The Streets Were Paved with Gold (51 page)

The state legislature was hardly an inspiration. In addition to expanding their already bloated staffs, the Albany lawmakers ignored the pleas of Koch and others to reform the antiquated civil service system; to exempt an additional 3,000 city executives from
union membership, strengthening the mayor’s ability to manage the bureaucracy; to reform the “Heart Bill” so that it would not be so easy for workers to win tax-free disability pensions; to slash the patronage-rich city marshals programs; to grant City Hall greater control over appointments to the Board of Education, lessening the influence the United Federation of Teachers (UFT) exercised over appointments made by the borough presidents. Though he pleaded, cajoled and romanced, Koch won none of these reforms from the legislature. It was a defeat, Koch told me. “You can’t get anything through the state legislature in an election year that the unions don’t want,” he groused. “I used to have some feeling of the power of the municipal unions, but I never comprehended the extent of their power. I was told the UFT put a hold on the education bill. I was called yesterday and told by a legislative leader we could get something out of the legislature—we could get two more seats on the Board of Education, four out of nine. ‘But what would I have to do?’ I asked. You know what I was told? I was told I would have to reappoint the UFT guy, Louie Rivera. I said, ‘Screw them. The UFT is not making any appointments.’ So we’re not getting our legislation through.” So we get a picture of the legislature’s concept of public service.

The city’s basic methods of delivering public services also did not appreciably change. Sure, the most egregiously incompetent commissioners were gone, the Management Advisory Board achieved some of their excellent recommendations, a director of operations was implementing a management plan for each agency. But it remained accepted city policy, as stated in Beame’s 1977 Management Plan as well as Koch’s 1978 version, that services would continue to decline. The City Council would get their raises. City employees would get their raises. The budget would go up. The banks would secure their investments. Politicians would get reelected. And the public would continue to receive reduced services.

Restrictive union work rules were not amended. The introduction of additional inspector generals checking on sloth was rabidly denounced by labor leaders as “a spy system.” The hot breath of competition was not introduced into the city’s muscle-bound, monopolistic service delivery system. Sixty-five percent of all American cities with a population of 25,000 or more encourage competition by contracting out for the delivery of sanitation services, according to former Deputy City Administrator E. S. Savas,
now a professor of public systems management at Columbia. Oklahoma City, he says, saved $850,000 by contracting out two of its five sanitation districts. Neighboring Newark, New Jersey, recently awarded a bid for one district to the New York Carting Company, the city’s largest private carting service. “The city of Newark was spending $4 million to do the job themselves,” said the president of the company, Charles Macaluso. “Our bid guarantees that we’ll do the job for half that, or $2 million.” Experience in other cities shows contracting out not only saves money—Savas estimates New York’s sanitation department could save from $25 to $60 million annually—but also improves the efficiency of the city’s effort. Savas’ study of the city of Minneapolis disclosed that after the introduction of competition the municipal sanitation agency “achieved a 35% reduction in direct labor hours per household per year, a 37% increase in tons collected per man hour, and a 51% increase in the number of households serviced per shift, while the number of complaints by residents has been declining.”

Since the late 1960’s, New York officials have prated on about introducing such competition. Savas proposed it then, and was left an orphan when Mayor Lindsay succumbed to the powerful opposition of the sanitation union. Environmental Protection Administrator Jerome Kretchmer, reacting to a Citizens Budget Commission study that claimed the city could save up to $77 million by contracting out sanitation services, proposed an experiment on February 6, 1972. That was the year Lindsay was running for President, and it was never undertaken. Sanitation Commissioner Martin Lang also proposed an experiment in 1975. Three months after offering the job, and under pressure from the sanitation union, Beame abruptly invited Lang to become Parks Commissioner. As a candidate for mayor, Ed Koch pledged to initiate such a program. Yet six months after he became mayor, Carol Bellamy, President of the City Council, chided Koch for appropriating “no funds to the Sanitation Department for such activities.” Koch, after he was elected, conferred with sanitation union consultant Jack Bigel about his choice for commissioner. Koch intended to appoint the first choice of his search committee, Nathan Leventhal, an outsider presumably open to experiments. When Bigel huffed, Koch backed off and reappointed Anthony T. Vaccarello, a lovely man but also no boat-rocker. As an added pacifier, Koch anointed Frank Sisto,
President of the Sanitation Officers union, as First Deputy Commissioner.

Koch seemed to be impersonating Beame. Vaccarello and Sisto won the confidence of their men, but in the first six months did little to change the way sanitation services were delivered. (By October 1978, Koch had a new commissioner.) In a June interview, Koch defended the glacial pace of government reforms: “Look, we haven’t had a chance to govern. For five and one-half months we’ve been going from abyss to abyss.” Crisis to crisis. Because of this, he said, he had not been able to focus on his director of operations’ conclusion that sanitation services could be improved by 10 percent with the introduction of two rather than three men to a truck, a practice followed by most cities. The sanitation union has traditionally opposed this practice, but since it is not prohibited by their contract the city could unilaterally begin such operations in many districts. That it didn’t was a management failure. All Koch had to do was give the policy go-ahead for his commissioner to proceed. Koch was offering an excuse, not an explanation—or at least not a very good one. A mayor is supposed to delegate authority and responsibility to his commissioners.

Koch was copping a plea, something Beame did when he ignored the recommendation of the Temporary Commission on City Finances that $100 million could be saved in the Police Department alone through better management; something labor leaders do when they caution that change must come slowly or it will further undermine “worker morale”; something management and labor have both done while ignoring proposals to farm out the delivery of some city services to worker cooperatives, permitting workers and taxpayers to share in the savings. Such cooperatives, which admittedly would alter the concept of public service as a sacrifice of sorts, would work in the following way: Assume it now costs $10 million to provide sanitation services in one district. The city would provide the worker co-op with $8 million to do the job, a $2 million saving for the taxpayers. If the co-op could perform the work for less than $8 million, it would get to keep, say, 50 percent of the difference. The worker thus has an incentive to improve productivity, to work harder, and the taxpayer saves money and receives improved services. As is the case with contracting out to private firms, which could go on simultaneously, competition would have been introduced to a moribund bureaucracy. Yet despite an agreement
in 1976 to experiment with worker co-ops in the sanitation department (called gainsharing), by mid-1978 the plan remained on the shelf.
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But neither the city nor its workers has the luxury of time. As the taxpayer revolt of the late seventies demonstrates, government will either reform itself or taxpayers will force it to. With a lagging economy, the best way to ensure future worker raises is to streamline government management. That is the stated view of Victor Gotbaum, who told his union members in mid-1978, “We can no longer cop a plea and exempt ourselves from the effort to bring about a more productive work force in this city.”

There is no substitute for City Hall leadership. And, sadly, the wrong kind of leadership sometimes emanated from Koch’s City Hall. “The only ‘perk’ in my administration,” claimed the press release accompanying one of his first executive orders curbing city limousine privileges, “will be the privilege of serving the public.” Within days, the public began to pay for that privilege. The mayor who had promised “suffering” and “equal sacrifice,” who had opposed a City Council pay raise because the negative “symbolism” would cost more than the dollars, blithely raised the salaries of more than two dozen City Hall aides by from 20 to 140 percent. They could now afford to take taxis to work. Ronay Menschel, who earned $33,000 as administrative assistant to Congressman Koch, was boosted to a deputy mayor at $57,500. Victor Botnick, a legislative assistant to the Congressman at $15,000, became a special assistant to the Mayor at $30,000. Campaign manager John LoCicero, who earned $33,000 as an office manager with a manufacturing firm, jumped to $47,000 as a special assistant. Admittedly, the pay of campaign workers is often deflated, making comparisons with former salaries potentially misleading. But most of Koch’s City Hall aides came directly from other government or private sector jobs. At a time when the new mayor was threatening no raises for city workers, he was taking good care of his own—ignoring his campaign admonition: “I will insist that my administration
take the attitude that all city workers are ‘public servants,’ that is, our job is to serve the public, not ourselves.”

Asked about these and other raises for Koch insiders, a deputy mayor sighed deeply, confessing that he felt “defensive.” “Look,” he lamented, “I see people coming into the government who are like looters, all waiting for the first person to go through the broken window. It doesn’t matter whether they’re reformers or regulars. We’ve all got lust in our eyes, and it’s sickening.”

There followed, shortly after, the disclosure that Mayor Koch had raided the staffs of fifteen city agencies to borrow at least ninety-two people to work in City Hall. If these people could be yanked from their agency tasks to work elsewhere, perhaps they hadn’t been needed in the first place? Or, if they had been needed at City Hall, perhaps they should have been openly added to the Mayor’s budget? Instead, the Mayor’s spokesperson defended the subterfuge by telling Don Singleton of the
News
, “We certainly didn’t invent the practice.” It was traditional.

Koch’s bending of the stated job qualifications for the head of the Municipal Broadcasting System was also traditional. Awarding this $40,000-a-year plum to his old friend Mary Perot Nichols, Koch defended the appointment by sermonizing that she would do a “great” job. Which, of course, is not the issue. The appearance of political favoritism during a period of austerity was. So was the question, ignored by the Mayor, whether a city with a cumulative deficit of over $1 billion could afford its own television station and two radio stations. It wasn’t as if the city were culturally deprived, enjoying as it does ninety-five radio and thirteen television stations.

By practicing what appeared to be the traditional patronage game, Koch weakened his credibility with city workers on the eve of important contract negotiations. Why should already underpaid secretaries forgo a raise, as the Mayor was then asking them to do, when Koch would not ask his friends to sacrifice? Koch also undermined his credibility by reneging on his campaign opposition to the $1.1 billion Westway project. This highway was, he said then, “an economic and environmental disaster” and “will never be built.” He betrayed that public pledge when he joined Governor Carey—who had also called Westway a “disaster” in his 1974 gubernatorial effort—and announced plans in May 1978 to complete the long-delayed project. Politicians, like the rest of us, have the right to change their minds. But citizens also have the right to question Koch’s sincerity when he vowed Westway would “never” be built.
Besides, Koch’s reversal suggests he had learned precious little from past city mistakes. Once again, the city was leaping to embrace federal funds no matter what the purpose. Once again, city policy would reward a handful of speculators—the construction unions and the “David Rockefellers and a lot of real-estate interests who are going to make a lot of money,” Koch warned in the campaign. Once again, the city was pouring limited resources into roads, not mass transportation. And once again, a public figure acted as if a campaign commitment were not a contract with voters. Politicians usually enjoy boasting to each other that their word is their bond; they have fewer compunctions about misleading voters.

Perhaps nothing illustrates how little has changed in New York so much as the 1978 labor negotiations. Because labor costs are the principal component of the city’s budget, and because labor contracts impinge on the city’s ability to deliver services, a detour is instructive. Witnessing the negotiations, one would think there was no fiscal crisis. Union leaders and others agreed it would be “an outrage” for the city not to grant “substantial” raises, not to keep pace with raises granted elsewhere. To union leaders, the city’s ability to pay seemed as much an abstraction as Koch’s Westway pledge to voters. The first union to negotiate was the Transport Workers Union, whose contract expired on March 31, 1978. The union commenced the duel by demanding, among other things, a 20 to 25 percent pay hike, two additional paid holidays, free public transportation for the spouses of their 33,000 workers, the elimination of all “beakies” (undercover inspectors), the payment of all unused sick days at retirement, lunch money allowances to be increased from $3 to $5, the three-day death in family allowance increased to five days and extended to cover the death of grandparents.

The Transit Authority countered by calling for contract changes which it said would save $120 million over two years. These included: elimination of paid lunch periods and wash-up and check cashing time, no pay for the first day of sick leave, reduction in vacation allowances, “eight hours work for eight hours pay” (ending swing time, etc.), elimination of premium pay for snow work and two hours’ pay on Election Day, limiting pensions to 120 percent of the final year’s base pay, and purging the contract of the prohibition against hiring part-timers. Union leader Mathew Guinan thundered, “We’re not going to negotiate away things we achieved over the last forty years.”