snipping red tape: it takes government coordination

The whole idea of federal, state, and local officials sitting down at a bargaining table together to develop a coordinated strategy for solving urban problems didn't exactly win Gary, Ind., Mayor Richard hatcher's immediate enthusiasm.

"I was initially very suspicious when the idea was first suggested to me," he recalls. "But after we actually got into it, and I saw state representatives sitting there and really talking to us, saying, 'We'll trade this off for that,' I began to realize this could be a very worthwhile process."

The so-called Negotiated Investment Strategy (NIS), developed by Ohio's Charles Kettering Foundation and pilot-tested in three Midwestern cities, including Gary, aims to cut through red tape and improve the coordination of government regulation and funding for urban projects by focusing on common goals. The process, which does not necessarily call for more legislation or more money, does require a hired mediator.

The experiences of the three cities and the potential of the idea for futher testing will be the focus of a day-long Washington conference sponsored by Kettering this week.

Some NIS proponents argue that the concept behind it fits well with President Reagan's new federalism and his hopes to transfer more program and taxing authority back to the state and local levels. But so far the new administration has refrained from any warm endorsements of the NIS idea. One known reservation is that the desire to lift Washington regulation might leave the executive branch, in its view, with nothing to bring to the bargaining table.

In any case, the President is on record as intending to continue support of the 10 Federal Regional Councils (FRC) around the country and to appoint a chairman of each. The Chicago FRC had served as the federal representative in the three NIS experiments.

Even the most ardent proponents of NIS, however, admit that the process is still rusty and needs further testing. All three cities encountered a problem with the change in administrations -- the shift raised new questions about whether or not previous federal commitments would hold.

But as a communications tool and a way of hurdling traditional bureaucratic barriers, the concept has the potential for what participant George Latimer, mayor of St. Paul, minn., calls a "high payoff."

In St. Paul's case, the focus of the agreement was on acquiring land and funding to develop an energy park, a riverfront project, an unused warehouse district -- and a to build a highway bypassing the city -- a project which involved the approval or participation of at least 10 different agencies.

"I'm convinced that we saved a lot of time and money using the NIS process," insists Mayor Latimer.

Larry Suskind, professor of urban studies at Massachusetts Institute of Technology and the mediator in the Columbus, Ohio, experiment, is similarly convinced of NIS merits.

"It's been an elaborate and substantial experiment which hasn't really received that much attention but which, I bthink, represents a real breakthrough in the way different levels of government deal with each other," he says. "They fail to cooperate because they're basically in competition -- with different policies. NIS acknowledges that it's a competition rather than a coordination problem."

Professor Suskind notes that the three government teams in the Columbus experiment agreed on 80 points -- some major departures from prevailing policies.

All three cities have had problems in assuring that their agreements are carried out, and Professor Suskind says he thinks that problem could be remedied by reassembling all parties involved every six months to review progress.

One question left is the degree to which the private sector should be involved in the agreement process.

In the latter stages of the Gary negotiations, representatives of US Steel, which had long and effectively fought a city proposal to issue bonds to finance and expansion of the local airport, were invited to sit in. In the process, company representatives became convinced that the city's efforts to expand its tax base and make the airport self-sufficient were such that they woudl consider withdrawing their opposition to the bond issue. Company officials concede that the company's longtime concern has been one of paying higher taxes. and that its decision not to protest is still contingent on all parties fulfilling promises made in the agreement.

Wherever the NIS goes from here, it may never become the best plan for all cities trying to work out their problems.

"One city told us flatly it didn't want to bargain with the state -- some cities don't want to give up anything," explains James R. King, a former assistant to three of the nation's mayors and a consultant who worked with Kettering on development of the concept. "You need a strong mayor willing to sit through meetings that may last as long as 12 hours and who is flexible enough to g ive as well as take."