With many cities and states across the nation facing serious budget deficits and pension crises, Atlanta stands out as an exception to the rule.  Since taking office 13 months ago, Atlanta Mayor Kasim Reed has balanced the city’s budget, hired more police officers, restructured city services, and increased the city’s reserve fund. 

The Howard University-educated lawyer visited Chicago on Friday as part of an event sponsored by the Northwestern University Law School.   As Mayor of Atlanta, Reed leads the country’s ninth largest metropolitan area, one of the fastest growing in the nation.  It’s also home to major Fortune 500 companies and the world’s busiest airport.

During our conversation, we talked about the challenges facing cities today, including Chicago, and asked him what advice he’d give to Chicago’s mayor-elect Rahm Emanuel.

Here’s an excerpt of our conversation:

SE:  Here we are in the midst of a national conversation about budget crises, about pension problems and as I look at what you’ve done in the first year in office, you’ve balanced the budget, increased reserves, and hired more police officers.  You’ve been able to do a lot of things that a lot of mayors say they have no way of doing right now. So, what’s the path that you’ve been able to take that other cities haven’t?

KR:  We’re investing in areas that generate the biggest yield and we’re cutting in areas where I believe the city should not be.  The City of Atlanta has more than 7,500 employees, so I don’t think it’s acceptable to tell people that you can’t have an appropriate level of public safety if you have 7,500 employees.  It probably means that you need to come out of some other spaces, which is what we did, reform some other areas, reduce costs in other areas, so that you can invest.  We finished the fiscal year 2010 with about $16 million in excess cash because of a series of reforms that we put in place to manage our budget better.  That helped us gain confidence with the City Council to make these critical investments.  And not only have we improved the balance sheet and our fiscal performance, our services are fundamentally changing.  

SE:  But help me understand the financial piece of this.  When you talk with a lot of political leaders, they’ll tell you that the fixed costs of govermnent - from labor costs to health care to pensions - are very hard to change.  So how have you been able to create the efficiencies you’re talking about? 

KR:  Well, that means you have a “will” problem.  It really does.  You know what to do. And in our instance, while we made these other investments, we did eliminate about 125 positions.  That generated some of the cash.  We implemented a series of pension reforms, which quite candidly generated the cash to be able to improve police salaries, fire salaries, and provide bonuses to city employees learning less than $75,000.  So we did hard things and we shared the benefits of that work with employees.  

You have to invest in areas that people are going to see and feel.  If you are a forward thinking elected official, a person who really wants to do transformational work, you’ve really got to care about the basic customer experience and you have to have the will to do what’s required. 

SE:  You make this sound easy.

KR:  No, I don’t mean to do that. It’s actually very hard, but I do believe that will is the issue. You know what the problems are facing cities. I know what they are. They are in multiple public documents, they have been researched -

SE:  We could fill this room with white papers on urban issues today -

KR:  Exactly.  They have been well researched and what happens is when you go to execute the things the document said, you meet a friction that you’re either prepared to deal with or you’re not prepared to deal with.

SE:  Here in Chicago we’ve just elected a new mayor who will take office in May.  Among the challenges he will face is an estimated $600 million dollar budget deficit and growing unfunded pension liabilities.  What advice would you give to  Mayor-elect Rahm Emanuel about how to approach these things?

KR:  Overcommunicate.  I’ve given 180 speeches since I’ve been mayor.  So, you have to constantly explain what you’re doing in every format and it helps get you through. It’s not enough that you’re in the office reviewing data that makes sense. You’ve gotta be willing to go into living rooms, barbershops, [and] neighborhood meetings to the point that you sound like a broken record and explain to people wherever they want to be explained to.

You gotta keep explaining it in real time and you have to put yourself in a forum where the person says “Hey, I saw that guy. I saw them stand up somewhere for 30 or 40 minutes and be questioned directly.” That’s the world we’re in. People like access to information, they like to see, touch and feel people, and personal contact is how you win the day. If you go out and do a bunch of hard things and don’t overcommunicate, you’re going to feel a backlash that comes from a lack of understanding.  If you’re doing the right thing, sit there in the living room for two or three hours and explain it.

SE:  Leaving aside financial issues for a moment, what do you think is the biggest problem facing American cities today? 

KR:  The biggest problem facing American cities is the challenge that we have with educating the next generation of young people to fill them.  We have cities that have significant populations that are coming into the city that are not well educated, so that is going to tell you what the future of your city is looking like.  I mean if you have a population of young people where 50 percent of them are dropping out and you know that a person who drops out of high school has a significantly increased possibility of becoming a felon, that can’t be the pipeline for your community and assume it maintain itself.  You risk reversing the trend toward urbanization if you continue to poor generations upon generations of people into the city who are unprepared.  And to reverse that, we’re gonna need to fix this in a more radical way than we are now.

SE:  I don’t mean to pitch this as a Atlanta-Chicago competition, but as you well know, there are cities that need to attract new businesses, new industries and prominent new conventions. So what’s the sales pitch you make when you’re sitting across the table from business leaders that would convince them to come to Atlanta as opposed to any other city?

KR:  Well, first of all, I love Chicago, so I want to say that.  It’s one of my favorite cities and a leading city in the world.  When I talk about Atlanta, I talk about the fact that we have the busiest airport on the Planet Earth. I handles 90 million passengers per year and you can get to 80 percent of the population in two hours or less and 84 international destinations. 

My goal is to make Atlanta the logistics hub for the western hemisphere, which is why I’m working to deepen the port in Savannah.  We have the fastest growing port on the eastern seabord, the fourth largest port in the United States. 

Our job - and my job as mayor -  is to be number one among southeastern cities because we’re moving to a world where you’re going to have mega regions. So, you will have a Chicago that is the center of the midwestern region, New York will maintain its dominance, and my view is that Atlanta will be the dominant force of the southeast.  You’re really going to have about eight or ten mega regions that will really determine the flow and growth of GDP in the United States.

SE:  I want to close by referencing a piece that was posted on The Hill, the DC-based blog, last week.  The title is “Frustrated mayors hope Rahm Emanuel will have Obama’s ear”. You’re quoted in this talking about the way in which Rahm Emanuel can help other mayors in cities around the nation.  What role can he play in the larger conversation around cities?

KR:  Well, being a mayor is where hope meets the street.  So having someone who has a direct relationship - a deeply personal relationship with the President of the United States - and who was the supervisor of most of the staff in the White House - is going to be very helpful for many mayors across America just to be sure their case is heard.  

And the real concern that I hear from mayors is “Is the experience we’re going through real-time being heard?”  States have a very powerful lobby.  Governors are very powerful.  But the fact of the matter is that 80 percent of the nation’s GDP occurs in cities. 

So cities, in my mind, are the more appropriate constituency for the President of the United States, because if you want to encourage economic productivity to deal with the high unemployment rate, you really gotta have a deeper concentration on the cities.  And there still is a problem with federal support and federal largesse really reaching cities and that is something the President has to figure out and break through. I think that Mayor-elect Emanuel will play a significant role in making that case to the White House.

Correction:  An earlier version of this story misstated Atlanta’s population rank.  It’s home to the ninth largest metropolitan area, not the ninth largest city.