[Senate Hearing 106-176]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 106-176


 
             MANAGEMENT REFORM IN THE DISTRICT OF COLUMBIA

=======================================================================


                                HEARING

                               before the

                  OVERSIGHT OF GOVERNMENT MANAGEMENT,
        RESTRUCTURING AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION



                               __________

                              MAY 3, 1999

                               __________

      Printed for the use of the Committee on Governmental Affairs


                                


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                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOSEPH I. LIEBERMAN, Connecticut
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio            RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico         ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania          JOHN EDWARDS, North Carolina
JUDD GREGG, New Hampshire
             Hannah S. Sistare, Staff Director and Counsel
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                  Darla D. Cassell, Administrive Clerk

                                 ------                                

SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING, AND 
                        THE DISTRICT OF COLUMBIA

                  GEORGE V. VOINOVICH, Ohio, Chairman
WILLIAM V. ROTH, Jr., Delaware       RICHARD J. DURBIN, Illinois
JUDD GREGG, New Hampshire            ROBERT G. TORRICELLI, New Jersey
                  Kristine I. Simmons, Staff Director
   Marianne Clifford Upton, Minority Staff Director and Chief Counsel
                     Julie L. Vincent, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Voinovich............................................     1

                               WITNESSES
                          Monday, May 3, 1999

Hon. Anthony A. Williams, Mayor, District of Columbia............     2
Linda W. Cropp, Chairman, Council of the District of Columbia....     5
Alice M. Rivlin, Ph.D., Chairman, District of Columbia Financial 
  Responsibility and Management Assistance Authority.............     8

                     Alphabetical List of Witnesses

Cropp, Linda W.:
    Testimony....................................................     5
    Prepared statement...........................................    38
Rivlin, Alice M., Ph.D.:
    Testimony....................................................     8
    Prepared statement...........................................    43
Williams, Hon. Anthony A.:
    Testimony....................................................     2
    Prepared statement with attachments..........................    19

                                APPENDIX

Report of the Special Committee on Police Misconduct and 
  Personnel Management of the Council of the District of 
  Columbia, October 6, 1998, submitted by Linda Cropp............    55
Responses to questions submitted by Senator Voinovich for Mayor 
  Williams.......................................................   169



             MANAGEMENT REFORM IN THE DISTRICT OF COLUMBIA

                              ----------                              


                          MONDAY, MAY 3, 1999

                                       U.S. Senate,
       Oversight of Government Management, Restructuring,  
                       and the District of Columbia Subcommittee,  
                         of the Committee on Governmental Affairs, 
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 3:32 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. George V. 
Voinovich, Chairman of the Subcommittee, presiding.
    Present: Senator Voinovich.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. The meeting will please come to order. I 
would like to welcome Alice Rivlin, Mayor Williams, and 
Chairman Cropp to this hearing this afternoon.
    I was thinking before I came in, it was March 1995 when I 
testified before a House Committee that was looking at the D.C. 
Financial and Management Assistance Authority and never thought 
that I would end up in the Senate and Chairman of the 
Subcommittee that has responsibility for the District of 
Columbia. But I must say that I am very pleased about that, 
particularly because of my experience in city government.
    In the last 5 years, the District has undergone tremendous 
change. Now on the road to recovery, Washington, before 
appeared to be a city falling off the hill and sliding into the 
Potomac. I remember when I became Mayor of the City of 
Cleveland, there were people who said that the City of 
Cleveland was sliding into Lake Erie. The joke around town was, 
the last person leaving town, turn off the lights. But what is 
nice about cities is that if you get everyone together and make 
up your mind, you can make a difference.
    Although the District has transformed fiscal year and 
accumulated deficits to surpluses more quickly than 
anticipated, the financial condition is one of convalescence. 
That is another thing I have learned, is you cannot ever take 
anything for granted. Sometimes things are going well, and then 
if you do not pay attention, they have a way of sliding back.
    But as we all know, simply spending less money and 
balancing the budget are not sufficient. A city which generates 
fiscal year surpluses yet cannot educate and nurture its 
children or protect its citizens against crime or reduce a 
staggeringly high incidence of substance abuse is still 
dysfunctional. Problems still need to be addressed, including 
the constant problem of improving city services, to which I 
know the Mayor is very dedicated, and the Council, to doing 
something about.
    Having been a Mayor and Governor myself, I understand the 
difficulty in implementing systemic change. I applaud Mayor 
Williams for setting clear short- and long-term objectives that 
can be measured. By establishing a baseline performance 
measurement system for the city and its agencies, we should be 
able to address problems and concerns in a proactive fashion 
instead of participating in an ongoing exercise of triage. I 
want you to know, Mayor, I did go through these measurements. I 
think that they are terrific.
    I encourage the District Government to improve the 
confidence of its citizens in the government by holding 
agencies accountable for achieving results. Agencies should 
develop strategic plans, outcome-based goals, an explanation of 
how the goals will be achieved, and the method for measuring 
progress. I say to my directors, if you cannot measure it, do 
not do it.
    This Subcommittee will monitor and certainly encourage the 
implementation of a system to measure the progress and 
performance of management reforms in District programs and 
agencies. When I met with Dr. Rivlin and Mayor Williams, I said 
that I thought it would be good if you would come in and we 
could establish a baseline. I have been around government a 
long time, and so often what happens is that you get anecdotal 
stories about city services, and before you know it, some 
Senator or Congressman is off and running and they want to do 
this or do that. I think we are just better off saying, here is 
where we are. Here is what we have done and here is what we 
would like to do.
    Before I introduce the witnesses, I would like to say what 
a pleasure it has been to have an opportunity to meet with 
Mayor Williams and Dr. Rivlin, and I look forward, as I 
mentioned to you, Chairman Cropp, to visit with you. I was 
supposed to meet with Eleanor Holmes Norton on Wednesday, but 
that got put off and so we will be doing that. The Mayor and I 
have talked about his coming to Cleveland. I notice you could 
not make that date, but we will reschedule it. They are all 
excited about you coming.
    Mr. Williams. I am looking forward to it, Senator.
    Senator Voinovich. At this time, I would like to welcome 
and introduce our witnesses, the Hon. Anthony Williams, Mayor 
of the District of Columbia, the Hon. Linda Cropp, Chair of the 
D.C. City Council, and Dr. Alice Rivlin, Chair of the D.C. 
Financial Authority.
    Your cooperative efforts have been key to the city's 
success. I have always felt that Washington, DC, should be the 
shining city on the hill and I look forward to working with you 
to realize that potential.
    Mayor Williams, if you would like to begin, we would 
certainly like to hear what you have to say.

 TESTIMONY OF HON. ANTHONY A. WILLIAMS,\1\ MAYOR, DISTRICT OF 
                            COLUMBIA

    Mr. Williams. Mr. Chairman, we want to thank you and 
Members of the Subcommittee for your role in providing 
assistance to the District and, I think, the oversight we 
expect from our Council, from our Financial Authority, and from 
the Congress in a partnership to really bring our city forward. 
We are particularly delighted as employees and managers in our 
government to be able to work with you because of your 
experience in Cleveland and leading it back to recovery, your 
experience as a Mayor and a Governor and now as a Senator. So 
we are very delighted to have you here as the Chairman of our 
Oversight Committee.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Williams appears in the Appendix 
on page 19.
---------------------------------------------------------------------------
    I hope to learn lessons from you--for example, this trip to 
Cleveland--the way the community there has come together and is 
now leading the country, I understand, in production of housing 
in the city. It is something that we want to duplicate here in 
our city.
    We have come a long way financially from a fiscal point of 
view, but there is still much work that needs to be done to not 
only improve the fiscal deterioration of the city's 
infrastructure, but more importantly, to rebuild the faith and 
confidence of our government.
    In that respect, I wanted to just highlight a couple of the 
items that are in my written testimony, which I submitted for 
the record. But for the purposes of entering into a dialogue 
with you, Senator, I will just give you some highlights.
    One is on the area of accountability and responsibility. We 
have set a number of goals for our city, how to make our city a 
cleaner city, a more customer-friendly city, a city that is 
more friendly to business, and a city that is really a beacon 
of hope and opportunity for everyone by providing the critical 
human service network activities that a city has to provide and 
that have been neglected in our city for some time.
    In the first instance, we have set a series of short-term 
actions along those lines, and I am pleased to report, as I 
have included in my testimony, that on many of these measures, 
with the notable exception, I might say, of the Department of 
Motor Vehicles, and even there, I think there has been 
improvement, I have heard from our citizens, we are on the way.
    I mentioned the Thomas Circle underpass, opening that up. 
That was a symbolic thing, not a major thing, but in terms of 
an irritant to our citizens, it proved to be important. Making 
headway on electrical inspections, again, not a major thing if 
you look at our overall operations, but again, giving the 
business community a sense that we are working in partnership 
with them to include not only the Department of Consumer and 
Regulatory Affairs but also reaching out to the Board of Zoning 
Appeals and making improvements there.
    The Gateway Beautification Initiative, launching an effort, 
a multi-agency effort initially focused on our gateways, and 
then moving from there into looking at where we have our major 
traffic circulation, where we need to do a better job of 
sending out a good impression of our city, a Potemkin strategy. 
Catherine the Great's assistant Potemkin cleaned up the 
corridors as she traveled around the country. You know, it was 
criticized by historians because all they did was clean up the 
corridors, but if you can clean up the corridors and at the 
same time do the background work to improve the overall 
neighborhoods, it is not a bad strategy.
    We are moving from these short-term agenda items to a long-
term strategic planning process in the District, which is 
really going to have a number of major components, chief among 
them performance indicators. We are going to be including in 
our budget submitted to the Congress a performance 
accountability plan, which will be the first step in moving in 
that direction.
    As I have stated in my testimony, we have learned a great 
deal from our residents over the campaign trail, in talking to 
residents in a series of community meetings, but we are also 
launching an effort beginning with a customer survey we have 
underway to get an assessment from our residents of where we 
stand right now. Then using that, to begin by the fall of 1999, 
we hope, using both the resources from our government, but very 
importantly, resources from the foundation sector to begin 
building a citizen planning process out in our neighborhoods 
that we hope to eventually link up with the strategic planning 
process we are going to be engaging our agency and division 
directors in. So, ultimately, the work of our city as a whole, 
and I hope it is not just our government but our community as a 
whole, our agency directors, is going to be fed and informed by 
real citizen needs. So that is what I call the neighborhood 
strategies.
    Another important feature here is that we are going to be 
developing a D.C. scorecard, informing the public of this goal 
setting and performance measurement system, and it has been an 
effective preliminary conversation to set these community 
expectations. We have worked with an organization called the 
D.C. Agenda, An Alliance for Redesigning Government, George 
Washington University's Center for Excellence in Municipal 
Management. We work with all these different organizations, 
developing a process for tracking changes in community 
conditions both critical to our residents and for engaging the 
public in gauging the performance of important services offered 
by the District Government.
    Over the past year, this partnership has conducted research 
of similar priority-setting initiatives in other jurisdictions 
cited as best practices and they have come up with Portland, 
Oregon, Phoenix, Arizona, and Charlotte, North Carolina. In 
Attachment III, we list the indicators and associated measures 
that are going to guide the work of our agency heads. They are 
more outcome-oriented than they are output-oriented, though 
they are really not truly outcome measures in the sense that 
they really do not get to ultimately do what, for example, a 
department wants to accomplish, but they are well down that 
road.
    Another device that we are going to be using, and we have 
begun to use it in the year 2000 budget, although we have much 
work to do, is the notion of benchmarking, asking our agency 
directors to compare their level of operations, compare their 
achievement of outcomes to the best practices around the 
country. There, in the work we have done already, we have used 
the cities of Detroit, Indianapolis, Philadelphia, Phoenix, and 
Portland, Oregon. Those are included in Attachment IV. Very 
importantly, there are ideas that our agency directors, our 
citizens have to have some way of comparison on an apples-to-
apples, oranges-to-oranges basis to really understand what 
services we are performing in what kind of cost-effective way.
    Finally, in terms of reporting, in addition to providing 
annual reports on performance to the District of Columbia City 
Council and the U.S. Congress within the proposed and final 
budgets, we are going to institute monthly and quarterly 
reporting on agency level measures and quarterly reporting 
against these community indicators. The report format and 
procedures will be designed by the end of June and the first 
agency reports will be issued by mid-July.
    All in all, again, what we are trying to do, Senator, is to 
listen to our citizens, listen to their statement of where we 
stand and build with them a consensus on where we want to go 
and then hold ourselves publicly accountable on the steps we 
have taken, the accomplishments we have achieved to reach that 
goal. So I believe it is very important and I have not really 
included it here in our testimony that this balanced scorecard 
that we are talking about is reviewed and validated by the 
Inspector General.
    In appointing, or at least nominating for the Control Board 
and the Council's consideration a new Inspector General, I took 
a lot of time and effort to talk to the candidates about the 
need to do aggressive performance auditing, although I will 
regret this, I am sure, a year from now, but to do aggressive 
performance accounting and to take a real leadership role in 
taking this scorecard and comparing how we are doing on our 
scorecard with how these other best practice cities are doing.
    I notice that in, for example, Phoenix and in Portland, 
Oregon, their city auditor did this kind of validation and I 
think it could be very useful to assure our citizens and assure 
the Council, the board, and ultimately the Congress that we 
have actually made the headway we are stating we have made.
    That concludes my testimony. As you can expect, I would be 
happy to answer any questions you may have. I appreciate the 
opportunity.
    Senator Voinovich. Thank you.
    If it is all right with everyone, I would like to give 
Chairman Cropp and Dr. Rivlin a chance to testify and then we 
can open it up for questions.
    I would like to say that one of the things I learned as 
Mayor is that the Council was 51 percent of the action. One of 
the nicest things that happened to me when I left the Mayor's 
job was there was a wonderful article in USA Today. It was an 
article about two individuals, the Mayor of the City of 
Cleveland, the short, white Republican, and the tall African 
American Council President that worked together to make things 
happen in our town.
    Mayor, I have always said the Council is 51 percent of the 
action. If you know that, then you get along real well. We know 
that what the Council is doing is going to have a great deal of 
impact on how successful the Mayor will be and also how 
successful the Council will be. You have a symbiotic 
relationship with each other, so we welcome you today.

   TESTIMONY OF LINDA W. CROPP,\1\ CHAIRMAN, COUNCIL OF THE 
                      DISTRICT OF COLUMBIA

    Ms. Cropp. Thank you very much, Senator. I appreciate your 
comments. The Mayor and the Council are working very closely 
together to make Washington, DC, the type of city that we would 
like for it to be.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Cropp appears in the Appendix on 
page 38.
---------------------------------------------------------------------------
    We found ourselves being new roommates, however, and when 
you are new roommates, you have to decide whose turn it is to 
wash the dishes or vacuum the floor, and we are in the process 
of doing that. So we are in the process of learning all of 
that, but it is coming along and I think as we continue this 
approach, Washington, DC, will do much better.
    The best thing about it is that we are willing to make sure 
that the arrangement is a successful one, and when there is the 
will for that and when there is the understanding that we need 
to have constant interaction, I do believe that we will be 
successful with it.
    I am happy to be here with my colleagues, Mayor Anthony 
Williams and Alice Rivlin, today as we come before you to talk 
about the government's system for measuring the progress of 
performance of our management reform program and its agencies. 
Let me begin by saying that management reform is a 
collaborative process. The Council has been working in 
partnership with the Executive Branch and the Financial 
Authority to correct longstanding deficiencies in management 
and program operations. There are a number of ongoing 
management reform initiatives and each of us has a role in 
order to make sure that we have success in these initiatives.
    The Council has set its 1999 and 2000 legislative agendas, 
the theme of which is community building and a government that 
works. In establishing our legislative agenda, there were four 
strategic priorities: Individual empowerment, neighborhood 
revitalization, economic growth, and government performance and 
accountability. It is our belief that when you do that in 
partnership, with the Mayor that it will help all of us to 
achieve.
    The Mayor and the Council do not always agree on 
everything. I often say that I have been married to my husband 
almost 30 years this year. I love him madly, and I do not agree 
with everything that he says, but that is OK. I think that is 
part of good government, for us to move forward in that way. It 
helps to stimulate debate, and in stimulating the debate and 
when we come together in consensus, it will initially help the 
outcome to be an outcome that is more beneficial for everyone.
    To ensure the long-term success of management reforms, the 
Council has already taken a number of steps, but there is much 
more to do. The Council has taken an active role in requiring 
performance measures for District agencies and publicly funded 
activities. In 1995, the Council enacted the Government 
Managers Accountability Act, which requires the establishment 
of performance measures and an accountability plan for every 
agency and activity in the District that uses any type of 
public funds.
    This fiscal year, the Council is working closely with the 
D.C. auditor in monitoring the implementation of this Act, 
including assessing the reliability of the performance data, 
the accuracy of the performance measurements, and the level of 
success in achieving the performance measures.
    In the past 2 years, prior to the budget process, the 
Council has had a set of hearings dealing solely on performance 
measures, and when we have held those hearings prior to the 
budget, we look at what performance measures have been 
identified and we look at where they have been achieved and how 
they have been achieved. It also provides the public an 
opportunity to come in and share with the Council and also with 
the executive as they see the outcome of the public hearings, 
exactly where we may still need to have growth, what we need to 
strengthen, and also where we have done exceptionally well and 
how we can then move on into other areas. The Council has found 
these public hearings on performance measures to be beneficial 
not only to us, but we hope to the executive agency directors, 
too, as they hear concerns and as they hear where they have 
done well.
    The Council has increased its oversight of agencies and 
their programs. We have instituted a comprehensive review of 
agency spending and performance outcomes. The Council has used 
performance measures as a tool in linking resources to results 
in its review of the fiscal year 2000 budget. We want to ensure 
that the government resources are linked to specific 
performance goals and measurements. Goals and measurements then 
can not only be tracked by the District Government, but by the 
District residents, as well.
    Pursuant to its oversight responsibility, the Council has 
also established special committees to investigate specific 
management and operation issues when appropriate. Last year, 
the Council investigated the Metropolitan Police Department and 
issued a report with recommendations for management reform 
within that Department. It was a comprehensive report and 
comprehensive investigation that, hopefully, will help all of 
us to move in a more positive direction with the Metropolitan 
Police Department. Senator, if you do not have a copy of that 
report, we will make sure that you get a copy of it.
    This year, the Council will undertake a similar 
investigation of the special education program within the D.C. 
Public Schools, an area of great concern for us, and we would 
like to be able to look at that issue, look at the concerns, 
and, hopefully, come together with a meeting of the minds with 
all who are involved.
    The Council has also assisted in management reform 
initiatives by enacting legislation which encourages 
performance and accountability. During 1998, the Council 
enacted comprehensive personnel reform legislation, the Omnibus 
Personnel Reform Act of 1998. This creates a core of senior 
managers who will have at-will employment status, raises 
executive pay to recruit and retain top managers, creates a new 
system of performance evaluation that links employee step 
increases to performance, streamlines grievance and discipline 
procedures, and authorizes cash incentives and gain sharing 
programs for employees to encourage and reward good 
performance. This law that the Council passed is an excellent 
tool that can be utilized by the Mayor as he moves forward in 
trying to do his performance measures.
    In 1996, the Council enacted procurement reform. The 
Procurement Reform Amendment Act of 1996 centralize the 
District's procurement activities under the direction of the 
Chief Procurement Officer. By working together, the Executive 
Branch and the Council, the District's procurement operation 
has greatly improved. This has resulted not only in reduced 
costs of supplies and equipment, but also improved service 
delivery to District residents.
    Along with the management reform initiatives, the District 
is implementing regulatory reform. Last year, the Council 
approved two comprehensive business regulatory reform bills. 
These legislative initiatives are part of the Council's ongoing 
efforts to address regulations which unnecessarily and 
inappropriately impair economic development in the District. 
The omnibus legislation addresses a number of regulatory 
reforms, including business licenses, insurance premium tax, 
health regulations, elimination of obsolete and redundant 
boards and commissions, building and land use regulations, 
vending regulations, and unemployment insurance and workers' 
compensation, which was no easy task. There was an awful lot of 
work that went into it, and a lot of really hard decisions, 
particularly when you look at the workers' compensation piece.
    Finally, the Council has not exempted itself from 
management reform. The Council commissioned a study by the 
National Conference of State Legislatures and worked 
cooperatively with the Appleseed Foundation in their study of 
Council operations. The Council has already implemented some of 
the recommendations from these two studies and is in the 
process of implementing others.
    In conclusion, the residents of the District and its 
employees alike will share in the results of management 
reform--improved quality of service, reduced costs, efficiency, 
and effectiveness. The Council will continue to work 
cooperatively with the Mayor and the Financial Authority in 
implementing management reform initiatives and monitoring the 
results of these initiatives.
    And possibly more importantly, we are not going to slide 
into the Potomac, Senator. We have stemmed the erosion that is 
occurring. We have stabilized the shoreline and we have 
strengthened our infrastructure, and we are in the process of 
pulling out a cloth and shining up everything that is there so 
that we can be that beacon that we ought to be, the city that 
is the capital of this greatest country in the world.
    There is a new sense of hope that can be seen very easily 
among District citizens. You see shoulders back and heads held 
high. It is with a new pride, a new hope, and a new 
determination that with all of us working together, we can make 
Washington, DC, the type of city that we all want it to be and 
know that it can be.
    Senator Voinovich. Thank you. Ms. Rivlin.

 TESTIMONY OF ALICE M. RIVLIN, PH.D.,\1\ CHAIRMAN, DISTRICT OF 
  COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE 
                           AUTHORITY

    Ms. Rivlin. Thank you, Mr. Chairman. I, too, am very 
pleased to be here with my two colleagues from the D.C. 
Government, Mayor Williams and Chairperson Cropp. We have been 
seeing a lot of each other recently. I did not exactly think of 
us as roommates, but we have been working very hard in long 
meetings to work out D.C.'s budget, to keep it balanced, and to 
improve the services.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Rivlin appears in the Appendix on 
page 43.
---------------------------------------------------------------------------
    The District of Columbia, as you said at the beginning, has 
come a long way since the dark days of escalating deficits, 
looming bankruptcy, and service breakdown that forced the 
Congress to create the Authority that I chair. The budget has 
been in surplus for 2 full years. Fiscal year 1999 will be the 
third. We are now working very hard to have a balanced budget 
in fiscal year 2000. The accumulated deficits are paid off. Our 
credit rating is improving.
    I agree with Chairperson Cropp that we have a new spirit of 
hope. We have vigorous new leadership in the Mayor, a strong, 
active, very vocal Council under Linda Cropp's leadership.
    The role of the Authority at the moment is to help forge a 
consensus on the budget that will contribute to the long-run 
fiscal strength of the District of Columbia and to encourage 
the efforts of the elected officials to improve the efficiency 
and the effectiveness of D.C.'s public services. We want to go 
out of business, but we want to go out of business leaving 
behind a very strong city.
    We strongly support the Mayor's efforts to improve the 
services to D.C. residents and we believe he was right to start 
with some immediate short-run, visible progress and then move 
on to the harder, more complex problems that will take longer.
    Performance measurement must be central to service 
improvement. We need to find out from a broad range of citizens 
what they want most from their government. We need to devise 
measures of success in delivering what people want. And we need 
to measure the outcomes and the cost of delivering them as 
accurately as possible and to keep a continuous record of what 
is actually happening so citizens can see the record and judge 
for themselves how well the government is doing.
    Now, that sounds great, but it is not easy. I am a veteran 
of quite a few efforts over a long time, several decades, 
actually, to do this kind of thing, so I know how hard it is, 
although I believe that performance measurement is generally 
more feasible at the local level where services are delivered 
directly to people than it is at the State or the Federal 
level, where you often have a lot of intermediaries. The 
District of Columbia has the advantage of coming late to this 
process and can learn from the experiences of other cities, 
some of which the Mayor mentioned, that are doing a good job.
    Let me point out a couple of hazards. It is easiest to 
focus on the services or the aspects of services that are easy 
to measure--waiting times, potholes filled, trees trimmed, 
those kinds of things that you can get at quite quickly--and 
these are not necessarily the most important things.
    A second hazard is that the measures themselves, if you are 
not careful, can distort the outcomes. A classic example is a 
training program where the measure is people placed in jobs. If 
you take that measure, it generally leads to the people who run 
the program working hardest with the people who are easiest to 
place, many of whom might have had jobs anyway, or to 
concentrating on getting people into any job, however 
temporary, rather than one with long-term prospects. Teaching 
to the test is another example, or getting children placed in 
foster care without adequate screening or follow-up if the 
measure is placement.
    So those kinds of things are all pitfalls which make it 
more difficult. This is emphatically not an argument for not 
doing performance measurement; it is an argument for doing it 
well. We will work hard with the Mayor and with the Council to 
give our support for a thorough, long-lasting effort to measure 
the performance of the D.C. Government and to get those results 
to the citizens and to the Congress. Thank you.
    Senator Voinovich. Thank you.
    Chairman Rivlin, have you had a chance to review the 
measurements that have been put in place and comment on them?
    Ms. Rivlin. We have had a chance to review them. It is sort 
of a continuous chance, because they are changing all the time 
and being improved. But, yes, we have, and we have access to it 
and, indeed, before the Mayor became Mayor, this effort got a 
good start, I think, under Chief Management Officer Camille 
Barnett.
    Senator Voinovich. And you will be reviewing those and 
giving your opinion on them independently and sharing those 
with the Mayor and Council?
    Ms. Rivlin. We will. We are not shy.
    Senator Voinovich. Great. That is good. They will have a 
chance to take advantage of your expertise. I have a series of 
questions here, but I would just like to comment on a couple of 
things. You are talking about your Department of Motor 
Vehicles, and I do not know if I mentioned this or not when you 
were in the office, but ours was in such bad shape that I went 
to the East Ohio Gas Company and asked them if they would lend 
us their top person who ran their whole motor vehicle division 
and they went to work for the city and spent almost a year and 
they trained the individuals there, a very fine person, but 
just did not have the background or education and experience to 
get the job done. It is amazing what a difference it made 
because of our making that person available.
    You were talking about your gateway corridors that are 
really key in terms of the appearance of the city, and one of 
the partnerships that I want you to visit with is Clean Land 
Ohio, which is an organization that was set up by the private 
sector to take those most conspicuous parts of the city and 
have the private sector ``adopt'' them. Basically, they pay 
$3,000 to come in and then every year they pay $250 and a 
private outfit maintains these areas. It is quite interesting. 
There is a very nice sign that is there. It has made a big 
difference.
    On the customer survey--what kind of a survey are you going 
to be using? I know you had one, but is this going to be a 
polling thing or how are you going to do this?
    Mr. Williams. The initial survey--and I can give you more 
detail from Norman Dong, who has been working on this--but the 
initial survey is a series of focus groups as well as an 
instrument where we actually are doing a survey of city 
residents directly.
    Mr. Dong. We will go out in July and actually do polling, 
telephone research. Right now, we are getting assistance in 
trying to figure out what the measures should be.
    Senator Voinovich. Are you going to have a professional 
polling firm do this?
    Mr. Dong. Yes. We have one under contract already, and I 
think it is the same firm that did a customer survey for the 
Financial Authority several years ago.
    Senator Voinovich. I am interested in that. That is a 
motivator, because we used to do one every year. Unfortunately, 
I could not get the city to pay for it, so I had to use 
campaign funds, or I would get the Chamber of Commerce to do 
it. But there was a lot of interest in the various directors of 
the departments in terms of the results of that survey. It was 
something that they every year looked at and it was an 
incentive for them to do better.
    Mr. Williams. We would like to elaborate on that survey 
and, beginning this fall, begin building real strategic plans 
out in the neighborhoods that would feed into the overall plan 
for the city and look for help from the private sector and 
foundations to help us defray the cost of that.
    Senator Voinovich. The benchmarking, I think, is a good 
idea. In terms of your benchmarking, have you tried to find 
places that are similar, though, in terms of yours?
    Mr. Williams. I think the cities that we have looked at for 
benchmarking, we thought for a variety of different reasons 
seemed to match up well, although it is a work in progress. 
Detroit, Indianapolis, Philadelphia, some of the same problems, 
some of the same issues. They are larger size, but you can do 
the measurements and you can control for size. Phoenix and 
Portland, because I think they are seen as model cities in 
their achievement, but I think this could vary.
    The initial indicators--no one has really paid attention to 
this in the budget, but the initial indicators I get from 
looking at the benchmarking in the budget and in my former role 
as CFO is that we have got a lot of work to do. We have got 
some agencies where you have in a similar city one FTE may do, 
say, 700 units of work and in our city you have an FTE doing 20 
or 25, so that raises a lot of questions. We did some 
benchmarking in my own office and found this to be the case, 
comparing to other executive functions.
    So there is just a lot of work to be done and we are 
committed to doing it. It gives you a sense of where you need 
to go. I mean, you can always make--I will put it this way--it 
raises issues.
    Ms. Rivlin. If I may chime in on that, I think that is 
right, but one of the reasons is that the District is so far 
behind on computerization and on really having a modern kit of 
tools for employees to work with and training them in how to do 
it, and that is one of the challenges.
    Ms. Cropp. One other piece, too, there is the upgrading of 
the infrastructure, but the other issue that is very important 
for us to get a handle on is the training of our workforce. As 
you stated with your DMV, it was not that the individual was 
not capable of doing it and did not have the intelligence to 
it, but sometimes they just did not know how to do it. We have 
found that in the District of Columbia.
    What we are committed to doing now is doing an assessment 
of our workforce and training our workforce into doing a good 
job, and if they cannot do that particular job, then the Mayor 
through the Personnel Act has the flexibility to take whatever 
the appropriate steps are in training or moving them into 
another area. Hopefully, after we move into this training of 
our workforce, we will really see a big difference.
    Senator Voinovich. Do you have anything in your budget for 
training of individuals?
    Ms. Cropp. Throughout the budget, we have different 
components with training in our budget. We have been looking at 
that, actually, for the past couple of years. One thing that I 
am really pleased with is that we are looking at our mid-level 
managers and we have a program in conjunction with several 
entities, a university, the World Bank, and others, where they 
send our workforce through a whole training program to train 
them how to do it. So we are looking at this somewhat 
comprehensively.
    Senator Voinovich. One of the things that I was surprised 
at, we did not put any money aside. If you look at good 
businesses, you will find that they put a lot of money into 
training, and unfortunately in government, the training dollars 
are never available. So we started it and the city set aside 
money for training, and on the State level, in terms of working 
with our unions, they gave up some of their pay increase that 
we matched or doubled for training because they thought that 
was very necessary and they were willing to give up a little 
bit, and so were their members, just to get money for training. 
I think up to $1,200 a year is made available now to each 
employee, and they sit down with their supervisor and figure 
out where it is that they need it. I know it is an added burden 
on a budget, but I think it is the kind of thing that if you 
work at it year after year, it can be very helpful.
    Ms. Cropp. It probably needs to be expanded as you go on, 
because I believe that the needs of the city will change 
constantly. So it is the type of thing where we will probably 
need to continually train and retrain our workforce in the area 
of need as needs of the city change.
    Mr. Williams. Senator, what we have tried to do is to 
develop a labor strategy that includes a healthy component and 
a commitment to training, so we lined up a group of law firms 
in the city who donated their practitioners, partners to work 
with us and came up with a proposed labor strategy that we are 
now working with the Council and the Board and labor unions on. 
It has a component of training, trying to provide foundation 
training for every employee, rehabilitation training for 
employees who need additional work based on a skills 
assessment, and specialized training for employees in certain 
areas, as well as the government saying, if you are an employee 
and for purposes of upward mobility and advancement, you want 
to do some continuing education along career lines somewhere in 
the District, the government would match a certain percentage 
of your training costs below a certain threshold.
    But to couple that training exercise with restructuring 
work down in the agencies and taking full advantage of this 
personnel reform that the Chairman was talking about, where we 
want to systematically go through the agencies and make sure 
that in all the mid-management positions, we have the very best 
people. I think we have made a mistake in the past of sometimes 
we have not spent enough training, and in some cases, we have 
done training but we have not done any associated restructuring 
or skills assessment, basically, and the training is not always 
as effective as it could be.
    Senator Voinovich. Who did your personnel plan?
    Ms. Cropp. Actually, it was a combination. It was initiated 
actually through a Council retreat, when we looked at the areas 
of the District where we were very weak and personnel happened 
to have been one. So the Council worked in partnership with the 
Executive Branch and the Financial Authority and all came up, 
using some outside help in coming up with a new piece of 
legislation that would change our whole way of operating.
    Senator Voinovich. Did you establish new classifications 
for all of your employees and benchmark them with the private 
sector, or how did you do that, or other governmental agencies?
    Ms. Cropp. We are still in the process of doing that, 
actually, and, in fact, we are looking at compensation level 
and benchmarks and all of that now. The Mayor has affirmed that 
it is doing a study on that currently and we hope to have that 
completed soon. I think the timeline is the fall.
    Mr. Williams. Right, to go through the agencies, set new 
positions with new classifications and compensation, do skills 
assessment, work with the unions, but then everyone in the 
organization will compete for the new positions. So we are 
doing that in the Department of Human Services as a way to 
reconstitute the workforce and I have a lot of confidence that 
this could prove to be very successful and allow us to get the 
best people in the right jobs.
    Senator Voinovich. I would really be interested in what you 
are doing there, because I know this from experience, that it 
is very difficult, getting a good classification system. And, 
of course, you have some disruption with people who get 
reclassified. We did that when I was Mayor and it was tough. I 
hate to admit this, but we ran out of time on the State level. 
It was such a complicated thing. I know I said to the new 
Governor, Governor Taft, that if you are going to do this, you 
had better start in your first year because it is a long 
process. I would be really interested in having you share with 
me and the Subcommittee what you are doing in that regard.
    One of the things that I must say, Mayor, that seems to be 
pretty ambitious on your part is this quarterly reporting. Do 
you have some kind of a software package that you put in place 
that makes it easier for your managers? Have you started to get 
their quarterly reports yet?
    Mr. Williams. As you know, Senator, as a manager, it is 
hard to get any kind of report from your managers, just a 
regular narrative report. And I would agree that this is 
ambitious, but I have always believed that you ought to try to 
be somewhat realistic but to set an ambitious goal and work 
toward it, because if you set a relaxed goal, it is harder to 
get there.
    I will say, as Alice was saying, there has been a lot of 
work done. I think one of the things that Camille Barnett left 
us was a lot of work done on the infrastructure performance 
measurements. They were actually farther along than one would 
think on the ability to do this reporting. But I would not 
underestimate the difficulty of it, having worked in the 
Federal Government trying to do it and as CFO trying to do it 
and now Mayor.
    Senator Voinovich. It is very difficult. We finished up 
with our management audits and came back with recommendations. 
We gave out, what is it, the Eagle Award, but we had some fun 
with our directors. It was public that they had certain things 
that they should do and we stuck the needle into those that 
were not getting it done and rewarded those that were. But, 
really, you have to dedicate the time to it in order to get it 
done.
    Do you have any things in place to encourage people to come 
up with suggestions on how they can improve the delivery of 
services or any kind of a reward program like the private 
sector has or anything like that?
    Mr. Williams. We have in the budget, and I think the 
Council is in agreement with this, we have proposed that we 
institute a program of gain-sharing where we give our employees 
and our managers, our work units, the incentive to come up with 
new ideas and implement those ideas and then take the gain from 
those ideas into rewards for the employees and reinvestment in 
plant and equipment in the work unit. I think that is going to 
give our people the incentive to do that.
    Also, I am a big believer--I did this when I was CFO, and I 
believe now that our managers and agency people, goal leaders--
sometimes they are not the same--who accomplish a certain 
result, under budget and ahead of expectations, should be 
rewarded for that. I did that as CFO and it worked very well if 
you have the right people and the right conditions.
    Senator Voinovich. There are a lot of packages out there 
that are employee incentive packages and I do not know how they 
fit in with what you can do legally, but we had a program in 
Ohio called Innovation of Ohio. We captured the suggestions 
from employees, individual employees and also we had total 
quality management, so we had teams. I gave out checks as much 
as $5,000 to State employees who came up with ideas that you 
could measurably show really saved money. Then they had a 
catalog of things they could choose, a television or something 
else, if they wanted to.
    Mr. Williams. That is a great idea.
    Senator Voinovich. And then, twice a year, I would be there 
to pat them on the back. It is amazing. It sounds like it is 
not that important, but it really made a difference.
    In the procurement program, you have put that in place, is 
that correct?
    Ms. Cropp. We passed new procurement legislation and there 
is a new procurement program that the executive is initiating 
in this year's budget. There is quite a bit of savings that we 
see coming out of the change in the procurement program. We 
hope that the laws and the legislation that was passed last 
year by the Council helps to make it go more smoothly. So we 
are hopeful. We still believe that there may be need for some 
additional changes. We will see what they are as we approach 
them. I guess the word may be flexibility as we watch and see 
what needs to occur.
    But the fiscal year 2000 budget will show, I think, about 
$14 million in savings in procurement by a new process that has 
been developed by the Executive Branch in the procurement area, 
and that is actually wonderful. I was really happy to see new 
parts that have been implemented and to see that it is really 
going to come to fruition and we will actually see savings from 
it.
    Senator Voinovich. Do you have a minority set-aside program 
like the SBA 8(b) program or anything like that in the city?
    Ms. Cropp. We have one set-aside. I will tell you, the 
Council also feels strongly that another thing that needs to 
happen in the city is that we need to keep business in the 
District as much as possible to help our economy. It seems to 
me that you need to first help at home and strengthen your 
economy, help your economy to grow, and then as you help your 
economy to grow, and if you do not have the wherewithal to do 
it in-house, then you go region, and then once you go region, 
then you go somewhere else.
    But, yes, we do, but I think it goes beyond that. That is 
part of it, but also, the Council's mindset looks at helping 
the economy within the District of Columbia, then helping the 
economy within the region.
    Senator Voinovich. I would be interested in your MBE 
program. it has been very difficult to maintain with the court 
cases, but----
    Mr. Williams. We use the term local small disadvantaged 
business and try to use economic conditions, class, and status 
as proxy for official minority status, given all the case law 
and given where we are. We have put a good person in who is 
working with the Inspector General and even the FBI to see that 
we are doing what we are doing the right way and affording our 
contractors opportunities with big projects like Y2K, the 
convention center.
    We have made an enormous amount of progress in procurement 
if you were here 3 years ago. There is night and day 
difference, although we still have a couple problems. One is we 
still have issues with the Federal Government in getting our 
Federal resources into the agencies and out on the street. 
There is still congestion in the procurement there.
    I am worried about being able to do major initiatives like, 
for example, this major interchange, Barney Circle. We ended up 
not doing it. So in the last highway bill, thanks to some 
heroic work of folks like Congresswoman Norton, we were able to 
use these funds for local streets and change the ratios, a 
number of different things. It was great for the District. But 
we have to make sure we get these funds out into real 
improvements in the city, and what I have told our people is we 
have to leave on the table every means necessary to see that we 
get these resources out there.
    Finally, there are simple things like cars. We do fleet 
management, and we have got to look at every possible way to do 
our fleet management in the most cost effective way possible, 
including having GSA do it for us if they can do it most cost 
effectively. I am not saying we should do that, I am just 
saying we need to look at all the different opportunities out 
there from procurement in to get to the intended result, which 
is better service for our people. Sometimes the tail ends up 
wagging the dog.
    Senator Voinovich. I think that, as I said, I would be 
interested in the program that you have in place. That is one 
of the ways that you can responsibly help small businesses get 
into business. I think it is something that we all should 
strive to do within the framework of the new court cases that 
have come out.
    I would like to welcome Congresswoman Eleanor Holmes 
Norton. It is nice to see you. We are glad to have you here 
today. I guess we are not going to get a chance to see each 
other Wednesday, but we are going to reschedule that and I am 
looking forward to that.
    Mayor, one of the things that I would be interested in 
having you share with the Subcommittee is how are you going to 
deal with your directors in terms of holding them responsible 
for their performance? What do you anticipate? How do you plan 
on handling that?
    Mr. Williams. In the first 6 months, as we went through 
this 6-month short-term action process, the performance 
contracts for our agency chiefs were pegged to these short-term 
goals. So if you were doing Department of Housing and Community 
Development, you committed to me you would turn over 100 units 
of housing into home ownership by the end of 6 months and that 
was a measure, ad hoc as it may be, that was factored into your 
performance contract. So everyone is operating under a 
performance contract.
    Now we are asking for our agency heads, and we have begun 
to sit down with them with their what I would call interim 
strategic plans, a longer view to try to correlate their short-
term items with their longer-term what I always call like Suez 
Canal projects, the long-term projects that every agency has to 
do. We fashioned these performance contracts now to incorporate 
the measures that you see here.
    So we have the measures in Attachment III, I believe it is, 
that are driving the agencies. Those would be factored in the 
performance contracts. They are evaluated on a periodic basis. 
If the agency director is not making it with these measures, 
then, obviously, they have got to find another line of work. 
Alternatively, if they are doing a great job, then, again, I 
believe that they ought to be rewarded with a bonus.
    Senator Voinovich. One of the things that I would also be 
interested in, you mentioned the performance evaluation the 
Council was looking into. I would be interested in what kind of 
a system you have, because that is another area that is tough. 
You hire people, get the contracts, and then have your managers 
do the performance evaluation of the people that work for them 
and then have the performance evaluation of their performance. 
As Mayor, the toughest job I had every year was to do the 
performance evaluation of my directors, which took just an 
enormous amount of time.
    But I would be interested in what system you have in place 
to guarantee that those performance evaluations are, indeed, 
getting done and how are you going to monitor that they are 
really indeed getting done. That is really important to me. I 
think people ought to know whether they are doing good or bad. 
I think part of the problem in government today is that people 
do not think anybody is paying any attention, and if they have 
to come in once a year and you talk about what they have been 
doing good and what they have been doing not so good, even if 
it is bad, at least they know somebody cares. So I think that 
is really a big area, and again, I would like you to share with 
me how you intend to get that done.
    Ms. Cropp. One of the things that is somewhat new that the 
District is doing is that a lot of the directors are signing 
performance contracts and it is somewhat helpful in a lot of 
ways. It spells out the tasks, the expectation. It gives an 
expectation level and a way in which they can measure it and 
the evaluating person can also measure it. I think it is 
something that is very beneficial in the long run.
    Senator Voinovich. One of the things that the Mayor and I 
talked about was quality management. I do not know, Chairman 
Rivlin, if we talked about it or not, but a lot of 
jurisdictions in the country today, a lot of governmental 
agencies are really looking at quality management as a way of 
involving their employees in decision making and creating 
teams.
    I know, Mayor, you have got lots on your plate. I know how 
you must feel, probably overwhelmed. But probably the most 
worthwhile thing that we did in State Government is make a 
commitment to quality management and really got our unions 
involved in it. In fact, they really ended up being the drivers 
of it and it is continuing. It has really changed the lives of 
people who work in State Government, because for the first 
time, they are involved. They get the training, they create 
teams, and they are involved. Their ideas are being looked 
upon.
    I do not know whether I shared this with the Mayor or not, 
but I had a terrible problem going back when I was Mayor in 
taking care of snow removal. We had all kinds of studies done 
and they came back. We implemented all these things. By the 
way, Mayor, this is a benchmark from around the country. It did 
not get done. So I finally just went crazy and just invited 
down all of the supervisors. They all came into my cabinet room 
and we spent about 3 hours together talking about why it was--I 
said it really bothered me that we just were not able to do 
snow removal. I said that the thing that should bother them, 
too, was that the suburbs were getting it done. It was like, 
well, now we are in Cleveland. It is not getting done. It was a 
bad reflection on our people.
    They came back and basically laid out what was wrong. They 
laid it out. There were not enough routes. They did not have 
mechanics that were out there in the districts to do the 
repair. The snow plow blades were not uniform, and in some 
instances they did not even have the equipment to get the job 
done. From them, we followed their advice and today, to this 
day, our snow removal is as good as the suburbs. But had we not 
gone to them and asked them for their ideas on how to do it, I 
am not sure we would ever have gotten it done. That is 
something you might look at down the road.
    Would you like to comment on anything else or share 
anything else with me?
    Mr. Williams. I think from the quality management, we have 
initiated something called Labor-Management Partnership, which 
I take as an effort to bring labor and management together to 
produce the kind of results that you are describing. As I 
quoted to you when we met, our improvement in the tax refund 
business--we were like the last, 55th among the States in 
sending back refunds--really improved because, I think like 
your experience in the snow removal, we did not use any 
consultants. We just sat down with the employees and said, why 
is the refund process completely broken. They gave us 20 
different reasons and we fixed those 20 reasons and it 
improved. We also made investments and everything, but it was 
really working with the employees.
    So I am hoping that this Labor-Management Partnership, 
working not just at the top level where it has to exist but 
down in the agencies, can produce the quality results that you 
are describing and we are very excited about it.
    Senator Voinovich. Chairman Cropp, anything further?
    Ms. Cropp. Let me just conclude by saying that the District 
is moving forward. We are strengthening our structure. And I 
think we have established an excellent working relationship 
with the Financial Authority. In fact, the Mayor and the Chair 
of the Council have been invited to go into the meetings with 
the Financial Authority. I think it has been very helpful.
    As we look into transitioning back to home rule without the 
Financial Authority, even though we have this good working 
relationship, I look forward to working with Alice Rivlin 
outside of the government because we are structurally sound and 
we have done those things necessary for that to occur. We would 
like to have all the support that we can in order to enable us 
to do that and get there as quickly as possible.
    Senator Voinovich. I am looking forward to continuing to 
work with you. We have put together--Kristine Simmons, who is 
the staff director, worked for the Committee as a whole, so she 
is pretty familiar with what is going on, and we have hired 
John Shumake, who worked with David Catania, one of your 
colleagues on the Council. That is all he does every day, is 
work on the District. I think enough of it to have someone 
working full-time on it and working to see if we cannot be of 
help to you.
    I am very grateful for your courtesy of coming here today 
and look forward, Mayor, to that visit to Cleveland. I am 
hoping that maybe a year from now, we can get together and find 
out how we are doing on some of these things that we have 
talked about today, if you just stay with it. Our motto in 
Cleveland was, ``Together, We Can Do It,'' and together, you 
can do it. Thank you very much.
    Mr. Williams. Thank you, Mr. Chairman.
    Ms. Cropp. Thank you.
    Ms. Rivlin. Thank you.
    Senator Voinovich. The meeting is adjourned.
    [Whereupon, at 4:36 p.m., the Subcommittee was adjourned.]


                            A P P E N D I X

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