Cost conscience

Joe Harris is frustrated. Each and every workday, the diligent financial whiz sits in his office surrounded by stacks of reports, rolls up his sleeves and searches for ways to save Detroit money. That’s his job. And, according to members of City Council, he’s darn good at it.

The auditor general has charted out $60 million a year in savings for Detroit. That’s money the city is throwing away annually on wasteful spending and inefficient services, as outlined by audits done by Harris’ staff and outside consultants.

But Harris, appointed by the council in 1995 to serve a 10-year term as auditor general, is largely ignored. In fact, last year, he predicted the city was headed toward a deficit. Nobody listened.

Now, as Detroit faces its leanest year in a decade, and Mayor Kwame Kilpatrick proposes raising bus fares 25 cents as one way to generate cash, Harris is hoping — but growing increasingly pessimistic — that Detroit’s new mayor will heed his call.

“I’ve been a voice in the wilderness,” laments Harris. “I’ve been screaming, and nobody hears me.

“We are sitting on a gold mine, but we haven’t begun to dig for the nuggets,” says the University of Michigan MBA, who grew up in Detroit and worked in steel and auto factories before and during college. “We work our butts off in this office to give the citizens as much as possible. It’s not because someone’s standing over my head with a whip saying, ‘Get these reports out now.’ It’s because we want to do as much as we can with this office during my tenure.”

But Kilpatrick’s spokeswoman says Harris is being taken seriously.

“There are things that Joe Harris has recommended that we are implementing,” says Shannon McCarthy. “A lot of the things we are looking at doing. We recognize the problems even if we might have a different solution.” Since his appointment, Harris has issued at least 100 audits — some done by his staff, others by national firms — laying out ways city departments could improve. The work isn’t free: Last year, taxpayers spent $3 million on Harris’ office. And only about 10 percent of his recommendations have ever been implemented, he estimates.

Which explains why Joe Harris is a very frustrated person.

“As an insider, looking at how the city’s run, it’s like looking at a beautiful woman whose lungs are full of nicotine and tar and whose veins are full of cholesterol. She looks beautiful on the outside, because you can’t see what’s on the inside.”

Harris is Detroit’s eighth auditor general. According to the city charter, the auditor’s job is to review the finances and operation of every city department and report findings to City Council, the mayor and the audited department. Like government auditors nationwide, Harris aims to improve city efficiency and service by comparing Detroit to other cities.

And most auditors are heeded more often than Harris, says J.C. Squires, president of the National Association of Local Government Auditors.

“Ten percent implementation rate, that sounds like a really low number. That’s a reflection on management, really,” says Squires, who notes that Long Beach, Calif., implements about 80 percent of the cost-saving and service-improving recommendations he has made as that city’s auditor. “Saving the local government money is our mission; that’s why we exist.

“It’s the responsibility of management to make the taxpayers’ dollars go as far as possible and provide the highest level of service. They should recognize the resource of the local auditor in accomplishing that mission.”

Who’s minding the till?

The problem in Detroit, says Harris, is that nobody is held accountable for city departments.

“Ninety percent of the audits will be discussed by council,” he says. “They’ll raise hell, and it’ll turn up in the newspaper, on TV. But then the dust settles, and nothing happens.

“If I have an audit report on transportation, that transportation director should be accountable. If he can’t explain why it’s not feasible to make the changes, he or she should have a timeline to implement it.”

The only person who can hold department heads responsible in Detroit is the mayor.

“The mayor has seen and reviewed the reports. He really views this as an opportunity to get some good information,” McCarthy says of Harris’ audits. “He thinks Joe Harris has some good points and has raised some valid issues, and he looks forward to engaging Mr. Harris in the future in this process.”

Harris inspired the tax amnesty program Kilpatrick announced recently, McCarthy said. She says the administration is following Harris’ advice and consolidating some of its many bank accounts.

From Harris’ perspective, though, the mayor’s budget, proposed on Friday (see our related story in News Hits) largely ignores his cost-saving measures. To balance the budget, Kilpatrick instead uses a one-time $100 million payment from casinos, slashes city staff, raises bus fares and temporarily closes the Belle Isle Zoo.

“We’re constantly ignoring the cost reductions and looking for additional ways to tax our citizens,” says Harris, an avid bowler and jogger, who pines for Detroit to spend more on its recreational facilities. While $60 million may seem like peanuts in a $3.3 billion budget, a few million dollars can make a big difference to cash-starved departments.

Before Kilpatrick, Mayor Dennis Archer routinely ignored Harris’ recommendations.

Archer wasn’t available for comment, but his former spokesman, Greg Bowens, says Harris is a political animal looking out for himself. Last year, the terse relationship between Harris and Archer exploded into public attacks following a report stating the transportation department wasted $40 million a year on inefficient service.

“We arrived at the reluctant conclusion that Joe Harris was more interested in politics than performance,” Bowens said recently. “Honestly, the problem in the end was the reports weren’t credible, because Joe Harris wanted to be the mayor. So the worse he could make the mayor look, the better he made himself look.”

Harris scoffs: “What I would prefer is that if there is a flaw in the report, criticize that, not why I issued it. When I do a report, there’s no sinister reason behind it. It’s for the benefit of the city.

“We bring in the experts in different industries. This isn’t just pie in the sky from the auditor’s office.”

City Council commentary

Council President Maryann Mahaffey, who’s served on City Council since 1973, says she finds Harris exemplary.

“I have found him to be very sound. We don’t always agree. But I happen to think very, very highly of him. I don’t know why Archer didn’t implement his strategies. I would implement many.

“I think he’s very thorough and very smart and very straightforward. He’s not playing the political game. He doesn’t tailor his findings to the political demands.”

Councilman Kenneth Cockrel says he takes Harris’ audits “very seriously.”

“I’ve been a proponent of using his office to determine what’s going on in city departments,” Cockrel says. “I think [the auditor] really can play a critical role in terms of problem-solving and troubleshooting that we can use to our betterment.”

As to why Harris’ reports have been ignored, Cockrel didn’t have an explanation.

“I don’t know. I do think in some cases there’s a natural tendency on the part of certain department heads, when deficiencies are outlined, to get defensive, instead of saying, ‘Well damn, he’s got a good point.’ I think that was a problem. It can be tough.”

Not all Harris’ audits are ignored. For instance, his 1999 report, outlining major problems with the management, training and equipment of the Detroit Fire Department sparked immediate changes.

And each year, council relies on the auditor to analyze the mayor’s proposed budget.

Last year, Harris recommended City Council reject Archer’s $3.4 billion budget because it ignored cost-saving options and failed to fund basic city services despite record tax revenues.

Harris also correctly stated the mayor’s budget included inflated revenue projections, which in part led to the city’s current deficit.

“Honorable City Council, not only must you reject this proposed budget, you must reject the philosophy that engendered the budget,” Harris said to council last year. “The philosophy of not maintaining our infrastructure during a period of prosperity and additional revenue from the new casinos, the philosophy of giving our playgrounds, parks and recreation centers a low priority, the philosophy of ignoring the opportunities for cost savings and revenue enhancements and the philosophy of operating from year to year without a plan.

“A budget without a plan, and without any idea of how the needs of the city will be met in the near future, leads to myopic decision-making, the effects of which are manifest in our city and throughout city government.”

Soon after, Harris — showing his quirky side — quoted from L. Frank Baum’s The Wizard of Oz: “Then Dorothy lost heart. She sat down on the grass and looked at her companions. And they sat and looked at her, and Toto found that for the first time in his life, he was too tired to chase a butterfly that flew past his head; so he put out his tongue and panted and looked at Dorothy as if to ask what they should do next.”

The council didn’t take Harris recommendation, and adopted the budget that Harris said was an example of “waste and neglect.”

Meanwhile, in this year’s budget, Kilpatrick proposes cutting Harris’ funding by 5 percent, along with the funding in many other departments. Already, Harris says, the auditor’s office is understaffed and can’t perform its charter-mandated duty of auditing each city agency every two years. “To my way of thinking, if you’re not going to use the information I’m providing, then, hell, you might as well cut all 22 of my staff,” says Harris. “He wouldn’t cut my staff if he truly appreciated the value of the audits and the cost savings they could bring to the city.”

City Council, which adopts the budget, will replace the money for Harris’ office, says Council President Mahaffey.

And in the end, no matter what happens, Harris will continue to do his job. He laughs at the suggestion that he’s an optimistic renegade. He’s just doing his job.

“I’m here for 10 years. I’ve got four years left. When I leave here, I want to have done the best job I could.”

Read this week's related story, "A million here, a million there," where you can take a look at how Harris' annual savings plan breaks down.