Report on Reorganization

Wriston, Walter B.


New York City, it is said, is often "first and best" in some respects and "first and worst" in others. As we consider the City's fiscal crisis, we should note one "first" of great potential significance: Only in New York has the Task Force approach to governmental reorganization and efficiency been tested -- and validated -- on such a broad scale over a period of years.

When the fiscal storm clouds were gathering over the City in 1970, EDC's first Task Force launched its memorable study of the Criminal Court system. Thus, the perception and foresight of EDC began to create what we see today as a "blueprint" for the revitalization of governmental management in New York City.

From the start, EDC has had the benefit of highly qualified executive leadership on a voluntary basis. It was a great day for the Council -- and the city -- when Joseph A. Grazier, retiring as Board Chairman of American Standard, agreed to give overall direction to that first Task Force and, as it turned out, a number of other major studies. It is my privilege today to review the highlights of the projects to which Joe, as EDC's Vice Chairman, has given impetus, energy, and guidance In full measure.

As "flagship" of the fleet, so to speak, the Criminal Court Task Force sailed strange, uncharted seas in 1970. Much depended on the outcome of its voyage -- and it made port with all flags flying.

In less than three years, the backlog of unfinished Criminal Court Cases cases was reduced, as George Champion has noted, from 59,000 to 13,500. The Task Force found that defendants often had to appear before five different judges, amid great delay, before their cases could be settled. Under reorganization, the average time needed to dispose of a Criminal Court case was reduced from nine weeks to less than four weeks.

Not only were these things done without any increase in the number of judges and court personnel, but actual budgetary savings of $6.7 million a year were documented by an accounting study. Further, the number of defendants in detention awaiting trial was reduced from 4,000 to about 1,300. This obviated the construction of new jail facilities at an estimated cost of $45 million.

Increased efficiency in the Criminal Courts had the effect of increasing the caseload flowing into other courts. In 1972, a second Task Force recommended the unification of the Criminal Court and the Criminal Branch of the Supreme Court with a common management structure under a single Administrative Judge. Today, in a new spirit of interchangeability judges from one court are "filling in" to help break bottlenecks in another. The overall "bench time" of judges has thus been substantially increased.

Subsequent Task Forces have dealt with the Civil Branch of the Supreme Court, the Family Court, the State Office of Court Administration, and the Criminal Justice Coordinating Council. Major new studies may be launched in 1976. All told, some 36 person-years of "on loan" executive time valued at $949,000 have so far been contributed to the Court Task Force programs without cost to the City. Substantial budgetary savings have been noted but the greatest gain lies in the demonstration that much can, in fact, be done to close the City's "management gap."

For the record, Presiding Justice Harold A. Stevens characterized the first Task Force as "a landmark in pointing out to the entire nation how the private and public sectors can work together for the common good." Reader's Digest defined the Criminal Court Study as "what may well be the most significant single reform of the past decade in municipal government." Administrative Judge David Ross termed EDC's support "absolutely invaluable in implementing the plan." And New York State Chief Judge Charles D. Breitel has said that: "EDC has been one of the brightest lights I have seen for the courts during the past 25 years."

In 1966, New York City's immense Human Resources Administration (HRA) was created to consolidate a variety of welfare and social into a single "super-agency." Instead, HRA turned out to be a "loose confederation of overspecialized bureaus and agencies with parallel and over-lapping functions and delivery systems" In 1970, Jule M. Sugarman, newly appointed as HRA Administrator, called on EDC for management assistance.

Early in 1973, An EDC Task Force proposed -- and HRA adopted a far-reaching reorganization plan which, in essence, consolidated 19 ill-assorted agencies and bureaus into five "line departments" designed to clarify lines of authority and accountability and strengthen the managerial capabilities of HRA in every area.

Things went well at first. By mid-1973, HRA was well on its way to achieving a strong line-delivery system. It had built an in-house corps of some 350 management engineers and computer specialists. Major steps were taken toward a comprehensive internal accounting system for HRA, citywide coordination of employment services, and increased productivity through work measurement and scheduling. Potential operating economies of $356 million a year seemed well within reach.

Then came an abrupt change in the HRA top command -- and in official cooperation with the Task Force program. By the end of 1973, reorganization came to a virtual halt, the in-house managerial corps melted away, and Task Force operations were reduced to a bare minimum.

This experience underscores the vital need for strong executive ability, experience, and leadership in governmental top management. The road to reorganization is never smooth but there must be a driving force to make the program go.

Despite setbacks, however, one important Task Force project has been moving ahead steadily with the support and cooperation of the state and federal governments. This relates to the wide margin of error in the determination of eligibility for public assistance. A national survey found that 10 percent of recipients were ineligible, 28 percent were overpaid, and 10 percent were underpaid.

In New York, EDC developed a "modular approach" to eligibility determination using "decision tables" to clarify a mountainous mass of rules and regulations. The plan was pilot-tested in 1973 with the help of state officials. With funds from the federal Department of Health, Education, and Welfare, it is being carried forward toward eventual national application.

Last year, Joe Grazier was asked to spell out a six-point program for getting HRA's reorganization off "dead center." His first and foremost recommendation was simply this: "Appoint a strong, proven executive as Administrator of HRA."

Well, J. Henry Smith has accepted that challenge. Retiring as Board Chairman of Equitable Life to become Vice Chairman of EDC last year, he has been appointed by Mayor Beame as HRA Administrator. Here is a prime example of the kind of leadership which is sorely needed to establish standards of efficiency and accountability so that the public can know exactly what is happening in a very chaotic and sensitive area of government. In undertaking this monumental public service, Henry deserves the unreserved support and cooperation of the business community. HRA reorganization, as we have seen, has had its ups and downs -- now it is on the way up again.

New York's Mitchell-Lama middle-income housing program was conceived by the State Legislature in 1955 as a self-liquidating venture. Early in 1975, an EDC research report found the program in serious financial straits. Mayor Beame and City Housing and Development Administrator Roger Starr then called on EDC to make a Task Force study of Mitchell-Lama program supervision.

This is no small problem. The City holds mortgages on the entire City-sponsored Mitchell-Lama system-- 130 developments containing 53,000 apartment units with 20 more developments of 9,500 units under construction. Far from being self-liquidating, the Task Force found, Mitchell-Lama and the City are sliding deeply into debt. Some 60 percent of the buildings, in fact, are in arrears in their debt service payments. And these arrearages threaten to force a charge of $500 million against the hard-pressed City's debt limit within the year.

Now before the appropriate officials and legislators is a Task Force plan for complete administrative reorganization of Mitchell-Lama, collection of arrearages, and control of debt. Succinctly, the report called on the Housing and Development Administration "to discharge its supervisory responsibilities without political interference and in keeping with the original legislative intent to foster self-liquidating middle-income housing."

Mitchell-Lama is one example of the way in which good governmental intentions can go astray because of deficiencies in management and policy. Rent control in New York City has long been a highly charged political issue - yet it should, in these times of crisis, be subject to dispassionate analysis.

In 1975, a comprehensive study of the city's rent control problems was completed by the Rutgers University Center for Urban Studies under the direction of Dr. George Sternlieb. This study, part of a broad survey of all of New York's housing problems, was commissioned and funded by the Economic Development Council.

In the Sternlieb report, we find recommendations for the creation of a single administrative mechanism for rent control, the stabilization of rent increases uniformly under a formula based on landlord's operating costs, and a gradual phase-out of controls which now affect more than 1.4 million housing units in the city.

There is no need here to go into the complexities of this hydra-headed issue. The point is that the Sternlieb report, factually and unemotionally, is shedding new light and helping citizens to think about a vital problem in a critical year of decision.

Today I have tried to give you the highlights of an innovative approach to the "management gap" and the "policy vacuum" which beset New York and, I suspect, other American cities. Better organization, management, and, above all, executive leadership are the real keys to the urban future. I therefore suggest further pursuit of this course of action along the road to fiscal and economic recovery for our city.

  • The document was created from the speech, "Report on Reorganization," written by Walter B. Wriston for the Economic Development Council Luncheon on 7 April 1976. The original speech is located in MS134.001.003.00007.
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