Book Review: The higher Street to public management

May 14, 2012

By Wayne Lusvardi

When I first started working for Los Angeles County government decades ago, it was what might have been called “republican” (with a small “r”).  Decision-making was delegated down to the managerial and supervisorial level.  Generally speaking, managers were competent and non-manipulative and co-workers were cooperative and not overly protective of organizational turf.  There were scandals and cover-ups, but not institutionalized such as the recent scandals at the city of Bell, Calif.

By the time that Gov. Pete Wilson left office in 1999 in California, government at nearly all levels in California had turned to what might be called “democratic” management — micromanaged from the top for the career advancement of the CEO and the enlargement of power of unions and politicians in the party of government.  Managers were selected not on competence, but on meeting some quota to avoid a discrimination lawsuit.

Government administration shifted from cooperation and leadership to command and control, especially of tightly guarded secrets.  And the more secretive the organization became, the more that managers became bullies and co-workers became back stabbers.  I learned that the “doors of hell are locked from the inside,” as British writer C.S. Lewis once put it.

Chriss Street’s new book, “The Third Way: Public Sector Excellence Through Leadership and Cooperation,” is an antidote to the above-described bureaucratization and politicization of government.  Chriss was elected as the reasurer-tax collector of Orange County, Calif. in 2006, and left office in 2010.

Orange County bankruptcy

This was the same office held by the infamous Bob Citron, the top Democrat to hold political office in Orange County in the early 1990’s.  Citron’s highly risky strategies of using borrowed money to invest — called leveraging — where why Orange County declared Chapter 9 bankruptcy in 1994.  Citron was a managerial star for earning high interest on investments, allowing cities to avoid having to raise taxes.  He was reelected several times.  But with high investment returns also came high risk.

Citron was the manager of the County General Fund, the Investment Pool and what was called the Co-Mingled Pool Fund.  The highly leveraged position of his investments in repos (repurchase agreements) and floating rate notes (FRN’s) blew up when federal interest rates rose in 1994, requiring the county to make extra margin payments or post collateral.  Citron’s investment strategy was found to be a house of cards that collapsed with nothing to back it.

Citron concealed the excess earnings of his investment funds and eventually pled guilty to felony charges and filing a false and misleading financial summary to investors in the Orange County Investment Pool.  The County had to fire 3,000 employees, retirement funds were jeopardized, and county services had to be cut across the board.

Chriss Street served as an overseer of the Orange County Public Employee’s Pension Plan where he exposed the risky trading strategies of Bob Citron and repositioned its assets after Citron left office.  Chriss resigned from the Pension Plan in 1998, leaving it as one of the few over-funded pension plans in the United States.

The ‘Third Way’

In his book, Street outlines a “Third Way” to manage public sector organizations that is between private- and public-sector management models.  The focus of Street’s book is not on bureaucracy, but how to administrate a public agency with greater efficiency and transparency.

Street defines his Third Way as replacing “command and control” type management with a “shared authority model of cooperation and leadership.”

Chriss tells how he canceled all vacations during peak trading weeks and mobilized the other sections of the treasurer’s department to handle peak overload and reduce worker stress.

He has other stories to tell.  Some are humorous. But Chriss never laughs at his employees. He laughs with them.

He tells the story of how he requested the carpet to be cleaned in the public service area of the treasurer’s office when he first arrived on the job.  He rejected the work and asked that it be steam-cleaned.  The maintenance personnel said there was no steam-cleaning equipment available.  When Chriss said he was going to contract out the service, a steam cleaner “miraculously” appeared!  The carpet was so bad that its original ornamental pattern was covered in dirt.  Later Chriss found that over-watering plants in the office caused the infestation of billions of tiny brine shrimp under the carpets.

Chriss’ book is filled with many stories of how business processes were improved, how hardware acquisitions were improved, barriers to communication were broken down, turf wars were reduced and costs were reduced — and probably most importantly, how transparency was communicated to the public.

Let Chriss tell you the rest of the story himself in his book. It’s available in a Kindle version for $9.99 at Amazon.com.  A paperback copy is here. Read it. It’s a keeper.

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  1. Beelzebub
    Beelzebub 14 May, 2012, 16:12

    I know that Chriss has had problems of his own – but I really appreciate his expertise in managing local government finances. I especially like the mental gymnastics and duels between him and the OC government since he vacated his post. It helps the public sift through what is true and what is myth and what is hidden from us. So I always read his stuff with interest. I would like to read his book. Perhaps someone I know will get it and I can borrow it after they’re finished. And, please, Chriss. Keep us current on what’s happening in OC government. It seems that you are becoming sort of a scapegoat for them. I don’t think that’s fair. We need to hear the other side of the story. Thank you.

    Reply this comment
  2. Rex The Wonder Dog!
    Rex The Wonder Dog! 14 May, 2012, 17:40

    Street defines his Third Way as replacing “command and control” type management with a “shared authority model of cooperation and leadership.”

    Here is the PROBLEM, gov employment USED to be based on civil service test scores-OBJECTIVE hiring. Even the LAPD Chief was promoted based on an applicants civil service test score, not by “appointment”, Darryl Gates was the LAST LAPD Chief promoted based on civil service test scores-Willie Williams was the first LAPD Chief who was “appointed”. That is the way to hire the BEST, if the testing is valid and reliable (which is not easy and itself a problem many times), you get the best person for the job. Today it is all based on subjective interviews and done by “appointment”, where the people who do the hiring base it on nepotism, cronyism, lawsuit decrees and everything BUT objectivity.

    So no matter what Chris’s book suggests-it will never work because the gov hires buffoon’s, who hire other buffoon’s. A buffoon would not know a smart intelligent applicant if it bit them in the hiney.

    Reply this comment
  3. Ted Steele
    Ted Steele 14 May, 2012, 21:06

    Wow Poodle– you sure paint all public workers with a broad brush. What about the paramedics who saved my Dad a few years back? I was kinda impressed.

    Reply this comment
  4. Chriss Street
    Chriss Street 14 May, 2012, 23:10

    Beelzebub: I appreciate your comments about Orange County. They just refused to provide me their “aging of payables” report today. I actually know thewy have the report from working at the county. My understanding is that they are way behind in payments. Lashing out at me seems to beat telling the truth that they raised spending and are quickly running out of cash.

    Rex The Wonder Dog: I wrote the book as a user friendly way to introduce certain private sector management tools of empowering workers who actually do the work. I believe almost anybody can become a more effective and effcient worker and go home each night feeling good about their contribution. I was able to almost eliminate overtime and cut head count from 130 to 85 in a completely unionized environment.

    There are always those special people who do not want to be more effective and effcient. They get enjoy my managing every 15 minutes of their day. This helps them get with the program or decide to retire.

    Reply this comment
  5. Beelzebub
    Beelzebub 15 May, 2012, 09:34

    Thank you for responding, Chriss. It just raises my ire when I listen to Moorlach dress you down from his chairman’s seat (without even mentioning your name)and using you as a scapegoat for the county’s financial problems. I couldn’t count on both hands all the related scandals and disturbing actions of the CURRENT board of supervisors that has dug a much deeper hole for all of us in the last 5 years. Then they take a guy like you who left the fold and hold YOU accountable for all the bad decisions that THEY made.
    Don’t let them get away with it, Chriss. Stand up and fight back. And I am not at all surprised that they would withhold documents like “aging of payable” from you. They talk a good transparency game but when push comes to shove they ALWAYS fold like a cheap deck of cards. Keep speaking up, Chriss.

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