HUD AND AFGE UNION REACH AGREEMENT TO IMPLEMENT MANAGEMENT REFORMS TO IMPROVE HUD'S PERFORMANCE AND SAFEGUARD INTERESTS OF EMPLOYEES

In a joint statement on the HUD 2020 Management Reform Plan, HUD Secretary Andrew Cuomo and Mortimer Coward, President of the National Council of HUD Locals 222 of the AFGE, said: "HUD's management reform plan is in the best interest of the Department, of the American people, and of HUD's hard-working employees. The agreement we have reached to work together to implement management reform is a model of how government reinvention should be carried out -- in a union-management partnership."

"HUD's management reforms will help stamp out waste, fraud and abuse in the Department's programs," Cuomo and Coward said in the statement. "With these reforms, HUD will serve America's people and communities with business practices that have improved the performance of some of America's most successful corporations. At the same time, we will protect the jobs of Department employees."

The agreement is believed to be the first of its kind between a federal agency and a labor union to work together to reduce the size of an agency. It was reached after four days of negotiations, without the assistance of a mediator.

White House Chief of Staff Erskine Bowles, who joined Cuomo and Coward at a news conference announcing the agreement, said: "The agreement between HUD and the AFGE is a model of labor-management cooperation. It will help HUD operate on successful business principles and deliver improved service to the American people."

Under the agreement negotiated between HUD and the AFGE:

• In order to allow a smooth transition to a reorganized Department and protect employees from layoffs, HUD will gradually reduce its staff size to 7,500 by the year 2002 -- rather than the year 2000 as originally proposed.

• HUD will work with the union to achieve staff reductions through attrition and employee buyouts. Both sides believe layoffs will not be necessary.

• A joint labor-management team will be established to oversee implementation of management reforms.

• HUD employees will be given the first opportunity to get jobs in new centers the Department is establishing in 26 cities around the country and Washington headquarters. The centers, which are focused on specific program activities, are patterned after the model of reinvention used by the nation's leading banks. Banks have moved routine processing work to "back office" centers, enabling branch offices to more efficiently serve customers. The centers will be in: Albany, NY; Atlanta; Baltimore; Boston; Coral Gables, FL; Cleveland, OH; Chicago; Columbus, OH; Detroit; Denver; Fort Worth, TX; Greensboro, NC; Jacksonville, FL; Kansas City, MO; Louisville, KY; Los Angeles; Memphis, TN; Minneapolis; New York City; Newark, NJ; New Orleans; Philadelphia; Richmond, VA; San Francisco; Santa Ana, CA; and Seattle.

• HUD's new centers and existing field offices around the country will give many employees the opportunity to continue working for HUD within their current commuting areas.

• Employees will be retrained to meet the new work requirements of the Department.

• Outplacement services will be available to any HUD employees who desire them.

"HUD's talented employees are our greatest resource, and our partners in reinventing and improving the Department," Cuomo said. "Our partnership agreement says we will work with them more closely than ever before. The leadership of AFGE has secured its members' future by securing HUD's continued existence."

"America's working men and women have earned the right to have a greater say in managing their workplaces," Coward said. "The agreement between the AFGE and HUD recognizes the contributions workers can make and recognizes the need to protect workers' jobs. It's an important step forward."

"Secretary Cuomo made a smart decision in compromising to move the target date for completing HUD's downsizing from the year 2000 to 2002," Coward said. "This will ensure that the reform of HUD moves forward without controversy and potential litigation. The employees of HUD know first-hand that the Department needs to be reformed and welcome the opportunity to be part of the process. We appreciate Secretary Cuomo's equal commitment to competence at HUD and compassion for HUD's employees."

In addition to creating new centers -- most of them expansions of existing HUD field offices -- the management reform plan specifies that all 81 HUD field offices will remain open. However, instead of trying to operate all of the Department's programs, the offices will focus on providing better services to customers -- individuals, governmental units, the housing industry, lenders, other businesses, and non-profit groups.

The management reform plan was developed at Cuomo's direction by HUD staff with the help of Vice President Al Gore's office, the Office of Management and Budget, the HUD Inspector General's Office, and outside experts including Ernst & Young, David Osborne (co-author of "Reinventing Government") and James Champy (co-author of "Re-engineering the Corporation").

The management reform plan says it aims to transform HUD from "the poster child for inept government" that "has been plagued for years by scandal and mismanagement" into "a new HUD, a HUD that works."

HUD has been criticized by Congress and its Inspector General since 1980 for failing to modernize operations and fight waste, fraud and abuse. The General Accounting Office designates HUD as the only "high risk" agency in the federal government.

In addition to creating new consolidated centers and reducing the HUD workforce, the management reform plans calls for: