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Daring Dalton dives in; former Little Rock city manager tries to tame a frightening $1.75 billion monster called DHS.


Lynched by a tormenting mob of politicians and journalists, loathed and misunderstood, the state Department of Human Services is a wretched thing on the run.

One man, however, believes he can help this piteous creature.

Tom Dalton, city manager of Little Rock for seven years before resigning in December, has staked his reputation on DHS by signing on as the agency's new director.

Dalton has made a career of taming government bureaucracy and only seems content when unraveling red tape. That's why he took what many people call the impossible job.

"I do love to keep the adrenalin running," says the long-legged Northerner. "I like the pressure."

Friends and colleagues describe Dalton as a hyperactive, micromanaging good-government guru who can't stop moving, even when he's on the telephone. Dalton had an extra-long telephone cord installed at City Hall to accommodate his chronic pacing habit.

"I am a control freak," he says. "I will be sort of intense. I want to know what's happening. But my management style is not authoritarian. I expect division managers to manage."

Dalton's first objective is to make the agency more human and approachable.

"I want to find ways to make us more responsive," he says. "To really minimize the number of complaints that come in and to resolve those complaints."

That will be more difficult than it sounds.

"I've walked miles in those moccasins," says Ray Scott, a Little Rock government relations consultant who directed the agency for seven years in the 1980s.

"It's what I would call an all-consuming job," he says, "both by the public and political nature of it and the kinds of human conditions that the department tries to assist with. A friend of mine described it as a department that spans from the cradle to the grave."

The massive scope of the job is not lost on Dalton. The pressure has wilted three directors in the past five years.

The most recent victim was Jack Reynolds, the former chief executive officer of St. Vincent Infirmary Medical Center, who stayed with DHS for less than nine months. Before him was Dr. Terry Yamauchi, who stayed for two-and-a-half years, and Walt Patterson, who lasted less than two years.

In 1994, the agency will spend a total of $1.75 billion, including $428 million in state funds, or nearly 20 percent of the state's budget.

Among its many responsibilities are the expanding federal welfare program, Medicaid and food stamps. Add mental health, services for the blind, developmental disabilities, nursing home oversight and volunteerism, and you still don't have the entire picture.

The department has about 8,000 employees scattered throughout the state in 81 county offices. There is a separate administrator for each of the state's 75 counties. Many of the DHS government-sponsored programs are run by local, private non-profit organizations, making supervision all the more difficult.

Still, some say that if anyone can handle this job, it is Dalton.

"I think that Tom is going to do well there," says Sharon Priest, former Little Rock mayor and a member of the city's Board of Directors.

"He likes to know what is going on. That's a real key to being able to take care of DHS. It seems like nobody knew who was in charge."

Dalton is the rarest of creatures -- a career public servant who has never once been elected to office. This is his first adventure in state government, but a career of more than 20 years in public service has probably prepared him for most of the troubles he will face.

Dalton was born and raised in the upstate New York town of Cortland and attended the local campus of the State University, where he was student body president.

The socially conscious Dalton and his bride joined the Peace Corps fresh out of college, serving from 1965-67 in Malaysia. Dalton taught algebra, trigonometry and upper mathematics to Chinese high school students there, while his wife Judy taught English.

In the two years that followed, Dalton worked in Washington, D.C., in the Office of Economic Opportunity, the spearhead of former President Lyndon Johnson's war on poverty.

From 1969-71, he did a stint in Pittsburgh with the planning arm of the local United Way.

But the big career leap for Dalton came in November 1971 when he became city manager of Oberlin, Ohio, a city of 10,000 residents with two stable employers: a reputable private college and a large air-traffic control center.

Smooth Initiation

It was a tremendous initiation into all aspects of local government. The city was very stable, with its own electric power generation plant and a city sales tax to help fill the coffers.

"It gave me my basis for management," Dalton says. "It was a small town, and the manager did a lot of things."

When electric rates needed to be raised, it was Dalton who decided the size of the increase. When the 13 members of the police force were due for a pay raise, it was Dalton who decided how happy they were going to be.

Dalton's two daughters spent their early years in Oberlin, and the family still has fond, pastoral memories of its seven-year stay in the city. A rude awakening awaited them at Dalton's next post.

The year was 1978. The place: Saginaw, Mich., a steel foundry center for the automaking giant General Motors Corp. A steady, blue-collar, middle-class town.

Steady, that is, until a year after Dalton became city manager. When GM began to bottom out, entire foundries were closed and Saginaw was left holding the bag.

The city's decline was dramatic.

When Dalton arrived, there were 102,000 residents and 1,100 city employees. By the time he left in 1986, the numbers had dwindled to a population of 60,000 and a city workforce of only 600.

"What I learned in Saginaw was cutback management, dealing with strong unions, dealing with crises."

Dalton oversaw multiple rounds of major layoffs at City Hall and bush-whacked his way through a series of extremely tough labor negotiations. He believed he had inherited a set of unreasonable concessions to labor unions, inspired mostly by the standards of the United Auto Workers. The poor economic climate made these benefits all the more difficult to handle.

"The first year, I can remember laying off 200 to 300 positions at the same time we were giving 12 to 13 percent increases because of the cost-of-living adjustments," Dalton says, shaking his head in disbelief. "That led to some very painful negotiations."

The winds of acrimony eventually blew Dalton all the way to Little Rock.

He arrived in 1986, bringing together a Little Rock Board of Directors that had agreed on little other than his selection.

His record here could be analyzed in many different ways; but from Dalton's perspective, his key accomplishment was establishing several human service programs to help children at risk, revitalize neighborhoods and fight drug and alcohol abuse.

Though some reporters are roughing up the Future-Little Rock planning process now, he includes it as a positive development that eventually will help the city if its conclusions are heeded.

Dalton abruptly announced his resignation in December, leading to speculation about whether he was pressured into leaving.

"It was time," he says.

Dalton lobbied Gov. Jim Guy Tucker for the DHS job, and his selection could prove critical for an agency suffering from low morale.

Over the years, Dalton has proven as complex and mysterious as the agency he now has been hired to save. Here is a man who secretly keeps a pair of hippie "granny glasses" from the 1960s in his desk drawer and longs to wear a ponytail again.

Then again, here is a cold, austere budgeter and labor negotiator who seems a bit like a frustrated city boss, what with his occasional suspenders, crisp white shirts, Yankee dialect and passion for gangster movies.

Which Tom Dalton will we see at DHS? The cost-cutting pragmatist of Saginaw? The compassionate do-gooder who joined the Peace Corps?

It's a stretch, but perhaps the answer lies in his haircut. Dalton's punkish locks streamed way down the back of his neck when he left as Little Rock city manager, but now he's groomed like a naval officer.

Could it mean something?

Dalton merely mumbles a response about political correctness, and cracks a boyish grin.

The Gallery of DHS Directors

Dr. Roger Bost, 1971-75

Bost served under then-Gov. Dale Bumpers and left the agency at the end of Bumpers' tenure to resume his duties as associate dean and professor of pediatrics at the University of Arkansas for Medical Sciences College of Medicine. He was in residence at Arkansas Children's Hospital until retiring in 1990.

David Ray, 1975-79

Ray was appointed by then-Gov. David Pryor, and was swept out of the office when Bill Clinton began his first term as governor in 1979.

Gale Huecker, 1979-81

Clinton's first appointee to the DHS post, Huecker became a victim of Frank White, who defeated Clinton for the governor's office in November 1980. She now works for the Illinois office that provides human services for children and families.

Ray Scott, 1981-87

Scott, White's appointee, held on longer than any other DHS director in history. He left to open his own private consulting firm that specializes in government relations.

Walt Patterson, 1988-89

Patterson began with DHS in 1985 as deputy director for the Economic and Medical Services Division. Clinton made him the first African-American director of the agency in 1988. But he didn't stay long, leaving to become director of marketing for Transfirst Corp. of Dallas, a data processing company. He is now president of Health Care Training Corp. of Arkansas.

Dr. Terry Yamauchi, 1990-92

Under Yamauchi's management, DHS suffered through one of the most tumultuous periods in its history. Yamauchi, an expert on childhood diseases and AIDS, took a leave of absence from his position as associate dean of the University of Arkansas for Medical Sciences College of Medicine to take over the agency. He is now professor and vice chairman in the college's department of pediatrics, stationed at Arkansas Children's Hospital.

A. Jack Reynolds, 1992-93

Reynolds, a lawyer by trade, was chief executive officer of St. Vincent Infirmary Medical Center when he surprised the community by taking the DHS director's job. He stayed at DHS for less than nine months, resigning March 12 to enter private law practice at the Little Rock firm of Jack Lyon & Jones.
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Title Annotation:includes related article; Tom Dalton; Arkansas Department of Human Services
Author:Haman, John
Publication:Arkansas Business
Date:May 3, 1993
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