Goldsmith Departure Latest Blow to Bloomberg's Outside Hire Strategy

Friday, August 05, 2011

The quick departure of Stephen Goldsmith, Mayor Michael Bloomberg's Deputy Mayor for Operations, after his a rocky, 14-month tenure marks a major turning point in the mayor's third term.

Goldsmith, the former Mayor of Indianapolis and previously a professor at Harvard's Kennedy School of Government, was brought in to streamline the way the city provides services. He will be replaced by the current Department of Environmental Protection commissioner, Caswell Holloway. Mayor Bloomberg's office does have a date for Goldsmith's departure but said the "transition was well underway."

Expectations were high when Goldsmith was picked initially.

"He was brought in to be fresh eyes in terms of re-inventing city government, making it cheaper and more efficient," says Richard Steier, the editor of the Chief Leader, which covers the city's municipal labor scene. "It was supposed to be a kind of reset button for the mayor's third term."

He says Goldsmith got off on the wrong foot with the city's union leaders. One of Goldsmith's most controversial moves was to try and demote 100 Sanitation Department supervisors and put them back on garbage truck routes as a way to cut costs.

"You just don't do that," says Harry Nespoli, President of the Uniformed Sanitationmen's Association and chair of the powerful Municipal Labor Council. Nespoli says he tried to advise Goldsmith his approach would backfire.

"You don't take people who took a civil service exam and marked high on it, put them into a title and receiving that money for their family and then say 'you know what I am going to knock you back down,'" he said. "It just kills the morale. I told him 'don't do it."

In the City Hall statement announcing his departure Goldsmith only said he was pursuing an opportunity in infrastructure financing.

“After thirty years of long hours in public service, the change will provide me, at age 64, with more flexibility for me and my family and a secure foundation for our future,” wrote Goldsmith.

Goldsmith’s departure came not long after the exit of Skip Funk, who reported to Goldsmith on the Bloomberg Administration efforts to revamp the 911 call and emergency dispatch system. That project has been plagued by delays and cost overruns.

During his first eight years Mayor Bloomberg prided himself on his ability to spot talent and delegate authority, which in turn historically inspired loyalty in his direct reports. Bloomberg likes to shake things up and doesn’t want complacency to settle in as his era as mayor slips into the history books. But so far his big third term gambles on outsiders such as Goldsmith to re-invent city government and Cathleen Black to run the city’s public school system have not paid off.

Steier says that part of Goldsmith's challenge was that had big shoes to fill in the top operations post after Ed Skyler, a highly regarded hands-on deputy mayor known for a 24-7 work ethic.

"Goldsmith had been Mayor of Indianapolis," something Steier says in theory should have been sufficient preparation. But he said the city's botched response to December's blizzard did further damage to Goldsmith's reputation after the Sanitation Department demotions.

According to Nespoli, Goldsmith also dismissed the labor leader's concerns months before the blizzard about what Nespoli saw as a troubling thinning of the ranks in the Department of Sanitation.

"Six months prior to last winter I sat down with him and I told him this is the lowest amount of sanitation workers going into any winter that we ever had," Nespoli said. "He was saying he feels that this is what he needs to do the job with and I told him 'look New Yorkers are different, that snow hits they want it cleaned.'"

The city last week announced it would hire an additional 300 sanitation workers, "so somebody must have been listening over there or the example of what happened last winter really got people's attention," says Nespoli.

Holloway, like Skyler, got his start in the City's Parks Department under Commissioner Henry Stern. In his role as chief of staff to Skyler and as a special advisor to Mayor Bloomberg, Holloway led the city's efforts to document the health impacts of the September 11 attacks as well as the behind the scenes negotiations over the Zadroga 9/11 Health and Compensation Act.

In his relatively short tenure at the DEP Holloway won praise from City Council members who had previously felt the water and sewer utility was unresponsive to community concerns.

Nespoli says he is optimistic that Goldsmith's replacement Caswell Holloway will have the ability to effectively collaborate with the city's unionized workforce.

He says their paths first crossed when Holloway was working as Ed Skyler's Chief of Staff.

"This guy has been around New York City," Nespoli says of Hollaway. "He knows New York and he knows the unions. He knows what it is about and he knows what makes this town move."


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