[SUCCESSES IN URBAN PROBLEM-SOLVING, MAYORAL PERSPECTIVES]
[From the U.S. Government Printing Office, www.gpo.gov]

 
        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


                    U.S. GOVERNMENT PRINTING OFFICE
41-800                       WASHINGTON : 1997
____________________________________________________________________________
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              COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
J. DENNIS HASTERT, Illinois          TOM LANTOS, California
CONSTANCE A. MORELLA, Maryland       ROBERT E. WISE, Jr., West Virginia
CHRISTOPHER SHAYS, Connecticut       MAJOR R. OWENS, New York
STEVEN H. SCHIFF, New Mexico         EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California          PAUL E. KANJORSKI, Pennsylvania
ILEANA ROS-LEHTINEN, Florida         GARY A. CONDIT, California
JOHN M. McHUGH, New York             CAROLYN B. MALONEY, New York
STEPHEN HORN, California             THOMAS M. BARRETT, Wisconsin
JOHN L. MICA, Florida                ELEANOR HOLMES NORTON, Washington, 
THOMAS M. DAVIS, Virginia                DC
DAVID M. McINTOSH, Indiana           CHAKA FATTAH, Pennsylvania
MARK E. SOUDER, Indiana              TIM HOLDEN, Pennsylvania
JOE SCARBOROUGH, Florida             ELIJAH E. CUMMINGS, Maryland
JOHN SHADEGG, Arizona                DENNIS KUCINICH, Ohio
STEVEN C. LaTOURETTE, Ohio           ROD R. BLAGOJEVICH, Illinois
MARSHALL ``MARK'' SANFORD, South     DANNY K. DAVIS, Illinois
    Carolina                         JOHN F. TIERNEY, Massachusetts
JOHN E. SUNUNU, New Hampshire        JIM TURNER, Texas
PETE SESSIONS, Texas                 THOMAS H. ALLEN, Maine
MIKE PAPPAS, New Jersey                          ------
VINCE SNOWBARGER, Kansas             BERNARD SANDERS, Vermont 
BOB BARR, Georgia                        (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       ELEANOR HOLMES NORTON, District of 
ILEANA ROS-LEHTINEN, Florida             Columbia
STEPHEN HORN, California             THOMAS H. ALLEN, Maine

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
                        Ron Hamm, Staff Director
                          Howie Denis, Counsel
                           Ellen Brown, Clerk
          Cedric Hendricks, Minority Professional Staff Member








                      COMMITTEE ON APPROPRIATIONS

                  BOB LIVINGSTON, Louisiana, Chairman
JOSEPH M. McDADE, Pennsylvania       DAVID R. OBEY, Wisconsin
C. W. BILL YOUNG, Florida            SIDNEY R. YATES, Illinois
RALPH REGULA, Ohio                   LOUIS STOKES, Ohio
JERRY LEWIS, California              JOHN P. MURTHA, Pennsylvania
JOHN EDWARD PORTER, Illinois         NORMAN D. DICKS, Washington
HAROLD ROGERS, Kentucky              MARTIN OLAV SABO, Minnesota
JOE SKEEN, New Mexico                JULIAN C. DIXON, California
FRANK R. WOLF, Virginia              VIC FAZIO, California
TOM DeLAY, Texas                     W. G. (BILL) HEFNER, North 
JIM KOLBE, Arizona                       Carolina
RON PACKARD, California              STENY H. HOYER, Maryland
SONNY CALLAHAN, Alabama              ALAN B. MOLLOHAN, West Virginia
JAMES T. WALSH, New York             MARCY KAPTUR, Ohio
CHARLES H. TAYLOR, North Carolina    DAVID E. SKAGGS, Colorado
DAVID L. HOBSON, Ohio                NANCY PELOSI, California
ERNEST J. ISTOOK, Jr., Oklahoma      PETER J. VISCLOSKY, Indiana
HENRY BONILLA, Texas                 THOMAS M. FOGLIETTA, Pennsylvania
JOE KNOLLENBERG, Michigan            ESTEBAN EDWARD TORRES, California
DAN MILLER, Florida                  NITA M. LOWEY, New York
JAY DICKEY, Arkansas                 JOSE E. SERRANO, New York
JACK KINGSTON, Georgia               ROSA L. DeLAURO, Connecticut
MIKE PARKER, Mississippi             JAMES P. MORAN, Virginia
RODNEY P. FRELINGHUYSEN, New Jersey  JOHN W. OLVER, Massachusetts
ROGER F. WICKER, Mississippi         ED PASTOR, Arizona
MICHAEL P. FORBES, New York          CARRIE P. MEEK, Florida
GEORGE R. NETHERCUTT, Jr.,           DAVID E. PRICE, North Carolina
    Washington                       CHET EDWARDS, Texas
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
                James W. Dyer, Clerk and Staff Director
                              ----------                              

          SUBCOMMITTEE ON DISTRICT OF COLUMBIA APPROPRIATIONS

              CHARLES H. TAYLOR, North Carolina, Chairman
MARK W. NEUMANN, Wisconsin           JAMES P. MORAN, Virginia
RANDY ``DUKE'' CUNNINGHAM,           MARTIN OLAV SABO, Minnesota
    California                       JULIAN C. DIXON, California
TODD TIAHRT, Kansas
ANNE M. NORTHUP, Kentucky
ROBERT B. ADERHOLT, Alabama
                   Americo S. Miconi, Staff Assistant












                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOHN GLENN, Ohio
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              JOSEPH I. LIEBERMAN, Connecticut
SAM BROWNBACK, Kansas                DANIEL K. AKAKA, Hawaii
PETE V. DOMENICI, New Mexico         RICHARD J. DURBIN, Illinois
THAD COCHRAN, Mississippi            ROBERT G. TORRICELLI, New Jersey
DON NICKLES, Oklahoma                MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania
             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       JOSEPH I. LIEBERMAN, Connecticut
ARLEN SPECTER, Pennsylvania          MAX CLELAND, Georgia
                        Ron Utt, Staff Director
      Laurie Rubenstein, Minority Staff Director and Chief Counsel
                      Esmeralda Amos, Chief Clerk







                      COMMITTEE ON APPROPRIATIONS

                     TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
SLADE GORTON, Washington             DALE BUMPERS, Arkansas
MITCH McCONNELL, Kentucky            FRANK R. LAUTENBERG, New Jersey
CONRAD BURNS, Montana                TOM HARKIN, Iowa
RICHARD C. SHELBY, Alabama           BARBARA A. MIKULSKI, Maryland
JUDD GREGG, New Hampshire            HARRY REID, Nevada
ROBERT F. BENNETT, Utah              HERB KOHL, Wisconsin
BEN NIGHTHORSE CAMPBELL, Colorado    PATTY MURRAY, Washington
LARRY CRAIG, Idaho                   BYRON DORGAN, North Dakota
LAUCH FAIRCLOTH, North Carolina      BARBARA BOXER, California
KAY BAILEY HUTCHISON, Texas
                   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          BARBARA BOXER, California
TED STEVENS, Alaska, (ex officio)    ROBERT C. BYRD, West Virginia (ex 
                                         officio)
                           Professional Staff
                          Mary Beth Nethercutt










                            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









        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 
            Appropriations; U.S. Senate, Subcommittee on 
            Oversight of Government Management, 
            Restructuring and the District of Columbia, 
            Committee on Governmental Affairs; and 
            Subcommittee on the District 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 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--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:]
    [GRAPHIC] [TIFF OMITTED] T1800.001
    
    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.
    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.
    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.
    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:]
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[GRAPHIC] [TIFF OMITTED] T1800.003

    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 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 part-time 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 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 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:]
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    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:]
[GRAPHIC] [TIFF OMITTED] T1800.009

    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 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 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:]
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    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, 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 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 
pro-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, 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:]
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    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:]
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    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, 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.
    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:]
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    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. 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 two-thirds.
    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.
    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 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.
    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, 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 economic 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.
    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 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 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 budget 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, 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 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 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.
    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 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.
    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.
    Ms. Golding. But I appreciated the opportunity to testify.
    Mr. Taylor. We appreciate it. I know in the some 2\1/2\ 
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 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.
    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 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.
    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.
    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 5\1/2\ 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.
    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 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.
    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.
    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 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 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 together. 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.
I 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 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:]
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