Grading the Cities introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Cleveland Revenue Rank: 29 Form of Government: Mayor-Council Mayor: Michael R. White (took office 1990) City Council: 21 members, elected by ward Elected City Council President: Michael D. Polensek FINANCIAL MANAGEMENT: B- A little more than two decades ago, Cleveland became one of the very few cities in the United States ever to default on its debt. That episode brought negative national publicity that is only now being overcome and continues to influence financial moves the city makes. “It looms large,” admits Martin Carmody, the current finance director, “Clearly, we are unique in that regard.” The memory of the 1978 trauma has created some positives. Cleveland handles its budget conservatively, and has kept expenditure growth at a moderate level. The city’s revenue and expenditure estimates are solid. Its books are kept in accordance with Generally Accepted Accounting Principles, general fund revenues regularly exceed expenditures, and the overall balance has been growing. The rainy day fund is rather small, but it has increased steadily over the past several years. On the negative side, Cleveland’s brush with disaster has left it with very constrictive policies that limit managerial flexibility in moving money around within budgeted categories. In purchasing, most acquisitions of more than $1,000 must be put out to bid. The city has virtually no cost accounting in place, and, until recently, has been constrained in financial management by old technology. A new financial management system is already helping to alleviate that. HUMAN RESOURCES: C- Cleveland’s human resources policies present managers with a host of obstacles. The managers seem to accept them, and do what they can to find ways around barriers. “We play the hand that we have,” says Jeffrey Patterson, director of the Department of Personnel and Human Resources. One of the obstacles is a centralized hiring process that uses certified lists for non-bargaining employees and uniformed services. Only the first three candidates on the list are considered for selection. For non-union positions, recruiting isn’t permitted if the city already has applicants who passed the required tests, even if a manager would like to look at other candidates. The city has no formal work force planning. A few months ago, the personnel department initiated monthly meetings with departments to help them do a better job of anticipating vacancies. It has merged divisions and departments to better utilize staff. Cleveland also is putting together programs with unions to help employees upgrade their skills. Training generally has been improved, with efforts to send trainers out to the departments and to better publicize training opportunities. INFORMATION TECHNOLOGY: C- Cleveland has a long way to go in this category. It is the only city among the 35 largest, for example, that has resisted the active use of e-mail. There is little access to the mayor through e-mail, and most employees cannot use it to communicate with the outside world. The city’s presence on the Internet is only about six months old, and the Web site is weak, short on both useful information and transactional capability. On the brighter side, Cleveland has successfully implemented purchasing standards for most of its information technology systems, particularly important in a resource-short city with no extra cash to spend on non-compatible purchases. The government is very thorough in determining the benefits of potential new acquisitions. A new financial management information system is being installed, and should, as staff is trained to use it, provide a good deal more information to managers. The use of IT in human resources management, however, remains a problem. Small desktop databases for maintaining personnel records are in place but have to be supplemented with paper-based systems. CAPITAL MANAGEMENT: B- Department directors make requests for capital and operating budgets simultaneously, a good way to help make sure that capital investments are affordable in the long haul. The City Planning Commission plays a strong role, reviewing all ordinances related to zoning, land use or capital improvement Cleveland is very tough on contractors; if a project isn’t delivered exactly as described, checks don’t go into the mail. When an airport garage had a faultily constructed exit door, the city flatly refused to pay for it until the problem was corrected. The government is moving toward a more systematic approach to street evaluations, but so far, it doesn’t appear that enough is being spent on this. Cleveland is unable to provide specific information about how much deferred maintenance there is in street repairs. The planning process here has a 10-year horizon, but the plans should be updated more regularly. MANAGING FOR RESULTS: C Cleveland lacks any formal strategic plan, performance auditing or effective use of outcome measures. Perhaps the most effective performance management system is Mayor White, a powerful, hands-on manager who regularly reprimands, suspends and fires people “from top to bottom, for not performing up to high standards,” in the words of one city official. Department managers set quantifiable goals and report to the mayor on a quarterly basis. At an annual three-day retreat, performance goals for the administration are established for the coming year. These are the foundation of departmental goals. The city’s so-called “People’s Budget” was first published in 1992. By 1998, there were 250 goals, of which the vast majority were output- or workload-oriented. It’s a very useful document, utilized increasingly by the city council; unfortunately, only 500 copies were printed, so it hasn’t been distributed widely. AVERAGE GRADE: C Copyright © 2000, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are trademarks of Congressional Quarterly, Inc.