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A Big City Struggles for Survival by Redefining the Way It Works


Washington -- Public worker strikes in big American cities are no joke. With sanitation crews off the job, huge mounds of garbage bags accumulate along the sidewalks. Critical street repairs grind to a halt. Housing services break down. Tax collections and safety inspections stall.

But Philadelphia seems poised to bear a strike this fall by two blue- and white-collar public worker unions representing its 16,000 non-uniformed employees.

Bargaining is still under way between the unions and the administration of Edward Rendell, the ex-district attorney elected mayor last fall on a platform of Spartan, efficient government to rescue a city teetering on the edge of bankruptcy.

But it may be tough for union officials to swallow Mr. Rendell's demands, at least without a fight. He is pushing a severe "no pain, no gain" action plan that raises red flags for municipal work forces and government employee unions across the country.

Mr. Rendell, a Democrat, says he's quite willing to take a strike if that's what is necessary to start righting the city's finances and to free city managers from cumbersome union and civil service rules.

Example: Building custodians resist cleaning walls above shoulder height. They claim wall-washers must do that. The city no longer employs wall-washers. The union insists that workers cleaning any wall above shoulder height get extra pay.

Example: Sludge truck drivers do a "great circle route" at the dump to work up overtime. Union reps say that to question that is harassment.

Example: With the unions unfailingly on their side, it sometimes takes Philadelphia years to terminate oft-reported goldbrickers, even workers with criminal records.

Mr. Rendell knows the city's image needs fast resuscitation to assure skeptical state and federal governments that aid for Philadelphia won't trickle down a rathole.

His five-year fiscal austerity plan differs sharply from typical city survival plans. It doesn't chop services (already cut to the bone), nor ask for new taxes. Philadelphia has had 19 tax increases in the last decade, and has the nation's highest wage tax. Everyone agrees the city is "taxed out." One estimate says taxes have cost it 130,000 jobs in 10 years.

Mayor Rendell aims instead to save through clipped labor costs and rigorous management. His five-year recovery plan persuaded the Pennsylvania Intergovernmental Cooperative Authority -- created by Harrisburg to watch over Philadelphia financing -- to guarantee $470 million in Philadelphia bonds (previously downgraded to junk bond status by Wall Street).

Mr. Rendell demands the unions go five years without a pay increase. He's demanding paid holidays be chopped from 14 to 9 (saving the city $9 million yearly). Sick leave would drop from 20 to 10 days a year. Employees would lose free legal aid. The city would take from the unions the management of health plans, saving $60 million to $70 million each year.

On top of that, Mr. Rendell wants to strengthen management's right to discipline workers and set work rules. He's pushing aggressively to rewrite the 1951 city charter, which tries so hard to prevent corruption that months are required to clear small contracts and major department heads get only two policy aides exempt from civil service and union discipline.

The unions are fighting charter reform. One union leader assails it as "warfare against my people."

David Cohen, Mr. Rendell's chief of staff, says Philadelphia is five years or so ahead of other major cities in having to face painful fiscal reform to survive.

The flight of middle-class working people (the city has lost 450,000 population in 20 years) accounts for a lot of Philadelphia's problems. It's becoming a city of the elderly, poor single parents and children. A quarter of its people live in poverty.

The city's property tax values were practically static in the '80s while suburban Montgomery County gained $4.5 billion in taxable property.

The University of Pennsylvania's Ted Hershberg, who calls Philadelphia a "catchment basin of poverty," notes that it has "hundreds of thousands of very poor people in great need of services. We need to compare their needs with those of 20,000 unionized workers."

A new dilemma is thus posed for cities: Should they be employers of last resort for workers whose jobs could be contracted out? Or is their bigger responsibility to their masses of poor?

It's amazing to note how a city as demoralized as Philadelphia has responded to the gravest fiscal crisis of its history. Last November not only Mr. Rendell but the new city council president, John Street, and most of the 17-member council ran on an austerity reform platform. Several divisive incumbents were retired by the voters.

Mr. Street, a colorful political leader from heavily black North Philadelphia, was an uncompromising, table-pounding renegade in his early political career. He now seems a new man, working closely and adeptly with Mr. Rendell, producing near-unanimous council votes.

Philadelphians consider all this amity miraculous. Fear of fiscal abyss has concentrated everyone's attention. There is tangible new civic unity, a suppression of intramural political spats and a desire to institute 1990s management standards. If it all works, hard-pressed cities across the continent will take note.

Neal R. Peirce writes a column on state and urban affairs.

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