A greasy-spoon diner and flophouse at Payne and Walnut Avenues downtown, c. 1968—emblems of the City of Cleveland’s intensifying financial distress 
Mayor Dennis Kucinich’s ceremonial presentation of a post-default debt payment
Kucinich proclaiming victory on the eve of his election as mayor in 1977
On December 15, 1978, Cleveland City Council considered and rejected Mayor Kucinich’s 11th-hour plan to avoid default.In 1978, during the mayoral administration of Democrat Dennis J. Kucinich, Cleveland became the first city in the nation to default on its financial obligations since the Great Depression. The following year Republican George V. Voinovich ran against Kucinich, whose combative stance toward big business contributed to a decision by local banks to call the $15.5 million in short-term notes at a time when the city was $30 million in debt.
The day after his election as mayor, Voinovich approached the Cleveland Foundation and the George Gund Foundation with a proposal. In exchange for his agreement to run for mayor, Voinovich had extracted a promise from a small group of corporate leaders that they would provide him with volunteer experts from business and industry to conduct a massive city management assessment once he took office. Now he needed funding for what he was calling the Operations Improvement Task Force.
In less than one month, the foundation approved a grant of $150,000 to help create the Operations Improvement Task Force, provided that half of its money be set aside for implementation of task force recommendations and that the foundation’s entire contribution be matched. $800,000 was ultimately raised.
In early January 1980, 90 loaned executives began fanning out in teams to every city department to observe procedures, ask questions and review documents. By the spring of 1980, the Operations Improvement Task Force (headed by Eaton Corporation chair and chief executive officer E. Mandell de Windt, who had recruited Voinovich to run) had produced more than 800 recommendations. These ranged from computerizing the city’s record-keeping to amending the city charter to provide a four-year term for the mayor. The Voinovich administration implemented almost 75 percent of the suggested cost-cutting and efficiency measures; and indeed, with additional guidance from the state-imposed Financial Planning and Review Commission, the city was able to balance its budget and refinance its defaulted notes during Voinovich’s first year in office.