Competitive Instinct

Indianapolis Mayor Stephen Goldsmith is serious about cutting back city hall.

William D. Eggers from the August/September 1993 issue

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Many of the examples are small but telling. Take window washing. Previously, windows on city buildings were washed by city crews exactly three times a year—whether they were dirty or not. The service was totally focused on inputs. Now a private company washes the windows—not three times a year, but when the windows are dirty. Microfilm operations were also moved into the marketplace. The private contractor has cut the city's cost by 61 percent, $40O,000 a year, and the quality of the microfilm documents has improved.

Competition does not always result in privatization, however. To beat out private competitors, a Transportation Department crew discovered they could fill potholes with four workers, rather than eight, and one truck instead of two. The crew also asked the mayor to relieve them of the 32 Republican-patronage supervisors above them. The supervisors were laid off (the mayor took a lot of heat from his fellow Republicans), and the city crew came in with a bid thousands of dollars under the closest private bidder, cutting costs by 25 percent.

Total savings from competition run $10 million to $20 million in Goldsmith's first 18 months, says Skipp Stitt, the spirited 30-year-old lawyer who runs the mayor's competitiveness office. Stitt is a true believer, one of the young idealists around Goldsmith who share the mayor's vision of leaner, more competitive government. He says the mayor is more interested in hiring people who share his political philosophy than those who merely have technical expertise. Goldsmith regularly assigns required reading to his top staffers—the 800-plus- page tome Liberation Management, by management guru Tom Peters, was on a recent reading list— and staff meetings move easily from garbage collection to political philosophy. "Working for the mayor, there's a sense you're part of something larger," says Stitt.

Stitt goes on to explain that while businesses have to tightly manage their assets, governments have a giant-sized attic full of potentially valuable holdings. On a tour of the transportation department facilities, SELTIC commissioner Jean Wojtowicz, a venture capitalist who manages a $70-million portfolio, was shocked at the piles of what she calls "stuff" just lying around. "The government mentality is: If we don't use it, we better hold onto it, we might need it next year," she explains. "The problem with stockpiling all this stuff is that it takes up expensive real estate."

With the blessing of the mayor, a SELTIC team has established periodic "garage sales" of city-owned furniture, equipment, and materials. By reducing inventories, Goldsmith hopes eventually to eliminate more than 40,000 square feet of leased space, saving as much as a third of a million dollars a year. Another SELTIC team is busy trying to sell off about 750 parcels of surplus real estate—$300,000 worth has been sold so far. The mayor is even exploring selling or leasing some of the city's "family silver," such as the wastewater treatment plant (the country's largest), the City-County Building, and the airport.

Could government officials have achieved these savings without SELTIC? It's possible, but doubtful. "I think if you are inside government you're too close to the forest. Sometimes you need someone from the outside to come in and take a fresh look. Private businesses sometimes need this also," says Wojtowicz, who has advised many private companies on restructuring.

Still, line-level employees can see government waste and inefficiency that outsiders might miss. To encourage employees to expose this waste, Goldsmith created the "Golden Garbage" award, presented each month to the city employee who finds the most egregious examples of government waste. The winning employee gets a toy plastic truck glued to a piece of wood and lots of press coverage.

The first award went to an employee who found a garbage truck that broke down so often and was so expensive to repair that it cost the city $39 for every mile it operated. "Taxpayers could have hired limousines to carry away their garbage and it would have cost less than using this 'Golden Garbage' truck," declared Goldsmith when he announced the award. The truck has since been sold to some sucker.

Not everyone is thrilled about Goldsmith's top-to-bottom downsizing of city hall. The new mayor did, after all, eliminate about 450 of 4,700 full-time employees from the city's payroll in his first 16 months, including 160 mostly managerial-level employees within the first three months. The layoffs of the patronage positions angered some Republican council members and party officials. "They were upset with Goldsmith because he broke up the old boy network," says a Democratic councilman.

The driven mayor concedes he will have to spend more time building consensus in the future, which will likely slow the brisk pace of change. He's not very happy about this. Schmoozing with other politicians is just not something the technocratic Goldsmith—who friends and foes alike say is incapable of b.s.—appears very comfortable doing.

Even more of a problem has been the city work force. "Abject fear," is how one city employee described his initial reaction to Goldsmith's downsizing. In the public works department, about 20 engineers left the first year. "No good engineer wants to work for this city anymore," former public works administrator Pete Chavol told the Indianapolis News in December 1992. A Parks Department employee admitted that "a lot of people coasted under Hudnut. Now they have to work and many people feel miserable and threatened."

Mitch Roob, the city's 31-year-old Transportation Department director, wants to show me that not all employees have been demoralized. He takes me out in the field to see the department's pride and joy: a city

crew that underbid private firms for a contract to seal cracks in the city's roads. I'm supposed to hear from them how empowered they feel and how competition has energized them. Instead, with their boss