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No fast method for city reform

THE BALTIMORE SUN

The fanfare and smiles that accompanied last week's delivery of a 500-page report on Baltimore city government are gone.

Now comes the hard part.

There are scores of recommendations for improving management and efficiency that, if adopted, could save Baltimore as much as $135 million a year, according to the report by the Greater Baltimore Committee and Presidents' Roundtable.

But there are few quick fixes - and many obstacles. The city's big spenders, the public works and housing agencies, would have to make fundamental changes in the way they operate.

"It's extremely difficult. Obviously, when you look at the departments we analyzed you look at some of the toughest jobs in the city of Baltimore," said Matthew D. Gallagher, the report's project director.

The mayor, whose campaign promised new ideas, now faces the challenge of changing the way his government works. Martin O'Malley made that challenge clear to his department heads. As he handed out copies of the report last week, he told them that "three answers will clearly betray you as a member of the old mindset: 'We're already doing that'; 'We tried that and it didn't work'; 'We can't afford that.'"

According to the report, many of the problems can be solved by changing management styles, streamlining various programs and discarding outmoded practices. But making these changes raises the specter of huge layoffs among the city's 16,500 employees.

"There's ways to do this without having to lay people off," said O'Malley, who acknowledged he cannot ignore that option. "I mean, there's always a possibility."

Gallagher said the report's aim was to create a better-managed and more efficient city government.

"Do you really need the same staffing levels to support smaller portfolios? The answer might be 'No,'" he said. "There's no question about it. When you look at the totality of the city's budget, far and away the biggest costs are labor costs."

For an example of the challenges facing the city, look no further than the Housing Authority of Baltimore City and the Department of Housing and Community Development. The city has the fourth-largest public housing authority in the nation. It is the state's biggest landlord. Yet the authority, which has 1,653 budgeted positions, does not have a chief financial officer to monitor its $206 million annual budget. HCD has 580 budgeted positions and a $160 million budget.

Lack of accountability

The report's authors wrote that the two agencies are "failing to achieve their mission of neighborhood recovery and stabilization," that "critical operational areas appear to be barely functional" and that these conditions call into question their ability to improve neighborhoods. As with much of the report, there were calls for greater accountability in terms of programs and employees.

"It's amazing, the absence of that in city government," said Robert C. Embry Jr., president of the Abell Foundation and team leader for the housing report. "Oh sure, they'll give you some bromide about keeping the city clean or getting people jobs."

Patricia J. Payne, commissioner of the Department of Housing and Community Development, said the report's findings did not surprise her. There are long-standing, systemic problems that have become part of the everyday workings of the department, she said.

"That's the reality of what I'm facing," said Payne, who took over the department in February, about the same time business leaders began working on their report. "I want people to understand the department and the nature of the challenges, because they are huge."

The department has 14,000 housing units spread throughout the city, is responsible for 11,000 rental vouchers and is trying to contend with 12,500 vacant houses that threaten the health of city neighborhoods.

Privatization suggested

The report proposed dramatic changes in the department, from privatizing property management and the Section 8 voucher program to closing Neighborhood Service Centers and moving housing authority police into the city's police department.

Embry, a former housing commissioner, said he was surprised by "the dramatic difference of private management of public housing and public management in terms of costs."

Privatizing property management could reap $7 million to $9 million in savings. Those numbers intrigue O'Malley, who has a projected $153 million deficit hanging over his head. Payne recognizes the management problem but is not ready to embrace privatization.

"It's clear that the management of the physical inventory needs to be changed, and whether that needs to be privatized or radically changed is something that we're looking at," she said.

Stabilizing neighborhoods

Another key recommendation is that the department change its focus from development to stabilizing neighborhoods. Though that approach doesn't have the glamour or public relations value of major demolitions and groundbreakings, it is equally important to city life, said Payne.

"It is a longer-term process than anybody would like. Setting up a new system, getting staff to buy into it, all takes time - sometimes longer than you wish - but it can be done," she said.

The department is using a $5,000 grant from the Abell Foundation to provide incentive bonuses for housing inspectors. A meeting Thursday at the War Memorial building gave people a chance to hear about the department's efforts to revamp its approach to demolition. The authority's board of commissioners is circulating a draft of principles that amplify what was mentioned in the report.

"Change is always difficult, particularly if the changes are the result of problems that have gone on for a while," she said. "The biggest impediment is trying to do these changes while you're doing the day-to-day operations."

A model of reform

Baltimore's reform model might be Philadelphia, where the business community helped bring the city back from the brink of financial disaster.

The Philadelphia study took more than two years to complete and produced recommendations that are saving the city $500 million a year, the GBC says. Gallagher was in Philadelphia during those years, serving as an assistant deputy mayor to Mayor Ed Rendell.

"They made a tremendous amount of tough decisions. There's no question about that," Gallagher said. "They were on the ropes. Now I think the comparison between Philadelphia and Baltimore is valid, but Baltimore is lucky in the sense it is not on the verge of bankruptcy. They have not fallen to junk-bond status."

Attorney David L. Cohen was Rendell's chief of staff and a principal architect of Philadelphia's turnaround. He made several visits to Baltimore last fall, meeting with GBC members, giving presentations and explaining what happened in Philadelphia. Patience was a main requirement for Philadelphia's success, said Cohen, who also met with O'Malley.

Implementing changes became a way of life in Philadelphia city government, he said. Every year, new ideas were adopted; some have yet to bring about the desired results.

'Turning an aircraft carrier'

"You cannot turn around a government overnight," said Cohen. "Turning around a city government is a lot like turning around an aircraft carrier. It takes a long time to get that baby going in the opposite direction."

But, he said, positive change has a way of feeding on itself, gaining momentum, winning converts. During the last decade, Philadelphia went from near hopelessness to being the host for the Republican National Convention. That took a combination of leadership, planning and luck, he said.

O'Malley hopes for a similar success.

"Part of our long-term gamble in a lot of this, whether it's the parking garages or the investment in the police officer salaries, there's a certain leap of faith that says, 'We're doing these things. They're investments. They've got to pay off,'" he said. "Getting our own house in order is what we need to do, and we need to do it quickly."

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