the
Department-wide level and the individual program level. The DHS-wide problems
included an absence of procurement standards for systems-related purchases and
the lack of a DHS-wide systems acquisition and implementation plan. This has
resulted in technology barriers and obstacles -- which in turn limits opportunities to
streamline operations and share data across programs. It also hag resulted in
systems-related expenditures being made without a thorough assessment of
technology priorities.

The review of DHS funding sources showed that although the agency has
recently taken some steps to increase federal funding of programs and operations,
major opportunities to improve the use of federal funding streams remain. These
include ways to draw down additional federal funds under both entitlement
programs, such as Medicaid, and a new grant program and ways to use District
expenditures in non-TANF programs to leverage the District's full federal TANF
payment while reducing District TANF program expenditures.

An assessment of the DHS organizational structure and current staffing
patterns revealed several ways in which these could be brought better in line with
the actual needs and priorities of the agency. These opportunities exist at both the
DHS-wide and the individual DHS component levels.


130

SOBCOMMITIEES

The LMPC may create sub-committnes or working groups to review issues,
conduct resedreh, draft reports and candoct other such business as determined by
the LMPC.

Ona priority basis, as determined by the LMPC, employee participation and labor-
management partnership councils.shall be introduced at the most appropriate levels
as a way to improve the cost, quality, and delivery of customer services. Attention
will first be given to same of our more immediate and challenging areas. Once
identified by the LMPC, the area selected shall be assigned support staff from
either the DOL or the FMCS and shall, from that point forward, choose their own
co-chairs and create their own solutions to problems, free, to a large extent, from
‘any oversight restrictions. Both creativity end appropriate risk-taking will be
encouraged. Outputs, timelines, and outcomes will need to be specifically

GROUND RULES AND DECISION MAXING

For both the city-wide LMPC ant the Agency/Department Councils, decisions will
‘be made by consensus. Consensus means agreement among both labor AND
Management members of the committes. The position of individual members may
reflect varying degrees of eattsiasm for the team decision, bet all Council members
shall agree to support Council decisions.

CONFLICT RESOLUTION
The LMPC will establish a conflict resolution procass.
MEETING AGENDA

Any member af the LMPC may suggest an agenda item to either af the co-chairs.
‘The co-chairs will confer prior to any fall meeting of the LMPC to jointly determine
the agenda for the upcoming meeting. Other items may be added to the agenda by -
consensus at the beginning of a meeting, as circumstances require.

D.C Labor-Management Pertership Counc
June 1997 page 4”


114

tem so that they are serving customers first and not simply bu-
reaucratic systems to do things like have always been done.

So those are the kinds of things included in the management re-
form, and to the extent that they’re not, we will put them in.

Ms. Norton. Ms. Barnett, I would simply say that I know with
your experience that the flow of management reform to customer
service is indeed going to occur. One of the problems in the District
has been that residents have not seen short-term change, and I
would urge you to set goals for the next 3 months, the next 6
months and the rest to restore confidence of residents that change
within their lifetime can occur.

It’s really what’s driving people out of the city. They know some-
how there is reform going on down there, but it’s hard to put your
finger on something that, in fact, has changed. So to the extent
that you could, in fact, tell the public shortly what your goals may
be in the next, I will choose—you may choose a timeframe that is
better than that, but in the next 3 months, and then give them a
progress report on meeting those, I think you would help us to re-
tain residents and you would help the confidence rebuilding proc-
ess.

Thank you very much, Mr. Chairman.

Mr. Davis. Thank you very much, and thanks to the panel. We
appreciate you all being here.

The last panel David Schlein, the national vice president, district
14, American Federation of Government Employees; and Chuck
Hicks, the president and the acting executive director, council 20,
of the American Federation of State, County and Municipal Em-
ployees.

If you will just rise with me before you give your testimony.
Thank you for being here. I’m trying to move this along.

{Witnesses sworn.]

Mr. Davis. Thank you very much. Your whole statements have
been read and are in the record.

Mr. Schlein, if you could give us, in 5 minutes, a summary and
hit your salient points, then we can get into the meat of this.

STATEMENTS OF DAVID SCHLEIN, NATIONAL VICE PRESI-
DENT, DISTRICT 14, AMERICAN FEDERATION OF GOVERN-
MENT EMPLOYEES; AND CHUCK HICKS, PRESIDENT AND
ACTING EXECUTIVE DIRECTOR, COUNCIL 20, AMERICAN
FED ERATION OF STATE, COUNTY AND MUNICIPAL EMPLOY-

Mr. SCHLEIN. Mr. Chairman, Congresswoman Norton, thank you
very much for having us here today. My name is David Schlein. I
serve as national vice president with the American Federation of
Government Employees. AFGE represents approximately 5,000
D.C. government workers that work for both the independent au-
thorities and the District of Columbia.

As I prepared for today’s hearings, I recalled that conversation
I and other AFGE representatives have had with Representative
Norton and Representative Davis and other prominent city leaders
throughout the last several years about the profound mistake that
the Mayor and some members of the City Council were making by
focusing only on the financial crises of the day and attempting to


116

bor’s union hall of infamy for his union-busting tactics and his
abuse of employees.

Yet we have persevered. We understand our members’ futures
are dependent on resolving the city’s financial and management
crisis. We also know that it is the frontline employees who do the
city’s work who must be in the center of any efforts to fix the city’s
delivery of services. That is why over 2¥2 years E,
AFSCME and the city applied for a grant with the Federal Medi-
ation and Conciliation Service to establish a labor-management
pilot program at the Fleet Maintenance Division at the Department
of Public Works. The project has already yielded impressive results
in improving the efficiency and labor management relations. ~

Further, the grant has required that a city-wide labor-ma:
ment partnership committee be established. Both FMCS and the
Department of Labor has generously donated resources and exper-
tise to make the Project a success. Over a year ago, we agreed to
a charter, which I have also submitted, and established other pilot
programs in other agencies. The success achieved by this project,
as well as the historic successes in the Federal Government and
other cities, like Philadelphia, Cincinnati, Indianapolis, Fort Lau-
derdale, and others, give us reason to hope.

id we are tremendously glad to be here today to comment on
the reports by various business consultants hired by the authority
to analyze the shortcomings in the management operations and the
structures of the agencies under its operating authority.

When the consultant released their first reports, AFGE locals im-
mediately began to analyze and respond to the findings. AFGE has
prepa: a comprehensive response to consultants in writing,
which we have attached to our jestimony today and which I hope
the members of the committee will regard seriously.

AFGE’s response entitled, “Service Excellence: A Union Vision
for the District of Columbia,” is an important step in fixing our
city’s problems.

findings at this point indicate that where union leaders and
members have been actively engaged in the process of analyzing
ency’s strengths and weaknesses and formulating reform propos-
is, the consultants’ findings are more accurate and the ideas for
restructuring are seen by workers as more likely to be effective.
Unfortunately, we have little indication up until today that as
agency's move to implement recommendations, that employees
through their unions will be involved.

Our report makes several important recommendations which are
listed in detail here, but just to summarize, we want to accelerate
the development of the city wide labor management committees,
the Authority needs to make a strong commitment to the process.
We want to establish labor management committees in each de-
partment. These offer the best channel for work force participation
to shape and implement effective reforms. The severe work force
downsizing of the past several years has to be brought to an end.
There shouldn’t be wasteful contracting out when city personnel
can do the job. We need to improve management accountability.
Consistent leadership for reform must also start at the top. Finally,
we must allow the collective bargaining process to work. Pay our
members the salaries we agreed to in our negotiated contract.


Ranking Member Delegate Eleanor Holmes Norton, Vice-Chair Connie
Morella, Speaker Gingrich, the Congressional leadership, and the
Executive Branch for working together through so many difficult issues.

With patience and perseverance, much-needed fiscal discipline has
been instilled into the City’s complex budget process. I thank each and
every member of the City Government and the Control Board and
respective staff for working with Congress and for helping to achieve so
many positive results under such difficult circumstances. Though I am
not always satisfied with the pace of action and results we should not
overlook the progress that has been made.

Without the Control Board we would not have been in a position to
pass and see signed into law last year the D.C. Revitalization Act and
related measures. The result has been a basic restructuring of the
relationship between the Federal government and the District of
Columbia.

Key elements of the Revitalization Act include federal assumption
of certain functions performed by state governments, and incentives for
economic development and private sector jobs. The District’s financial
and managerial tasks were reduced through cost-avoidance of some of
the fastest growing parts of its budget. Authorization of any funds was
conditioned on specific budget and management reforms.The federal
government is making significant investments in many key areas. Tax
incentives were also included in the equally historic Tax Reform Act of
1997.

The management reforms were not motivated by a desire to confer
or remove specific power from existing governmental entities. Rather it
sprang naturally from a strong desire to provide direction to the Control
Board and the City. I am convinced that management reform is the key

2


93

Financial Reform created the conditions for successful management reform.

The enormous progress that we have made in reforming the District's financial management
provides the foundation for successful management reform. Additionally, the Council and
the Authority have made the difficult decisions to help put the District on sound financial
footing. The District's overall financial position improved dramatically in FY 1997, and we

expect that to continue into 1998 and 1999.

Estimated

Fiscal Year local revenue
1997 $2.749B

1998 $2.811B

1999 $2.870B

The audit results, to be released in February, are expected to show that improved revenue
collection and spending discipline will leave the District with a surplus for the first time
since 1993. Our improved financial performance has been recognized by the bond markets

through lower rates and the potential upgrade of the District’s credit rating.

1 success is not just the byproduct of the omy.

* Much of the District’s increased revenue is due to collection efforts of the Office of Tax
and Revenue.

«The improved budget process produces better information for making decisions while
aggressive budget execution increases the capacity to enforce accountability.

© The efforts of our treasury department have given the District new credibility in the

bond markets.


38

Mr. Mayor, I think every big city mayor and medium city mayor
would share your frustration about economic development.

My own experience as head of a university, one of the largest em-
ployers in my city of Long Beach over 25 years, has been the fol-
lowing is needed if you are going to have economic development.

One, you have got to shape up your bureaucracy. You have got
to get people in there that are facilitative, not just sitting there
reading a novel between 9 and 5. You have got to get people that
can turn things around in the permitting process and be helpful to
people, not just sit there and ww a rule book at them and don’t
even know what is in it themselves. You need a zoning office, a
planning office, permitting offices that are working with profes-
sionals heading them, not political appointees, but people that have
a track record in this area over the years. And you also need a city
that has decent schools, a noncorrupt government; fills the potholes
so you can have a decent drive in this town or you can move com-
merce rapidly to wherever some new development is, and to get
lights in the traffic lights, which would be helpful.

As I drive around this town, and I lived here for 13 years of my
life previously, we have things that have gone downhill substan-
tially, and that has to be turned around. I think your new chief
management officer has a national reputation as an outstanding
administrator, and if she can shape up the city government, if the
control board gives her that authority, and the City Council, you
will have a city that will attract people here for economic develop-
ment.

It just seems to me there are a lot of things that have to be done.
Obviously, control of crime is one of them. Nobody in their right
mind is going to come to parts of this District unless we get the
critical mass of turning that section around.

Now, there is the old story of the Middle Eastern ruler many
centuries ago who wanted to find out what his people thought, and
he went around and put the cloak over his face at night and start-
ed asking them. You are a pretty visible guy, so you are not the
one to go around asking people what they think. They will know
you are the Mayor, et cetera. But maybe you can get some staff
that are unknown that can go out and really listen to people.

My listening experience was about a year ago. I had purchased
the residential permit, I don’t have to, but I did, just to be a good
citizen living in the District, and I went down—my wife was in
California. I went down to renew it. I didn’t have any congressional
insignia on or anything else, sports shirt, it was a hot day and
whatnot. I ask three people, where do you do this in city govern-
ment? They directed me to a spot in Northeast, and I went there.
The line was about 100 ahead of me when I got there. By the time
I finally got served, there were about 100 behind me. It took 3
hours to do this.

No one came out and even had the first sense of management of
saying, gee, you know, I am sorry, it is a hot day, come on in from
the outside; 100 people sitting in the boiling sun or standing. Move
them around in a queue so they will at least be in a place where
it would be cooler than it is outside.

It was clear that the officer, and I don’t know whose department
that is, but a very friendly person, but nobody had given her any


125

These offer the best channels for workforce participation to

shape and implement effective reforms.

3 The severe workforce downsizing of the past several years
should be brought to an end. There should be no further

contracting out where city personnel can do the job.

4. Improve management accountability. Consistent leadership

for reform must start from the top.

5. Allow the collective bargaining process to work. Pay our

members the salaries agreed to in our negotiated contract.

Conclusion

The front-line workers of the District of Columbia remain ready,
willing, and able to work with any authority who approaches the
job of improving the financial management and service delivery
challenges we face with integrity, with a rational plan, and with
respect for the crucial role we will play in any revival of this

City.

Our union issues no threats, but we urge the members of this
committee to prevail upon whatever entity it deems responsible to
sign our ratified collective bargaining agreement and commence

paying our bonuses and salary adjustments. The hundred dollars


100

Mr. WILLIAMS. And what we are doing is the agencies are sub-
mitting spending plans to encompass all their management reform
projects with suggested program changes, that is to say, increases
in their budget to fund projects on a prioritized basis. And as we
go through those spending plans, we will review these cost avoid-
ance and revenue generation figures.

Ms. Norton. Well, if in fact the figures do not, in fact, come

through, and every figure is a projection, how will a figure be made
up?
Mr. BRIMMER. Well, first of all, I am highly confident that they
will come through; therefore, I am not planning any contingencies
if they don’t. But, in addition, in addition, we said that some part
of the net benefit from the Revitalization Act could be used. But
long before we get to that point, what I am saying is that the cur-
rent estimate of the cost of management reform is $185 million.

And then the next question I asked is, where will we get the
funds to assure that financing is not an obstacle to implementation.
We start off with $8 million in direct Federal appropriation. That
is in the bank earning interest. I said also that .5 million are
included in the fiscal year 1998 regular budget, which are ear-
marked for management reform projects. Those are funds already
in the budgets of the various agencies.

Ms. NorTON. What number is that?

Mr. BRIMMER. $44.5 million. I also said that we plan to leverage
an additional $50 million for capital purposes. We mentioned in our
testimony with respect to the budget for 1998, and Congress has
approved it, that we would use some part of the net benefit to
the additional debt service of borrowing $50 million. We intend to
use some of this additional capital borrowing to finance manage-
ment reform capital projects.

We would plan to use about $10 million of that $50 million for
school capital, and about $10 million for public works. That leaves
$30 million, which we would devote to management reform. That
is the $82.5 million that is assured right there. In addition, we said
that we would anticipate that as a result of either cost savings, or
revenue generation resulting from the implementation of the man-
agement reform projects, we could end up with $140 million addi-
tional. By the way, included in that $140 million is about $26 mil-
lion which we have been assured by the chief financial officer could
be generated as a by-product of his own tax and revenue efforts.
We believe the number might be larger than that, but we believe
that at least $26 million is assured.

Mr. Williams, is that still your estimate?

Mr. WILLIAMS. That’s correct. We are in the process, and I men-
tioned this last week, Congresswoman Norton, in the process of in-
stalling an integrated tax system, and this tax system will actually
be funded by additional revenue generated by that system. And so
that is an example of a project for fiscal year 1998 where the
project will generate, beginning in 1998, revenue in excess of its ac-
ual cost.

Mr. BRIMMER. Another example is in the Department of Con-
sumer and Regulatory Affairs. y collect over $25 million in fees.
They can clearly do more. And the reforms are designed to assure
that they will enhance that.


41

So we are beginning to do it. I think you have an idea where to
look at, is how do we in the government, have a manager who does
what you just suggested?

In terms of the economic development conference, let me say that
you are absolutely right about the environment. Incidentally, we
have fixed over 60,000 potholes, about another 8,000 to go, and
spent about $12 million doing that. And Constitution Avenue fi-
nally is being resurfaced so you can tell all your colleagues when
they come across Key Bridge and the Roosevelt that they now can
come down Constitution Avenue with a resurfaced and repaved
road.

Mr. Horn. I appreciate oe telling me. I better switch from Inde-
pendence to Constitution because my axle is about ready to go into
the mercury mode.

Mayor Barry. On the other hand, Washington is unique. When
you do all that, when you get the public safety down, when you get
people processing g permits very easily, quickly, we are a border city
competing with Maryland and Virginia for businesses and, there-
fore, one of the major impediments to doing business in the Dis-
trict, outside of perception of a sluggard bureaucracy, is the eco-
nomics of it.

Our commercial taxes are higher here than they are in Maryland
and Virginia, and our income taxes and sales taxes. And so that’s
why I am advocating another revenue stream to compensate for
those high taxes and then cut those taxes in half. And I think we
will be more competitive in that regard.

Mr. Horn. You mentioned, I think, earlier, you had a meeting
with Dr. Barnett on January 20, and I just wonder, were there any
specific ideas that you have given the new chief management offi-
cer as to more effective and efficient delivery of basic city services?
Has the Mayor’s office sent over a list of things they think she
ought to consider?

Mayor Barry. No, I haven’t done that. We were just initially
meeting to see where all were and have some dialog on the city
government, how things had been managed in the past, what are
some of the options or some of the challenges and some of the other
areas, and we agreed to come back together on some specific kinds
of suggestions as to where she should focus some of her time and
attention and some priorities.

One of the priorities is to—is to move us into the implementation
phase of these management reforms. We need to get that done
starting like yesterday, because the expectations have been raised
by the Congress and by the media of how quickly we are going to
get this done. We need to get about the business of doing that.

The other thing, Congressman, that we have to work on, I start-
ed this yesterday, for a lot of reasons—and you have been a univer-
sity president; you know about city governments—we have to de-
pend on motivated workers to do this work. And for a lot of reasons
the morale among our workers is very low. They haven’t had a pay
raise since 1994. There are just a whole range of things. So we
started a motivational speaker. That’s not the answer to all of this
but we had 150 ple yesterday who now are more inspired to
come to work and work harder and, as Mrs. Cropp talked about,
we need to and ought to immediately start massive training of our