U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

41–800 CC 1997

SUCCESSES IN URBAN PROBLEM-SOLVING,

MAYORAL PERSPECTIVES

JOINT HEARING

BEFORE THE

SUBCOMMITTEES ON THE DISTRICT OF COLUMBIA

OF THE

COMMITTEE ON GOVERNMENT

REFORM AND OVERSIGHT

AND THE

COMMITTEE ON APPROPRIATIONS

HOUSE OF REPRESENTATIVES

AND THE

SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT

MANAGEMENT, RESTRUCTURING AND THE

DISTRICT OF COLUMBIA

OF THE

COMMITTEE ON GOVERNMENTAL AFFAIRS

AND THE

SUBCOMMITTEE ON THE DISTRICT OF COLUMBIA

OF THE

COMMITTEE ON APPROPRIATIONS

UNITED STATES SENATE

ONE HUNDRED FIFTH CONGRESS

FIRST SESSION

MARCH 11, 1997

Serial No. 105–17

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

and Appropriations of the House of Representatives and the Committees on

Governmental Affairs and Appropriations of the United States Senate

(

(II)

COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

J. DENNIS HASTERT, Illinois

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

STEVEN H. SCHIFF, New Mexico

CHRISTOPHER COX, California

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

DAVID M. MCINTOSH, Indiana

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

JOHN SHADEGG, Arizona

STEVEN C. LATOURETTE, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

JOHN E. SUNUNU, New Hampshire

PETE SESSIONS, Texas

MIKE PAPPAS, New Jersey

VINCE SNOWBARGER, Kansas

BOB BARR, Georgia

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

GARY A. CONDIT, California

CAROLYN B. MALONEY, New York

THOMAS M. BARRETT, Wisconsin

ELEANOR HOLMES NORTON, Washington,

DC

CHAKA FATTAH, Pennsylvania

TIM HOLDEN, Pennsylvania

ELIJAH E. CUMMINGS, Maryland

DENNIS KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

JUDITH MCCOY, Chief Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON THE DISTRICT OF COLUMBIA

THOMAS M. DAVIS, Virginia, Chairman

CONSTANCE A. MORELLA, Maryland

ILEANA ROS-LEHTINEN, Florida

STEPHEN HORN, California

ELEANOR HOLMES NORTON, District of

Columbia

THOMAS H. ALLEN, Maine

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

RON HAMM, Staff Director

HOWIE DENIS, Counsel

ELLEN BROWN, Clerk

CEDRIC HENDRICKS, Minority Professional Staff Member

(III)

COMMITTEE ON APPROPRIATIONS

BOB LIVINGSTON, Louisiana, Chairman

JOSEPH M. MCDADE, Pennsylvania

C. W. BILL YOUNG, Florida

RALPH REGULA, Ohio

JERRY LEWIS, California

JOHN EDWARD PORTER, Illinois

HAROLD ROGERS, Kentucky

JOE SKEEN, New Mexico

FRANK R. WOLF, Virginia

TOM DELAY, Texas

JIM KOLBE, Arizona

RON PACKARD, California

SONNY CALLAHAN, Alabama

JAMES T. WALSH, New York

CHARLES H. TAYLOR, North Carolina

DAVID L. HOBSON, Ohio

ERNEST J. ISTOOK, JR., Oklahoma

HENRY BONILLA, Texas

JOE KNOLLENBERG, Michigan

DAN MILLER, Florida

JAY DICKEY, Arkansas

JACK KINGSTON, Georgia

MIKE PARKER, Mississippi

RODNEY P. FRELINGHUYSEN, New Jersey

ROGER F. WICKER, Mississippi

MICHAEL P. FORBES, New York

GEORGE R. NETHERCUTT, JR., Washington

MARK W. NEUMANN, Wisconsin

RANDY ‘‘DUKE’’ CUNNINGHAM, California

TODD TIAHRT, Kansas

ZACH WAMP, Tennessee

TOM LATHAM, Iowa

ANNE M. NORTHUP, Kentucky

ROBERT B. ADERHOLT, Alabama

DAVID R. OBEY, Wisconsin

SIDNEY R. YATES, Illinois

LOUIS STOKES, Ohio

JOHN P. MURTHA, Pennsylvania

NORMAN D. DICKS, Washington

MARTIN OLAV SABO, Minnesota

JULIAN C. DIXON, California

VIC FAZIO, California

W. G. (BILL) HEFNER, North Carolina

STENY H. HOYER, Maryland

ALAN B. MOLLOHAN, West Virginia

MARCY KAPTUR, Ohio

DAVID E. SKAGGS, Colorado

NANCY PELOSI, California

PETER J. VISCLOSKY, Indiana

THOMAS M. FOGLIETTA, Pennsylvania

ESTEBAN EDWARD TORRES, California

NITA M. LOWEY, New York

JOSE ́ E. SERRANO, New York

ROSA L. DELAURO, Connecticut

JAMES P. MORAN, Virginia

JOHN W. OLVER, Massachusetts

ED PASTOR, Arizona

CARRIE P. MEEK, Florida

DAVID E. PRICE, North Carolina

CHET EDWARDS, Texas

JAMES W. DYER, Clerk and Staff Director

SUBCOMMITTEE ON DISTRICT OF COLUMBIA APPROPRIATIONS

CHARLES H. TAYLOR, North Carolina, Chairman

MARK W. NEUMANN, Wisconsin

RANDY ‘‘DUKE’’ CUNNINGHAM, California

TODD TIAHRT, Kansas

ANNE M. NORTHUP, Kentucky

ROBERT B. ADERHOLT, Alabama

JAMES P. MORAN, Virginia

MARTIN OLAV SABO, Minnesota

JULIAN C. DIXON, California

AMERICO S. MICONI, Staff Assistant

(IV)

COMMITTEE ON GOVERNMENTAL AFFAIRS

FRED THOMPSON, Tennessee, Chairman

WILLIAM V. ROTH, JR., Delaware

TED STEVENS, Alaska

SUSAN M. COLLINS, Maine

SAM BROWNBACK, Kansas

PETE V. DOMENICI, New Mexico

THAD COCHRAN, Mississippi

DON NICKLES, Oklahoma

ARLEN SPECTER, Pennsylvania

JOHN GLENN, Ohio

CARL LEVIN, Michigan

JOSEPH I. LIEBERMAN, Connecticut

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

MAX CLELAND, Georgia

HANNAH S. SISTARE, Staff Director and Counsel

LEONARD WEISS, Minority Staff Director

MICHAL SUE PROSSER, Chief Clerk

SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT MANAGEMENT,

RESTRUCTURING AND THE DISTRICT OF COLUMBIA

SAM BROWNBACK, Kansas, Chairman

WILLIAM V. ROTH, Jr., Delaware

ARLEN SPECTER, Pennsylvania

JOSEPH I. LIEBERMAN, Connecticut

MAX CLELAND, Georgia

RON UTT, Staff Director

LAURIE RUBENSTEIN, Minority Staff Director and Chief Counsel

ESMERALDA AMOS, Chief Clerk

(V)

COMMITTEE ON APPROPRIATIONS

TED STEVENS, Alaska, Chairman

THAD COCHRAN, Mississippi

ARLEN SPECTER, Pennsylvania

PETE V. DOMENICI, New Mexico

CHRISTOPHER S. BOND, Missouri

SLADE GORTON, Washington

MITCH MCCONNELL, Kentucky

CONRAD BURNS, Montana

RICHARD C. SHELBY, Alabama

JUDD GREGG, New Hampshire

ROBERT F. BENNETT, Utah

BEN NIGHTHORSE CAMPBELL, Colorado

LARRY CRAIG, Idaho

LAUCH FAIRCLOTH, North Carolina

KAY BAILEY HUTCHISON, Texas

ROBERT C. BYRD, West Virginia

DANIEL K. INOUYE, Hawaii

ERNEST F. HOLLINGS, South Carolina

PATRICK J. LEAHY, Vermont

DALE BUMPERS, Arkansas

FRANK R. LAUTENBERG, New Jersey

TOM HARKIN, Iowa

BARBARA A. MIKULSKI, Maryland

HARRY REID, Nevada

HERB KOHL, Wisconsin

PATTY MURRAY, Washington

BYRON DORGAN, North Dakota

BARBARA BOXER, California

STEVEN J. CORTESE, Staff Director

LISA SUTHERLAND, Deputy Staff Director

JAMES H. ENGLISH, Minority Staff Director

SUBCOMMITTEE ON THE DISTRICT OF COLUMBIA

LAUCH FAIRCLOTH, North Carolinam Chairman

KAY BAILEY HUTCHISON, Texas

TED STEVENS, Alaska, (ex officio)

BARBARA BOXER, California

ROBERT C. BYRD, West Virginia (ex officio)

Professional Staff

MARY BETH NETHERCUTT

(VII)

C O N T E N T S

Page

Hearing held on March 11, 1997 ............................................................................ 1

Statement of:

McCrory, Patrick, mayor, Charlotte, NC; Susan Golding, mayor, San

Diego, CA; Stephen Goldsmith, mayor, Indianapolis, IN; Knox H.

White, mayor, Greenville, SC; and Edward G. Rendell, mayor, Philadelphia, PA ......................................................................................................... 11

Letters, statements, etc., submitted for the record by:

Cunningham, Hon. Randall, a Representative in Congress from the State

of California, prepared statement of ........................................................... 21

Faircloth, Hon. Lauch, a U.S. Senator in Congress from the State of

North Carolina, prepared statement of ....................................................... 4

Golding, Susan, mayor, San Diego, CA, prepared statement of ................... 25

McCrory, Patrick, mayor, Charlotte, NC, prepared statement of ................ 15

Morella, Hon. Constance A., a Representative in Congress from the State

of Maryland, prepared statement of ............................................................ 45

Norton, Hon. Eleanor Holmes, a Representative in Congress from the

District of Columbia, prepared statement of .............................................. 9

Rendell, Edward G., mayor, Philadelphia, PA, prepared statement of ........ 52

White, Knox H., mayor, Greenville, SC, prepared statement of ................... 40

(1)

SUCCESSES IN URBAN PROBLEM-SOLVING,

MAYORAL PERSPECTIVES

TUESDAY, MARCH 11, 1997

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON THE

DISTRICT OF COLUMBIA, COMMITTEE ON GOVERNMENT

REFORM AND OVERSIGHT, JOINT WITH SUBCOMMITTEE

ON THE DISTRICT OF COLUMBIA, COMMITTEE ON APPRO- PRIATIONS; U.S. SENATE, SUBCOMMITTEE ON OVER- SIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING

AND THE DISTRICT OF COLUMBIA, COMMITTEE ON GOV- ERNMENTAL AFFAIRS; AND SUBCOMMITTEE ON THE DIS- TRICT OF COLUMBIA, COMMITTEE ON APPROPRIATIONS, Washington, DC.

The subcommittees met, pursuant to notice, at 1:20 p.m., in room

2154, Rayburn House Office Building, Hon. Charles Taylor (chairman of the House Committee on Appropriations, Subcommittee on

the District of Columbia) presiding.

Present: Representatives Taylor, Davis, Morella, Cunningham,

Tiahrt, Northrop, Norton, Allen, Moran, Dixon, and Senators Faircloth, Brownback, and Boxer.

Staff present: Committee on Government Reform and Oversight,

Ron Hamm, staff director; Howie Denis, counsel; Ellen Brown,

clerk; Cedric Hendricks, minority professional staff member; and

Jean Gosa, minority administrative staff. Committee on Appropriations, Americo Miconi, clerk.

Mr. TAYLOR. Our ranking members, Senators Boxer, Leiberman,

and Representative Moran and Norton, are with us today.

This is the first hearing of our appropriations subcommittee for

this Congress. And I’m very pleased that it’s a joint hearing with

the four congressional committees with jurisdiction over the District of Columbia. Our purpose is to explore how our great American cities have dealt with a variety of problems similar to those

faced by our Nation’s Capital.

We all feel that this is our Capital, and we take a great deal of

pride in Washington, DC, we want to see that this city is a model

for the Nation. And the mayors who have so graciously agreed to

come are here today to make suggestions. And we’ll have an opportunity to approach it in that way. We want to share with America’s

Capital how other cities have addressed the challenges of economic

development, educational quality, infrastructure improvement, public safety and general governmental efficiency.

We want the Nation’s Capital, as I said, to be a model for the

Nation and for the world. We are pleased that this landmark hearing brings together the congressional committees charged with

2

oversight of our Nation’s Capital as envisioned in our constitution.

Our concern is not only for the one half million residents of the

District of Columbia, but for the 260 million Americans across the

Nation, who look to Washington as our national symbol both at

home and abroad.

We’ve asked the mayors, Susan Golding of San Diego, Stephen

Goldsmith of Indianapolis, Patrick McCrory of Charlotte, NC,

Mayor Rendell of Philadelphia, and Knox White of Greenville, SC

to join us today. Other mayors from across the country may make

suggestions—written suggestions—and even public comments to

help the committee as the hearings and time go on.

But we’re pleased to have these mayors with us today. We’d like

each of them to make a short opening statement, and then we’ll follow with questions. Our hope is that we have more of a round table

here today, that we have an opportunity for discussion back and

forth, and a less formalized proceeding. I understand that Mayor

Goldsmith has to leave at 3:30 p.m., for another hearing, but will

be back, and Mayor Rendell from Philadelphia will be here some

time between 2:30 p.m., and 3:30 p.m.

With their busy schedules, we appreciate their effort. To facilitate our process this afternoon, and to allow each of us an opportunity to ask questions, I would like to follow the 5 minute rule.

We have a timer here to remind us when our 5 minutes are up.

And with that, I’d like to yield to the distinguished chairman of the

Senate Appropriations Subcommittee, Lauch Faircloth, Senator

Faircloth.

Senator FAIRCLOTH. I want to thank Chairman Taylor for holding the unprecedented hearing of the four committees in the House

of Representatives and in the Senate with jurisdiction over the

Capital and the District of Columbia. It’s no secret to any of us or

to anyone that the great city of Washington is in trouble, big trouble. The city’s finances are in chaos, and infrastructure is in dire

need of improvement.

Over the past several weeks—last week or two—I have met with

Mayor Barry, Representative Eleanor Holmes Norton, Dr. Andrew

Brimmer, and other members of the DC Control Board and members of the city council from Washington, the elected city council.

I met with Police Chief Soulsby. And this morning I met with General Julius Beckton and his staff, the superintendent of the District’s public schools.

I haven’t met anyone that didn’t have the same goal, the same

aspirations and the same hopes. Sometimes they approached it

from different perspectives, but, certainly, everybody would like us

to head in the same direction. And each of us pledged to make this

city, this pristine type of Capital, that not only the people that live

within the bounds of the District of Columbia, but as Chairman

Taylor said, the other 260 million people of this Nation—plus, it’s

a world capital as well as a Nation’s Capital. As Capital of this

country, it’s a world capital.

I will be the first to say that Congress and the American people

cannot and will not allow the city to fail and to spiral deeper into

chaos. We have a special duty to restore it to the greatness it

should always have had. There is no question, when we hear the

various mayors of the other cities, that we have to keep in mind—

3

Washington is a very special case. It’s different. It does not have

the infrastructure of a State to support it in many ways that are

State supported.

There are many things that Charlotte or Indianapolis or San

Diego are supported by State government that the District of Columbia does not have. And we have to always be cognizant of that.

We have to always be aware that so much of the property is not

subject to taxation. There is no chance to expand the city limits of

Washington. And there are severe and very proper constraints on

the type and size of building that can be built here.

These are special conditions, and that is the reason that the Federal Government is always going to have the obligation of supplying additional money to make the city viable and to make it

work. But, of course, with that comes the—to see that the money

is properly spent and that it’s used in the right way. I want to extend a special welcome to my good friend, Mayor Patrick McCrory

of Charlotte.

Charlotte is now our Nation’s second largest banking and financial center, and a proud city of 500,000 people. I’m proud, also, to

have our former mayor here, and now Congresswoman, Sue

Myrick. Mayor McCrory has done a fine job of carrying on the fine

record of a lot of previous mayors of the city, and Mayor McCrory,

we’re delighted to have you.

Mr. MCCRORY. Thank you very much.

Senator FAIRCLOTH. Thank you, Mr. Chairman.

[The prepared statement of Hon. Lauch Faircloth follows:]

4

5

Mr. TAYLOR. I’d like to introduce Chairman Tom Davis of Virginia, who is chairman of the House Subcommittee on the District

of Columbia.

Mr. DAVIS. Thank you, Chairman Taylor. Today’s joint hearing

is a historic recognition of the high priority that the issues in the

Nation’s Capital are receiving from Congress and the executive

branch this year. I’m so pleased to share the dias today with Senator Sam Brownback, Senator Lauch Faircloth, Congressman

Charles Taylor and members of the subcommittees that they chair.

All of us, authorizers and appropriators alike, share a solemn and

special responsibility for the Nation’s Capital and those who reside

in this region.

The congressional leadership—both parties in both Houses have

agreed with President Clinton that the District of Columbia is one

of our top five priorities this year as we proceed with budget negotiations. Some time this week I anticipate an announcement from

the Speaker concerning the makeup of the leadership of the House

task force to work with the Senate and the administration on this

issue.

Our subcommittee has already begun the process of hearings on

the President’s proposal, and this hearing is an adjunct of that

process as we move to deal with District issues. Our next hearing

is going to be held this Thursday in a joint hearing with our Senate

counterparts led by Senator Brownback to hear views of local leaders on the President’s proposal.

I said 2 years ago, during the consideration of the control board

legislation, of which I was the chief sponsor, that we’d need to address important underlaying issues in the structure, form, resource

base and responsibility of the District of Columbia when we had

enough good information to get good answers to our questions and

when enough good data was available on which to base decisions.

It appears that the time has come for this discussion and consideration. In conducting this discussion, it will be helpful to have

input from other people from around the country who have had to

deal with urban problems and issues similar to those facing the

District of Columbia. In many ways, the District is unique and cannot be compared and contrasted with any other city. But in many

other and important ways, its problems are familiar to all urban

residents and officials.

Today’s hearing is designed to gather information from municipal

leaders across the country—and we’ve got some of the best—as to

how they have handled concerns similar to those that we’re dealing

with within our Nation’s Capital. All of the mayors who will testify

shortly have great experience with urban problems. I’m sure we’ll

all benefit from their experiences as we seek to fashion further legislative initiatives here in our Nation’s Capital.

Two years ago, on March 8, 1995, our subcommittee heard from

State and local leaders who’d experienced and overcome tough financial times. We heard from the mayors of Cleveland and New

York and Philadelphia. All of these cities had positive experiences

with financial control boards in other forms of urban rejuvenation.

We gained valuable insight as a result of that testimony as we

fashion legislation to create the control board which is now in place

in Washington, DC.

6

For those who live in the region, as I do, and are stake holders

in the vitality of the city—as a Congressman from northern Virginia, a former head of the government in Fairfax County across

the river, I know that a healthy city is necessary for a healthy region. The citizens of this region are vital stake holders in what we

do. This is not a theoretical exercise. The establishment of the control board and the job it is doing make it possible for us to now

move into the second phase of our reform efforts.

As we do so, it’s important that we continue to address these serious issues in a bi-partisan way. I’m grateful to the ranking member of my subcommittee, Delegate Eleanor Holmes Norton, for

working with me in that spirit. We’ve gotten this far by working

in a collegial atmosphere, avoiding partisan bickering and have

thus succeeded in making great progress toward our common objectives. This was all before the bi-partisan retreat in Hershey last

weekend.

But we can’t be blind to the fact that we still have a long way

to go. We’re on the right track. It’s only natural that each of us

may have somewhat different views from time to time as to how

best to accomplish our objectives. But I’m optimistic that we’ll be

able to work together in a constructive way.

I look forward to working with all of my colleagues in this important matter. I assure them all that we welcome their views in this

process. We will involve them fully as we move forward. And

Chairman Taylor, I thank you, again, for calling this hearing and

instigating the idea and for you and Senator Faircloth inviting the

members from authorizing committees to participate.

Mr. TAYLOR. Thank you, Chairman Davis. I want to introduce

the ranking House member from the—minority member—Jim

Moran from Virginia. Jim and I have had the pleasure of working

together on other subcommittees. And I’m glad to have him with

us today. Jim.

Mr. MORAN. Well, thank you very much Mr. Taylor. I appreciate

that. Let me just say that I think the time has come for us to recognize that a sufficient number of politicians have advanced their

own careers at the expense of the District of Columbia.

It’s important that we work with the District’s own leadership

and citizens to provide sufficient resources to bring about the economic development and the social opportunities that other urban

areas have, and the sufficient will, perhaps, to say no to some of

the interest groups that, as well, have advantaged themselves at

the expense of DC citizens.

I think that many of these cities have some very good suggestions for what worked in their cities. But, as was mentioned earlier, the District of Columbia is a somewhat unique situation.

It has more cooks crowded into the kitchen than there is room

for. And I think we have to understand that if we are not prepared

to give the kind of autonomy to the District of Columbia that these

mayors would all insist upon before they would assume the responsibility, then we have to recognize that there ought to be a quid

pro quo. And there’s going to have to be a certain commitment of

concomitant resources.

7

With that, let me relinquish the rest of my time because I would

like to hear the mayors and get on to this session. Thank you for

calling on me, Mr. Taylor.

Mr. TAYLOR. Thank you, Congressman Moran. We are pleased

today to have with us Senator Barbara Boxer, who is the ranking

member of the Senate DC Appropriations Subcommittee. I have

had the pleasure of serving with her when she was a Member of

the House. Senator Boxer.

Senator BOXER. Thank you so much, Mr. Chairman. It’s nice to

be back, and in this very room where I served on the—what was

it called then? The Government Operations Committee. And now

it’s changed it’s name. But I was here for quite a while. Mr. Chairman, I will ask unanimous consent that my full statement be entered into the record.

Mr. TAYLOR. Without objection.

Senator BOXER. And I will summarize it so as to not to take too

much of the committee’s time. I want to welcome all of our witnesses. We are very happy to see you here. I want to extend a very

special welcome to San Diego’s mayor, Susan Golding. San Diego

is a wonderful city with a vibrant and an involved citizenry. And

it’s good to see you here.

Without question the District of Columbia needs our attention. It

is the Capital city of the greatest country in the world. This country is the envy of the world. And this city should be a shining city.

This city should be a model city. And I believe if all of us share

that vision for the city, we can help make it happen.

Right now, when we look at the crime and the streets in disrepair and the crumbling infrastructure, we see the symbols of a

city in need of an infusion of vision and energy in addition to the

extraordinary vision and energy of Eleanor Holmes Norton, who I

think is an extraordinary leader. I want to acknowledge the contributions of the control board. I know that it is difficult for those

people to do what they do.

They came in in an emergency and they have a daunting task.

DC, unlike any other city has financial responsibilities typically

borne by a State. Those responsibilities include Medicaid funding,

the local match for Federal aid highway systems, the maintenance

of a prison system. DC functions as a State. And this is an issue

with which we in Congress must come to grips. Notwithstanding

the District’s financial burdens, I want to make it clear that those

responsibilities don’t excuse the chronic problems of the city.

The solution to the financial and management woes of DC should

be tackled now. And I am pleased that we’re doing that. And with

the right spirit we’re going to make a good difference. And I’m also

pleased that the President is involved in all of this.

So, it is in that spirit of cooperation, Mr. Chairman, that I hope

the mayors here today will provide us with some strong suggestions for the pitfalls that DC faces in today’s world, and also some

ideas that they can share to make it a model city. So, thank you

Mr. Chairman. I look forward to hearing from our witnesses.

Mr. TAYLOR. Thank you, Senator Boxer. We are pleased to have

Representative Norton, who is the ranking member of the House

DC authorizing subcommittee, and a very energetic spokeswoman

for the District. Representative Norton.

8

Ms. NORTON. Thank you very much Mr. Chairman. And I want

to thank the members who have come here today to hear the mayors, and, particular, to thank my own colleagues and the mayors

who have agreed to come today. I want to acknowledge the presence of an elected official from the District of Columbia, Council

Member Carol Schwartz.

This hearing is the idea of the new DC appropriation chairs, Senator Lauch Faircloth and Congressman Charles Taylor. I appreciate the collegial relationship that has begun to develop between

these two North Carolinians and this Washingtonian. Looking at

the best practices of other cities is a good idea, notwithstanding the

considerable differences between the District and other cities. The

District is in the throes of the largest management and operational

upheaval in more than 100 years.

It would be foolish and wasteful to reinvent the wheel, rather

than look at other wheels around the country. The District, however, like the cities we will hear from today, will have to decide it’s

own local governance structure. Given the city’s serious economic

condition, neither the city nor anyone else is in a position to make

decisions about governance today. If governance issues emerge

now, the cart moves up before the horse and we waste valuable

time and energy on needless contention and what I assure you will

be a great deal of quarrelling. At the same time, how other cities

accomplish their operational tasks and run their services can illuminate the effort to re-engineer the management and operations of

the District government. If we ask cities like Charlotte and San

Diego or Philadelphia and Indianapolis what they would do if they

had to pay for Medicaid, a State prison, a State mental hospital,

a State university and unfunded pension liability all by themselves,

there is little they could tell us.

The District is the only city in the United States burdened with

State, county and municipal functions. We will not be able to help

the District by comparing apples and oranges. However, there is

plenty of room for discussion about the many operations and services other cites and the District have in common. The DC city council is beginning it’s own series of hearings on changes in local governance. The council passed a resolution recently that reads in

part, ‘‘Any recommendations for changes in the home rule charter

regarding the structure of municipal governance should emanate

from a comprehensive process approved by both Federal and District officials and in which the residents of the District are full participants.’’

I doubt that any American could or would care to take issue with

this statement which simply memorializes a basic American tenet.

I ask unanimous consent that the full resolution of the DC city

council be admitted to the record. I will make the record of this

hearing available to District residents and officials, so that they

may profit from the experiences that will be shared with us today.

I welcome today’s witnesses and thank them for coming.

[The prepared statement of Hon. Eleanor Holmes Norton follows:]

9

10

11

Mr. TAYLOR. Thank you, Congresswoman Norton. And all of their

remarks will be entered into the record and will be made available.

I’d like to recognize, too, the chairman of the DC government affairs committee—from the city council—Carol Schwartz, if she

would stand. Also Steve Harlan and Ed Singletary from the control

board are with us. And we appreciate you gentlemen being with us

and appreciate your cooperation that we’ve had.

I would like to ask our colleague Congresslady Sue Myrick from

Charlotte—herself a former mayor of Charlotte—to introduce the

mayor of the Queen City, of Charlotte, NC. Sue.

Mrs. MYRICK. Thank you, Congressman Taylor. I’m delighted to

be here and say a good word about Pat, and just remind everybody

that we’ve done some good things in our city. When I was mayor,

I started restructuring government and literally privatizing services for the first time. And at first it wasn’t real well accepted. But,

then, then the citizens started to see that they actually we getting

increased services and saving tax dollars, it got their attention and

they agreed that we were on the right track.

We also have good record in our city of doing public-private partnerships to leverage tax dollars. And that’s been tremendously successful in efforts from a homeless shelter, the HOWAY, to an NFL

football stadium. So I know Pat’s going to share some of those successes with you. And he’s carried on the tradition for good government in Charlotte.

And I’m really pleased to have this opportunity to introduce him

today and just to say that I look forward to working with you all

in your committees—and anything I can do to help to overcome

some of these challenges that exist here in DC. And if you will excuse me, I’ve got a Rules Committee meeting to go to. Thank you.

Mr. TAYLOR. Pat. Thank you for being here with us.

STATEMENTS OF PATRICK McCRORY, MAYOR, CHARLOTTE,

NC; SUSAN GOLDING, MAYOR, SAN DIEGO, CA; STEPHEN

GOLDSMITH, MAYOR, INDIANAPOLIS, IN; KNOX H. WHITE,

MAYOR, GREENVILLE, SC; AND EDWARD G. RENDELL,

MAYOR, PHILADELPHIA, PA

Mr. MCCRORY. Thank you very much. It’s an honor to be here

today. And I’d just like to make a few personal comments. First of

all, we want to help Washington, DC. In Charlotte, NC, we consider Washington, DC, to be the symbol for our Nation, and, thus,

a reflection, also, on our entire Nation including our city of Charlotte. So, we’re here to give any advice we can. And I just also want

to make a point that I will also plan to learn from this session from

other mayors that are here today.

That we constantly try borrowing best practices from other cities,

even during good times in Charlotte, NC because we cannot take

for granted what we have today. Because things can change so rapidly. And during these times of change, whether you’re in the private or public sector, you constantly have to borrow from the best.

And we have, in fact, visited cities like Indianapolis to borrow from

what we consider a very well run city.

And we borrowed some of their practices and actually have applied them in Charlotte, NC. So, today I will be taking notes along

with you and other representatives from Washington, DC, and

12

their city to continue to learn from best practices, both during good

times and difficult times.

Just a brief bio of myself. I’ve been mayor since 1995. I was on

the city council prior to that, for 6 years. And I also served as

mayor pro temp. I also have been with Duke Power Co. for 18

years in several management jobs during my 18 years with Duke

Power Co. in Charlotte, NC. Just a few points about Charlotte, NC

that I want to state, and then we’ll just give you some of our best

practices in the few minutes that we have.

Charlotte is the largest city between Atlanta and Washington,

with a population of approximately 460,000. And after this year,

we’ll be well over 500,000 people. It is the center of the fifth largest

urban center, with approximately 5.6 million people living within

a 100-mile radius. And we also have something we’re very proud

of, and that is the 14th busiest airport in the United States. We

also, as Senator Faircloth mentioned, the second largest banking

and financial center. And we’re extremely proud of our AAA bond

rating.

We also work very closely—and this is a difference between

Washington and Charlotte—as there are many differences—with

our county government. The county government is also a very similar run form of government in which they have part-time public officials including the county chairmen and the county commissioners. And I work daily with the county commissioners and also

the chairman of the county commission in which they are responsible for the schools, social services, jails, medic, libraries and

parks and recreations, where Charlotte is responsible for police,

fire, garbage collection, the airport, transportation, water and several other services.

We have consolidated—during the past 6 years—almost all the

services that we can between the city and county governments.

And, in fact, during the past 4 years, we are now looking at attempting to politically consolidate the city and county governments.

Even though we are going through good times, we’re, again, constantly looking at difficult ways we can organize our government

to bring more efficiency for our taxpayers.

You have some other information in front of you. I don’t want to

repeat it all. But we do have something that I know Senator Faircloth and Rep. Davis have asked us about, and that is what we call

the council manager form of government since 1928. I am a parttime mayor. Although I put in many, many hours every week, and

we do have an 11 member city council form of government with 7

district representatives and 4 at-large representatives.

I’d like to also introduce Malachi Green, who is in the audience,

who is one of our district representatives. We also are very proud

of partnerships that we have with our citizens. We have over 300

citizens participating in boards which help advise the city council

and the mayor, and also help advise city staff. In a business sense,

basically what we are is this—is that I serve as the chairman of

the board of the city of Charlotte for its government functions. The

city council serves as its board of directors.

We are responsible for setting the policy for the city of Charlotte

and approving all budget matters for the city of Charlotte. We hire

a professional city manager. And, in fact, we just hired one in the

13

past year, who is responsible for the day to day operations of the

city. She is trained in those efforts. And, then, she is, in turn, responsible for the hiring of the police chief, the fire chief, the CMUD

directors—that’s our Charlotte Mecklenburg Utility Department—

and other direct operations that report to the city manager.

Only the city manager, the city attorney and the city clerk report

to the mayor and city council. So, it’s very similar to a business operations, where, again, we are responsible for the overall policy of

the city in Charlotte, where we hire a professional to deal with the

day to day operations for the city of Charlotte. And that is the difference between even some of our forms of government that we

have on the table today. And there are pros and cons to each one

of those forms of government. And I’ll be glad to discuss those in

more detail.

Again, we want to talk about anything we can, in Charlotte, that

may help Washington, DC, meet their own unique situations. But,

like Washington, we do have some unique challenges, ourselves.

And those unique challenges are also true in Indianapolis, San

Diego and Greenville, SC, and that is trying to meet the ever-needing infrastructure demands while also trying to keep the sufficient

amount of revenue to pay for those infrastructure demands. And

that’s—our major challenge is trying to keep the tax rate as low

as possible.

You notice in the information that you have in front of you, that

we have had a very stable property tax rate for the past 10 years.

And we also have implemented, during that time, a 5-year, $42

million community safety plan, which we’re extremely proud of. We

also have a tremendous amount of support from the Charlotte citizens to support a bond package for street and maintenance and

schools and water/sewer, which is drastically needed in any city to

keep the needed infrastructure up.

We also are very proud of operating what I think our city Charlotte be run as, and that is as a business. We try to keep the politics as much as possible out of the day to day operations. And we

let the professionals participate in those day to day operations and

let the professionals try to make the decisions in streamlining our

government. We, however, as chairmen of the board, set very

strong directive demanding that efficiency and demanding those

types of operations.

Because we also demand no tax increase in the city of Charlotte

with regards to property taxes. Therefore, in fact, we’ve had 19 percent fewer city employees per 1,000 population now than we did in

1980. And that also includes hiring—and increase in our police department by well over 20 percent. A key to some of our success stories, which I think you also learn from Indianapolis and San Diego

and also Philadelphia when Mayor Rendell gets here—and that is

that we are convinced that we must provide a more competitive

spirit for our city employees.

And that best way to do that is introduce competition like you

have in the private sector. And I’ll just tell two stories with regard

to that. The first is, regarding our water operations, for the first

time, the city of Charlotte bid out to the private sector the operations of one of our water plants—water treatment plants. We did

14

not sell the plant, we bid out the actual operations. The city of

Charlotte won the bid.

But in doing so, it decreased its costs by over $5 million by introducing lessons learned from the private sector. In other words, the

introduction of competition actually brought about more efficient

government workers. And we’re very proud of that. And we have

a very good relationship with our government workers in the city

of Charlotte. Another example is where we are now privatizing and

putting out for competitive bids our sanitation collection.

We have privatized 25 percent of our sanitation, which is now

done by the private sector. We will be putting out for bids this

year—in fact the bids just went out 2 weeks ago for another 25 percent, which is competing against the city government versus the

private sector. And we’ve got four bids on the table right now,

which we will be reviewing. In addition to us reviewing that, we

have a citizens committee composed of business people, who are reviewing those competitive bids outside of city government.

So, we actually have a third party who have business experience.

Because they are a third party and city is involved in the bids, we

have volunteers from our community who are participating in the

evaluation of those bids to make sure they’re fair in both private

sector and public sector evaluations.

Those are just a few of the examples of things we’re attempting

to do in Charlotte in the few minutes that I have. Just in brief

summary, we are never satisfied with the status quo, even during

good times in Charlotte. We are constantly looking for ways to

change, because the world around us is changing so rapidly.

And any organization that is constantly not looking for new and

better ways to do things, I do not think will be around in the next

10 to 20 years. And that’s why we’re constantly asking three questions. And we gave you a package of what we did to reinvent government. And, again, in my few minutes, I don’t have time to review those. But we asked three basic questions. The first question

is: what business should the city of Charlotte be in? What services

should Charlotte provide?

The second question is: what is the best way to provide those

services. For example, should we have the private sector provide

those services with taxpayer assistance, or should we have the public sector. Or should we put out competitive bidding. And the third

question we ask, which is really the final question, is: what’s the

best form of organization to implement those services? What’s the

best form of government that we should have for the next 10 to 20

years to meet these ever changing demands of high customer expectations, which are demanding public safety, demanding good

streets with no potholes, demanding clean water, while also meeting the demand of no tax increase.

And those are the same demands that are on the private sector

right now. And we anticipate meeting those demands in the public

sector. Again, thank you very much.

[The prepared statement of Mr. McCrory follows:]

15

16

17

18

19

20

Mr. TAYLOR. Thank you Mayor McCrory. We appreciate your

comments, and we’ll have some questions a little later. I’d like to

introduce a fellow member of the committee, Duke Cunningham,

the Congressman from California, who’ll introduce Mayor Golding

of San Diego. Duke.

Mr. CUNNINGHAM. Thank you Mr. Chairman. I thank you for

convening this hearing. When you’re hot you’re hot, when you’re

not you’re last. So, Susan, it’s not that you’re last, it’s that I am

last. So, we get to introduce you right now. History has dealt the

city of Washington a pretty bad hand in the past. But the good

news is that there is support from the Speaker of the House, the

President, and the District Delegate, Eleanor Holmes Norton, all of

whom have been at the forefront of this battle.

I am a new member of the DC appropriations panel. I live in

Washington, DC. And the problem is monumental. It’s overwhelming. I lived up by the train station. And I used to literally

have to walk down the street huffed up and saying, ‘‘I’m bad. I’m

bad.’’ If I was concerned about my safety, you can imagine that defenseless, in many cases, single women walking down the street,

would feel even less safe.

Citizens do live in fear in Washington, DC. The schools, although

they have many dedicated teachers—the education system is in

shambles, in my opinion. Steve Gunderson, a Member from the

104th Congress, tried to work to improve the school’s particular

system. It’s a difficult process that we have. I think that if someone

can shed a great light on DC’s problem, it is our distinguished panelist, Mayor Susan Golding of San Diego, now serving her second

term as chief executive officer of America’s finest city.

California Business Magazine named Mayor Golding’s San Diego

the best California city for doing business, based on quality of life,

low crime rate, low business taxes and rapid permit processes. Why

is this significant? Mayor Golding inherited a city from her predecessor that was in shambles. A neglected sewage system, high

crime rates, an anti-business attitude out of the mayor’s office,

higher taxes, higher red tape—and she turned all that around.

On the same things in Washington that I hear Delegate Mrs.

Norton speaking about, as far as lower taxes, and a pro-business

stance—Susan has turned that around for the better in San Diego.

Her experience and success, I think, will shed light on how we can

improve in Washington. Mayor Golding also recently brokered a

successful NFL expansion stadium agreement. It was controversial,

but—you can see her management skills. She did well. And we’re

going to have the NFL championships there next year.

Basically, Susan Golding, when she does something, it turns out

gold-ing, the way it should. And I have nothing against Stephen or

Pat or Edward or Knox. I would match her against you or any

other mayor in this United States. She’s warm. She’s personable.

And she’s tough. And with that, Mayor Golding.

[The prepared statement of Hon. Randall Cunningham follows:]

21

22

Mr. TAYLOR. Thank you, Duke. I appreciate it. Mayor Golding.

Ms. GOLDING. Thank you. Thank you, Mr. Chairman. Thank you,

Congressman Cunningham. I hope I live up to that introduction.

Mr. CUNNINGHAM. You do.

Ms. GOLDING. But I do appreciate it. And appreciate the opportunity to testify before you today. Because it is true that we all feel

that Washington, DC, is our city, because it is the Capital of our

country. I am proud of what we’ve achieved in San Diego. But,

really the story I have to tell—and then we can get into questions—is that every city is different.

I think if you survey these mayors, you’d find out that every one

of us had a different type of governmental structure, that there

were differences in how the power was exerted or could be exerted,

that even the relationship between city, county or State was different as well. But there are basic principles that work in any situation. And as someone previously noted, good practices fit anywhere in any city or in any government.

And we do borrow from each other a lot. When I see a mayor

who’s done something great, I’m the first to try to steal it if I think

it will work in San Diego. But you do have to adjust any good idea

to your own situation or your own city. But much that has worked

elsewhere, I believe, would work in DC, or any city. You just have

to adapt it. In addition the citizens, as well as, the elected representatives have to believe in it.

In San Diego when I took office, we had a skyrocketing violent

crime rate that had risen about 46 percent the year before I took

office. We were in a very deep recession. The Nation was in a recession, but in California it was even worse. And for San Diego it was

the worst at that point in time, at the tail end of 1992. Businesses

were literally leaving town.

We had lost at least 60,000 jobs. They were jobs of every kind:

blue collar, white collar jobs. There was really a tremendous depression in—not economic, we had a recession there—but a depression among our citizens and the feeling that just nothing was going

to work again. My job was to change the attitude and also change

the statistics as well.

The first thing I did—and one of the most popular things I ever

did—occurred when I took office, I appointed an officer of common

sense in the mayor’s office. The only criticism I received was why

isn’t there more than one person with common sense in the mayor’s

office. But it was an individual that was there to cut red tape, to

make sense out of a lot of the rules that were really killing us, and

to make a list as people complained, of what had to be changed.

Fortunately today we have many people of common sense, and

we’ve expanded that. We’ve started putting all employees through

customer service training. I did say at the time that I wanted our

city government to treat our citizens the way Nordstrom’s treats its

customers. Because, after all, we’re supposed to be a service to the

citizens. And when you walk into a government office, you ought

to be treated like you’re the guest.

And that’s not the way our citizens were being treated. And,

therefore, their attitude about their government’s ability to do anything was not very good. We also started by immediately putting

a moratorium on any new business fees or regulation until we

23

could dig ourselves out of this hole. We began regulatory relief

days, which I started my first year and we have continued since,

to cut back on rules and regulations that really weren’t necessary,

that didn’t do what they were intended to do. They cost everybody

from the average home owner on up to a business, a lot of time,

money and aggravation, and made no common sense.

We established a Business Ombudsman Program that cut red

tape for certain industries particularly high tech industries that we

believed were our future, California’s. And I established the first

true regional permit assistance center. What we did was take local,

county and State permits—compare this to Washington, DC—put

them all in one place so someone could go to just one location instead of 13 or 14 in the city to get a permit for what they needed

to do.

It took some time to put it together, but it’s made a huge difference. We cut permit processing time in half, and in some instances more than half. And that was money to a lot of people.

Many argue that this was the worst time to cut taxes or fees because, we were in the worst budget cycle the city had ever had, I

believe, ever. We lost millions in revenue. The State decided to

take millions of dollars from us that had been historically the city’s

revenue, because the State was in trouble.

So, in response, I cut the business tax in half the first year and

cut it in half the second year. Now, there were those who felt that

that was the worst thing I could do when our revenue was already

depressed, when property tax revenues were going down. I argued

that we had to send a signal to turn it around. And we did just

that. We made a series of cuts after the business tax was cut by

80 percent total the first 2 years.

We made a series of other cuts that I proposed in fees. And we

did, ultimately, cause the city to be turned around. We developed

a reputation for inviting jobs rather than repelling jobs. And we

have now replaced all the jobs we lost. I’m not talking about each

individual job the same, and by at least 8,000 more than we had

lost 4 years ago. Today, our business taxes and fees are, I believe—

I want to be careful when I say this with other mayors here—lower

than any other major city, and any of the 10 largest cities in the

country.

By the way, San Diego is the sixth largest city in the country,

the second largest in California. We have a population of approximately 1.2 million people. We also have the lowest hotel tax, the

lowest real estate transfer tax, no utility tax and no local income

tax. So, my view was we had to make it a place that you could live

and produce jobs during that period.

We also brought the crime rate down dramatically. After my first

year we had a decrease in every index category of crime for the

first time in 40 years. And it has continued to go down since then.

Most recently, through a very strict new curfew enforcement policy

and a juvenile anti-loitering ordinance, working.

And I’d like to, when I have the chance later, tell you how. Both

which are working. The juvenile violent crime rate has gone down

for the last 2 years. And that, as you know, is the toughest, toughest part that any city in this country has to face. And it’s tough

to keep it down. But we’re going to continue to do that. One other

24

comment that I want to make before the other mayors talk is that

part of this also was to involve our citizens.

We now have Citizens Patrols in every neighborhood of the city.

They work well. They are the eyes and ears of the police department. And there are no problems. They are trained by the police

department in liaison with the police department. All their equipment is provided by businesses. So, it is a volunteer operation at

no cost. They help the kids. They help the seniors. And they help

us keep the crime rate down. And we use thousands of volunteers

just assisting in the police department.

We have called on our citizens to be full participants. And without them we would not have been as successful as we have been.

We, too—and I think you’ll hear this from many of the mayors—

introduced competition programs. I have terrific stories to tell

about ours. Competition is absolutely the best way to reduce costs,

reform government and make your own operation more efficient,

because just privatizing doesn’t assist your employees in learning

how to compete and how to do their operation better. The competitive bid process does that. We have improved efficiency.

I put together a panel of CEOs who went through every department in the city and made 52 recommendations for change, all of

which were adopted, and are being put into place. They’re businesses’ best practices, from true benchmarking to true performance

judgments as opposed to what most governments do—and including

ours—which is just to simply say we’ve done a good job because we

talked to X-number of people and processed X-number of forms.

We called that task force Change2. And it is still going. We went

to zero-based management reviews. We changed a lot of our historic practices. And those changes are still going on. So, our economy is now growing at the fastest rate it has in the city’s history:

4.7 percent. And I believe it’s going to continue at that rate in the

future. That doesn’t mean population is increasing at that rate. We

have a lower ratio today of city employee per 1,000 population than

we had in 1960.

And it has gone down every year since I’ve been in office, because

we have become more efficient. But I want you to know that we

may have been the only city in California during that deep recession that didn’t close libraries, that didn’t cut back on the kinds of

essential services that the citizens wanted. But we did prioritize,

and that’s how we did it.

I introduced a public safety ordinance that requires the addition

of police officers based on a formula of increases in revenue. So,

we’ve added police officers—new ones—every year in spite of the

worst recession in the city’s history. And we did that by combining

a lot of these efforts.

I wish you the best of luck. Washington, DC is terribly important

to the whole country and I would be happy to help in any way I

can.

Some things work well. I’m sure you’ll see that we’ve adopted,

we’ve copied from each other. So, I hope you are able to gain some

good ideas from the mayors that are sitting here. And I know we

all stand ready to help in any way we can. Thank you.

[The prepared statement of Ms. Golding follows:]

25

26

27

28

29

30

31

32

33

34

35

Mr. TAYLOR. Thank you, Mayor Golding. I’d like to recognize DC

City Councilwoman Hilda Mason, if she would stand. She joined us

since we started. We’re delighted to have you with us, Mrs. Mason.

Mayor Goldsmith from Indianapolis, IN—we’re very pleased to

have you with us today and know a great deal about the work that

you’ve done in your city. Please make an opening statement.

Mr. GOLDSMITH. Thank you very much, Mr. Chairman. And, as

the other mayors, I’m delighted to be invited to share some observations. I don’t think any of us would suggest we know how to

make DC work, just some observations about large cities and

what’s worked in our communities. Let me perhaps start with a

few observations.

First of all, I don’t view Indianapolis as in competition with

Charlotte or Washington, DC, or San Diego. A large part of our significant urban centers are in competition with their own suburbs.

And as infrastructure quality has deteriorated, taxes have gone up,

crime has increased, education has decreased. Money is quite mobile in this country, and it moves. Wealth moves to where it’s most

welcome.

It seems to me that there are some basic principles that all of

us have attempted to address to make our large cities significant

sources of investment and opportunities for our citizens. First, we

have to provide high quality, low cost public services. Second, we

have to have a taxed and regulatory environment that’s competitive. And third, we have to provide quality education.

And let me just make a couple comments on each of those. As

both of the previous mayors mentioned, even though I was elected

on something of a privatization platform, I think the main principle

that we want to underscore here is that it’s not that private sector

employees are necessarily more productive than public sector employees, it’s that public sector employees working in monopolistic

situations, work in inherently inferior systems.

So, what we have done in an effort to produce high quality, low

cost public services, is go through each one of the businesses that

we’re in—and we’re in about 200 in Indianapolis alone—find out

how much we’re spending for each service—how much it costs to

fill a pothole, how much it costs to clean a sewer, how much it costs

to copy a piece of paper—and bid them out one at a time.

And over this process, we’ve now bid out 70 public services, we’ve

reduced our non-public safety work force by 45 percent, we’ve saved

$250 million. And I think it particularly important to underscore,

in the effort to look at DC, there has been a feeling that the only

way to decrease a budget is to decrease the quality and the quantity of a service. In fact, our experience, like Mayor Golding’s, is actually these are inversely related, that as we have decreased our

budget each year for the last 5 years, as we’ve decreased our number of public employees, in each instance, the quality and quantity

of the service is better, it’s not worse.

Our water quality is better. Our golf courses are better. Our

playgrounds are better. Our roads are better, as a result of allowing our employees, through a competitive process, to find smarter,

more effective ways to spend taxpayer dollars. Even our unions—

even though our public employee work force is down 45 percent,

36

our unions, given the opportunity to compete, have competed effectively. And none of our line workers have been laid off.

Second, with respect to effective low cost public services, the Government needs to pay attention to the basics. Big city governments

over a number of years have tried to do too many things. Basically,

the job of mayor of Indianapolis is pretty straightforward. We need

to make sure the streets are smooth, the sewers work, and you

don’t get beat up on your way to church or work.

If we get that done, the rest of the economy will work on its way. So, we have invested, now, with our savings, $700 million in infrastructure repair in the last 5 years alone, and added $100 million

to our public safety budget, without even raising taxes. So, you can

produce more effective, lower cost public services and do that in a

way that doesn’t reflect on the quality of the service.

Second—and I think Mayor Golding covered this, but I’d like to

emphasize it—that rather than trying to patch together, in an environment that allows for investment, we need to change the structural barriers to investment in large cities. The barriers are backward. the investment flows out of our large cities and into the suburbs. And that means that taxes have to be competitive. Our tax

rate now is the lowest it’s been since 1981, and the regulatory environment has to say, ‘‘Please come invest your money in our city.

We want your investment.’’ We’re going to reduce the regulatory barriers. We have our own

regulatory study commission which is perhaps a version of Mayor

Golding’s, which says we’re going to rigorously manage down the

regulations that don’t produce quality in terms of public safety. So

the tax and regulatory environment is important, as well. And last,

although we’re not convened to talk about it today, especially in a

welfare reform time, I don’t think we can say, as we all agree, that

the path to the future is a good job, entrap our urban children in

monopolistic, poorly performing urban school systems and deprive

the poorest residence of choice of education for their children.

We have a privately funded voucher program in Indianapolis

called the Educational Choice Charitable Trust. It has been evaluated by the Hudson Institute. Controlling for demographics and

parent selection, we find very encouraging results from the children who are given the right sorts of opportunities as defined by

what their parents think is best.

In summary, Mr. Chairman and the members of the committee,

the future is bright for large urban communities around our country. They are areas of vibrancy and diversity and excitement. They

are the psychological and economic centers of our regional economies, and, in the case of DC, of our national economy. Our report

card after 5 years is encouraging. Our population growth has been

more robust than ever before. Our budget balances are up by four

fold. We’ve had 5 straight years of budget decreases. We’ve invested $700 million in infrastructure. And we’ve brought down

about $1.5 billion in liabilities.

But just in summary, as we go forward and we try to address

these issues, the job of a mayor, the job of people concerned about

urban communities, is to create opportunity. Opportunity comes

from good education. Opportunity comes from a good economic

playing field. I am proud of the fact that as our public sector jobs

37

have been reduced, our private sector jobs have increased dramatically.

The unemployment rate has drooped from about 7 percent to less

than 3 percent. And I believe that’s not because Government is creating the jobs, but because Government is paying attention to its

core responsibilities: public safety, infrastructure and a competitive

economic environment. Thank you very much.

Mr. TAYLOR. Thank you, Mayor Goldsmith. I appreciate your

statements on that record, and we’ll have questions for you in a

moment. I’d like to introduce Mayor Knox White from Greenville,

SC. Mayor White has worked in Congress in a staff position and

has been an outstanding mayor in South Carolina. Mayor White.

Mr. WHITE. Thank you, Mr. Chairman and members of the committee. It is a real honor and a privilege to be here today. As the

chairman mentioned, I had a chance to live in the Washington, DC,

area for many years, so it has a special place in my heart. And I

did try to, as preparing some remarks, to try to think in terms of

one or two helpful concepts that I think are relevant even to a city

like Washington that is so much larger than my own.

Let me say up front a little bit about Greenville, SC, since you

may know the other cities here today. You may not know Greenville. Greenville is on the Interstate 85 corridor between Charlotte

and Atlanta, which is very much an area in the midst of an economic boom. It’s a metropolitan area of about 1 million. We also

are noted by the amount of foreign investment in the area. We

have more foreign investment per capita than any place in the

country. Greenville is the home of Michelin North America. The

BMW plant is just across the county line. Hitachi and other international companies have a large presence in our community.

And this has, to a large degree, fueled an economic renaissance

in the upstate of South Carolina. One thing that’s quite significant,

though, is the economic boom of the area has also translated into

a boom in our downtown. And we have a classic downtown situation like so many cities in this country—the downtown was dead

and dying in the 1960’s and 1970’s as the department stores left.

We all know that picture.

Today we have record capital investment in downtown Greenville. We recently won a citation from the International Downtown

Association for our revitalization effort. We have the office towers

and all the usual features of big American cities, but we also have

an extraordinary tree-lined, pedestrian friendly landscape for

downtown full of restaurants, coffee houses, a 24-hour nightlife and

those kinds of nice amenities. In fact, downtown in our area has

become the entertainment destination for the region.

Everybody goes downtown again. So it’s really an extraordinary

thing and something wonderful to see. But, again, the economy of

the area has not always been this way. We were a textile region.

And you know what that can mean. The textile industry has, of

course, changed a great deal. And, again, we had a downtown that

was pretty much dead and dying at one time. But things have

turned around. The area is booming.

How this happened is, first of all, as has been mentioned so

many times now—and this is something that you just have to—

every community has to grapple with—you have to create a proVerDate 11-MAY-2000 11:01 May 28, 2002 Jkt 078983 PO 00000 Frm 00045 Fmt 6633 Sfmt 6602 W:\DISC\41800 pfrm09 PsN: 41800
38

business climate. And that’s State and local. And that means in

terms of your taxes and your regulatory climate, it has to, indeed,

be a pro-business community. And second, a success story of so

many communities in this country—Greenville among the—is a

commitment to private-public sector partnerships. We hear that

phrase a lot, but it’s tried and true, and it’s been done across this

country, where you use public sector dollars to leverage private dollars to spur development in areas where, perhaps, things are not

happening fast enough.

We began this effort about in the early 1980’s with a hotel

project—a Hyatt hotel project. For instance, the lobby of the hotel

is actually a public park. And, of course, the garage is a public facility and things like that. After the Hyatt project of the eighties,

we’ve moved on to a performing arts center with a great deal of public and private investment and a $50 million arts center, a new

arena project—17,000 seat arena project is about 57 percent private.

So, we have a long-standing commitment to engaging the public

sector to work with the private sector in these kind of large scale

partnerships. Another kind of partnership that I think is relevant

to all cities in this country is a willingness of a city to get into an

area of business that you don’t normally get into—promotion of

things like festivals and special events.

Cities have always had parades, I suppose, but successful cities

have been those that have taken their areas that are not growing

or producing like they should—and that’s where you have the festival. You pick the most down and out section of town, and that’s

where you do that kind of thing time and time again. What I think

cities across that country have found is that if you bring people

into areas, people, over the long haul, induce investment in that

area. And that’s another strategy of revitalization.

All of this is to say, though, is that attention to this kind of

amenities—the tree-lined downtown, the special festivals, those

kinds of amenities—show that quality of life and economic development really go hand in hand. Let me mention, finally, a strategy

that hasn’t been mentioned yet, but I think you’ll hear it a lot in

the literature out there of what’s going on in urban America, and

that’s this—it’s time to also pay attention to the neighborhoods, to

residential neighborhoods where people live.

And a lot of cities in this country are so focused on the 9-to-5 environment, the office buildings and the development around that,

that they forget that what really makes a city, what gives it its

heart and soul is the residential component. You’ve got to encourage folks to live in cities. People don’t have to live in cities. They

can live in the suburbs, and that’s indeed what they do too many

times. So, we’re trying to put a great deal of more attention, as we

grow with our economic development program, go back to basics,

and now we’re strategizing on ways to make the residential sectors

of the city as livable as possible.

And we’re doing something, again, borrowing—as you heard

many mayors state it today, we steal from each other’s ideas—and

this is one of them. We have a very intense planning process underway on the neighborhood level. We start with the idea that the

city is made up of many separate neighborhoods. And Washington,

39

DC, of course, is full of wonderful neighborhoods, where if you stop

someone on the street and ask them where they live, they can tell

you, ‘‘I live in’’—they don’t necessarily say Washington, they say

Adams-Morgan or something like that.

You want to first get into the neighborhoods and identify what

are the neighborhoods that people relate to. Then, we’re in the

process of holding meetings in these neighborhoods—grass roots democracy—inviting everyone to come. And in a free flowing kind of

style, trying to identify what do you like about this area of town?

Why did you choose to live here? If you were selling a house, what

would you tell somebody if they wanted to live here. And it’s important to affirm those good things about that area, its assets.

And then you turn to what you don’t like about this neighborhood, this area of town. If you’re trying to sell a house, what would

you keep people from trying to find out. It’s important to get all

that out there, to get the folks on the neighborhood, grass roots

level to talk about the issues before them, to talk about crime, their

level of anxiety about crime, to look at zoning issues and sidewalks

and street lights, local parks, whatever is on their mind, and help

those folds develop and action plan to for their own neighborhood

and to get focuses on that.

This also has the effect, frankly, beyond an action plan to address particular issues you identify. It has the effect of giving people a voice. And if there’s anything that I think cities need to be

about these days—and all Government—it’s to try to get into the

roots of people’s anxieties today. People have a sense, especially in

large urban areas, that their voice really doesn’t count and that

things are kind of spinning out of control and they don’t count anymore.

When you get down to the neighborhood level, you start giving

people a voice again. And that contributes to quality of life as much

as anything I know. And I think cities are in a particular good position to do that. It’s just called democracy, grass roots democracy.

Cities can do that, and also cities can be about nourishing—nourishing not just neighborhoods, but all private organizations. A city

has a great helper and a great friend in churches, in schools, in

civic clubs, private organizations.

They’re out there. They’re just waiting to be engaged. And city

can do a lot to nourish those kinds of private civic organizations

and make them part of the solution and again give people a voice.

If you do that, you give people what I think at the end of the day

is what a city is all about, and that’s giving people a dignified quality of life. And in my definition, that’s a successful city. Thank you,

Mr. Chairman.

[The prepared statement of Mr. White follows:]

40

41

42

43

44

Mr. TAYLOR. Thank you, Mayor White. We appreciate this. We

have a number of outstanding members on our various subcommittees. And I’d like to ask if any of them have statements they’d like

to make before we begin the questioning. Congresslady Morella.

Mrs. MORELLA. Thank you. Thank you, Mr. Chairman. I’d like

just to ask unanimous consent that an opening statement be placed

in the record. And I wanted to make sure that you realize how valuable this hearing is. And I want to commend the chairmen, all

four of them, for putting it together and making really joint, joint

and even bicameral.

It shows how important the District of Columbia is to all of us,

not only those in the region, but throughout the country. I’ve enjoyed hearing the panelists share some of their experiences. I think

at the root of it is community, people involvement, partnerships, investing in something that you believe in. And I want to thank you

all for the presentation and look forward to asking the questions.

Thank you, Mr. Chairman.

[The prepared statement of Hon. Constance A. Morella follows:]

45

46

47

48

49

Mr. TAYLOR. Thank you. You’ve been a leader, I know, in working to make Washington, DC better, as well as the neighboring

areas, which you represent a part of that area. What we’re going

to do, if we may, we’ll start the questions. Mayor Rendell, who just

came, would you like a moment to pause or would you like to go

ahead and start with your statement, sir?

Mr. RENDELL. Whatever you’d like, Mr. Chairman.

Mr. TAYLOR. We’d be delighted to have your statement if you are

ready to go at this point.

Mr. RENDELL. Sure. Absolutely.

Mr. TAYLOR. Thank you. We know and we appreciate your schedule and your being able to be with us today. Our procedure will

continue with the mayor’s statement and then we’ll open for questions by the members of the committee to the various mayors.

Mr. RENDELL. Well, thank you, Mr. Chairman. And it is my

pleasure to be here, because I’m sure my colleagues indicated to

you that those of us who head up cities and urban centers have a

great felling and a great empathy for others who do the same. And

it is not my goal to come here today to give advice to Washington,

DC, or to this panel or to anybody else. I haven’t had the time to

read up on the financial structure or the extent or nature of the

problems that effect Washington, DC, and I don’t purport to be an

expert or knowledgeable in any way on that.

I come here to share, briefly, our experience. And if there are

things that are relevant in our experience to Washington, DC, then

I’m happy to help. And I think all of us come with the belief that

the things that we have done to help our cities’ financial situation

are important and we’re willing to share them, but there are long

range, inherent systemic problems facing all American cities, even

American cities that have recovered or are credited with recovery

like the five of us, which do not lie within the power of mayors or

city councils to address.

And I think that is a very, very important factor. What we have

done is cured the financial conditions of our cities, of our cities’

budgets. We haven’t been able to get at some of the deep seeded,

underlying problems that effect every American city—Philadelphia,

Washington, DC, and every American city across the board. And I

think that’s an important point to note.

When I became mayor, we started out facing a $230 million deficit, a deficit that was calculated to grow to $1.4 billion in the next

3 years if everything froze, including no wage increases. We were

a city that has raised taxes 19 times in 11 years before I became

mayor. And we have the highest wage tax and the highest business

taxes in the United States of America. So, a tax increase wasn’t an

option.

We were a city where basic services had almost reached an all

time low. So, a massive across the board lay off to balance our

budget wasn’t an option either. Because, just as high taxes drive

businesses and tax paying families out of jurisdiction, so do the collapse of municipal services. So, I believe when I ran, and I enunciated that during the campaign, I believed that we could cut

money out of the operating budget of the city of Philadelphia without affecting the quality of the services we deliver, to the contrary,

50

we could do it in a way where we actually enhanced many of the

services we deliver.

The bottom line is we were able to do so. I’ve been mayor for a little over 5 years. We have cut $1.6 billion cumulatively out of the

cost of the operation of the government of the city of Philadelphia

during that time. Are city services at a level where I’d like to see

them? No. But are they definitively improved over where they were

5 years ago? Absolutely.

We did not lay off a single individual. Through privatization, we

have lost a net of over 1,000 jobs, but we did that in a way so that

every city worker who was, by competitive contracting, privatized

out of a job, got another city job. We froze whenever we knew privatization was coming. We froze for months at a time so we could

transfer that city worker into another job.

So our work force did take a hit. We had to look at our labor

costs. And about 40 percent of the savings that I’ve enunciated

came on the labor side, including in our first contract, $300 million

in 4 years of savings in the cost of providing health care to our citizens. And at the end of that, our workers still had the choice for

co-pay, a choice of the three best HMOs in the city of Philadelphia.

So, we were able to do it in a way where we cut health care costs

dramatically, but without affecting the basic security of any of our

workers’ families.

We went out and looked at every facet of what we did as a government. And I think the cumulative experience of all of us and

mayors who aren’t here can tell you that there is no government

that if you examine what it does on almost a line by line basis, we

cannot effectuate significant savings. We are—the city of Philadelphia leases almost 800,000 square feet of space. When I became

mayor, I became mayor at a down cycle in rental values for office

buildings in the city of Philadelphia.

I immediately ordered our folks to go out and renegotiate our

leases, to renegotiate all of our leases, willing to extend, in a market where holding on to big hunks of office space was important,

willing to extend leases if we could reduce current prices. And we

saved over $5 million in just the cost of our operating leases alone.

And I could go on and tell example after example. Double zip coding mail, something as simple as that that we weren’t doing, that

racked up close to $500,000 of savings.

We looked at every facet of what we did. We tried to put basic

principles of private enterprise at work. Privatization—we have, to

this day, privatized 41 municipal functions, which saved us on an

annual basis $30 million. Over the course of 5 years, they’ve saved

us over $100 million. But we’ve also had four instances where we

did competitive contracting. We let the municipal workers and

their managers put the last bid in. And they beat back privatization efforts in four areas.

Those four areas save us on an annualized basis, $12.7 million.

Including our greatest single savings, in one of our sludge recycling

centers, where the employees and the managers got together and

beat back a privatization bid and cut the costs by changing work

rules, by being more effective in scheduling, cut the cost from $24

million a year to operate to $16.5 million to operate. It’s a privatization that has an enormous effect, too.

51

But we’ve also looked at revenue enhancement. When I became

mayor, the basic fee structures for the operation of our government

hadn’t gone up in 10 years. We raised our fee structures, found

ways to collect taxes better. We privatized tax collection and gave

private attorneys an incentive. They only get paid when they collected for us. And we now, on an annualized basis, between fees

and tax collection, produce about $45 million more a year in revenue than we were producing.

But the things that I think that we did best of all—and I know

that your time is limited—we’ve managed, through a whole series

of things—I’d be happy to talk about in response to some of the

questions—we managed to incentivize the government. When you

have a government like ours that was civil service and that had a

basic labor contract that restricted a lot a management rights, it

was very difficult to put incentives for performance in the government, incentives for cost savings, incentives for better productivity,

incentives for enhancing revenue collection.

I mean, some of the things that we did were so basic that I would

scratch my head and wonder why it wasn’t done before. For example, like Washington we run an EMS service. And we don’t ask

questions when someone is in need. We don’t, before we put them

in the ambulance say, ‘‘Do you have reimbursement for this?’’ We

put them in the ambulance. We never bothered to find out the people we took to the hospital or EMS whether they had basic health

coverage that would cover the cost of reimbursement.

By just doing that, $2.3 million in additional revenue a year. So,

there are many things that all of the mayors assembled at this

table, and many others have done, and we’d be happy to share

them with you at length.

[The prepared statement of Mr. Rendell follows:]

52

53

54

55

56

57

58

Mr. TAYLOR. Well, thank you, Mayor. I do look forward to asking

questions. As chairman, I’m entitled to start the questioning, but

I’m going to ask—since several of our members have pressing

schedules—I’m going to ask them if they’d like to question first and

I’ll save my questions to the end.

And we’ll start with Chairman Davis. If you’d like to start the

questions. I understand that Mayor Goldsmith has to leave by 3:30

p.m. Am I correct? Does anyone else have to leave earlier? If not,

if you have a question for Mayor Goldsmith, be sure that you put

it to him.

Ms. GOLDING. I have to leave at 3:30 p.m., also Mr. Chairman.

Mr. TAYLOR. Two mayors. Mayor Golding has to leave also. So,

if we’d be sure we get the questions answered by them. Chairman

Davis.

Mr. DAVIS. Chairman Taylor, thank you very much. Let me say

to each of you that I think you are walking examples of what leadership can do in troubled cities that first and foremost, whatever

the form of government, however dire the consequences, leadership

is critical to success. You’ve taken the bull by the horns. You’ve

made tough decisions. In Washington, one of the problems has been

a culture of not making decisions.

You’ve probably made some wrong decisions along the way and

you hear about those too. But you’ve got the guts to go out and

make decisions. As many of you know, I was the head of the county

government in Fairfax, which was city and county combined, before

I came here. I’ve admired each of you, and have followed you

through different publications. It’s a real privilege to have you

here.

Mayor Rendell, the Philadelphia story is impressive, because

being a northeastern city it is similar to Washington with regard

to its labor force. You have collective bargaining for city employees.

Is that right?

Mr. RENDELL. Yes.

Mr. DAVIS. I don’t know if all the rest of you have collective bargaining? Mayor Golding, do you have collective bargaining?

Ms. GOLDING. Yes.

Mr. DAVIS. Mayor Goldsmith does. You don’t, though, do you

Mayor McCrory?

Mr. MCCRORY. Only in transportation.

Mr. DAVIS. Mayor White, you don’t either, do you?

Mr. WHITE. No.

Mr. DAVIS. We didn’t in Fairfax. It made a huge difference in

some of the options available. Yet you privatized 41 functions in

Philadelphia. Washington, DC, has a service contract act that applies to it so that when you privatize, you have to pay a prevailing

wage to the new employees. But every city has nuances and difficulties that must be worked around. I’m just wondering, do you

have any unsuccessful privatization stories? We had a great one in

Fairfax.

Mr. RENDELL. I’d say out of 41 different functions that we’ve

privatized, 40 clearly resulted in not only reduced costs—they all

resulted in reduced costs because we had a benefit structure when

I took over that we paid 55 cents in benefits for every $1 of salary.

59

If any private business did that, they would be bankrupt. And we

were.

So, it wasn’t very hard for a private firm, given that, even

though the government, the work force didn’t have to pay taxes. So

when they were fashioning their competitive bids, taxes weren’t a

factor. But they just, in many cases, couldn’t or were unwilling to

compete. So I’d say all 41 saved us money. In one instance—in one

instance, our nursing home—we had a nursing home. And we still

own it but we privatized management out.

And I’d say it’s a wash. The management company had some real

significant problems. We temporarily lost State accreditation. We

regained it—the management company regained it. But, of course,

the opponents of privatization railed against that. And I pointed

out that——

Mr. DAVIS. As a poster child, right?

Mr. RENDELL. Right. But I pointed out that 2 years before when

the city work force had it, we lost accreditation too, so—but generally, the—but I want to stress—and I know Steve would say the

same thing—one of the best things in a government like ours in

Washington, DC is, all of a sudden, with privatization, our managers and our workers and our ship stewards go together and said,

‘‘Hey guys, let’s figure out how we can do this cheaper—not effecting our salaries—but how we can do it cheaper.’’

So, for the first time in our municipal government—and this was

only one of the things—but there was an incentive to do things better, faster and cheaper. And that’s really where the payoff has

been. We haven’t privatized, for example, trash collection, because

the savings that the work force has made by making concessions

with the managers have cut the savings from privatization by twothirds.

Mr. DAVIS. Bottom line: deliver the best service at the lowest

cost.

Mr. RENDELL. And competition.

Mr. DAVIS. Competition whether it’s government does it—have

any of you instituted a pilot program that’s a payment in lieu of

taxes for tax exempts? And I wonder if we could—let me start, just

start—Mayor Golding, have you had to do that in Indianapolis?

Mayor Goldsmith.

Mr. GOLDSMITH. It depends how you mean the question. What—

let me take a specific transaction—let me just gather in about a

minute a few thoughts. The goal here is to manage outcomes,

right? And the more you try to tinker with processes, the more you

preclude good employees from producing value. So, our savings

have not come from reducing the salaries of the employees whether

they are private or public, they’ve come from being able to buy the

best management in the world to bring their technology to bear.

So when we privatized our waste water treatment plant, which,

at the time, was the largest waste water privatization in the country, we saved $70 million and the water is cleaner. Now, that was

a private management contract, because we did not want to sell the

plant, we wanted to continue to control policy. And once the management contract was entered into, then we taxed our own plant—

a payment in lieu of taxes.

60

And that provided a substantial amount of money—in that case,

$5 million a year that we were able to invest in police officers. Because, essentially, there’s no reason why that plant wasn’t paying

a reasonable fair market tax like everyone else is, and the same

would be true of other municipal services once they are privatized.

Therefore, the difference between whether you sell the asset or privatize the management can go away if you are prepared to impose

a payment in lieu of taxes on the public facility once the management contract has been entered into.

Mr. DAVIS. Mayor Rendell, did you have any?

Mr. RENDELL. Yes. We instituted a pilot program across the

board because we’re a great medical center and university center,

and a good hunk of our real estate was untaxable. It’s a payment

in lieu of services. What we did is—there was a Supreme Court

case that sort of opened the door to do this—we put the pilot level

at far less than the entity would pay if they were found to be a

non-charitable institution.

And then, on top of that, we instituted something called SILOTs.

So, you can knock off—say your pilot payment was $1 million, you

could knock of a third of a million dollars, a third of it, by providing services to us. So, identify you were a hospital and you

wanted to provide doctors for a district health center so it could be

open on Saturday, you got the monetary credit for that. And it replaced—sometimes they can replace what would cost to us—that’s

$1.5 million cost—costs to them $400,000. So, we both win by having SILOTs—Service in Lieu of Taxes—as well as pilots.

Mr. DAVIS. Thank you very much. My time is up.

Mr. TAYLOR. Thank you. We’ll try to adhere to the 5 minute rule

and then come back and have a second round of questions if the

mayors have time. Senator Boxer.

Senator BOXER. Thank you, Mr. Chairman. I will go quickly and

try to cover all of my issues. Mayor Golding, as you went through

San Diego’s economic recovery, I was smiling and proud and looking at California. We have really come back in California from the

darkest recession days in 1992, to a time when we are moving forward. Now, we have a long way to go. We still have to keep on

moving forward. That’s for sure.

But it is a good story to tell. And as I think about my friend, Eleanor Holmes Norton, who is going to look at us and say, ‘‘How

does this relate?’’ I think about a lot of what you said—the boom

in high tech, dual use technologies, the imports and exports, the

faster pharmaceutical approvals. In our case, the entertainment industry is really leading the way in many ways. And tourism is very

important. We had a cruise ship revitalization act that’s helping.

And as I look at all of this, I think the tourism area is one area

where we can work with the city of Washington, DC and their employees if we have any good ideas for them.

And we’ve talked about that. Because the base of employment is

really quite different. On the crime rate, I wanted to just quickly

ask you each to give yes, no or don’t know to the following question. San Diego and many cities in California have seen a lower

crime rate. There are many reasons given—changes in demography, other things, community policing. Do you support President

61

Clinton’s proposal to add even more community police? If we could

start with Mayor Golding and go down. Yes, no.

Ms. GOLDING. It depends how the final proposal is structured.

Senator BOXER. So, you don’t know?

Ms. GOLDING. Yes.

Senator BOXER. OK. Yes. Next?

Mr. TAYLOR. Well——

Senator BOXER. The reason I want to do this, sir, is because I

want to cover all my questions. And then we can come back to explanations. But I really need to find out because it’s very important

to me, because I do support it and I want to know if the mayors

support.

Mr. TAYLOR. Well I—just a moment, if I may. I’m not sure what

the President’s program is.

Mr. DAVIS. I don’t either.

Mr. TAYLOR. What about a description? Maybe they could give us

a description.

Senator BOXER. OK. Let me ask this—do you agree that we

should add more community police under the existing Presidential

program, or cancel that program and just add more community police?

Mr. TAYLOR. I don’t know what the program is.

Senator BOXER. Mayor Goldsmith.

Mr. GOLDSMITH. It depends on the details. At present I do not

know.

Senator BOXER. OK.

Mr. MCCRORY. I’ll say the same. We’re adding community police

regardless.

Senator BOXER. OK. Good.

Mr. RENDELL. Yes.

Senator BOXER. OK.

Mr. RENDELL. I say yes, absolutely. We need the help. We’ve

added—we’ll add 763 police under the crime bill to a 6,100 force.

So the answer is yes. We’d love more.

Senator BOXER. OK. Thank you.

Mr. WHITE. And we’re adding community police officers, as well.

Senator BOXER. Do you support the President’s community policing program?

Mr. WHITE. I don’t know enough of the President’s plan——

Senator BOXER. OK. So, we have one yes and four noes—four

don’t knows at this point. OK.

My next issue has to do with bonded indebtedness. At this particular time—and this is very important—DC is looking at adding

more debt. And as I look over all of your statistics here—and I

have a chart on each city—I want to focus in on three cities—

Washington, DC, Philadelphia and San Diego—because they’re all

in a very different position. Washington, DC’s debt is about equal—

it’s actually less then it’s annual budget.

Its annual budget is $4.9 billion. It’s outstanding debt is $4.1 billion. San Diego’s budget is $1.1 billion. It’s outstanding debt is $1.6

billion. And Philadelphia has the lowest ratio. It has a $2.9 billion

budget and a $1.8 outstanding debt. Now, the reason I raise this

is because bond ratings are different, too.

62

In the case of all of you. One of your cities went up in bond rating and one went down. And so, what advice can you give, Mayor

Rendell and Mayor Golding, to the city of Washington, DC, in

terms of relationship of the amount of your debt to your annual

budget. Mayor Rendell.

Mr. RENDELL. Well, obviously, you want, in an ideal circumstance, you want to keep your debt down as low as possible.

We, when we went through this, looked at that as an issue—and

because of our bond rating, frankly, couldn’t have increased our

debt under any circumstances. However, the issue of debt in the

long run, the key is whatever your debt is, is it a manageable number.

And what you should not do, and what cities have done in the

past, is you should not fall prey to the temptation to add debt, but

backload it.

Senator BOXER. Mr. Rendell.

Mr. RENDELL. You know, after you’re gone, backload it so you get

the immediate kick of, ‘‘Boy, we spent all this money and look at—

our infrastructure is better, et cetera.’’ But, you’ve left backloaded

debt to such a degree that the city won’t be in a position to deal

with it 5, 6, 7 years down the road.

Senator BOXER. Mayor Golding, what would your advice be to

DC, to avoid a downrating of their bonds, and how should they look

at future bonded indebtedness?

Ms. GOLDING. Well, I would advise them not to have their jurisdiction pass Proposition 218. Because our bond rating has been

AAA for years. It was AAA my first 4 years. And the only reason

we went down a slight amount was because of the passage in California of Proposition 218, which says that every fee has to be voted

on and that every fee can have an initiative to revoke it after it’s

passed.

And because of the uncertainty in the market this has created

this is why that happened. Through no act of any city, there were

several cities in California that were, in fact, downgraded because

of 218.

Senator BOXER. I have that list. I have the list of the major cities. They have not gone down.

Ms. GOLDING. Yes they have.

Senator BOXER. Los Angeles has not gone down—stayed an AA.

San Francisco has not gone down.

Ms. GOLDING. Los Angeles was downgraded to an AA.

Senator BOXER. Stayed an AA.

Ms. GOLDING. Right.

Senator BOXER. San Francisco stayed the same. And Oakland is

under review. So, your advice—you don’t have any advice to this

city in future debt? Do you think they ought to cap it? Do you think

they ought to go to the people if there’s a bond that’s over a certain

amount, because you proposed that in your city? Do you recommend that?

Ms. GOLDING. I think it depends on the way the people of that

city feel. And I think it’s important to respond to that. But I think

you have to watch bonded indebtedness and not allow it to go too

high. And it depends on what kind of bonds you’re talking about,

63

too. Revenue bonds are different than GO bonds at the source of

revenue.

Senator BOXER. Sure.

Ms. GOLDING. So it’s kind of hard—if you put it together as one

lump it doesn’t mean as much. But I would avoid allowing your

bonded indebtedness to go exceptionally high, of course.

Senator BOXER. Thank you.

Mr. TAYLOR. Thank you, Senator Boxer. Congresslady Morella.

Mrs. MORELLA. I’d be happy to start off by yielding 1 minute of

my 5 minutes to Mr. Davis.

Mr. DAVIS. Mayor Golding, let me make a comment. I just want

to clarify that with regard to community policing—I was always

concerned because it said you had to use the money just for community policing. It paid for just the first 3 years. What we needed

was a block grant that would have allowed us to spend the money

as we felt needed. We could have used it for police.

The President’s plan, by the way, is not just community policing,

there’s a number of different officers you could use—but you could

use it for an extended 911 system, computer aided dispatch. Every

jurisdiction is different, and the one size fits all standard gave me

some concern. The proposal, to my knowledge, hasn’t been seen in

print except for a press release.

Ms. GOLDING. I haven’t seen it.

Mr. DAVIS. So I could understand why members didn’t want to

put anybody on the spot where you’re responding to something that

is not yet submitted legislatively. I just want to make that clarification for everybody here. Thank you, Ms. Morella.

Mrs. MORELLA. A pleasure. I want to thank you all for what I

consider up-beat stories of successes. It’s kind of like the phoenix.

It rose from the ashes. And we certainly hope the same will happen

with the District of Columbia. I wanted to ask a question directed

to all of you. Later today, the President is going to announce his

support for an economic development corporation for the District of

Columbia.

I wondered if you might want to express or share with us any

experiences that you have had with that kind of corporation? I

think, for instance, Mayor Rendell, I think Philadelphia has something similar to that. And then, for the others, if you had not had

any experiences, you probably have some feelings about it and you

might want to comment on taxation. In other words, tax reduction

incentives. I know that Mayor Golding mentioned a number of

them for hotels, et cetera. And so, maybe I’ll start with Mayor

Rendell and then go through the rest of you.

Mr. RENDELL. On the question of the economic development corporation, I think it’s an excellent idea. We have something called

the Philadelphia Industrial Development Corp., which is a quasi

governmental agency and, therefore, not subject to the same restrictions and restraints and criteria and requirements and all of

that that the normal governmental entities would be.

It has been enormously helpful in helping Philadelphia businesses to expand and helping us to attract new businesses to the

city and in the fight which all of us undergo to keep our own businesses in place when they are looking to expand or grow or just a

way to drop their bottom line. In terms of tax incentives for ecoVerDate 11-MAY-2000 11:01 May 28, 2002 Jkt 078983 PO 00000 Frm 00071 Fmt 6633 Sfmt 6602 W:\DISC\41800 pfrm09 PsN: 41800
64

nomic growth in the cities, I’ve long been an advocate of using the

Federal tax code to incentivize development.

Understand, most of our cities, free market reins unchecked,

most of our cities will lose out. They will not be able to compete,

particularly the older northeastern and midwestern cities. They

will not be able to compete. We need to use the Federal tax code

to incentivize investment, capital investment in American cities.

I have, even though I am a strong and loyal supporter of the

President, I have trouble with this treasury department, although

I think Bob Rubin is starting to come around more than any other

secretary, just like I had trouble with prior treasury departments.

They seem to have a block against using tax incentives as a way

to spur economic development.

Mrs. MORELLA. Thank you. Mayor Goldsmith.

Mr. GOLDSMITH. The mayor and I agree on this point, and I

think it is important. First of all, tax credits, tax opportunities are

a much more efficient way to help a community than government

programs, because it removes the bureaucracy. It facilitates the

flow of capital and it involves private investment, so people are

making market place decisions.

So, Washington, DC, like Philadelphia and Indianapolis and perhaps San Diego, has these structural barriers to investment. You

can try to manage those barriers by dumping additional government programs and government money on top of them. That generally doesn’t make the barriers go away. Or you can try to compensate for the barriers, at least in the short run, by some sort of

tax incentive. Now, whether that’s on the capital gains side, which

would be great, whether it’s on the payroll tax side, that would be

great. But what it does is it evens the playing field perhaps temporarily.

A few years ago, I proposed that we would give back all of our

Federal money to Washington if they would just give us a payroll

tax advantage or a little flatter tax than what they would do elsewhere. Because what we’re trying to do is say high costs are added

on to urban areas. But we have to use the free market to get ourselves out of this mess. So, temporarily, while the costs of welfare

have built up urban costs, while the environmental mandates are

much higher on urban communities, Clean Air will impose extraordinary costs, hurt the poorest people who attempt to buy their way

out.

So, the Federal Government could compensate for those with tax

advantages that would be much, much more effective. Now, whether they go through an economic development corporation or they go

through a mayor, I think is an issue of government relations that

could vary from community to community.

Mr. MCCRORY. One just additional comment, too, I think is similar, even in a modern city like Charlotte and comparing with Philadelphia, is that we have blighted areas in Charlotte that are bringing no tax revenue to the city in a very dynamic, economic city.

And we’re looking at—and I’ve been to—I visited Mayor Rendell’s

city and seen what they are trying to do to revitalize these blocks

of blight, where you’re getting no return on investment either in

the private sector or public sector.

65

So, we’re looking at that inner pride zone concept and doing anything we can. Some of our even local tax policies discourage reinvestment and encourage a vacant building to remain vacant or a

parking lot to remain a parking lot as opposed to encouraging investment. So, we’re looking at even, not only the Federal tax policies, but even some of our local tax policies to encourage investment or reinvestment, especially in these areas of blight, which

tend to be your areas of high crime, high unemployment and all the

other problems that are associated with an urban area.

Mrs. MORELLA. Mayor Golding.

Ms. GOLDING. I echo what my colleague said. In our city, what

we did was, any place that we could reasonably cut, given the fact

we were in a recession, we did. I looked at our water and sewer

capacity charges, for example. Those are the hook up fees. There

were times when that charge, for either a business moving in or

someone who was developing, was as much as the cost of the land.

And what happened was people just didn’t do it. They didn’t do

business.

We had a laundromat going in. I heard the story, actually, before

I was elected, of a laundromat going in in the inner city. They had

no laundromat in that community, and they needed it desperately.

But when this private business owner—using all the capital he

had, to invest in this small business—found out what his hook up

charge was going to be, he couldn’t afford it. And there was no

laundromat at that time.

So, what I did was propose—we cut those fees in half. And we

cut housing trust fund fees in half. As I told you, we cut the business tax by 80 percent and it has not hurt the business climate.

And the revenues to the city, sure, were hurt that year, but you

could start to see those turn around as well as the attitude that

business had about doing business in the city of San Diego. They

didn’t want to do business in the city.

When I took office, they didn’t want to call city hall in general.

And there has to be a clear partnership. We established an incentive program and gave our staff the flexibility to negotiate a good

deal if a business was coming into the city and was going to

produce sales tax—and we have a whole system of determining

whether it’s enough sales taxes—and jobs for the citizens. We were

willing to give them a break on a lot of the fees that we were

charging because they were producing a very distinct public benefit.

And I think those are the kinds of things that make it clear to

any entity. And if you can help on the Federal level on down, it’s

a tremendous incentive. I’d like to see enterprise zones cut everything for the inner city, everything, absolutely everything out, because the truth is many of the blighted areas aren’t producing tax

revenue anyway. So, what are we worried about losing. Why not

really make taking that risk worth while to a business or investor.

Mr. WHITE. I just want to mention one of the sins of local governments—I guess you need to know all the bad things too—is everyone hues the line on trying to hold down taxes in one door. The

other door that opens is fees. And I think around the country you’ll

find that local governments have been too quick to raise fees and

66

layer fee upon fee while the record may look nice and clean on

taxes.

Mrs. MORELLA. Good points. Thank you. Thank you, Mr. Chairman.

Mr. TAYLOR. Thank you. Congresswoman Norton.

Ms. NORTON. Thank you, Mr. Chairman. Again, may I say how

elucidating I have found all of the testimony. I think there is something in all that you have said from which the District could benefit. If I could say to my good friend, the chairman of the committee, who seemed to imply that the question of the gentlelady

and senator needed some elucidation, that the mayors, themselves,

indicated that there had been an increase in the number of police.

So I don’t think it an unfair question to pick out the community

policing part of the President’s plan to ask a question about, even

if there are other parts that might also be relevant. My I ask each

of you to indicate the percent of your budget that comes from the

State and Federal Government? How much of your budget comes

from local taxpayers?

Mr. GOLDSMITH. Our city is a donor to both the State government and the Federal Government. We send more money to both

than we get back.

Ms. NORTON. Yes. That’s not my question. I asked what is the

percent of your total budget that comes from the State and Federal

Government combined?

Mr. RENDELL. I think for us, if you just looked at our operating

budget, it’s surprisingly small. It would be about 17–18 percent.

But a lot of the money that you send us doesn’t go into our operating budget, like CDBG—Community Development Block Grant

funds.

Ms. NORTON. Yes.

Mr. RENDELL. That never goes into the operating budget of the

city of Philadelphia—homeless, housing with aids, et cetera. So, it’s

not totally an accurate barometer.

Mr. MCCRORY. That’s the dilemma I’m having, also, in answering

the question, because most of our budget, our budget that I included in the numbers I gave you, are our moneys. There’s small

percent that’s from State. But such things as the housing authority

money—a lot of that money comes from the Federal side, but we

do not include the Federal—the housing authority budget within

our budget. So, I’d have to get you figures of combining the two and

then give you a percentage.

Ms. NORTON. Yes. I asked the question—I would appreciate your

being able to do it. The reason I ask it is because the District has

been forced to put into it’s budget each every part—each and every

dollar from whatever grant and whatever source into a package

that becomes its budget.

Mr. MCCRORY. Sure.

Ms. NORTON. That, of course, makes its budget look much larger

than if its budget was budgeted the way that other cities have.

Mr. MCCRORY. Sure.

Mr. RENDELL. No question. You take Philadelphia—we have a

$2.3 billion operating budget. But if a talk about the crime bill

money, the money for economic conversion of our Navy base, the

67

housing authority, housing homeless, CDBG, it’s well over $3 billion.

Ms. NORTON. And if you said put all that together and submit

it as your budget to the Congress of the United States, it might

look quite large.

Mr. RENDELL. Right.

Mr. MCCRORY. I would like to reiterate, though—the mayor from

Indianapolis—and that is some of us are more donor—we’re donor

cities to both our State government and to the Federal Government

in areas such as transportation and otherwise.

Ms. NORTON. Yes. I’m sure that’s the case, too. Has the percentage of your budget that comes from the State and Federal Governments gone up in the last 10 years, dozen years or so? Or has it

remained stable or gone down?

Mr. RENDELL. Declined.

Mr. WHITE. Declined.

Ms. NORTON. Hmm?

Mr. RENDELL. Declined.

Ms. NORTON. The percentage of your budget from the State government has—has the State government cut you in the amount of

money that they send to you?

Mr. RENDELL. Over the course of time, yes.

Ms. NORTON. How have you made up for those cuts? With the

cost of living going up, if the State government—every time you

come to the State government, you’re telling me they gave you less

money than they gave you last year?

Mr. RENDELL. Well, adjusted for inflation, or just straight across

the board? Adjusted for inflation—clearly less, clearly less. In raw

dollars, it’s been static, slightly less. And the way we’ve made up

for it, Congresswoman, is some programs are gone, our reach and

the number of people we’re able to put in certain programs is diminished. And, as I said, in the 10 years before I became mayor,

we raised local taxes. You know, we raised local taxes 19 times. I

mean, it’s a stunning amount.

Mr. MCCRORY. We’ve also had to, due to new regulations from

State and Federal, we’ve had to increase—the mayor of Greenville

is absolutely right that—our property tax rate has not gone up,

but, for example, storm water fees, we’re are increasing well over

4 percent a year to mainly meet some of the environmental regulations from the Federal and otherwise, which is a major, major challenge for all of us in cities regarding storm water and other environmental issues that the urban areas have to deal with.

Mr. GOLDSMITH. Can I make just a brief observation in partial

response to your questions. I don’t think any of us are comfortable

with kind of macro comparisons of budgets. In fact, I couldn’t even

figure out what my budget meant until we did activity based costing for every one of the activities that we’re in. Because it’s not

until you say, ‘‘Here is the cost of picking up trash. Let’s bid that

against the private sector. Here is the cost of a public hospital.

Let’s bid that against a private hospital,’’ that any of it makes

sense.

So, I think the long pause you hear after questions is, I wouldn’t

want to suggest, although I’m confident that we’re very efficient,

that we’re efficient, necessarily, by measuring the size of the budgVerDate 11-MAY-2000 11:01 May 28, 2002 Jkt 078983 PO 00000 Frm 00075 Fmt 6633 Sfmt 6602 W:\DISC\41800 pfrm09 PsN: 41800
68

et compared to the person. But I’d feel better measuring it activity

to activity. And that’s one way to drive down costs and enhance

quality at the same time.

Mr. WHITE. I want to mention, too, that as HUD dollars, in particular, have come down or remained about static, to the Federal

Government’s credit, more flexibility has been the rule now as opposed to the past. And I think HUD, in particular, has let local

governments do things with those dollars that they couldn’t have

done 10 or 15 years ago.

Mr. RENDELL. Yes.

Mr. WHITE. And we have stretched those dollars out further than

we ever did.

Ms. NORTON. Have any of your cities experienced flight from the

city? What percentage of the population has been gained or lost in

the last, let’s say, 10 years?

Ms. GOLDING. Well, I can answer that. There was a period of

time when San Diego really experienced that. The suburbs are

cheaper to live in, in general—the housing costs are lower. Because

of significant investment over the last 25 years in the downtown

and in redevelopment, people are now moving into downtown again

and living in facilities at all income levels, from very high priced

to low. So, there has been a distinct return to the inner city—I

mean to the downtown area, which, after all, is the heart of any

city. But that doesn’t happen by chance.

Ms. NORTON. So, has it been a loss in population or not in the

last 10 years?

Ms. GOLDING. You know, I don’t know where it is today. I know

that there is a reversal going on. It’s a reversal going on.

Ms. NORTON. Yes. Well, I’m trying to find trends.

Ms. GOLDING. It is reversing.

Ms. NORTON. Yes. It is reversing now?

Mr. GOLDSMITH. You are obviously aware, that most large midwestern and eastern cities have suffered enormous population

losses in the last 20 years. Losses of wealth have been even greater

than losses of people.

Ms. NORTON. Yes.

Mr. GOLDSMITH. From our center city, we lost a quarter of our

population. In the last 5 years, as we’ve cut taxes, cut regulation

and invested in infrastructure, we’ve gained in population. And one

of the things we did was took the savings from competition and privatization and invested those savings disproportionately in the infrastructure and policing of the communities that had lost the

greatest population, stabilizing those communities so people felt

safer living there or investing there. And, so, we are up, now,

slightly, although there was a long historic period of flight from the

center city to the suburbs.

Ms. NORTON. And the reduction in taxes helped you gained population, you believe?

Mr. GOLDSMITH. I’m sorry, ma’am. I couldn’t—— Ms. NORTON. Reduction in taxes helped you gain population, you

believe?

Mr. GOLDSMITH. Yes. Let me be very careful here, because I

think the answer to this question varies in every city. I think what

helped us the most was delivering a higher quality housing, roads,

69

sidewalks, sewers and policing, and holding the line on taxes. We

made a decision, in fact, where we could have lowered taxes more,

but instead decided to invest that in several hundred million dollars of roads and bridges and streets and sidewalks and sewers and

parks, because we thought that was more important. And I think

that can be played out very differently in each community.

Ms. NORTON. Mr. McCrory.

Mr. MCCRORY. Our growth continues to be about at a 3 percent

rate. However, we are seeing flight to the outlying suburbs where

the growth rate is much greater, probably 2 percent higher in the

suburbs and counties. In fact, I’m competing with the State of

South Carolina, which is right on the Charlotte border. And South

Carolina is offering tax incentives to some industry. And we’ve had

some industry move 2 miles down the road to South Carolina.

So, we’re seeing flight in both residential, commercial and industrial. And, I think, as the mayor said, that’s probably our greatest

competition right now as a city, is to keep the investment in Charlotte. And that’s why our greatest chance for return on investment

is revitalizing the blighted areas and to get people to move back

in.

Ms. NORTON. Mayor Rendell.

Mr. RENDELL. We’ve lost about 10 percent of our population in

the last 10 years, about 140,000–150,000 people. And it’s a combination of things. And high taxes certainly is a factor. But we

were really way up there. And, second, as Mayor Goldsmith said,

it’s the quality of life issues. For example, if our public education

system could be fixed overnight to be a quality public education

system, I think we would stop the flight and begin to slowly but

surely regain population.

Ms. NORTON. That’s a magic key. Nobody has turned the lock

yet.

Mr. RENDELL. Right.

Ms. NORTON. Mayor White.

Mr. WHITE. Yes. As we continue to steal industry from Charlotte,

NC and corporate headquarters, we are continuing to grow.

Mr. MCCRORY. I was afraid to mention that publicly.

Mr. WHITE. I’m glad the mayor mentioned public education. Because I think for all schools, issues of flight and changing demographics, there’s no doubt that the decision of people to move into

these cities, the right demographic mix with the right ages, it’s the

schools that still play a crucial role. And successful cities have successful schools.

Mr. TAYLOR. Thank you, Ms. Norton.

Ms. NORTON. Thank you, Mr. Chairman.

Mr. TAYLOR. Congressman Tiahrt.

Mr. TIAHRT. Thank you, Mr. Chairman. I want to congratulate

all of you on managing your cities in an extraordinary fashion. And

that’s why you’re here. And we need some help coming up with

some ideas. I find it interesting that most communities that I talk

to like the concept of block grants rather than having some bureaucrat from Washington telling you how to structure things.

And I think that probably one very effective model of this is community policing. I know in Wichita, KS, which I represent, we have

very effectively employed community policing. I’m not surprised

70

that four out of five of you didn’t recognize President Clinton’s efforts for community policing, because it’s happening on its own.

And even though, he’s tried to get 100,000 policemen on the street,

Attorney General Janet Reno reports that there are only 18,000

partially funded policemen there.

Many of us have favored block grants as Representative Davis

pointed out, and I think that’s probably a more effective approach,

giving you the freedom your cities needed as unique problems come

about. As you all spoke about coming up with these new ideas,

Mayor Rendell mentioned incentives for employees. I wonder if

there were some structural or policy changes that you had to put

in place in order to provide those incentives. And I’m not sure

which incentives you’re referring to.

Also, in privatization, as Mayor Goldsmith talked about, were

there structural changes or policy changes that you had to put in

place in order to privatize or provide those incentives? And I’d like

others to respond, too. And, incidentally, Mayor Golding, I was in

San Diego, it was the first time I’ve ever been to California. It was

last August. And I felt safe downtown. It was a very clean city and

I appreciate the job you’ve done.

But I’d like you to comment on—what incentives do you provide

and what changes in policy needed to be made so that you could

provide those incentives? And the same for privatization. Mayor

Golding.

Ms. GOLDING. Well, I can add—we have a system of merit pay,

rewards for suggestions that actually can be documented to have

saved the city money and have allowed the service to be provided,

essentially for less cost. I have recently asked the managers to institute a bonus for department heads who have achieved, in actual

cash percentage to the savings they achieve, plus meeting performance goals.

Because I think it comes down to the individual supervisor who

can watch what is going on far better than anybody at the top can

possibly do. And that involves everyone in the city. You cannot become more efficient unless everyone in the labor force is also trying

to do the same thing.

Mr. GOLDSMITH. Last—when I announced my privatization/competition program, my ASFME unions did not exactly respond with

enormous enthusiasm. And I went out there on my first week in

office and told them don’t worry and got pretty loudly booed. Last week I went out and distributed $1,000 bonus checks to each one

of our mechanics in our central garage because they had—not only

had they bid against the private sector and won, but they are performing under their bid and they’re sharing in the gain—50 percent.

It has the phenomena of them consistently producing more and

more suggestions for better productivity because they know they’re

going to share in the gain. And so that has been infused in the system. I think the enormous challenge for this joint committee and

for DC as in all of our cities, is as bureaucrats in cities—every city

over the last 40 years—have abused their discretion, Federal Government, State government and even local government, itself, have

set up structures which restrict the discretion. So they are tightly

controlled, autocratic, somebody telling somebody else to do, and

71

lots of process restrictions. We had to change State law and local

law. Sometimes we could work with it, sometimes we had to

change it. Because the systems are highly inflexible because they

control process more than outcome. So, to the extent that—and I

understand how difficult it is in the DC situation—but the extent

to which the District could be given, or any government agency,

discretion on how it accomplished a result, a very clear auditing of

the performances, and holding people accountable at the outcome

level, then that provides the opportunity for these bonuses.

If bonuses can be connected to performance, if discretion can be

connected to performance, if audits can be on the outcome and output side, then you can create conditions similar to those in the private sector, which encourage enterprise.

Mr. MCCRORY. There is one other addition. We’re doing very

similar things in Charlotte. But one area that the committee also

might want to look at—and one of our greatest increases in costs

had to do with medical benefits regarding employees—and I’d

strongly encourage this committee to look at those costs and compare how rapidly those costs are going up in comparison to the private sector. We saw in Charlotte that our costs were going up dramatically, much more than the private sector, and it was going to

make us go broke within a short period of time, so we changed a

lot of our benefit policy, and actually have a very strong benefit

policy for city employees.

And our medical costs have gone down well over half at this

point in time, which is something Mayor Rendell and I were whispering. A lot of these issues we’re talking about are not short term

savings, they’re long term savings. We will not see the results of

this work for probably another decade. And that’s when a lot of the

real savings are going to come in regarding a lot of the medical and

other types of benefits in the areas of competition and privatization.

Mr. RENDELL. I would agree with everything that my colleagues

have said. I think, though, in addition to incentives—and I’m not

talking about one special incentive—accountability is important.

We publish a quarterly mayor’s report on city services, where we

ask each and every department to show how they’re doing. This is

a little chart on how much grass in our park system, the largest

in the country, is mowed as compared to previous years.

It’s unbelievable how the publication of this book causes city

managers at the top and at the mid level to really want to put out

and perform. They don’t want to see those charts on the down side.

We also publish a monthly city manger’s report, which shows how

you’re doing on your budget.

Are you on track to come in with a balanced budget, things like

that. And last, we’ve done something called creation of a productivity bank. In government—municipal, Federal and State—often

something isn’t a capital expense. It’s not a capital expense, but

you don’t have enough money in your operating budget to take that

hunk of money and buy that new technology. For example, our revenue department told me that for $5.8 million purchase of software, they could save me tens of millions of dollars of business

tax—to collect better.

72

But they had a $41 million budget. They couldn’t take $6 million

out of it on an annual—on a 1-year basis. So we created a productivity bank with city officials on it. Departments come and borrow

money from the productivity bank. We’ll give it to them if they can

demonstrate that it’s got cost saving potential. They have to pay

it back over the course of 3 years with what the rate of interest

is at that time, and they can keep 50 percent of the savings they

generate above the 8 percent interest, let’s say.

So, if they generate an additional million dollars, they keep $500,000 that can be reinvested. And just one last thing on block

grants. We all like block grants, because we all like flexibility, as

anyone does in the work place. But block grants and flexibility cannot be a substitute for significantly less money. If you want to

block grant us and give us 5 percent less money in return for the

flexibility, that’s great. But if you want to block grant us and give

us 25 percent less money in return for the flexibility, that’s disaster.

Mr. TIAHRT. Well, I’d just like to say that the concept of block

grants is so we can have more money available moving back to the

cities. Any comments, Mr. White? Thank you, Mr. Chairman.

Mr. TAYLOR. Thank you. Congressman Allen.

Mr. ALLEN. Thank you, Mr. Chairman. And thank all of you for

being here today. This is a hearing of special interest to me. I was

on the Portland city council—Portland, ME—from 1989 to 1995.

One of those years I served as the so-called part-time mayor. It

turned out to be pretty much the full-time job.

Mr. MCCRORY. We have visited your city to look at your best

practices.

Mr. ALLEN. I’m glad you have. In fact, what I was going to say

was that Mayor Golding began by talking about good practices or

best practices. And I think that is one half of the coin, one half of

the issue that we have to deal with. And the other half is related

to what many of you, and particularly Mayor White, said about

neighborhoods. And about making sure that people feel they have

a voice in local government, that they are included, that they are

part of that government.

If I were to try to summarize what I think you are saying, it is

on the one hand there have to be a series of incentives to motivate

public employees to want to serve the public well, and ways of

holding them accountable, and on the other hand, the citizens need

to feel that the government listens to them, that they are part of

the government, that they own the government, that it’s theirs,

and it’s responsive.

I want to give you a couple of examples and then ask you for

some examples form your communities. One of the things we did

in Portland was to try to motivate parks and public works to do

a better job serving our customers, was to break them up by region

of the city—one team for each district. And that team did all of the

snowplowing, all the repairing of potholes, all of the other work in

that district. They came to own the district and feel that the district was theirs.

They were highly motivated. And once this program was in place,

we started getting letters from citizens who said, ‘‘I called city hall

and said our sidewalk is a mess, I wish it would be repaired. And

73

I thought I’d be on a list and a year and a half from now something

would happen. But within 3 days someone was out to repair the

sidewalk. I never thought it would happen in this city.’’

That is the intersection between a motivated work force and an

engaged public. And when you’re talking about community policing

or parks and public works or schools or whatever, any community,

whatever its form of governance—and governance matters, but

frankly, not as much as this stuff—any community that can find

that intersection, to connect its work force with its public, I think

is going to do very well. And I was wondering—you’re free to disagree—but if you had examples one way or another that would

support or challenge that view.

Mr. GOLDSMITH. I wonder if I could briefly answer your question

and then, with permission of the chair, to excuse myself to go down

the hall and testify. Let me just real briefly and then, with the

chair’s permission—this is really a fascinating issue and it’s a result of a monopoly which is that people, public employees need customers. And so what we ended up with is functional specificity and

geographic generality when what we really needed is geographical

specificity and functional generality so people owned.

The same thing that makes community policing work, as you

said, is what connects the public employee—I want to make that

urban area better. And we have tried to make that conversion possible. I just wanted to close by saying, in this conjunction, I think

all of us—and I particularly feel strongly about this—view these

tools as a way not to save money, as a way to improve the quality

of life of urban residents.

It’s not the money. It’s not the savings from privatization. It’s

how we create viable neighborhoods. And that comes from both the

service attitude on the part of government, the economic opportunity that we present the people. The quality of the chances they

have to flourish in an urban community. That’s why taking the

savings from privatization and investing it in $700 million of roads

and streets and sewers and houses is important.

That’s why it’s important that neighborhood residents have a

chance to participate in defining what they need in their neighborhood. That’s why it’s important that public bureaucrats connect

and are held responsible for customer service in those areas. So, I

appreciate your question because it allows me, I think, to connect

the dots. We spent a lot of time here talking about the efficacy of

public services, which all of us sincerely believe, but as a way to

enhance the quality of life in our communities, not just as a way

to save money. Now, with the permission of the chair, I’d like to

be excused so that I can testify down the hall.

Mr. TAYLOR. Reluctantly. Thank you.

Mr. GOLDSMITH. Thank you very much.

Ms. GOLDING. If I could ask the chairman, because I will have

to follow the mayor out also, because I have to leave at 3:30 p.m.

What you’re saying is not only correct—I don’t think, particularly,

as a city grows, that it can grow well without both preserving and

enhancing the life in the neighborhoods. I think we’ve taken—I’ve

lived in a lot of other cities before I moved to San Diego, including

New York.

74

And when you lose the identity of the citizen with the location

in which he or she lives, you have lost the identity that makes

someone like to live somewhere and invest in it. By invest, I mean

volunteering at the library or watching the neighbor’s house or the

little things that really make life work. So, I wanted to emphasize

the neighborhoods immediately.

And we are establishing a system of neighborhood service centers. And I’m taking some good ideas from other cities and adapting them to San Diego, so that ultimately—and in certain neighborhoods now, you don’t even have to go downtown, you don’t even

have to go to city hall, everything is connected fiberoptically. And,

so, all those things, whether it’s to apply for a permit, get information on housing, all of those things, instead of going downtown, taking a day off from your business or a day off from your kids, and

standing in long lines, you can now go—not in every neighborhood

yet, but we will be expanding it into every neighborhood of the

city—but those that are up and running, you can do all that at

your neighborhood service center which is not very far from your

home.

And we are moving city employees. I’m not talking about adding.

We’re moving city employees out of city hall into the neighborhoods, some on a rotating basis, because of the cost of increasing

them, which we can’t do at this time. The ultimate goal is to

have—whether you call them mini city halls, I prefer a better name

that people relate to better, whether it’s a neighborhood service

center, or something like that.

And we’ve tracked the usage of the ones we have up and running

now, and it’s tremendous, the number of people who go to use it.

We first surveyed the neighborhood to find out what the people in

that neighborhood wanted. And each one is different depending on

the needs of the neighborhood. And there is an individual who is

charged with making sure the neighborhood works such as street

repairs or other things that need to be done.

That individual is going to be in charge, not some nameless, faceless person downtown, but someone that the neighbors actually

know. In fact, we have reorganized the city because I saw that

streets were being done and all of the infrastructure was being

done, but they didn’t know what each one was doing in that neighborhood. So, we restructured. We now have a department of neighborhoods so that we look at things on a neighborhood basis as opposed to street basis or sewer basis or something like that.

I would agree that infrastructure is real important to all the

neighborhoods. And we’ve invested over $600 million just in sewers

alone. But it’s the decay in the neighborhoods. And that’s what the

community policing also turns around, because the police officer is

charged not just with catching somebody, but if they see something

wrong, whether it’s a crack house or cracked window, they’ll call

the owner of that building. They’ll be pro-active with the community. But all of it is neighborhood based. And I don’t believe it

works otherwise.

Mr. TAYLOR. Thank you.

Ms. GOLDING. Thank you, Mr. Chairman. I’m sorry. I do have to

excuse myself.

Mr. TAYLOR. Thank you.

75

Ms. GOLDING. But I appreciated the opportunity to testify.

Mr. TAYLOR. We appreciate it. I know in the some 21⁄2 hours

we’ve had, it’s been hard to give this much time. And we especially

appreciate it. I’d like to go ahead, perhaps, with the remaining

three witnesses, with their indulgence, to be able to question. And

I’ll start with Mayor Rendell.

I was intrigued and have admired the work you’ve done in Philadelphia. And you mentioned earlier in your opening statement, you

might make some more comments about the areas of privatization

and working with unions, how you put that together to keep massive layoffs from happening, at the same time bringing in the efficiencies you’ve brought to your city. Can you comment about that,

sir?

Mr. RENDELL. Yes. I think it’s obviously—look, all of us believe

that we ought to consider the individual people involved in any

change first, if we can. And if you manage the privatization—and

we all prefer to talk about it as competitive contracting—but if you

manage that process well, you can require—we essentially required

from our vendors that if we were unable to place any of the workers in a function—let’s say we were closing the city print shop—

if we were unable to place those workers in the government, which

was always, because of benefits and pensions and things like that,

always the first desire of the work force—but if we were unable to

do so, the vendor was required by obtaining the contract, the vendor was required to hire those city workers for the expanded use

that the vendor was going to undertake by doing our contract.

And I think that won us, as Steve said about his example, won

us a lot—in the long run—a lot of grudging acceptance of the process by the work force. We had the wonderful occasion—you know,

privatization was hated by the unions and hated by the work force,

but we had the wonderful occasion in two or three times of having

workers who were privatized out of their city jobs in this function,

been hired to do another function at increased salaries because

that level just happened to have—in one case we privatized prison

food services.

Our prison food services were awful. And we were able to privatize and save $2 million, and have ARA, which is a worldwide

food provider, provide the resources. Well, some of the people in

prison services were able to qualify for correctional officer jobs at

$7,500 more than they were making. So, there is no reason that

the basic human sensitivity and dignity has to be eliminated from

the process.

Our city workers were never the problem. They were never the

enemy. Certain things have to be changed. And even in benefits—

we saved over $400 million a year in total benefits. But we targeted the benefits, Congressman, that didn’t affect the security of

the family. Having free—no premium—entrance into the three best

HMOs in the city of Philadelphia keeps you in pretty good shape.

Eliminating—we had a system of 14 BETAL—we ratcheted down

to 9.

No one is going to suffer because they have to work those 5 days,

particularly when you compare it to the private work force. We had

20 paid sick days. We knocked it down to 15. Still extraordinarily

generous. You could get disability pensions and workman’s comp at

76

the same time under our system. You were getting paid more

money to stay off of work than if you returned to work.

So, we changed all of those things. But it can be done without

armageddon. People will resist change because it’s change. And you

know that from the culture here. But you have to have the political

fortitude to make those changes, to believe in the process and know

in the end goal you will be there. I’ll just give you one political

anecdote. My first year in office, I was picketed everywhere I

went—in parades, in public appearances.

We opened a little sidewalk cafe outside city hall and when we

had the press conference to announce it, nobody could hear me because the municipal workers were chanting so hard. And I felt so

sorry for the vendor. Well, 4 years later I ran for reelection and,

according to a poll we took a week before the election, which turned

out to be accurate as to the percentage of vote I got, I got 60 percent—a little under, about 59.5 percent—of all the votes of municipal workers and their households. If you’d have followed me in

year one, you’d have thought I’d have been lucky to get 5.9 percent

of the vote in municipal workers’ households.

Mr. MCCRORY. He had protestors here in Washington, I think.

Mr. RENDELL. Absolutely.

Mr. MCCRORY. I saw them.

Mr. RENDELL. It’s true.

Mr. MCCRORY. I recall.

Mr. TAYLOR. Your police, fire workers and so forth, do you have

a residency requirement?

Mr. RENDELL. Yes. And I do believe in it. I don’t know what the

pool—again, no city is, as we said, exactly the same, but for a city

of 1.6 million people, there is enough in that pool. And think about

what we said about neighborhoods and think about the value you

lose by not having police live in the neighborhoods, the tremendous

value you lose between the relationship between city employee and

the people of the neighborhoods.

If your city police go home and they experience the same things,

it will serve as a motivation for them to protect their own kids, just

at the same level that we want all of our kids protected.

Mr. TAYLOR. Sometimes there are those who say that inside the

boundaries of a city, you cannot get a quality police force because

you limit your area to pick. How would you respond to that? Or

perhaps firemen or other city employees.

Mr. RENDELL. Again, in a city of 1.6 million people, we have not

found that. And, by the way, you don’t have to be a city resident

at the time you’re hired.

You have 6 months to move in. So, even if that were the case—

and it’s not the case in Philadelphia—but the 6 month requirement

to move in obviates that as a problem.

Mr. WHITE. I think it’s particularly—for senior department

heads, no matter what size the city may be, I think there’s almost

no excuse for not encouraging that strongly or having a policy.

Mr. TAYLOR. If you’re building a community, it’s hard to build it

if your key leadership, city employees and especially fire and police

and others who are your leaders, are looked up to in the community—it’s hard to build it if they’re not in the community.

77

Mr. RENDELL. Absolutely. And think of what it would do. And I

assume by your question that Washington doesn’t have that requirement.

Mr. TAYLOR. It doesn’t.

Mr. RENDELL. Think of what it would do to build middle class

neighborhoods back up again in Washington if you brought those

thousands of employees and said, ‘‘You’ve got to live here, guys.

Men and women, you have to live here.’’ All of a sudden, you’d be

building middle class neighborhoods. And it’s not the rich neighborhoods. You know, downtown Philadelphia is doing great. We’re losing 10 percent of our population and yet you cannot rent an apartment in downtown Philadelphia. It’s gone from 72 percent to 99

percent.

But in the neighborhoods where the middle class is the rock,

we’re having problems. But if I could bring—you know, we’ve got

7,000 policemen and 3,000 fire—if I could bring 10,000 middle class

wage earners and say, ‘‘You’ve got to live here.’’ Think of what that

would do for the stability of my neighborhoods.

Mr. TAYLOR. Mayor McCrory, you mentioned volunteerism, and

I know that’s quite a spirit. Could you elaborate on that and how

that—how do you motivate that? How have you brought that into

the communities and what type of leadership do you provide to get

that?

Mr. MCCRORY. One thing we’re proud of in Charlotte is we’re a

very open city. You don’t have to have five or six generations of

blood lines to get involved in local politics or any community or

civic activities. In fact, we almost pride ourselves, if you live in

Charlotte for 6 months and you’re not in leadership, we’re wondering what’s wrong. So, we very much open ourselves up to new

people who are arriving in Charlotte.

But we have a very, very close relationship with our business

community and also our neighborhoods. As mayor, I meet once a

month with a chamber of commerce. And, in fact, I meet with the

chamber of commerce, and the county chairmen and myself have

a 2-hour meeting once a month. In fact, we rotate the location of

the meetings. One time it will be in my office. The next time it will

be in the chamber office. The next time it will be in the county

commission chair’s office.

So, we’re constantly building relationships and trading off names

to serve on committees. We try to work as one because I know if

it’s good for business, it’s good for Charlotte and vice versa. We’re

in this game together, so we have a very open business environment. Another thing we’re very proud of, we’re a very clean city

from ethical standards. And we’re going to keep that reputation.

But volunteerism is probably our greatest attribute.

In fact, today, I’m supposed to co-chair the strategic session for

our United Way strategy for the next 2 years. And I’m here instead. But that’s the involvement. The United Way asked the

mayor of Charlotte to co-chair their strategic session for the next

2 years for the United Way. That’s the type of relationship we have

with the private sector.

Mr. TAYLOR. Mayor White, you look like you’re ready to say

something. I have a question, but would you like to comment. I

know you mentioned a lot of public/private cooperation. In fact, for

78

a city of your size to have the arts center, the stadium you mentioned a moment ago, the large sports complex that’s being planned

and the other things in the city. Tell us a little bit about how you

did that.

Mr. WHITE. We have a very fine tradition—we’re fortunate to

have a fine tradition of business people in town and people across

the strata who do jump in to projects, who come to the aid when

a need is enunciated and who also get involved in whatever the latest project is the community feels is a priority. And we sort of go

from one priority to the next priority to the next to the next.

And, obviously, that goes back, again, to whatever sense a community can build that when people live there, they really have a

stake in the community, that it’s not some place they’re just passing through. And that’s something that I think is often lacking in

some communities around the country.

Mr. TAYLOR. You mentioned some of the downtown festivals in

some of the poorest parts of the city, the dilapidated parts, and

how you use that to renovate or put a spirit of renovation back in.

How do you get those started and how do you draw crowds into it,

protection and all the other problems that might be involved?

Mr. WHITE. Well, to revitalize areas I think cities around the

country have found that you’ve got to encourage residential, you’ve

got to create a 24-hour life in that sector of the city that can’t be

simply a 9-to-5 kind of situation. One way of doing that, we have

found, in other communities, is through special events and festivals. And we do, indeed, move festivals around. If one area has

been revitalized and investment has, indeed, followed the people to

that area, we’ll move it around to another side of town where we

think, perhaps, a little more vitality is in order.

Mr. MCCRORY. Representative Taylor, I would like to also make

one other comment, that I think you—and I know Philadelphia and

Greenville and other cities are doing this, is that the customer is

saying we can’t hire anymore people except for police officers. And

public safety is a major issue. We are having a major truancy problem, major murder rate problem in Charlotte. We’re at 115 killings

in 1 year in Charlotte 5 years ago.

We’re down now to about 65, which is far too high. But we’re improving drastically. But the truancy problem is so high that the immediate solution is let’s hire truant officers. Well, instead of hiring

truant officers—because we have limited budgets and we can only

hire so many police, we’ve made every single resident in the city

of Charlotte. And every police officer’s major duty, now, is truancy.

And it’s called the Tolerate No Truancy Program, where, if you

have someone who you see obviously belongs in school on a school

day, you call a special hotline that the police will respond to and

deal with it as an emergency call, and will take that person to the

school system and put him together with a dropout prevention

counsellor and will track down the parents. But that’s an issue,

again, we couldn’t hire more truant officers, per se, we just used

existing resources. And we’ve had a tremendous decrease in youth

crime.

Mr. TAYLOR. We now would like to go to the other Members if

they’d like to question. Senator Boxer.

79

Senator BOXER. Thank you. Thank you for your patience and

your time and your insights and your wisdom. And I would say it

seems like I hit a raw nerve when I asked about community policing. You know, we had comments from my colleagues. That’s very

unusual. So, I would like to kind of rephrase and do it in a way

that will not put you on the spot.

Because I think four of you said you’re not sure if you’d support

President Clinton’s proposal until you see the details. And Mayor

Rendell said although, of course, cities love block grants, that he

thinks it’s a good program and he would support it. Now, did you

participate in it, Mayor McCrory, the last time?

Mr. MCCRORY. Yes. We did. And, in fact, we’ve got a proposal in

for more Federal money this time with the understanding—and

this is the dilemma in accepting any Federal money. For example,

for the police, it’s a 3-year moneys. I’ve got to budget long-term and

that’s a situation.

Senator BOXER. I understand.

Mr. MCCRORY. But, you know, North Carolina, we’re a donor

State—at least we think we are—and statistics prove that point.

We want to get that revenue back.

Senator BOXER. So you did apply and——

Mr. MCCRORY. We applied. And one thing——

Senator BOXER. Yes?

Mr. MCCRORY [continuing]. And my police chief would also say

this, is that give us as much flexibility as possible, because 1 year

we might need equipment versus work force. For example, a major

issue in Charlotte right now is having the proper computers in

cars.

Senator BOXER. Well, I just want to state on that point, I think

the President has determined—and now he may be changing this

next round——

Mr. MCCRORY. We love flexibility.

Senator BOXER [continuing]. That he wanted—but I think the

President is thinking of more police on the beat. I think he wants

to reach his goal of 100,000. But the reason I’m pressing it is, it’s

a place that I could help. I can help. So I want to know what you

think.

Mr. MCCRORY. Right.

Senator BOXER. Did you or Mayor White apply?

Mr. MCCRORY. Yes. We have. And we’ve also——

Senator BOXER. So you participate in the program?

Mr. MCCRORY. Yes. And we’ve programmed to take it over in a

few years. Exactly right.

Senator BOXER. Fine. And I know that San Diego also has applied and received over $10 million. I think it’s important that, although there were some reservations—I don’t know about Mayor

Goldsmith, so I can’t put him in the category—the vast majority

did apply. The reason I raise it is what Congresswoman Norton

said, which is, all of you, in your presentations talked about the

importance of community policing. And I am such a champion of

it that when I want to reach out to help DC, or all the cities in

the country, I’m going to do whatever I can to make sure that it

happens.

80

Way back in the 1970’s, I was on a local board of supervisors.

And in my particular district, we started the first tiny little substation in my district. And it was just two little officers right there

in Marin County and it was a huge success. Way before anyone

ever gave a name to it. We called it neighborhood police. But I

think it really does work.

I’m the ranking member on the DC Appropriations Subcommittee

and I want to work with all of my colleagues—in particular Congresswoman Norton. As I listen to you all—you’ve all given us

ideas. I think you’ve given us ideas on bonded indebtedness, to

keep our eye out that you don’t do too much. You’ve given us ideas

on involvement of the community. You’ve given us ideas on the morale of city employees. All of these things are absolutely crucial.

Ways to open up competitive bidding between the private sector

and the city itself, which is very intriguing and exciting.

And I think all of these ideas are quite relevant. I do want to

say this as the ranking member of the subcommittee, I would hope

as we look at ways to help and be a partner in doing so, that we

will always remember something that you all said, which is how

important it is to involve the people of the city. People are dying

around the world to get the opportunity to vote.

We can’t forget that. And we must be, as we look at DC, very

aware that if we don’t allow the community to participate, then

we’re cutting the heart out of democracy in the capital city. So,

whatever proposal we move forward, I hope we will keep that in

mind. And I just want to thank all of you and the two mayors and

the two mayors who had to leave for your participation.

Mr. RENDELL. Mr. Chairman, may I just say one thing about

what Senator Boxer said?

Mr. TAYLOR. Sure.

Mr. RENDELL. And about our discussion on the crime bill. Because she’s absolutely right. All of us would absolutely agree that

unless we can improve the public safety of our cities across the

board, every neighborhood, every area, that we’ll never truly recover, that what we have done here is made the dying patient feel

a little more comfortable and live a little longer. And point No. 1,

it is true, as one of the Congressmen pointed out, that these grants

only last for 3 years.

But when you are planning long range—and all of us plan long

range—having that money allows you to phase in your assumption

of operating budget cost. If I had to put 753 police officers—new

police officers in Philadelphia on in 1 year, I could never do it. The

shock to the system—the saving dollars, generating more revenue,

couldn’t have absorbed it in 1 year. But thanks to the crime bill,

I’ll be able to phase those officers in over about a 51⁄2 year period.

And, as a result, I can’t absorb it in my budgeting process and

plan. Would I have liked to see the Federal money go on forever,

of course I would have, because I could have taken that one third

and used it to hire more police or used it to do something else. But

it’s still valuable. And second—and, again, the Congressman who

asked this question is unfortunately no longer here—there are

parts of the crime bill program—and they all have names like Cops

Ahead or Cops More or cops this or cops that—but there are parts

of that that do allow us to use dollars for overtime.

81

We won a competitive grant under the cops program to use

money for overtime to go after quality of life crimes that have a

tendency to really erode neighborhoods. Not the murders and the

rapes, but the vandalism and the graffiti and things like that. And

then, second, we won, also a competitive grant for the installation

of MDTs, which the mayor of Charlotte was talking about in our

patrol cars. So, there is flexibility in the program. It’s not all

money for just cops on patrol.

Mr. MCCRORY. I would add to that. It’s also moneys for backup

support. Because sometimes, instead of hiring a police officer—and,

politically, you don’t want to say I don’t want to hire a police officer—but the fact of a matter is the police will say, well, wait a

minute, each police officer also takes amount of support—not only

support within the police department, but support within the judicial system.

And we have areas in our judicial system that don’t have copy

machines to process some of the arrests. And, so, we might want

to divert the money elsewhere. And that’s where we’d like to have

the authority and the flexibility to make those decisions locally.

Where Mayor Rendell may have one specific need in Philadelphia

we may have another need in Charlotte or in San Diego. And that’s

what we’d like to have.

Senator BOXER. Thank you very much.

Mr. TAYLOR. I’d like to comment there. I think what you gentlemen are describing is how the Congress amended the President’s

program to make flexibility through block grants. And one of the

things that convinced me was the sheriff of Greenville County, who

is a Democrat and president of the National Sheriff’s Association—

not now, but was a few years ago—who did not want to participate

in the program as it was, because he was afraid of being locked

into officers, and then have to find the revenue inside the county

to pay for it in the future years.

And what you’re describing, molding the two things together,

some Federal help but the flexibility where you can work it in, you

can use it on equipment, you can do the things with it that works

with your budget, I think, is what makes the program successful.

And I think that’s important.

Mr. RENDELL. I would agree. There’s no question that from the

time the President’s crime bill came out, the modifications that

Congress made, I think, did improve it. And, also, I was the district

attorney of my city, which is also a county, for 8 years. So I’ve been

in the business for 20 years.

And make no mistake about it, the crime bill, again, a collaborative effort of Republicans and Democrats that wouldn’t have

passed without Republicans, that has been the most meaningful

thing for local crime fighting in the two decades that I’ve been involved with local government. There hasn’t been anything that

comes close to it.

Mr. TAYLOR. Thank you. Chairman Davis.

Mr. DAVIS. Yes. Let me just put this in context. We just got a

study back from Mr. Allen that I don’t think you’ve had the opportunity to see yet. It shows the city has a higher per capita police

ratio than any city in the country, over seven to one. It’s much

82

higher than Philadelphia. The problem we have is a deployment

problem and an equipment problem.

I think, in looking at limited resources, we have to ask ourselves

where those resources can best be deployed. That is why I favor

flexibility in these issues, and, frankly, some better management

solutions, which each of you have displayed in your own jurisdictions and which I hope the city can take heart from.

Mayor Rendell, I wanted to ask you. I’m very, very impressed

with the job you have done over the years in a city that was on

the brink of disaster.

Mr. DeSeve of the Office of Management and Budget has worked

with us on a lot of legislation pertaining to the District in the administration, so this will be a bipartisan effort this year to help

bring the city back. Hopefully we’ll come up with something that

we can all feel some ownership and pride in at the end of the day.

There is a proposal for an economic development corporation in

the Nation’s Capital that the President is going to be announcing

in just a few minutes. It’s my understanding this has been very

successful in Philadelphia. I wonder, Mayor Rendell, if you can

elaborate on that for us; tell us what has worked about it, and

where we might improve it.

Mr. RENDELL. Well, our economic development corporation has

worked for a number of reasons. No. 1—and you put your finger

on the whole ball of wax—it’s always had good management. It has

never been politicized. It’s always had first rate managers. It’s set

up in a way that the political system, interestingly, shares 50 percent of the appointment to the board with the chamber of commerce, a very interesting concept, so that no mayor can come in

and say, ‘‘Boom. Out with all of you guys. I don’t care how good

you did. I want those jobs and I want those pretty decent salaries.’’ The chamber would put its foot down against that approach. so,

right away, the overall management of the managers lends itself

to a non-political—— Mr. DAVIS. May I ask you a question?

Mr. RENDELL. Sure.

Mr. DAVIS. Institutionally, did the Chamber of Commerce name

these—was it named as an institution or was this—— Mr. RENDELL. It was in the original by-laws creating the corporation, that half of the appointees be from the Chamber of Commerce.

I think that’s a superb—— Mr. DAVIS. Who made the appointments? Did the Chamber make

them?

Mr. RENDELL. Yes. The president of the Chamber—the CEO of

the Chamber makes half the appointments, I make half the appointments. And, so, we can’t even elect a chairman unless we both

agree.

Mr. DAVIS. Interesting.

Mr. RENDELL. We can’t hire an executive director. It’s a great

way of insulating it from politics and the political change. Second,

the corporation, itself, is outside of the ordinances and—we have a

city charter—the requirements of the city charter. And that makes

it effective. Third, by being outside of the governmental flow—there

was a time when the city of Philadelphia absolutely couldn’t borrow

money.

83

But PIDC never had any of those problems because it was

viewed as an independent agency. And it was quasi. It wasn’t totally independent, because just as I can’t name a chairman without

the chamber, the chamber can’t name a chairman without me. So,

I think the independence of the agency is very, very, very important. It will get you through the fiscal hard times. And it has a professional staff.

Right now our executive director is a man by the name of William Hankowsky, who could leave me—he’s the highest paid person

in the government, if we count him as being in the government—

and he certainly is. By far, he makes about $75,000 more than I

do. And he should, because he could leave right now and double or

triple his salary. But he believes in the professional nature of the

mission. And he believes that—and it’s the whole ball of wax.

What we are talking about in managing the government better

and reducing deficits, we are talking about taking a patient with

a cancer that is potentially fatal cancer and a bullet wound to the

chest, we’re talking about patching up the bullet wound to the

chest so the patient won’t die in the short run. But creating economic development and jobs, broadening that tax base so they don’t

have to come back here 20 years from now, that’s the whole ball

of wax. That’s the cancer.

Mr. DAVIS. That’s the chemo.

Mr. RENDELL. That’s the cure for the cancer.

Mr. DAVIS. Yes.

Mr. MCCRORY. Representative Davis, you might want to also

check into Charlotte’s uptown development corporation, which is a

very similar set up regarding my appointment—I appoint—our economic development chairman is a member of the uptown development corporation, and each of our major CEOs who work in uptown

Charlotte are now members of the board of directors.

And they have their own budget. They have their own tax in the

uptown area. The uptown area of Charlotte is 10 percent of our tax

base, which is fairly substantial for us. So we have a separate corporation and they have special street cleaning and other things.

But we have a management director for that, also.

Mr. DAVIS. Pat, if you could enter that—if you could send us

some information, I ask unanimous consent, Mr. Chairman, that be

entered into the record.

[Note.—The information referred to was not available at time of

printing.]

Mr. RENDELL. That’s called—those are called business incentive

districts or special service districts. Our downtown is 40 percent of

our tax base—of our property tax base and about 30 percent of our

wage tax base. And we have the same thing. It’s a slight surcharge

on the taxes, independent management on certain issues and a

commitment from the government that we don’t go below the baseline that we had there before they came on board.

Mr. MCCRORY. Our goal is to increase ours from 10 to 15 to 20.

Mr. RENDELL. Right.

Mr. MCCRORY. Because the more investment we have, the greater return I have to pay for other services.

84

Mr. DAVIS. I want to hear how Mayor White is stealing your people and your businesses from you. What are they doing in Greenville?

Mr. WHITE. The State of South Carolina is very aggressive on a

State level, as the chairman knows.

Mr. MCCRORY. Very aggressive.

Mr. WHITE. The fee in lieu of taxes and other good incentives.

Mr. DAVIS. Let me just say, that after hearing all of you testify,

I notice there’s a constant refrain by all. Part of it is good management. Part of it is understanding that a partnership between the

business community and city hall is critical to success. A good attitude in working with the business community is critical for any

comeback. Would everybody concur with that?

Mr. WHITE. Absolutely.

Mr. RENDELL. Absolutely.

Mr. DAVIS. It’s something that, here in the Nation’s Capital, we

need to think very long and hard about to make sure the city has

the tools. Right now, the playing field is not level. I represent a

suburban district where the rents are cheaper. More workers are

out there. In my judgment, we can do some things for the city that

won’t even be at the expense of the suburbs. We can expand the

pie for the whole region if it’s done correctly. That’s why I’m interested in some of the models that have worked in—— Mr. WHITE. But every area has strain. So, you can list a long list

of negatives for the District of Columbia and every community. But

every community also has assets and strengths and reasons why

people want to be here if given a chance. And that’s what you have

to focus on.

Mr. DAVIS. Well, Philadelphia was literally on its back not that

long ago, and it has come back. It needs constant vigilance and attention or it may disappear as you know. You need to give it continued focus. Mayor Rendell, let me just ask you. You had a city

that’s a little close to Washington because of some of the traditions

in the northeast as opposed to the south.

Mr. RENDELL. Well, again, I don’t want to paint too rosy a picture of Philadelphia. As I said, we still have our systemic inherent

problems that all big cities do. But I also think one thing a big city

has to do—and I didn’t hear Mayor White’s testimony on festivals—but if you look at cities and the age old reasons that we had

cities, they were places to do business, for commerce.

Because the businesses had to be near their customers. And the

lawyers had to be near their clients. And the accountants had to

be near everybody. Well, as technology changes, and we can e-mail

and we can fax and we can video teleconference, there’s hardly any

need for anybody to be near anybody anymore. So, if there’s going

to be a rationale for cities in the future, it has to be a number of

things, but they mainly have to be the centers of areas where people can come to have fun, to experience art, cultural and historical

experiences, and to gather together.

And our festivals—and, again, I didn’t hear Mayor White, but assume I know what he says—cities have to be dynamic, vibrant, fun

places. And I will tell you, that’s the one area where Washington,

DC, has the ability to knock everybody dead. You should be clobbering everybody. We have a July 4th, 10-day celebration that

85

leads up to July 4th, where we bring 3 million people downtown— 3 million in 10 days downtown.

And we don’t have half the assets that would be attractive to

people from the region. Forget tourists, you do OK with tourists.

But go around to some of your television market and ask those people the last time they were in Washington. And it’s probably been

a while ago. And every time they come, even if they come in for

a free festival, you can just see the cash register going. Because

they have to park somewhere. They have to eat somewhere. They

buy a souvenir. Boom, boom, boom.

Mr. DAVIS. There goes the budget right there in this town.

Mr. RENDELL. That’s right.

Mr. TAYLOR. Thank you, Chairman Davis. Ms. Norton.

Ms. NORTON. Gentlemen, we have kept you too long. I will ask

you only one question. If you were to ask residents of the District

of Columbia today what was the problem that most disturbed

them, they would probably say crime.

Mr. RENDELL. Right.

Ms. NORTON. Has the crime rate in all of your cities gone down

in the last couple of years, and if so, what do you regard as the

major reason for the decline?

Mr. MCCRORY. The answer is yes. It’s gone down drastically. One

area we’re still having problems with is car break-ins. But, as I

said, our murder rates were decreasing every single year. And we

were having a major, serious problem with crime in Charlotte.

Ms. NORTON. So what happened?

Mr. MCCRORY. Well, I’d contribute three things. One is we did

hire over 225 new police officers, which helped tremendously. We

forged a relationship with our DA’s office and with the county and

others to try to streamline some efforts where people were falling

through the cracks. We started enforcing things like truancy laws,

which we weren’t enforcing in the past. We have now a program

called Target 100, which we implemented last year, which we now

identify as our top 100 people who are getting arrested over and

over again in the city of Charlotte, and we treat them as a customer.

Just like your top 100 customers if you were working in business.

These are the people we’re going to give special VIP treatment to.

Because they’re using our resources over and over again in addition

to causing havoc in our community. And we’re working with the

DA and with the other people in the criminal justice system to,

again, target especially those people who are committing—you

know, been arrested 20, 30, 40, 50 times.

And other things other cities are doing also. We’re targeting the

smaller crimes, too. Once you let the graffiti or once you let minor

crimes occur and you do nothing about it, you know that’s going

to escalate into more serious crime. And so we’re starting at the

lowest level possible and the message is going out interviewed the

city of Charlotte, and we’re very proud of that reduction in crime.

Those are a few examples.

Ms. NORTON. Mayor Rendell.

Mr. RENDELL. Yes. All of those things that the mayor said are

correct. We have, as I said, almost 400 more police on the street,

which is a tremendous step in the right direction. All of those law

86

enforcement things are important. But it’s also demographics.

Crime tends to reflect the number of people in the prime crime producing age brackets, which are 15 to 26. We’ve gone through a demographic trough.

We’re now, unfortunately, about to enter into an up period,

where we have a lot more people in those age brackets than we’ve

had in the nineties. And our crime statistics are down significantly.

But the problem is, if you look at the crime statistics nationally,

Charlotte, Philadelphia, I don’t know about Greenville, but the one

area where crime is increasing—overall crime is down—violence

among young people is increasing.

And all the law enforcement in the world, all the police in the

world, all of the better streamlined courts, tougher sentences, that’s

not going to make a difference. There are too many young people

in the city of Philadelphia who grow up and look around them

when 12, 13, 14—and they may even be school dropouts, but

they’re awful street smart—and they see in their neighborhood no

male working other than the drug dealers.

And even the drug dealers they know end up getting shot or

thrown in jail. And that absence of hope, that absence of visible

economic opportunity does more to produce crime among young

people than any single factor that I can think of, any single factor.

It’s interesting, crime among juveniles has gone up. And we’re incarcerating more juveniles.

And unless we come to grips—and those are the—when I said I

don’t want to paint too rosy a picture of Philadelphia—I could take

you to neighborhoods of Philadelphia that are just—that just have

awful problems. And the biggest problem is lack of hope in those

neighborhoods. And they’re not all African-American. They’re

latino.

They’re poor white. And unless we do something to reverse the

absence of economic opportunity, things aren’t going to change.

Have you wondered why in all of this evidence, this mountain of

evidence about how smoking is terrible for you, that among minority youth smoking is actually increasing. Well, you try to go tell a

16 year old kid in some of my neighborhoods, ‘‘You better not

smoke. You’re going to die of lung cancer when you’re 55.’’

That young kid doesn’t believe he’s going to be 25, no less 55. So,

I think when we look at the crime problem, we can’t be too patting

ourselves on the back for the national decrease, because the increase in juvenile violence and that demographic trend that’s going

to start going up are ominous figures for us. And, again, we ought

to have more police and we ought to have stronger systems. But

we’ve got to look at economic opportunity.

And, to me, we need a bipartisan approach to economic opportunity. Capital gains, absolutely. But only capital gains that’s going

to produce jobs. No capital gains tax relief for someone who buys

and sells art or collects gold coins. That’s ludicrous. But if someone

wants to invest in a job producing enterprise, we ought to give

them, I think, capital gains exemption if they are going to produce

jobs. And, this may be my last chance to speak. I just want to say

one more thing.

From our point, where we live—and now I’m talking more as a

citizen than as an elected official, we really want you to act toVerDate 11-MAY-2000 11:01 May 28, 2002 Jkt 078983 PO 00000 Frm 00094 Fmt 6633 Sfmt 6602 W:\DISC\41800 pfrm09 PsN: 41800
87

gether. And we don’t want it to be Republican or Democrat. We

don’t want there to be winners or losers in this process—individual

winners or losers, or parties that are winners or losers. We have

real problems. Even cities that are success stories have real problems. And we need your help and we need your leadership.

And we need you to—once the election is over—and I am a combative person come election time—but once that election is over,

you can’t be Democrats or Republicans anymore. And I know the

chairman said that that’s the approach you’re going to take to

Washington, DC. And I hope you do, because this is our Nation’s

Capital, and it’s a great city. And we’ve got to save it. And you

ought to do that with Washington, but you ought to do that with

all of our problems. And if you can do that, it’s amazing how much

progress I think you’re going to get done.

Ms. NORTON. Yes. Mayor White.

Mr. WHITE. We’ve seen an improvement. I want to comment

about community policing. That’s one of the ironies about community policing is that you put officers into a neighborhood and they

become a part of the neighborhood, is that your crime rate actually

goes up. It makes sense. More reports. They see things they didn’t

see before. And people feel more comfortable coming forward with

information.

So, you see that little blip up on the screen sometimes, and I

mentioned that because I don’t want folks to think that community

policing raises the crime rate. But, ironically enough, it just might

in some neighborhoods for a while. But I think it’s one of the big

reasons we’ve been able to target high crime areas in a lot of cities,

target high crime areas with an effective weapon. And that is community policing.

Ms. NORTON. If I might say, Mr. Chairman, that I don’t always

learn something from every hearing. And the reason I am particularly grateful for the appearance of you all here today is that I can

truthfully say that I have learned something from each of you, and

I think that you have, training, contributed. To the extent that we

can take what we have learned and actualize it, that you have contributed to the revival of the District.

I do want to say one word about Mayor Rendell, because when

the District went down, the city that most approximated where we

were going was Philadelphia—a huge city, helped build its State.

And Mayor Rendell came in to find it on its knees. You talked

about how the city employees were—that you got 60 percent of

their vote. The word from Philadelphia is that, as to the rest of

them, you got your elections by acclamation, which says to me it

is possible to do tough things if one exercises the kind of skillful

and dedicated leadership you apparently had.

Frankly, as far as I am concerned, Mayor Rendell, I distill my

view that Philadelphia wrote the book for and on cities that have

gone down. I regret that this city has not followed more closely. I

think we’d be further along. It has been the bane of my existence.

I want the control and the city to live in Philadelphia until they

absorb—instead of reinventing the wheel here. In a real sense,

Philadelphia has been there and done that, is a role model for

cities that find themselves on the bottom and lift themselves up.

88

talked to members of your city council when our control board statute was being written.

And to see people who would say, ‘‘Look, we were real doubtful

about having a control board.’’ And that in less than a year, they

did not believe that a control board could have brought them back

so far. We still, when I go into the neighborhoods, people are still

talking about we know where the before is, where is the after. And

we’re continuing to lose people because we are not seeing—we’re

not seeing change—and we have very patient people. Even small

change matters.

I just want to say to you just how smart Philadelphia has been.

It’s great to see a city that was just so smart in going at a tough

problem that did not continue to engage in crisis management reform. And I am still interested in learning more about Philadelphia

because it so approximates what we’re going through. And I am

certainly not interested in reinventing the wheel, and believe that

one of the major mistakes we have made in this city is to reinvent

the wheel instead of to sit at the wheel with Philadelphia.

And I believe that today’s testimony helps us to get out of the

mode of reinventing the wheel. I may ask that—I think you do us

a great service if, beyond the testimony from your aids, who came

so generously to testify when we were setting up the control board,

if there is other written material on what you have done in Philadelphia, whether it’s been material written about you in the popular press that describes how you did that, or whether it is material from the inside of your government, I would certainly want to

make it part of the record.

I would want to pass it on to our own city officials and control

board. And I just want to say again, you are a role model city as

far as the District of Columbia is concerned and I congratulate you

on what you have done.

Mr. RENDELL. Well, thank you Congresswoman. And the only

thing I’d say is, I think as all five of us would attest, there’s nothing that involves rocket science. It involves, as you said, the fortitude to make tough decisions—and every one of the five of us has

done it—and leadership and bringing everybody together, community groups, business groups, et cetera. And that’s the reason why

I think there’s every reason to be hopeful that with your leadership—and if you stay on the case and continue to apply the pressure, Washington, DC, can come back, as well. There’s no question

in my mind.

Because we all borrow from each other. I have a list of some of

initiatives that we undertook, and a third of them were borrowed

from other jurisdictions, a third of them were from comptroller’s reports before I became mayor. I mean, it isn’t rocket science. And

if the District hope officials have the will, that’s great. But if not,

if you and the control board can impose that will, I think it can

be done.

Mr. TAYLOR. Thank you. I agree with several of the things that

have been said. This should not be Republican or Democrat issue.

This is America’s capital. There’s no question, though, that the

theme that has run through this hearing—and it’s been a very,

very valuable hearing for me, and Congresslady Norton just mentioned for her, and I’m sure for the whole staff and members who

89

were here—is that there needs to be a philosophical change, certainly, in approaching the problem. You cannot use a lot of the old

methods that were ineffective, there need to be new methods tried,

whether you’re dealing with a young city that’s growing, such as

Charlotte or Greenville, or Philadelphia, which has had many of

the problems which Washington, DC has.

Privatization, which I’ve heard throughout from all of the mayors, done in a way that does not dump the city employees and the

talents of those employees on the street. Privatization in a way

where the competition raises the level of the departments and allows the public departments to bid. And if they can win the bid,

then they are much better and the city is much better for it. Cutting regulations and taxes is, as you mentioned a moment ago,

wherever possible, and especially if they’re excessive, is common

sense.

People do not come to regions where they are overtaxed when

they can go to areas with much lower tax and perform the same

purpose. And the mayor pointed out, with today’s technology, you

do not have to be in the center of a downtown area. You can be

outside. And, so, it’s necessary to be competitive, also, with the

lower taxes and abolishing useless regulations. And, of course,

then, the quality of life: the school system, the law enforcement

agencies we have.

Here, again, the problems of crime are broad and deeply rooted

in all of our society and have to be attacked in a variety of ways.

But the basic ways I think each of you has talked about is, first

of all, having competent law enforcement in place, enforcing the

law, from juveniles all the way, so that the example is set from beginning all the way up, and taking repeat offenders off the streets

and incarcerating them for reasonable periods of time based on

their offense.

Now, these are basic common sense practices. But they seemed

to run throughout. And, so I’d like to say to you today, you’ve made

a national contribution, I believe, with your testimony and your appearance. I appreciate, as Congresslady Norton mentioned, any

other suggestions, any other programs that you have that you

weren’t able to articulate today. If you could pass them on to this

committee. Mayor Golding, Mayor Goldsmith, Mayor McCrory,

Mayor Rendell, Mayor White, I especially applaud your 3 hours

plus time that you’ve spent with us and the contribution you’ve

made in what I think is a national debate to improve the Nation’s

Capital. I believe that working with the control board and with the

Capital’s citizens, and the Congress working together, we can improve this city. And I want to thank each of you for being here. I

appreciate the use of the hall from the Government Reform and

Oversight Committee. And this committee is now adjourned, subject to call of the Chair.

[Whereupon, at 4:15 p.m., the subcommittees were adjourned,

subject to the call of the Chair.]

[Additional information submitted for the hearing record follows:]

90

91

92

93

94

95

96

97

98