From Fiscal Crisis to Thriving City with Social Mission Intact

New York Law School presented Stanley Brezenoff with the Civic Fame award at the Fifth Annual Civic Fame Breakfast held at New York Law School on April 26, 2019. The certificate of award acknowledged Brezenoff‘s 40-year career in managing governmental institutions with unequaled persistence, skill and determination from the days of the fiscal crisis to today’s thriving City, and for his relentless efforts to preserve and enhance the social mission of the City of New York. Over the 40 years Brezenoff had served as First Deputy Mayor, Executive Director of the Port Authority, President of the Health & Hospitals Corporation, Administrator of the Human Resources Administration, and Acting Chair of the New York Housing Authority. In accepting the Civic Fame Award Brezenoff reflected on his 40 years in government. The following are his remarks.

I’m going to reflect on a couple of broad principles that apply in different ways and have applied over at least the forty years I’ve been in and around City and State government. I thought I’d use three administrations as examples because in many respects they were so different. But they incorporated these priority principles.

Let me start with when I was very young and came into the Lindsay Administration [1966-1973] as literally the lowest paid professional in the City of New York as a community organizer for what was then called the Development Agency of the Human Resources Administration.

These agencies were the engines for the anti-poverty programs that were coming out of Washington. It was actually a good window into the thrust of the Lindsay Administration because Lindsay led a reform administration. The Lindsay Administration came on the heels of many, many years of Democratic mayors, not that that’s such a terrible thing, but those mayors were products of what was remaining of the political machines around the City. The Lindsay Administration came in with a reference point of “they’re all tired and he’s fresh” and he came in with a fresh perspective. And his fresh perspective sought to connect with problems and issues in the City that up until that point had not been getting a great deal of attention. The Lindsay Administration is an example of an administration that focused as a priority on moving an agenda of engagement with communities, of focus on the needs of poor citizens. These priorities were reflected in how they behaved as an administration.

What do I mean by that?

The Lindsay Administration was expansionist. It created new super agencies. It focused on things like housing development. It created agencies that were tasked with creating new housing, with creating jobs, with connecting poor communities with jobs. Not that the Lindsay Administration lasted for eight years with that kind of charismatic leadership at the top, but the administration always reflected its agenda.

Now we in New York City, not unlike most cities in the country and most cities in the world, had not crossed over into successfully navigating the business requirements of running a city. And, during the Lindsay Administration in its expansionist mode, some of the seeds were sown that turned into the Fiscal Crisis.

Frankly, most of the analyses of that crisis in my mind oversimplify the connection. You’re probably familiar with the book “The Cost of Good Intentions” by Charles R. Morris which seeks to put the burden for creating the Fiscal Crisis on the Lindsay Administration. I think that is a gross overstatement and simplification. But one thing is certain – we certainly were not prepared for the Fiscal Crisis.

In the focus on priorities with social goals in mind, we did not, not unlike every city in America, pay sufficient attention to the basic principles of running a vast enterprise. So when the crisis came – when the banks became reluctant to continue to advance credit and focus began to come on things like a capital budget that clearly included lots of operating expenses because that was one way to advance the agenda we – and I’ll say we throughout because I was in and out of government and even at the Ford Foundation I was deeply involved in state and local government –  we were not prepared to do the management jobs that were required to even get a handle on the problems that we had.

So when the Beame Administration [1974-1977] came in following the Lindsay Administration, it floundered. First the enormity of the problem; the first time in history that New York City was facing a cataclysmic potential. And the basic steps of controlling the budget by doing something to reduce expenses were not in place. The tools were not there; the understanding was not there.

The agenda of the Lindsay Administration was absolutely necessary; it reflected the shifting awareness nationally that the country had a lot to do to tackle the sins of the past, some grounded in racism, some grounded in economic inequality. New York City was there on the battlefront because of the leadership of the Lindsay Administration. But there was a piper to be paid that was not visible during those eight years and then emerged in all of its fury during the Beame Administration.

I came back into government in the Koch Administration [1978-1989], which was the first administration to bring perspective to what was occurring. If the Lindsay Administration reflected the necessary and invaluable commitment to a social agenda, the Koch Administration came in where that was a luxury that could not be pursued.

The police force was around 20,000 heads. There was no capital budget. The City was living on an operating basis on borrowed money and it got the borrowed money through the purchase of bonds where certain taxes were put into a locked box. Obviously, not a prescription for long term viability. In fact the City was legally committed under the aegis of an Emergency Financial Control Board to balance its budget.

So a different dynamic, a different reality. It doesn’t mean the social issues went away, and to some degree they could continue to be pursued, especially with federal dollars, but there was simply not enough money. And the psyche of the public changed because the public, in turn, recognized the enormity of the problem, the crisis the City was facing. Remember the Daily News headline: “Ford to City: Drop Dead.”

It became easier to say “No.” It became de rigueur to say we can’t afford to do that and every dollar that we do have to spend we have to spend better and more wisely. We have to get maximum use in order to bring the City of New York as an operating enterprise into the modern world. The shortcomings became more and more evident. It’s very hard to control headcount when you don’t know how many people are working for you. A classic example was the Board of Education. Every day we got a different total of how many people were working at the Board of Education. And not because of anything that we did. They discovered people.

So, that was the focus of the Koch Administration for the first half or two-thirds of the twelve years. Turn the City around. Get it to a point of financial stability. Balance the budget. Rebuild the capital budget.

Think about that. The only capital dollars that the City of New York had in the early years of the Koch Administration were the community development block grants from the federal government. The City itself could not borrow money. Who would lend money? It’s like your profligate brother-in-law. You can’t lend him money. And the City of New York was in that circumstance.

But the City of New York is marvelously resilient. We balanced the budget a year early against the legal requirement and we began to rebuild our standing. And by the time of the third Koch term, we could once again turn ourselves to fundamentals. The police force being a high, high priority; the Board of Education, a high priority.

We were able, for example, to turn our attention to the need for affordable housing and you may remember that in the last Koch term, billions of dollars were found, capital dollars, to support the development of housing in New York City. It was a major undertaking. It meant making housing the signal priority for the City. Obviously I’m contracting these things and oversimplifying them. There’s much more complexity.

The primary thrust being out of necessity, the restoration of financial stability, just as in the Lindsay Administration it was reconnecting government with disaffected New Yorkers and communities. It doesn’t mean that other things weren’t happening, but those things were the primary foundation of the government operation and of what the administration was about. But in the last Koch term because of the availability of resources, we were able to begin the rebuilding of essential services. It’s a long time ago, but you may remember how serious street crime was, the lack of police coverage in the City, closing firehouses, lots of things going on.

I want to jump ahead to now because we’re at another point where it’s possible to reflect on the basics of what an administration is all about. First, context. This has been an extraordinary period of affluence for the government of the City of New York. We’re now going on six years of very deep pockets. In all my years I don’t recall anything like that. The last decline was brief and the City recovered from it, and it was before the de Blasio Administration.

Like the Lindsay Administration, the de Blasio Administration is very focused on a progressive agenda. It is an administration that has had the benefit of substantial resources to advance a progressive agenda that I imagine most of us would enthusiastically support: Universal Pre-K, another affordable housing program.

But it’s also an administration that has not had a PEG program. Do you all know what the PEG program was? It’s the Program to Eliminate the Gap and it has its roots in the Fiscal Crisis. Every year, no matter who was mayor, no matter what the circumstance, no matter how good the tax receipts were, there was a PEG program. The theory being that even in flush times it’s always possible to do the job better, and to examine what you’re doing and find things to improve and even eliminate or replace with something better. It’s a pretty basic theory.

This is the first year that there’s been a PEG program in the City of New York in the de Blasio Administration. And honestly, I say this with affection and respect; it’s not a very vigorous PEG program. And it’s all tied to advancing the agenda and the availability of dollars. Now all of us know that there’s nothing more political or philosophically political than a budget. The truth is it’s the most political of all documents. And that’s something we all understand. Budgets may be about dollars and cents, but they reflect priorities.

So that’s all to the good, but the good stewardship, regardless of who the mayor is or what the administration is, good times and bad times, we have learned requires that you never take your eye off the rearview mirror while you’re driving. And I have concerns because history tells us the good times don’t stay forever. There are many, many imperatives that the City will be facing, some of them apparent even now. And I believe that if history teaches us anything about advancing a social agenda, the key is to do it wisely, to do it prudently and to be assured that you can sustain those things over time.

There is a parallel issue that also goes back to the Lindsay Administration and that has to do with the relationship of neighborhoods, communities, individuals to decision and policy making in government. You can trace within the Lindsay Administration the beginnings of the commitment to greater transparency, to greater involvement of communities. That was the time when the school decentralization projects were started, contentious moments at the time, but reflective of a sense that communities and neighborhoods, parents, individuals, needed to be more involved, in that case, in the delivery of educational services to their children. Other issues involved community boards, Borough Presidents and so on. And that too is a difficult dynamic. One thing that allows the City of New York to stand apart from most other cities in the world and certainly all of the large cities in the United States is its ability to function well. And to my mind, much of that is attributable to the strong mayoralty that the City of New York has.

And I call attention to this issue in closing because there is a City Council-based Charter Revision Commission working. It is the first one with a City Council charge since 1989. That 1989 Charter Revision Commission was put in place to deal with the one-person, one-vote decision that eliminated the Board of Estimate. Paralleling the progressive agenda, which substantively I am eager to support, is the notion of increased local involvement in decision making. While not advocating a return to Robert Moses, I would caution not to reduce the ability of the mayor to lead, to get things done, to chart courses for the City. I have to tell you that I am a bit anxious about what I hear about the current charter revision process. So I’m going to stop there, just not quite all of the 40 years, but a few of them and I’d be happy to take questions if there’s time.

(Q&A)

Q: Roger Herz. Thank you for your wonderful work over the decades. You mentioned the Charter Commission. Are there a couple of issues that you are particularly for or against?

A: Adding additional decision points to the ULURP process. ULURP has the virtue of being in a certain time frame, where things have to happen. A project might get thrown back and you might have to start again, but the virtue and the reason that many of us supported ULURP was the definiteness of its time frame. The notion of introducing additional bargaining points, even opening it up for discussion or to present alternatives to the project, near the end of the project – that to me is a great concern.

Second, the role of the Law Department, the Corporation Counsel, and how it interacts with City government is a worrisome set of issues.

Given my background, I regard the office of Management and Budget with its great talent and great responsibility and some independence, as key to the sound operation of the City. Obviously policymakers have the ultimate sway. But there’s clearly a bias to somehow curtail the role of the Office of Management and Budget relative to City agencies.

There’s also, within the discussion, a kind of a halcyon days of old, when the Borough Presidents had a role. Now I remember the Borough Presidents (audience laughs). Never has there been a more political apparatus that controlled the capital budget, streets, and so on. Reformers from LaGuardia’s time sought to curtail the Borough Presidents, and some talk about it as if it’s Return of the Jedi or something.

Q: Brian Logan. How does the City continue to attract administrators and stewards?

A: I’ve been surprised by the fervor and dedication and backgrounds of a lot of the young people I’ve encountered recently at NYCHA, Health & Hospitals, even the Board of Corrections. So I think that there are young people, especially with the rise of the progressive agenda again, that are being attracted. I think retention is difficult. Some of that is economic and many of you have probably experienced that in your own lives.

I do think there is a deficit at the other end. During the Fiscal Crisis and the immediate aftermath of the fiscal crisis the community at large, the business community, the academic community came to the fore. Names that are probably forgotten – people like Walter Wriston, David Margolis, and Larry Huntington. I don’t see that now.

The corporate mindset seems to have changed a bit, perhaps because of the internationalization of corporations and even our banks. We got a lot of leadership from the business community. They had a real oar in the muck and therefore wanted to help solve the problem. But you just don’t see that kind of high level business engagement with New York City the way that occurred years ago.

Q: Jay Kriegel. Thanks for that fascinating survey. Insightful as always, in particular your comments at the end about the Charter Commission, which the community needs to hear. I wonder if we can take the next step on progressivism and maybe ask if you have any reflections about the current politics of the City in the AOC [Alexandria Ocasio-Cortez] era which seems to have rapidly driven New York City politics to the left. Do you have any reflections on what this means politically and what you see going on?

A: A few reflections. At the request of Peter Vallone [Former City Council Speaker] I chaired a group that tried to undo term limits. We lost that 80 percent to 20 percent. So term limits play a part here. Everybody’s running for office on a continuous basis at the City Council. Now I say that having become persuaded that the talent on the City Council is better than the talent that I remember in the City Council way back in the day. These are smart, very sharp, young, energetic, hardworking people on the whole, but they have to run from day one.

Secondly, they lack certain kinds of seasoning, and I don’t want to sound like the kind of pontificating old man on the hill when I say that, but the truth of the matter is that back in the day there were some really terrific leaders of our legislative body, the City Council and the Board of Estimate that were around for a long time. The chair of the finance committee knew as much about the budget as anybody on the other side of City Hall. You don’t get that now and that means you’re relying more heavily on staff and I’m not sure if that isn’t a part of this; it’s like one big community meeting. Each time the dialogue moves, in this case to the left, everybody moves to the left and tries to go a step up further.

So I’m concerned about it, it’s one of the reasons I’m concerned about charter revision which would take even more authority away from the mayoralty which ultimately has to be one of the bulwarks against more extreme undoable stuff. One thing the mayoralty needs to keep in mind is the economic well-being of the City. I’m not saying those are easy questions but it has to be front and center as part of an evaluation of any change in policy. Economic well-being needs to be a part of the dialogue and there’s a certain amount of glibness going on. We’re going to save the planet, and not have anybody paying the real estate taxes that we need to meet basic services.

And finally, when all else fails, and this is the right audience, the courts will have a role in this too because some of the more extremely unrealistic proposals that are out there are, in my view, not in accordance with the legal limitations. Watch out for this charter revision.