U.S. GOVERNMENT PRINTING OFFICE

56–983 CC WASHINGTON : 1999

NEW VISIONS FOR THE DISTRICT OF COLUMBIA

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

FIRST SESSION

JANUARY 22, 1999

Serial No. 106–8

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.house.gov/reform

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COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

DAVID M. MCINTOSH, Indiana

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

STEVEN C. LATOURETTE, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

BOB BARR, Georgia

DAN MILLER, Florida

ASA HUTCHINSON, Arkansas

LEE TERRY, Nebraska

JUDY BIGGERT, Illinois

GREG WALDEN, Oregon

DOUG OSE, California

PAUL RYAN, Wisconsin

——— ———

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

GARY A. CONDIT, California

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, Washington,

DC

CHAKA FATTAH, Pennsylvania

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

HAROLD E. FORD, JR., Tennessee

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

DAVID A. KASS, Deputy Counsel and Parliamentarian

CARLA J. MARTIN, Chief Clerk

PHIL SCHILIRO, Minority Staff Director

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C O N T E N T S

Page

Hearing held on January 22, 1999 ......................................................................... 1

Statement of:

Rivlin, Alice, chair, D.C. Financial Responsibility and Management Assistance Authority; Anthony Williams, Mayor, District of Columbia;

and Linda Cropp, chair, District of Columbia City Council ...................... 22

Letters, statements, etc., submitted for the record by:

Cropp, Linda, chair, District of Columbia City Council, prepared statement of ........................................................................................................... 78

Davis, Hon. Thomas M., a Representative in Congress from the State

of Virginia, letter dated January 19, 1999 .................................................. 2

Norton, Hon. Eleanor Holmes, a Representative in Congress from the

District of Columbia:

Information concerning salaries ............................................................... 83, 85

Prepared statement of ............................................................................... 8

Rivlin, Alice, chair, D.C. Financial Responsibility and Management Assistance Authority, prepared statement of ................................................. 27

Williams, Anthony, Mayor, District of Columbia:

Information concerning attorneys fees .................................................... 105

Prepared statement of ............................................................................... 44

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NEW VISIONS FOR THE DISTRICT OF

COLUMBIA

FRIDAY, JANUARY 22, 1999

HOUSE OF REPRESENTATIVES,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The committee met, pursuant to notice, at 9 a.m., in room 2154,

Rayburn House Office Building, Hon. Thomas M. Davis presiding.

Present: Representatives Davis, Morella, Horn, and Norton.

Staff present: Peter Sirh, staff director, Howard Denis, counsel,

Anne Mack, professional staff member, Ellen Brown, clerk, and

Trey Hardin, communications director, Subcommittee on the District of Columbia; and Jon Bouker, minority counsel, and Jean

Gosa, minority staff assistant, Committee on Government Reform.

Mr. DAVIS. Good morning and welcome.

This hearing is being convened under the auspices and with the

cooperation of the Government Reform Committee. I am grateful to

Chairman Burton for his leadership in facilitating this hearing,

and I also wish to thank the ranking minority leader, Henry Waxman, and all the members of the full committee for their help.

Pursuant to the rules, I’ve been authorized to administer oaths

to witnesses. As per Chairman Burton’s authorization, this hearing

will be conducted in accordance with the Rules of the House and,

to the extent possible, the Committee Rules of the 105th Congress.

Without objection, I ask Chairman Burton’s letter to me of January

19, 1999, be entered into the record.

[The letter referred to follows:]

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Mr. DAVIS. I look forward to continuing the excellent bipartisan

working relationships which we have enjoyed from day one of this

subcommittee’s creation 4 years ago. I am so grateful to the ranking member, Eleanor Holmes Norton, for helping to make that possible, as well as my vice chairman, Connie Morella, and my colleague, Steve Horn, who is here on my left.

The District of Columbia Subcommittee is proud to have played

a constructive, bipartisan role in the revitalization of the Nation’s

Capital. Back in 1990, the Commission, chaired by Dr. Alice Rivlin,

had warned of an impending crisis in the District of Columbia.

By 1995 the District, and consequently the region, was in the

midst of such a profound crisis. The Rivlin Commission had noted,

to take just one example, that the District government, even considering its county and state functions, had about 40 percent more

employees then comparable cities. I stated in our first hearing on

February 22, 1995, that the District of Columbia faced a spending

problem of monumental proportions and a management failure to

enforce controls.

The crisis was so severe that the District government couldn’t deliver basic services. There were very real concerns that the city

would run out of cash to pay debt service or meet its payroll. The

District clause of the Constitution gives Congress a unique role in

the Nation’s Capital.

I think we can all be proud of the responsible way in which Congress has stepped up to the plate and worked together in exercising

this function. It’s been my great, great pleasure to work closely

with my ranking member as we helped the District alleviate the

unprecedented crisis we found 4 years ago. I am also grateful to

the Clinton administration for working with us. This could not

have been done had we had both ends of Pennsylvania Avenue

going in the same direction.

Along with revising the District’s budget process, we created the

position of Chief Financial Officer to work from within the government. A window was opened to the Treasury for dealing with the

District’s cash and short-term budget problems, as well as the District’s bond rating which had slipped to junk bond status.

It was never our intent, nor do I believe that it should be Congress’ role, to involve itself intimately in the relationships that

were created within the city in such a bipartisan fashion. Our purpose in acting as we did with the passage of Public Law 104–8 was

to create one team to rescue and revive Washington, DC.

The legislation creating the Control Board and the position of

Chief Financial Officer was signed by President Clinton on April

17, 1995. Anthony Williams was not appointed as Chief Financial

Officer until October 1995, but he was worth waiting for. The Control Board and the CFO working together, helped the District government to find weaknesses and implement solutions. Mayor Williams, I say was worth waiting for. I think there’s some instruction

there as you look for your chief administrative officers; sometimes

acting precipitously you don’t always get the best people right off

and we learned a lesson in getting you as CFO was a godsend.

Public Law 104–8 makes it abundantly clear that the CFO is an

organic part of home rule government. Nothing else would make

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sense as the position is a permanent one, which will exist long

after the Control Board moves into its dormant phase.

As Chief Financial Officer, Tony Williams supervised and performed the financial responsibilities of the Mayor, as well as those

duties normally assigned to a CFO. These duties included tax collection and assessment, bill paying, approving contracts, allocating

available money in compliance with the appropriations and ensuring that the budget is adhered to. In Mr. Williams’ testimony to the

subcommittee at an oversight hearing on March 19, 1996, he stated

that his top priority was to reestablish credibility by taking steps

to improve the District’s financial management, and this was done.

Today we are very excited about the prospect of hearing testimony reflecting the solid accomplishments and a real surplus that

the Control Board, the Mayor and all the City Council and all of

us who worked together to make positive changes can take pride

in having helped to achieve.

The MCI Arena and the new Convention Center project wouldn’t

have been possible without the enhanced credibility we achieved by

working together to resolve tough issues. Passage of the D.C. Revitalization Act of July 1997 moved us into the next phase. We relieved the District of many of the fastest growing items of its budget, putting the city in a far stronger position to perform basic municipal services. Dealing with the unfunded pension liability, closing Lorton, and striking a more equitable balance with Medicaid

helped to maintain our momentum toward achieving economic recovery.

We are here today with enthusiasm and optimism. As now Mayor

Anthony Williams said in his inaugural address on January 2,

1999, this is indeed a time for renewal and recommitment. I commend as well the City Council and its chair Linda Cropp for working with us and for taking a positive bipartisan approach.

The phrase ‘‘new era’’ and ‘‘new day’’ is on everyone’s lips, and

rightly so. I applaud the emphasis in Mayor Williams inaugural address to basics, such as filling potholes and sweeping streets, washing away graffiti, repairing road signs and collecting garbage.

While we are gratified that crime is down and home sales are up,

we also recognize the continuing need to restore Washington’s

image in the eyes of the world. So even though the city is a far

more stable place than it was 4 years ago, we clearly have a long

way to go. Regional priorities, such as traffic congestion, must be

addressed, to take just one example. And whether it’s traffic, economic development, education or public safety, it has always been

my philosophy that we need a healthy city to have a healthy region.

Mayor Williams’ action in requiring his cabinet members, agency

heads and senior staffers to come up with detailed plans for improving services, to require department heads to sign performance

agreements is very intriguing to say the least.

I will be very interested to know how those agreements are being

implemented. Mayor Williams has put himself under some deadlines and he established similar goals and targets as CFO, and he

was very able to achieve some very concrete solid results.

The memorandum of agreement between the Control Board and

the Mayor has my full support, and I will be introducing legislation

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with the ranking member, Ms. Norton, and vice chairman, Connie

Morella, to facilitate its provisions. The time has come to shift substantial authority from the Control Board to the city’s elected

Mayor and to give the Mayor the greater flexibility he has sought

over top personnel. In other words, I want to give Mayor Williams

the tools he has requested to do the job.

I also expect to be introducing legislation to afford high school

graduates from the District of Columbia opportunities to pay instate tuition to State universities outside the city, so they will have

the same opportunities that people and students in the other 50

States have.

I look forward to today’s testimony as we proceed with our joint

efforts on behalf of the Nation’s Capital, and I would now yield to

Delegate Norton, the ranking member of the Subcommittee on the

District of Columbia and our partner here, for an opening statement.

Ms. NORTON. Thank you very much, Mr. Chairman.

My sincere thanks to Chairman Tom Davis, who has initiated

this hearing so early in the 106th Congress allowing the new

Mayor, the new Council, through its chair, and the new Control

Board chair to affirmatively lay out their plans and ideas for the

District.

The officials who appear before us today have strong records,

both of bringing improvements to the city government and of unequivocal support for home rule. All three have demonstrated that

the necessary reforms they are undertaking to create a new resident oriented city government are part and parcel of home rule and

give self-government its essential meaning.

Chairman Davis arranged a very good and encouraging meeting

with Speaker Dennis Hastert, Mayor Williams and me yesterday.

Speaker Hastert, the House leadership and others in the new Congress have indicated that the Congress wants to help, not hurt; to

step up, not step in. However, for all the city’s traditional and justifiable concern about undue interference, the truth is that full and

permanent recovery cannot occur without assistance from the

President, the Congress and Federal agencies alike.

We have already begun to think through how the Federal Government may be useful in helping to meet a revenue gap which

may show up in a few years. The fiscal crisis that began early in

this decade forced the District into a one-sided focus on the expenditure side at the expense of the revenue side of the budget. That

emphasis was in response to unusual amounts of overspending that

resulted in the loss of the most important asset any city can have,

a credit rating allowing it to borrow money.

However, the city government, the Federal Government, and the

private sector are all now deeply engaged in planning an action on

the revenue side. For example, this week the Mayor and I spoke

at the opening of City First Bank, the first community development

bank to open in the District, a financial institution that could not

have been established without assistance from the Federal Government, Georgetown University, and several private financial institutions. Howard University, Fannie Mae, and the District government have kicked off an ambitious plan for home ownership and

reinvigoration of the historic neighborhoods surrounding Howard.

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I have recently worked with private business interests, HUD,

and the District government to secure infrastructure funds from

HUD for a privately financed shopping center in ward 8. It will

house a 12-screen movie theater and a supermarket to replace

Safeway, the last remaining supermarket in the ward, which precipitously left in October.

During budget negotiations in October, the White House helped me get $25 million into our appropriation to fund an economic development corporation. I very much appreciate that Chairman

Davis has indicated an interest in pressing a District-wide enterprise zone, such as the one I proposed last Congress. We already

have evidence that new thinking on urban tax policy can produce

revenue for the District, and my $5,000 homebuyer credit has

helped produce a home ownership boom that is slowing the loss of

the residents, including the middle income population, whose flight

has ravaged the city during this decade.

These significant public-private initiatives are only a small part

of the mounting evidence that the District has climbed out of its

fiscal crisis and is unquestionably moving quickly ahead. However,

there are governance tools that the new administration needs if it

is to be held accountable and if residents and the Congress are to

be assured that revenue from them will be productively used, not

wasted in the bureaucracy.

The chairman has already agreed to the first such tool. I very

much appreciate that Chairman Davis has indicated that in early

February the committee will mark up the first section of H.R. 214,

the D.C. Democracy 2000 Act, which will become a Davis-Norton

bill and will go to the floor as one of the first bills of the 106th Congress.

This provision puts into law what the Control Board has already

done in delegating to Mayor Williams the responsibility for the

nine agencies removed from executive control in 1997. The bill also

eliminates any doubt that the Mayor alone has the power to hire

and fire his cabinet and managers.

The heart of the District of Columbia 2000 Act is not yet ripe.

But I appreciate that the chairman does not have a closed mind on

whether the Control Board should sunset in the year 2000, a year

earlier than anticipated.

I have proposed this provision, not only because democracy delayed is democracy denied, but also because the District already

has significantly surpassed the goals set for it by Congress. Instead

of a balanced budget by 1999, the District will have 3 straight

years of balanced budgets plus surpluses by 1999.

The Congress gave the city the authority to borrow to eliminate

its accumulated deficit, but the city will eliminate that deficit without any borrowing. With the administration of the city in the hands

of a Mayor who came to office with a 3-year management and financial track record in this city and surpluses he helped produce,

the burden should be on those who insist on an un-elected overseer

for elected officials.

Congress has been quick to criticize, even punish, the District for

low performance. Let us now see if Congress will be as quick to recognize the city’s concrete accomplishments and a new administration with more than lip service when the District outpaces congresVerDate 11-MAY-2000 10:42 Sep 22, 2000 Jkt 065954 PO 00000 Frm 00010 Fmt 6633 Sfmt 6602 E:\HEARINGS\56983 pfrm04 PsN: 56983
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sional expectations and mandates. However, from the beginning I

have indicated I would not press H.R. 214 until the city develops

a track record that can command passage this year.

It is difficult to get bills empowering the District through the

Congress and impossible without a strong case. I believe that the

city can accrue the necessary evidence in time for the District’s historic year 2000 on its own like any free American jurisdiction. At

the same time, the Mayor, the City Council, and I are neither

lulled by the present surplus revenues nor naively optimistic about

the city’s financial future. Part of the surplus consists of revenues

that were not spent because of operational problems in the District.

Further, in the face of wholesale flight from the city, the good

economy has kept revenues from reflecting the depth of the loss of

middle income taxpayers. We know what must be done, and it is

clear that our elected officials can do it. Some long-term fiscal problems remain to be solved, but the fiscal crisis that necessitated a

Control Board is over.

Even the best run city government, however, will have to work

hard to convince the Congress that a payment in lieu of taxes or

a substantial Federal payment is not only fair, but is necessary.

At an appropriate time, I expect to work with the Mayor, the

City Council, and Chairman Davis on how to achieve reliable and

regular revenue sources for a city without a state and without the

power to tax commuters. Today, I welcome Mayor Williams and Financial Authority Chair Rivlin in their first appearance in the Congress in their new roles, and Council Chair Cropp once again to the

subcommittee.

I look forward to today’s hearing, particularly for the way it begins to lay the groundwork for the appropriate return of authority

and hopefully new assistance to the District. I want to note that,

among those in attendance in this hearing are Councilwoman

Charlene Drew Jarvis, Councilman David Catania, Control Board

Member Eugene Kinlow and Statehood Senator Paul Strauss.

I thank you, Mr. Chairman.

[The prepared statement of Hon. Eleanor Holmes Norton follows:]

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Mr. DAVIS. Thank you very much, Ms. Norton.

Let me recognize our vice chairman, Mrs. Morella, for any comments she may wish to make.

Mrs. MORELLA. Thank you, Mr. Chairman.

This is pretty exciting. Here we are together considering new visions for the District of Columbia. I want to welcome our panelists,

certainly welcome our new Mayor, Anthony Williams and welcome

Linda Cropp, who is here with us, who is the chair of the District

of Columbia City Council and, of course, Alice Rivlin, chair of the

D.C. Financial Responsibilities and Management Assistance Authority. We’ve spread that title out.

I’m very proud to serve on the District of Columbia Subcommittee and certainly very proud of the achievements that have

been made to add to the luster and strength of the District of Columbia. As a result of the D.C. Revitalization Act, the Federal Government has relieved the District of certain burdensome expenses,

such as the unfunded pension liability and the Federal Government

has also assumed a larger share of the Medicare costs and has

taken over the operations of the prison system.

Relieved of these cumbersome administrative tasks, local officials

are now able to concentrate on the daily operations of the city. The

city government can devote more time to improving police and fire

services, collecting trash, fixing potholes, maintaining neighborhoods, and improving schools. These are the toughest tasks of all

and the most important because they touch the lives of everybody

on a day-to-day basis.

This hearing does mark a new beginning; although we continue

our bipartisan efforts from the 105th Congress, we do so with a refreshing new landscape. As the Chief Financial Officer Anthony

Williams has testified before this subcommittee on many occasions.

This is the first time that he is here today as Mayor Anthony Williams. I’m certainly pleased to welcome him in his new role.

Although Mayor Williams has been on the job for less than a

month, he’s already made a difference. I, too, applaud him for his

commitment to fix potholes, sweep the streets, pick up the garbage,

rid buildings of graffiti. It has been gratifying to see him with

rolled up sleeves pouring over city documents and directing his

staff to improve city services in a timely fashion. And I even note

in today’s Post, too, the Mayor’s commitment and demand for a better short-term action plan from city agency directors.

Yes, he’s tough on others, but he is just as tough on himself. I

look forward to working with Mayor Williams and also with the

City Council, its great members and its very able and effective

chairman, Linda Cropp.

There is much to be done, although I want to make it clear that

I strongly believe that Congress should not try to micromanage the

District of Columbia. That would be counterproductive, would encroach on the legislative roles of the Mayor, the City Council and

the Control Board. We can, however, be helpful in many ways. And

like you, Mr. Chairman, and Ms. Norton, I think it’s time to restore

substantial authority from the Control Board to the newly elected

Mayor and to give him the flexibility he needs to effectively fulfill

his role.

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I also want to commend you, Mr. Chairman, for the bill that

you’re about to introduce to give high school graduates in the District of Columbia the opportunity to attend State universities

throughout the country at in-state tuition rates. It looks like a really good and fair proposal, and I’m pleased to be a cosponsor with

you, and I want to work with you in any way I can to get the legislation passed and implemented.

As a former teacher, I’m most concerned about the status of education in the District of Columbia. At the hearing last September

on the District of Columbia school system, I was alarmed at the declining test scores in math and science of students in the poor sections of the city. Thousands of D.C. students are leaving school

without the fundamental skills needed to find a job and function

as productive members of their communities. Consequently, there

are a high number of unemployed workers in the District who are

undereducated and undertrained, unable to meet the emerging

technological needs of the workplace.

We must work together to find a way to break this cycle of failure and defeat. The present economy is an information economy.

People who can process information to develop goods and services

and use technology effectively will excel in the next century. We

must prepare those who are undereducated and underserved so

that they, too, will be prepared for the new economy.

It will mean lower taxes, better services, a higher quality of life,

not only for the District, but for the region as a whole. In addition

to work force development, there are many critical regional issues

that challenge us to work together as a team, traffic congestion,

growth management, water and air quality and getting our computers ready for the year 2000.

I look forward to the testimony from our excellent panel. I want

to thank you, Mr. Chairman, for holding this very important meeting and for your leadership, Ms. Norton’s leadership and Mr.

Horn’s leadership.

Mr. DAVIS. Thank you very much, and let me now introduce my

distinguished colleague from California Mr. Horn, whose family

roots go back deep into this city.

Mr. HORN. 1840’s to be exact, and I’m the only one who hasn’t

been born here but I went 1 year to high school here, Mr. Mayor.

And this has been a great city over the years and the members of

this subcommittee and the Speaker are very committed, as the previous Speaker was, to help the government be a very responsive

government.

I congratulate you on your excellent record in the past as a public servant. I know you bring tremendous skills to the leadership

and chief executive of this city and not too many mayors have had

your experience. So you’re way ahead of the game. And I’ve gone

through your program proposals. I think they’re excellent.

And I think you need the power to appoint, to discipline, to remove managers, not only at the top level, but also in the intermediate level. I remember one of the things that took me 5 years

to get accomplished from the board of trustees of the California

State University system and that was to provide flexibility of management. We could appoint, we could remove, and we could pay according to their commitment on a particular contract, 6 months, 1

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year. In other words, we provided a results-oriented government.

We asked: what are you going to accomplish in this time period?

I believe that you should be the judge of whether or not your managers have accomplished what was agreed on their contract. That

will turn a bureaucracy around very rapidly.

I think also that what you’ve said in here about children and

health is very important, and recreation. And I would hope that the

neighborhood school, which is really the visible aspect of government for people around them, would be able to combine health

services at the local level, recreational services after school. Schools

seldom have their lights on after 3 p.m. The community should be

able to use those playing fields for little children under appropriate

supervision.

As I mentioned to your predecessor Mayor in one of these hearings, I stood for 3 hours in line in a sports shirt. No one knew I

was a Member of Congress, and I just wanted to see how people

were treated. The motor vehicle department was not treating them

very well in that northeast operation; one, they didn’t even have

their people informed as to what kind of service was there.

So I happened to stand for 31⁄2 hours after asking five people who

said, ‘‘oh, yes, this office will do that,’’ and then when I finally get

to the window, it was sorry, it is 5:30—that’s over in the municipal

building.’’ That’s not very good; 200 citizens that day were standing

in the heat, no one from management came out to say, ‘‘come on

in, we’re going to cue you up and it’s cooler in here than it is out

there.’’ The signs were misleading. The security guard was helpful,

but untrained.

So a little bit of initiative obviously was needed, and several hundred residents, black and white, in this city weren’t too happy with

their experience. Neither was this Member of Congress.

Economic development I think is key. And I recall when Disney

was talking about desecrating a few Civil War battlefields to bring

the feeling of history to people who had come to Washington.

Washington is where much of our history has occurred and is occurring. Disney ought to be approached to build in the District of

Columbia. That means Disney building new housing as a condition

for them to occupy certain land. It means jobs for the citizens of

this District.

As for the public schools, the Mayor of Chicago has taken over

education, and so should you. That will place responsibility.

I know you have the interest. I think any powers we need to give

you we should give you. And somebody mentioned micromanaging,

my last micromanagement would be one pothole at Independence

and 3rd——

Mayor WILLIAMS. Take that address down.

Mr. HORN. It just about took my axle out the other night, Mr.

Mayor. But you have my strongest support. Anything I can do to

help, I will.

Thank you, Mr. Chairman.

Mr. DAVIS. Thank you very much, Mr. Horn.

I just want to note for the record, although Mr. Horn who had

grandparents who were born in the city, parents born in the city,

kids born in the city, Mr. Horn wanted to be born in the city, but

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he thought it was more important to be with his mother on that

important day, and he couldn’t be here.

I would like to call our panel of witnesses to testify: Dr. Alice

Rivlin, the Control Board chair; Mayor Anthony Williams; and the

City Council chairman, Linda Cropp.

As you know, it’s the policy of the committee that all witnesses

be sworn in before you testify.

[Witnesses sworn.]

Mr. DAVIS. Thank you. You can be seated.

I ask unanimous consent any written statements be made a part

of the permanent record.

We will begin with Dr. Rivlin, who needs to leave by 10:30. Dr.

Rivlin will be testifying before this subcommittee for the first time;

followed by Mayor Williams, who will be testifying before the subcommittee for the first time as Mayor; and City Council Chair

Cropp, who is now a frequent visitor and has testified before this

committee.

Dr. Rivlin.

STATEMENTS OF ALICE RIVLIN, CHAIR, D.C. FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE AUTHORITY;

ANTHONY WILLIAMS, MAYOR, DISTRICT OF COLUMBIA; AND

LINDA CROPP, CHAIR, DISTRICT OF COLUMBIA CITY COUNCIL

Ms. RIVLIN. Thank you, Mr. Chairman. I’m delighted to be here

in this capacity. I think the citizens of the District may not realize

how lucky they are to have the strong, constructive, bipartisan

leadership of this committee helping us as we move into our new

era.

It’s also a pleasure to be on this panel with the new Mayor of

the District, Anthony Williams, and with the chair of the Council,

Linda Cropp. I think the District is very fortunate, and I say this

even when I’m not with them, to have such strong, qualified elected

officials at the helm to lead us as we move into this new era of effective, responsive city government.

And, Mr. Chairman, I do believe we are entering a new era in

the District. There is renewed energy in the city and a sense of

hope that the cooperative efforts of the District, the region and the

Federal Government will help us build on the progress that the Nation’s Capital has made in the last few years.

The District of Columbia Financial Responsibility and Management Assistance Authority, and I never can get through that whole

title, affectionately known as the Control Board, has enormous respect for Mayor Williams. My four colleagues on the board and I

are working hard to build a collaborative and constructive relationship with him.

We’re also working closely with the new Council. The Council

has three energetic new members elected in November. Both the

new and the returning Council members are endeavoring to build

on the positive results that the city has recently achieved. Altogether, it is a promising time to be working for the revitalization

of the Nation’s Capital.

As you have noted, Mr. Chairman, the Authority was created by

an act of Congress in April 1995 to assist the District in restoring

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financial solvency and improving management effectiveness. At the

time, the District was virtually bankrupt. It was unable to pay its

employees or its contractors. It was running a significant operating

deficit and had a large accumulated deficit. Since the District’s

bonds could not be sold at market rates, the U.S. Treasury was the

city’s only source of funds.

Moreover, the District at that time was not responding adequately to the needs of its citizens. Streets were filled with potholes

and often went unplowed in winter. Citizens seeking ordinary services, such as motor vehicle inspections or building permits, encountered long delays and often confused records. Medical care for the

needy, child welfare services and assistance to the elderly were

often lacking and inadequately provided. Crime was rising. Neighborhoods were decaying. The public schools were deteriorating.

Residents and businesses were fleeing the city.

Now, nearly 4 years later, the District is in much better shape.

Thanks to the efforts of many people, including the former members of the Authority and my predecessor Andrew Brimmer, Mayor

Williams in his former position as CFO, members of the Council,

the President and the Congress, the District has not only stemmed

the deterioration, it has considerably improved its overall condition.

When the books are closed on fiscal year 1998, which ended in

September, they will show that the city ran an operating surplus

for the second straight year and was able to pay off in its entirety

its accumulated deficit. The city has greatly improved the integrity

and internal controls of its budgeting process and financial systems. The bills get paid, the taxes are collected, and the District’s

securities sell at market rates. From a financial standpoint, the

city’s comeback has been remarkable.

However, while—and there’s always a however—while the fiscal

progress has been gratifying, it is important for everybody to understand that the city still faces an uncertain financial future. Its

tax base is narrow and can grow only if vigorous efforts to attract

new residents and enhance business opportunities are sustained

and successful. Deferred maintenance and inadequate investment

have left a legacy of decayed and outmoded infrastructure, from

bursting pipes to leaky roofs and decrepit or nonexistent computers, and that will take substantial resources to put right.

Similarly, while the quality of the District’s public services has

demonstrably improved—and those lines, Congressman Horn, are

shorter than they were before—much remains to be done. In response to the National Capital Revitalization and Government SelfImprovement Act passed by the Congress in 1997, the Authority

has in the past year laid the groundwork for long-term, sustainable

improvements in the quality of public services. Through the process

of management reform and the establishment of a chief management officer to focus on service delivery improvements, the District

has made measurable progress in the quality and efficiency of service.

In recognition of the new era in the District, the Authority and

the Mayor have signed a memorandum of agreement describing

their new relationship. The memorandum makes clear that, while

the Authority retains all of the responsibilities under the statute,

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the Mayor will be in charge of the day-to-day running of the city

and supervision of executive branch departments. The Mayor will

also have the responsibility for program and policy matters related

to the departments and agencies. There must be no confusion about

who is in charge of delivering services, the Mayor is. The memorandum further states that the Chief Management Officer will report to the Mayor and that most government agencies

will report to the Mayor through the CMO. The agreement calls for

the Mayor to combine the existing authority and staff of the city

administrator with those of the CMO.

The Metropolitan Police Department and the Office of Corporation Council and some smaller agencies will report directly to the

Mayor. The public schools will continue to report to the Authority.

The agreement can be revoked by either the Authority or the

Mayor with 30 days’ written notice. To ensure effective communication and cooperation, the Authority has invited the Mayor to attend meetings of the Authority in

a nonvoting capacity. And we have also extended the same invitation to the chair of the Council. We have met three times under

the new arrangement, and we are communicating very well. I am very pleased by the strong working relationships that the

elected and appointed officials of the city are developing. We have

found shared purpose and common ground in our efforts to improve

the District. Together, we are already working to achieve consensus

in such areas as the fiscal year 2000 financial plan and budget,

strategic plan priorities for the District, the National Capital Revitalization Cooperation and a strategy for accelerating economic development. The Mayor has publicly stated his strong intentions to make immediate improvements in public services, and Authority members

have told the Mayor that he can count on our full support in his

efforts to improve the quality and performance of government services. The faster the better. All of us look forward to cleaner and

safer streets and alleys, more responsive public officials, a safety

net that is compassionate and timely, and all of the other things

that citizens expect that their local government will effectively provide. We believe visible short-run improvements are feasible, but

we are also conscious that many aspects of the D.C. service delivery are still deeply broken and will take sustained effort to repair. The Mayor and the Council and the Authority are also working

together on long-term priorities for the District. One of the fundamental goals we have all agreed on is accelerating economic development. The District, through a collaborative process with the private sector, nonprofit organizations and

community groups, recently issued an economic development strategy that focuses on a list of specific actions to leverage jobs and

growth in the city. We view this approach as the beginning of an

intensive effort to make the District more attractive to new business, retaining those businesses and Federal agencies that are already located in the city and creating greater opportunity for

neighborhood development, not just activity in the central business

district. It is vital that we focus our attention on economic development.

Other long-term priorities the Mayor, the Council and the Authority will stress in the coming months include improvements in

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financial management, tax reform to create a more equitable structure, targeted investments in technology and other infrastructure

areas and the widespread improvement of public services. We will

give special emphasis to investing in our young people and the

skills and vitality of our work force.

The Authority is working closely with Superintendent Arlene

Ackerman to strengthen the D.C. public schools. There is no question that, as Congresswoman Morella has noted, that our ability to

build a bright future for the city and to keep and attract residents

requires quality public education and safe schools. We are optimistic that the strides made in the last year to rebuild decaying

schools, make facilities safer and increase the quality of education

are laying the groundwork for sustained improvement in education;

and we are working closely with the Superintendent, the Emergency Transitional Education Board of Trustees and the elected

school board to make that happen.

Finally, the District must make the transition to normal governance. This city, like every other city in America, deserves to be

managed by professional managers responsible to elected officials

who, in turn, are responsible to an engaged electorate. Democracy

is the cornerstone of our Nation’s heritage; and the District should

be an example of how well democracy can work, not a shameful exception.

We all recognize that the District is our Nation’s Capital at the

same time it is a local community. As such, it occupies a unique

and sometimes complex place in our governmental structure. The

District is fundamentally intertwined with the Federal Government. The city’s prosperity, its well-being, its future are all influenced by how we interact with the Federal Government and responsibly steward the resources that support the city, both as a

community and as a capital.

In 1995, and again in 1997, the Congress was sufficiently concerned about the condition of the District that it passed laws aimed

at improving the financial and management health of the city. The

laws stipulated that control periods would remain in force—and the

Authority would remain active—until certain conditions were met.

The District was required to first run its operating budget without

a deficit for 4 consecutive years and to repay any borrowings by the

Authority. More general provisions of the law mandated that the

District improve the quality of its public services and strengthen

the structure of government in the city and help sort out the functions between the District and the Federal Government.

Mr. Chairman, the District is on its way to accomplishing the

goals and objectives of the congressional statutes, but let me stress

that we’re not there yet. I’ve highlighted some of the achievements

today and some of the issues we will be working on in coming

months. Through the cooperation that the Mayor, the Council and

the Authority have established, I believe we will continue to make

progress in meeting the goals set by the Congress so the District

can make the transition to normal government as soon as possible.

I know the Mayor and the Council chair join me in welcoming the

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opportunity to come back to the Hill and report to the subcommittee as we move toward the statutory objectives that will

bring about a timely return to normal governance.

Thank you, Mr. Chairman.

Mr. DAVIS. Dr. Rivlin, thank you very much.

[The prepared statement of Ms. Rivlin follows:]

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Mr. DAVIS. Mayor Williams.

Mayor WILLIAMS. Yes. Mr. Chairman and members of the committee, Congresswoman Norton, Congresswoman Morella, Congressman Horn, it’s a pleasure to testify here again to the general

committee not as CFO to the District, but as Mayor. It’s a real

honor to be on the panel with Chairwoman Cropp and Chairwoman

Rivlin.

And I have a power point presentation I would like to make that

states our vision for the Nation’s Capital, the progress we’ve made,

current efforts under way and where we see ourselves going.

First, to talk about progress, we can go to the next slide. We talk

about the financial health and, just to reiterate briefly, we have

balanced the budget of our city for the past 3 years. I would argue

that we’ve gone further and faster than any other American city in

a financial recovery. We have in 1998 retired an accumulated deficit we inherited of $350 million, with a surplus on top of that without any resort to financing of that debt. So that was done the oldfashioned, hard way.

We’ve received a ratings upgrade of the District’s bond rating

and in our last transaction actually had a transaction that performed at an investment grade in practical reality.

We received a clean audit in our last financial statement and

look forward to having one in this financial statement with a lot

of hard work.

We have generated a budget surplus of at least $400 million in

1998 and, as I stated earlier, have eliminated that accumulated

deficit.

We’ve also made progress in public safety. Homicides in the District have declined 46 percent since 1991 and are at their lowest

levels in 12 years.

Violent crime is down 19 percent, property crimes have declined,

and there’s also been a decline in total crimes committed.

Our new police chief, who I think is really setting an example of

standing up, taking responsibility and taking charge, has announced that a captain is going to be assigned to every watch; and

I think this will further strengthen the lines of accountability.

We have got a lot further to go. He is the first to recognize that.

But I think he is really a model and an example of where our agency heads to go.

And I might add, our agency heads have a way to go. The action

plans that we receive from our agency heads needed work. They

didn’t have the breadth and the depth that I expected, but I did

not characterize and I would not characterize those plans as shoddy. Because, you know, as I’m going to discuss in a second, I’m the

coach of a team now, the District government. I’m proud of my

team. In the locker room, there’s going to be an exchange and probably it won’t be pretty and you wouldn’t want to televise it, but out

on the field, I take responsibility for my managers.

Going on. We want to foster a strong Federal relationship, developing the role initially of the Federal Government as a good corporate citizen. I’ve traveled to cities around this country looking at

best practices. Many of the Mayors in these cities are very envious

of us because, unlike any cities like Philadelphia or Detroit, we

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didn’t lose a huge manufacturing job base in the city. We still have

a job base from the Federal Government.

The Federal Government, whether we like it or not—and I happen to like it more than not, it depends on the day—is our No. 1

corporate citizen. And we want to foster that relationship. And one

of the key ways to do that is responding promptly and professionally to Federal requests and offers of assistance.

Too often in the past, there have been offers of assistance or have

been entreaties from the Federal Government generally or from the

Congress or from individual cabinet departments, and phone calls

that haven’t even been answered. We’ve got to change that.

We want to be a true model for other cities in our relationship

with the Federal Government and proactively engage Federal agencies. If there is any discretionary Federal grant out there in any

of the cabinet agencies, we want to be first in line. Not that we’re

going to elbow other cities out of the way, but we’re going to definitely use our proximity to these Federal departments. That’s a

competitive advantage we have, and we take it very seriously.

A vision for our government—I’ve stated it for 6 months now.

Many people are tired of hearing it. But I think it remains one government, good government and self-government for our city. One

city and one government focused on major policy initiatives, whether they be in the areas of labor, whether they be in the areas of

continuing management improvements, whether they be in the

areas of health care or education or economic development, one city

and one government should meet these challenges.

Restoring faith and confidence in our government by major service delivery improvements and, finally, unifying our government

and creating a foundation for lasting self-government.

To talk about one city and one government briefly, it’s a vision

of, very, very importantly, public/private partnerships coming together to meet the challenges that confront our city.

I think everyone would agree that to do the things we have to

do in our city, whether they’re meeting the needs of children, rebuilding the human services network, that where one half of it has

been placed practically in Federal receivership, focusing on the

needs of work force development or our workers, economic development, health care, all of these things are going to take the government working with the community, working with our nonprofit institutions, working with the private sector, to successfully realize

the government cannot do it alone.

Some of our major initiatives: One major initiative, as I’ve stated

many times, is that our children are our future; and that includes

providing a safe, clean environment for our children, providing

after-school programs for our children, again in the partnership

that I talked about and, very, very importantly, supporting children in a neighborhood context, in a community context with the

faith community and the other sectors I’ve talked about providing

that whole continuum of education, including programs for healthy

children, school readiness programs, looking at our parks and libraries to see that they’re doing their job to support our children

and, very, very importantly, supporting our parents so that our

parents understand and are oriented on what it means to have a

child in school and what those expectations should be.

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Some initiatives on rebuilding the human service network.

Again, in partnership; the government cannot do this alone. And I

will also state, rebuilding this network is going to require—and

this is a theme that will come up again and again—is going to require some choices. There’s no silver bullet. If there were an easy

choice, if there were an obvious choice, it would have been made

by now. So it’s going to require some choices.

But it involves providing quality health care to the greatest number of our citizens to support our other policy initiatives. It means

meeting our children’s needs before, during and after school. It

means supporting our mothers initially and then families as a

whole in moving from welfare to work. And, very, very importantly,

it means utilizing more effectively the Federal money we’re now receiving for drug treatment and prevention. We receive a significant

amount of money from drug treatment and prevention, and we can

do a better job with it.

Work force development is very, very important to me. Work

force development to me is essentially focusing on the issues of pay

and the issues of performance. And both must go together. It’s not

simply an issue of we’re going to have more accountability and

workers have to do more and leaving it at that. It’s really combining both of those tools together.

It includes managed competition. It includes effective labor

agreements, working in partnership with labor, not only on a general management level but, most importantly, down in the agencies

where the results are actually going to be achieved.

It means focused and effective training for our workers, each

worker having a customized, individual training kit, a development

program, if you will, that that worker can pursue, with the support

of management, to realize that worker’s aims—that employee’s

aims and our agency and our government’s aims as well. It also

means, very, very importantly, the information systems and the

communication systems to support what our workers are doing.

As a former CFO and as a former background manager, if you

will, I am a strong, fervent supporter in the groundwork that’s

been laid by the management reform program and the need to continue these long-term investments. The last thing I want to do as

Mayor, in focusing our short-term visible concrete gains that I believe we can realize, is to do that, rob from the longer term management improvements I think we know we all need. And I echo

what Alice Rivlin said in that regard.

Continuing on in economic development. It’s defining the role of

our city as the vital center of a regional economy; it’s spurring

growth; it’s achieving jobs for District residents not only in our city

but in our region. It’s developing our city as an international trade

center, recognizing we have the largest diplomatic community in

the world. And, finally, appointing a Deputy Mayor for Economic

Development who can coordinate not only the planning and development functions but also those functions with our tax programs

that, as you know, have a major impact on investment decisions to

stay or leave our city.

It’s a matter of leveraging public-private partnerships, restructuring the Grants Management Office and related processes, putting them on a fee-for-service program, for example, trying to utiVerDate 11-MAY-2000 12:37 Sep 22, 2000 Jkt 065954 PO 00000 Frm 00043 Fmt 6633 Sfmt 6602 E:\HEARINGS\56983 pfrm04 PsN: 56983
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lize, to the maximum extent possible, every Federal dollar we have

available, establishing budget priorities that leverage and that reflect these partnerships that I talked about.

Health care priorities I talked about, and I will just mention

briefly again. It includes children, our low-income adult population

and our elderly, very, very importantly, again, a whole continuum

of health care making the choices we have to make over the next

year to really focus our precious health care dollars. And that

means bringing together our private service providers, our HMOs,

our labor unions, our public hospitals, Medicaid. I think I’ve gotten

every one together on a health care strategy for the District.

Service delivery improvements. Much has been stated about service delivery improvements and their role in creating both an investment climate in our city and, very, very importantly, restoring hope

and confidence in our government.

And I mentioned some of the things that we’re focusing on right

now, including streamlining the business licensing and permitting

process; establishing effective and reliable—or improving—making

more effective and reliable our trash collection; cleaning streets and

alleys; paving roads. They’re all listed here. All of these are the

kinds of visible, tangible, concrete improvements that we are working for with our agencies.

And just to give you some illustrative examples in public works,

licensing and permitting. In public works, for example, it’s a matter

of conducting a customer service survey to establish a baseline

measurement of where we are with the public. It’s a matter of implementing managed competition programs in selected areas and in

most of these areas where government isn’t even doing the work

right now. So in many areas it’s not a matter of outsourcing what

employees are doing but it’s a matter of extending government’s

reach and government’s impact in our neighborhoods in innovative

ways.

It’s a matter of increasing the involvement in the private sector

and internships and mentoring and partnerships. And it’s—very,

very important when we talk about public works—a matter of partnership with the community. Not to get graphic, but rats eat food

left by someone, you know. Trash on the streets doesn’t fall from

the sky. It comes from somewhere. So those partnerships are very,

very important.

To continue on, on a short-term improvement tool kit, I’ve asked

our agencies to come back to me with action plans that distinguish

between short-term, visible, concrete results and the longer term

strategies our agencies are working on and that I strongly support.

But to distinguish the two and in working on these short-term improvements to reach into a tool kit, I want to provide them to make

sure that these things happen.

And I list some of them here, you know: Asking what your customers want; thinking first about what your customers want;

thinking about how you can do more with less.

In many, many instances we’re going from a situation over the

last 3 years in our government of where we were getting less for

more to where, in the short-term, we’re getting more for more and

to where, ultimately, we want to get more for less. That’s kind of

a continuum we’re going around. We’re telling them to use existing

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resources, to reach for the stars, to take a chance, to measure their

progress, to lead by doing. Very, very important in talking about

that tool kit.

The long-term tool kit includes the area of managed competition,

identifying the functions where our employees can be given the resources and can compete. This isn’t a matter of taking jobs held by

good, diligent government workers and shipping them to Indonesia

or something. It’s a matter of competing, giving our employees the

resources and the tools to compete.

And what I found looking closely at other cities is that we don’t

lose thousands of good-paying jobs for our workers, but what we do

get is we get better quality at lower costs for our citizens, and our

employees have pride in the work that they’re doing.

The longer-term tool kit also includes a personnel assessment,

asking each of our managers to conduct this assessment and to

maintain this assessment, not just to ensure accountability but

again to support the individual training and development needs of

our employees and giving them the resources they need.

I list some of the others here. I think the committee, and I know

because of its work in general oversight, is well familiar with performance measurement, activity-based costing and the need for

cross-cutting governmental cooperation.

On this next slide, I just briefly try to distinguish between the

short-term action plans and the long-term action plans. In the

short-term action plans, I am talking about time lines of anywhere

from now to 1 year, and I am stating that we have to show our

public visible improvements beginning in 6 months. And I keep

clarifying this, we are talking about visible improvements realized

within 6 months. I am not saying that the city will be completely

fixed within 6 months.

We are talking about using existing resources. We are talking

about an infrastructure, emphasizing enhanced management, redeploying existing resources. It is a matter of, as I did as CFO and

now as Mayor, working very closely with the financial authority,

very closely with our managers in personnel and procurement and

technology to see that we have the supply lines to get these management changes done quickly, because often the snags are in procurement or personnel or some of these cross-cutting support functions.

Priorities is focusing on improvements visible to the public; I just

distinguish in the long term by focusing on priorities. In the long

term, we are focusing on priorities that are internal, that are background, that support, day by day, the short-term initiatives, but

are nonetheless very, very important.

To give you an example would be the work that we are putting

in phones, for example. We want to put in place over the short

term measures that will give our citizens prompt and professional

response to their phone calls, and I honestly believe that this can

happen within 6 months.

On the other hand, I strongly support efforts to put in place the

technology and the resources to give all of our citizens one-stop 311

inquiry into our government. Now that, longer term, is going to

take resources and it is going to take long-term initiative. It is

going to take some improved technology. The short term is going

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to take some improvisation and entrepreneurial leadership and

know-how. I think we can do both.

Talk about unified government, Congresswoman Norton has spoken to this and so has Alice, and I think the need by this Mayor

and this government to command the respect of our country and

support the return to full self-government for our city, to support

the statement that democracy can work in our city. And democracy

working in our city is not just a question of our government working effectively; it is a civic culture and civic leadership working

with our government to show that we all working together that can

make this thing work. As I state here, it is important for the executive to regain statutory authority over agencies and their personnel; and I think Members have spoken to this, and I believe that is a first phase in our

effort to return self-government to our city, that this is sorely needed, that we need this restoration of accountability and faith in

elected leadership as a foundation for the kinds of independence

and self-government that we are talking about. We have spoken to the memorandum of agreement. I would simply state that on the memorandum of agreement much has been

stated about the need to give the Mayor this hiring and firing authority, and I strongly support that. I believe it is necessary. But

having said that and without contradicting myself, I have got a

very, very close working relationship with the financial authority,

a good working relationship with the Council, and on a day-to-day

basis, I think the job is getting done. So I don’t want to leave this

committee with the feeling that the job is not getting done and I

can’t do my job without this authority, but that authority would enhance the ability to move forward on some of these changes. As I state here on this slide, I fully support returning the statutory power to the Mayor taken in the Revitalization Act, and that

this effort to bring the Control Board into a dormant status 1 year

ahead of schedule is supported by this Mayor with the understanding that this Mayor not only supports the long-term improvements that have been initiated. I really do believe that, but this

Mayor also supports, having been the independent CFO, a strong

CFO function in our city and a strong management function in our

city. Now, we are looking for a full-time city administrator and we are

going to look all over the country for a full-time city administrator.

In the interim period, yours truly, with the help of an expert team

of advisers and assistants, is going to manage the government. We

are going to do this with outside help and with help from the Federal Government and with assistance that we have tapped from

throughout the government to give us the day-to-day cooperation of

operational responsibilities, to give us the ability to proactively

push this change agenda. So, saying that over the next 2 months, however long it takes to

bring a city administrator, I am going to manage this government

is not to say that I am going to micromanage this government.

Those functions are going to be delegated out to selected individuals of the kind that I have talked about. But I do think that it

is very, very important in this period for us to bring to this management change agenda, both in the long term and actually in the

short term, something that we have had missing; and that is someVerDate 11-MAY-2000 12:58 Sep 22, 2000 Jkt 065954 PO 00000 Frm 00046 Fmt 6633 Sfmt 6602 E:\HEARINGS\56983 pfrm04 PsN: 56983
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thing that I think only elected leadership provides, and that is

leadership. We can have great plans, we can have great organization and great controls, but without leadership on the ground in

the agencies, we are not going to get where we need to go.

Some people have said, how are you going to do that without

completely robbing yourself of any public contact. What I envision

is pushing these changes through the agencies, working in the

agencies, meeting with employees and doing what I did as CFO. I

had 60 ‘‘brown bag lunches’’ with employees as CFO. I am going

to have the same kind of contact with employees as Mayor, working with labor unions, working with the employees on the ground,

seeing how they do their jobs.

I am talking about improving phones; I am going to answer the

phones. I am talking about sweeping the streets; I am going to go

out there with our agencies and sweep the streets. We talk about

citizen contact; our citizen contact is going to be geared toward

working with our neighbors on neighborhood strategies to improve

how government services our neighborhoods, working with neighborhoods to take greater responsibility to improve things like graffiti, clean streets and very, very importantly, working with our

neighborhoods to get their input on what these short-term plans

should be. So this is not robbing ourselves of this critical element

of support to get this job done.

I am excited about the opportunity that the citizens of the District have given me and this unique opportunity we have to work

in partnership with this Congress, as we have had with the administration, and to work with the Financial Authority, Dr. Rivlin and

Chairman Cropp.

So I thank the committee and look forward to answering your

questions.

Mr. DAVIS. Thank you very much.

[The prepared statement of Mayor Williams follows:]

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Mr. DAVIS. Chairman Cropp.

Ms. CROPP. Thank you Chairman Davis, Congresswoman Norton,

Congresswoman Morella and Congressman Horn. It is a pleasure

to be here before you. I am joined by the chairman pro tem of the

Council, Charlene Drew Jarvis, and Councilmember David Catania.

The inclusive approach of the new Financial Management Authority under the leadership of Chair Alice Rivlin serves this city

extremely well, and the Council looks forward to working with our

new Mayor, Tony Williams, as together we meet the needs of the

citizens of the District of Columbia.

Let me briefly review how we got here and then give you the

Council’s perspective on where we are going. As you know, many

of the problems encountered in the District of Columbia have been

similar to those faced by other urban cities during the past 2 decades. Other problems have been structural and unique to the District as a city that is not part of a State within the United States—

the unfunded pension liability, the escalating costs of the State-like

functions such as Medicaid, the prisons and courts, the inadequate

revenue base. Most similarly situated cities, no matter how well

managed they were—and admittedly we have had some management problems—would not have been able to survive under the

same circumstances as the District has had. In fact, I would suspect that some of the cities probably would not have been able to

do as well as the District has.

The camel’s back was broken in this city by the early 1990’s, but

the straws have been piling up for a long time, and I am happy

to say that the camel is now standing up again and we are moving

in the appropriate direction.

The Revitalization Plan of 1997 addressed some of these issues.

Thank you. Thank you for your help in that, Mr. Chairman, for the

leadership, for your leadership, and also for the Members of Congress who helped us address some of those very crucial structural

issues. We applaud our Congresswoman, Eleanor Holmes Norton,

for her role in that.

Without Federal reassumption of the pension liability that the

home rule government inherited the reality is by the year 2004, the

District would have faced a $5 billion liability, costing the District

over three quarters of a billion dollars every year, and this problem

was not of the District’s own volition.

Much progress has been made during the past couple of years

with the Council, the Mayor and the Financial Authority playing

a role. Certainly the consensus budget that has been developed was

extremely helpful. We can finally see light at the end of the tunnel,

and this light is not a train coming directly at us.

Painful but necessary reductions in programs, services and personnel, better management of the city finances, the Revitalization

Plan and the good fortune of a healthy national economy have all

contributed to our recent progress from the brink of bankruptcy

with no access to the credit markets and with a $536 million accumulated deficit in 1995 and an annual budget deficit of over $100

million, to paying off the entire debt within 3 years without borrowing and to a current budget surplus of over $400 million. That

was not an easy feat. It is not one to take lightly. It is one that

truly needs to be applauded.

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The fact is that the District has recovered from its financial crisis. We are exceeding the tangible measures that Congress itself

established to return limited home rule to elected officials and to

allow the Financial Authority to become dormant; elimination of

the accumulated deficits, access to Wall Street credit markets, and

4 consecutive years of a balanced budget. 1998 was our 2nd consecutive year of a budget surplus. This year, 1999, will also end in

a budget surplus.

We still need to make much more progress in managing our government and improving just very, very basic municipal services—

public schools, public works, public safety. Substantial improvements are necessary in all of these areas, but particularly in education. This is needed to retain and attract many more residents

and businesses in the city and thereby expand our revenue base,

which is critically necessary to our long-term financial health. In

this regard, let me express my appreciation to your proposal, Congressman Davis, to provide District high school graduates the ability to attend public universities in States across the Nation and in

State tuition rates. This will be very helpful to us, and we at the

local level need to ensure that our students are academically qualified to attend these universities.

At the same time, we have our own local university that we must

also strengthen and make sure that that option and the option of

other universities, which are economic engines in the District, also

remain viable.

The Revitalization Act’s bifurcation of the management of our

government was frankly not helpful in ensuring effective service

delivery, nor was the trifurcation of the bureaucracy with the establishment of a CMO, but we are pleased that the Financial Authority has returned the day-to-day operation of the nine agencies

and the four cross-cutting agencies to the elected Mayor of the District of Columbia. As Mayor Williams has stated, one government

by elected officials helps to ensure good government because the

citizenry then has knowledge and the power to hold their elected

officials accountable for the effective delivery of public services.

The Council is committed to working side by side with Mayor

Williams and Dr. Rivlin’s Financial Authority in achieving both

short-term and long-term positive visible results for both our residents and our businesses. All of us know what our problems are.

We have a zillion reports. I am up to the gazoo with reports of the

problems that we have and the recommended solutions.

The renewed Council is definitely about the business of joining

our Mayor on the playing field, as he says, to keep moving the ball

forward toward the goal of solving our city’s problems. The Council

will be a constructive partner in this effort. While the Council may

not always agree with the Mayor or the Financial Authority on everything, and while we will continue doing strong legislative oversight, we will all continue to be at the table and on the field working hard with all of our private and public stakeholders to ensure

the progress of our city.

Over the past year, the Council has passed significant and crucial legislation impacting the District of Columbia as a whole. It

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tinue to help improve the functioning of government agencies, we

can demand no less of ourselves as a council. And in that light, 6

months ago the Council initiated a comprehensive study of our own

operations and organization by the National Conference of State

Legislatures. This study is only a part of the ongoing process to review and reform our legislative operations so that we, like the rest

of the government, can optimize our performance.

The executive knows that it needs to speed up the implementation of the business and regulatory reforms that have been enacted

by the Council in the past year. These reforms, along with the

pending release of the $25 million in Federal funds for the National

Capital Revitalization Corp., will greatly facilitate economic development throughout the city, which has been synergized by the exciting downtown projects like the MCI Center and the new Convention Center.

As we revitalize and we deal with economic development in the

downtown area, it is extremely crucial, if we would like to see a

truly revitalized city, that we also look at the appropriate development of our neighborhoods, for it is the strength of the neighborhoods, the communities, and the local communities that will help

make the city as a whole strong. You cannot just have development

downtown, not in the neighborhoods, and expect the city as a whole

to grow and to develop.

The Council knows that it needs to legislatively build upon the

important reforms which we enacted in the procurement, personnel, and workers compensation areas by adopting meaningful

tax legislation as well. We simply cannot compete for more businesses and residents without addressing local tax issues that need

to be addressed. Tax reform is part of our agenda.

So this year’s budget process, even with a substantial surplus,

will be a difficult but an extremely important one, because we have

to do a lot of things at once. And we will have to make choices, because we cannot afford to do everything that needs to be done.

After paying off our debt, we have to set aside a rainy day fund

for unforeseen expenses that will inevitably occur when there is a

downturn in the economy and less revenue is coming in. We also

need to improve dramatically the provisions of municipal services,

and we have heard our Mayor talk about that and his desire and

will to move in that direction.

We also need to continue to upgrade our work force and both our

physical and technological infrastructures need vast infusions of

funds after years of no investment or deferred maintenance. We

also should probably establish a sunny day fund to take advantage

of unique opportunities that arise to maintain or attract major

businesses.

Finally, as I just said, we need to begin local tax reform to help

grow our economy on the long term. What we are experiencing now

will probably not remain, and we need to be prepared in the future

for what happens. So the priorities are many and the choices will

be difficult, but that is why we are here.

The Council also would like to initiate a locally based process of

reviewing the District of Columbia’s home rule charter. In the past,

there has been some trepidation to opening up the idea of charter

review, frankly out of fear of what might happen in the Congress.

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However, during the past few years not only has that door been

open, but quite frankly, the Congress has blown the roof off, so we

might as well locally look at this issue, review it with our citizens,

have input and make some very important decisions with regard to

our charter.

You know, most States review their constitutions at least once

every 20 years. It has been 25 years since the Home Rule Act was

first adopted by Congress. And as we prepare for the return of the

limited home rule in that act to elected rather than appointed officials, it is probably a good time for a citizen-based effort to review

the provisions of that act with an eye toward changes that might

be beneficial. For example, something just as simple as changing

the title of the leader of the legislative body of ‘‘chairman’’ to a title

that may be more gender neutral will probably also be more appropriate.

Also, as the Mayor has talked about ensuring the independence

of the city’s Chief Financial Officer, the citizens and the Mayor

may want to ensure that there is a certain independence of that

office, and perhaps other offices such as city administrator, by

being the body that steps into the role of the current Financial Authority. But these are issues that should be debated, discussed and

decided upon by the local citizens, and we hope that this effort will

start.

In addition to local governance issues, we need to revisit other

structural problems that the District of Columbia has that relate

to our relationship with the Federal Government which are not addressed or which have been exacerbated by the Revitalization Plan,

and probably in the future we will get more into that. But the Federal Government payment, as you know, is supposed to compensate

the District for the 41 percent of the property base of the Nation’s

Capital that is tax exempt and receives local services. The elimination of the Federal payment coupled with the continued unique

Federal prohibition of the District taxing income at its source

where two-thirds of the income earned, even by our own government employees—not private sector, not Federal Government, but

our own—severely restricts the city’s revenue base. We in the District continue our quest for budget and legislative autonomy. I hope

that as we look at this, we will have congressional support in this

area.

The District, unlike most other cities, operates a very costly inpatient mental health institution, St. Elizabeth’s, which no other city

has to operate. Additional Federal measures are needed to expand

our residential and business resident base such as Congresswoman

Norton’s 15 percent Federal flat income tax for District residents.

Last, voting representation in Congress must be provided for our

District residents. We must finally bring full democracy to the residents of the Nation’s Capital.

In closing, let me say that prior to and since the enactment of

the Financial Responsibility and Management Assistance Act, the

city has gone through some rocky times, some challenging times,

and some creative times. We are now entering a new era which all

of us here at this table recognize is a transitional time. Implicit in

the word ‘‘transition’’ is the concept of rebuilding bridges, of moving

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ed officials who are accountable to our citizens. A lot of things still

need to be done, but the first step of recovery from our financial

crisis has been accomplished. Implementation of reforms and service delivery improvements are ongoing; and we, the Council, the

Mayor, and the Financial Authority collectively have the vision and

the commitment to work together toward a renewed and revitalized

District of Columbia.

Thank you for this opportunity to testify before the Congress,

and of course I am available for any questions.

Mr. DAVIS. Thank you.

[The prepared statement of Ms. Cropp follows:]

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Mr. DAVIS. Because of Dr. Rivlin’s time constraints, we want to

move very quickly to some specific questions for her, and then we

will ask questions of the Mayor and the Council chair.

Now, Dave Clark, the former chair of the D.C. Council, never

complained about the name of the Council or suggest that we

change it, but maybe it is something we ought to look at, and I

think we have a couple of Members who would be happy to look

at that request. Let me start with Ms. Norton who has some specific questions for Dr. Rivlin.

Ms. RIVLIN. Thank you.

Ms. NORTON. Thank you. I do have a question that has to do

with the Control Board here, and it is also for the Mayor.

Let me first recognize that State representative Tom Bryant has

come in, and we are glad to see him here.

Let me ask all of you a question about the surplus.

Dr. Brimmer has announced a $400 million surplus. I have to

look to the officials who are in charge of whether or not there is

a surplus for accurate information on this, and so I am going to ask

you what is your best and most accurate estimate of the budget

surplus for 1998? Will it be more than $400 million, or less, or do you simply want

to confirm Dr. Brimmer’s figure?

Ms. RIVLIN. We don’t have final figures yet, Congresswoman Norton. He is in the right ballpark. You have to remember that he is

talking about the operating surplus. From that has to come the repayment of the accumulated deficit, but we will have a positive

fund balance.

Ms. NORTON. I am, therefore, forced to rely on Dr. Brimmer. I

am asking for your best and most accurate estimate. Perhaps Mr.

Williams, perhaps Chairwoman Cropp can answer. Should I look to

Dr. Brimmer for this information?

Mayor WILLIAMS. I think the Congress ought to look to us for the

financial information, as to what is happening, along with the CFO

in the District.

Ms. NORTON. So what is the answer?

Mayor WILLIAMS. Operating, it is at least $400 million. I would

be shocked if it were something different.

Ms. CROPP. I think the only reason that we probably have not

said specifically at this point is because the full audit has not been

completed, but it is in the process.

Ms. NORTON. When do you expect that audit to be available?

Ms. CROPP. February 1.

Ms. NORTON. Thank you.

I would like to ask that my first slide be put up.

[The information referred to follows:]

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Ms. NORTON. First, I want to say that I have full confidence in

the Control Board, and the question that I am going to ask really

goes to the actions taken by the last Control Board, and my concern is not with a particular official, nor do I want to second-guess

what the Control Board has done with respect to the Chief Management Officer. I am enough of a lawyer to know that there was

a contractual obligation there. One of the problems that the last

Control Board had is that it went willy nilly ahead and got itself

into lawsuits.

I am concerned with whether or not the first Control Board has

built into the salary schedules of the District of Columbia a structural problem. To find out whether this was the case, the only

place I know to look is at market rates, that is, to compare yourself

with similarly situated folks.

Now, the first schedule on the screen shows you the salary of the

D.C. Chief Management Officer that was negotiated by the first

Control Board to be greater than the salaries of chief administrative officers in all of the surrounding jurisdictions of the United

States, the nearest available markets, so that the District of Columbia had by far the highest with $155,000 for a population of

540,000. Compare that to Fairfax people, which has almost twice

as many people, 914,000 people, $147,000. Compare that with

Montgomery, 826,000-plus, or even with Prince George’s, 770,000,

and you can see the figures down that we are way above them.

Moreover, the history of the first board—and this is relevant to

the Mayor because we are about to give the Mayor back what

would amount to this authority, albeit with the oversight of the

Control Board because it involves money. But the history we are

talking about involves not only these salaries but something that

rarely happens in government, and that is negotiating large severance packages to outgoing managers. For example, Superintendent

Franklin Smith, $180,000; former Inspector General Angela Avant,

$90,000, this is severance going out. Former Head of Housing and

then Consumer Regulatory Affairs, David Watts, $121,000; former

DPW Cell Bernardino, $60,000; Cheryl Dotson, a sole contract person, $250,000.

Now, let me have the second slide. To show you my concern—

where is the second slide?

Ms. RIVLIN. Congresswoman Norton——

Ms. NORTON. I want to get my question out.

To show you my concern, my concern is not with a particular officer but with a perhaps systemic problem.

[The information referred to follows:]

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Ms. NORTON. The second slide shows the salaries of representative D.C. government managers to be far greater than the average

salaries for cities of comparable size. And if you look at those officers—chief administrative/management officer, chief financial officer, director of public works, planning and economic development,

personnel—if you go down this slide, you will see that our salaries

are 1.7 times greater, 1.4 times greater, sometimes two times

greater, far greater than cities of comparable size.

First, are you aware of a provision that was placed in the D.C.

1996 appropriations bill that prohibits funding during any fiscal

year employees or contractors whose employment with the District

of Columbia is no longer required, and was that considered at the

time when these severances were paid out?

The only exception provided in this 1996 provision in the appropriations bill was to services already provided to the District government. Was this provision known or did you consider using it?

Will it be used in the future? How are we to justify these salaries?

How are we to know that these are not simply built into the structure so that instead of meeting what I usually meet here, which is

that our City Council, has the highest salaries in the United

States, something that I am confronted with all the time—higher

than New York, higher than California. Now I am going to be met

on the floor with—and so are all of the officers, so are all of the

managers and all of the Cabinet people—much higher for large cities and cities of comparable size. I need to know what is the response I am going to give back when I meet that in the face of

these statistics?

Ms. RIVLIN. Congresswoman Norton, I am not familiar with the

provision, and I hadn’t seen these numbers before, but let me say

that the effort to find very highly qualified people to run a complex

government that has had very serious managerial problems is not

an easy one, and the previous Control Board faced the issue of

talking very qualified people into coming into admittedly a very difficult situation and taking over.

Mayor Williams will face the same problem, and trying to get absolutely the best people that we need to run the city will, I think,

take looking at who is available and who is willing to come and

paying salaries that are sufficient to attract the talent that we

need.

Now, with all due respect to the chairman, I actually think it is

probably easier to get somebody to run Fairfax County

managerially than the city of Washington for reasons of complexity

and——

Mr. DAVIS. Let me intervene. There is a huge deferred benefit

package that is not included in the Fairfax situation. So taking a

look at the total salary is not an appropriate way to look at the

total benefit package, which includes hospitalization and retirement benefits. It may include a severance agreement and the like.

Ms. RIVLIN. But let me say that I think these are interesting

numbers and that we would like to answer the question in writing

and to look at the comparability. But one has to be careful in making comparisons that you are really comparing the same things,

and that we put ourselves in a position as a city of attracting the

best people because we need help.

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Mr. DAVIS. I think one of the biggest problems we have in government today is salary caps; we have it at the Federal level. If we

are going to get the best and the brightest in an information age,

we are going to have to have a benefits package that is comparable.

Ms. NORTON. Could I just ask that you submit to the committee

your view of the 1996 provision in the appropriation, whether it

was applied and whether it will apply in the future.

Second, let me say that I could not disagree more with the notion

that it is harder to attract people here than to Fairfax County or

to any other comparable city in the United States. Let me say why.

I believe if you come to the District of Columbia, which is the

center of the universe, when its government is on its knees and you

show that you can do your stuff here—not in Fairfax, not in Indianapolis, but in the District of Columbia—you are made for life.

So instead of bargaining, ‘‘Can you please, Mr. Whoever-you-are,

can you come and help us?’’ we need at the table people who say,

‘‘Let me tell you what you get for coming to the District of Columbia, what a showcase this is for you, and what will happen for you

if you succeed,’’ not ‘‘Please help us; we will pay you any amount.’’

And I am very disappointed if your answer is—because my question was a systemic one, and it was no criticism of the payment to

any particular person, but I am very disappointed if your answer

is this is what it takes to attract talent to the District of Columbia,

because I do not believe that you can make the case that, with

tough bargaining, that indeed will be the case.

And so I am going to have to ask finally if Mayor Williams can

give me any greater assurance with respect to these salaries already built in. Mr. Mayor, we are talking about people who, for example, in some cases were sitting on the job when the city went

down, who got $20,000 increases instantly from the Control Board.

Mr. DAVIS. Let me allow Dr. Rivlin to leave.

We appreciate you being here. We may have some other questions that we will submit in writing.

Ms. RIVLIN. Thank you. I am sorry that I can’t stay.

Mayor WILLIAMS. Labor economics here, supply and demand, I

think when our management and our city were in crisis—I was

former CFO—it was hard to get people, and I was criticized for

paying people what were considered to be exorbitant wages, but

they got the job done. I will say what is past is prologue.

Now I think we are creating a situation where we can be competitive and attract the best and the brightest, and we can buildup

competition for these jobs because people want to be part of a

change effort, and I think we can begin to see some decline in this

overall scale. I do believe that. Not getting into what happened in

the past, but prospectively.

Ms. NORTON. Thank you.

Mr. DAVIS. Mr. Horn, do you want to start questions?

Mr. HORN. On this salary thing, I have listened to that over the

years in legislative bodies of one sort or another, and I agree completely with what Dr. Rivlin said and the chairman. If you are really serious about a salary study, look at the total benefits package.

And while I share the view of Delegate Norton that people should

step up to the plate and make this a better city, and they would

be made elsewhere.

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There are only a few of us that self-flagellate ourselves, and you

are looking at one that would take that challenge. But don’t expect

the average person, who has a lot of places to go to be a first-rate

city manager, to do that. And if you are going to pay him or her

a salary here, you might start deducting what it costs to get a bulletproof vest, whether it be coming to Congress or just walking the

streets of Washington.

I think this is the kind of thing that we hear all the time in Congress from some people. It is an easy shot at public officials to be

sort of throwing out the salary.

You have to pay a salary for good people or you are not going to get them. And if you are not willing to pay $10,000 or $20,000,

more than other cities for a particular job, it is just pound foolish.

You have to have good middle managers or it isn’t going to happen.

The Mayor can’t sit there and micromanage the whole city. He

has to depend on people with vision, people with guts, people who

are not afraid to make personnel changes. They can’t all land on

his desk. And if those people can’t do it, he has to deal with those

officials and get them out of there and get new people in there.

It won’t pain me if he has a clean house in a few months, but

that is what needs to be done in a city or a university or a corporation when you are trying to turn it around; and that is why a chief

executive gets paid what they get paid, and that is why a competitive administrative person would get the same thing as either a

county executive or a city manager. And I think a lot of this is just

the easy thing to potshot in town meetings and all of the rest of

it.

Let me ask a question, Mr. Mayor, on your own situation. How

do you evaluate the work product of the Water and Sewer Authority? Are they making enough progress in repairing the progress of

water main leaks? Have you had a chance to look at that yet? Because here we are spending probably thousands of dollars every

week on Capitol Hill having bottled water shipped in here because

although the Corps of Engineers delivers and outstanding clean

product to Washington, as well as to the surrounding suburbs, the

fact is in Washington’s case the distribution system just hasn’t

been kept up to date. And that seems to me to be something very

important in the infrastructure capital plan; we need to systematically work at that. Do you have any feelings on that?

Mayor WILLIAMS. I am spending my initial time on the agencies

for which I am directly responsible, and then we will be working

on to the independent agencies and make sure that they are coordinated with this change agenda and moving forward in the same

fashion. I have not really delved deeply into Water and Sewer, but

I will say this. I think that initially Michael Rogers, and now the

present management, is moving Water and Sewer years and years

ahead of where they were; there is no doubt in my mind. And they

have put in place a plan to begin infrastructure improvements and,

very importantly, management change efforts over there.

I do think that there is a new spirit of accountability that I have

seen over the last couple of weeks where we had a number of water

main breaks. Citizens complained, and what they got was the usual

finger-pointing. Over a week or two, after some phone calls and

some discussions, there has been a new attitude of people willing

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to take responsibility for getting these things fixed. That is, I

think, an early indication that things are going to be moving in the

right direction.

Mr. HORN. The National Park Service unveiled a plan last month

to build a parking lot and certain other facilities under Pennsylvania Avenue in the vicinity of the White House. This follows the

closing of Pennsylvania Avenue a few years ago, an action which

severed a key east-west transportation link in the city. What is

your view of the current situation regarding Pennsylvania Avenue

and the National Park Service plan for parking in that area?

Mayor WILLIAMS. Closing Pennsylvania Avenue has had a major

negative effect on the overall transportation in the District and the

marketplace in the District. It is my understanding from briefings

that E Street is going to be reopened—I am not sure exactly what

the date is—so that will allow two-way travel.

But Pennsylvania Avenue, my general belief is—and this is as

part of a long-range agenda with the Federal Government—there

has got to be a way that we can use modern devices to protect our

President. We all want to do that while at the same time providing

this critical east-west link in our city.

Mr. HORN. I agree with you on that. They have legitimate security concerns in that area, and with the nuts roaming around this

world, one can’t be too careful.

Ms. CROPP. If I may, I concur with the Mayor on that. While we

do need to look at the security of the President, it is really important that we open up an east-west linkage across our city. E Street,

there is no reason why the traffic cannot move east to west. Because we have traffic moving from the west going east, obviously

traffic is flowing there. It would significantly have a positive impact on our traffic flow if it could be two-way, the traffic is moving

one-way, unless we are saying that a nut would only come from one

direction, because the traffic is moving.

Mr. HORN. Well, I think you make a very good point, and I wish

you well, as one that drives in that area fairly frequently.

I think you probably share high respect for Mayor Rendell in

Philadelphia, as I do. He is a very impressive mayor and has been

before our committee. How do you think his philosophy of rejecting

tax increases and emphasizing public-private cooperation, does that

apply in the District of Columbia, do you believe?

Mayor WILLIAMS. I think it definitely applies. I think to attract

better investment, we have to improve the services of this government. We always call it the three publics—public education, public

works, public safety—are the kind of foundation. We need better

economic execution of a strategy. We are beginning to do that.

We also need to lower business costs, and a key way to lowering

business costs is on the tax side. And in my mind, lowering that

cost for business is going to be a partnership between our city and

the Federal Government.

I support the legislation that has been introduced—will be introduced by Congresswoman Norton that would relieve a lot of the tax

pressure using Federal resources. I think we need to complement

that on our side using our precious ability we have to lower taxes,

to focus that tax reduction initially on smaller businesses; and I

think you will get relief for individuals coming from the Federal

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side and relief for smaller businesses coming from the local side.

That, coupled with what we are doing to improve service, I think

then you have a tremendous climate for investment in our city.

But adding to the tax rates, to me is a stupid way to bring more

revenue to our city because it is short-term gain, long-term pain.

Mr. HORN. Mayor Steve Goldsmith of Indianapolis is another

mayor, for whom I have high respect. We have had him visit my

city of Long Beach, CA, which is about the size of Washington,

450,000, major ports, major aerospace industry and so forth. And

as you know, Mayor Goldsmith has encouraged a competitive bidding process for a lot of city services. I don’t know to what extent

that might be on your agenda, but I am curious, is that an option?

Mayor WILLIAMS. Again, I talked at length about managed competition in my presentation, and I think that is something that we

want to pursue very aggressively in our city.

I am a big admirer of Mayor Goldsmith and his hands-on approach to his management. He permanently has no city administrator. He manages his city himself. He didn’t even have a chief of

staff for some time. I am not arguing or advocating that, I am just

talking about a temporary situation, but I just want to put that

into the record.

But when he first came to Indianapolis, his approach was just to

privatize everything. It was only after some experience with that

outright privatization approach that he began to fashion what he

has became known for and what Indianapolis has become a mecca

for; and that is—I think he said they had 3,600 people visit Indianapolis to look at their approach to managed competition. It is giving his employees and his unions the resources to compete, exposing them to competition. They have kept many of those jobs and

functions. They are doing a better job at less cost, and I think there

is a direct, relevant example for us in the District.

Mr. HORN. And he has the unions on his side now.

Thank you.

Mr. DAVIS. Mrs. Morella.

Mrs. MORELLA. Thank you. I want to thank Chairwoman Cropp

and Mayor Williams for their testimony, and also Dr. Rivlin.

Mayor Williams, last month you met with officials in other cities.

I am curious not only what you learned from those meetings, and

some of it was in your response to Congressman Horn, but I am

interested in hearing from you about your meetings regionally with

county executives from Prince George’s County, Montgomery County, and with representatives from Virginia. Have you devised methods of working together, and if so, on what issues? Will you be

meeting regularly with them? What enlightenment can you give us

in terms of regional cooperation?

Mayor WILLIAMS. On regional cooperation, as I have stated many

times, I believe that our city has to define itself as a vital center

of a regional economy competing in a global economy. And I say

‘‘vital center’’ because this has got to work for the gain of our city

as it works for the gain of the region. So I am not interested in

exporting jobs out of my city or exporting revenue out of my city,

no mayor would. But I recognize in this global economy, there are

mutual gains in us working together.

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Certainly, and I have seen this with Mayor Rendell and Mayor

Archer, there were mutual gains where we work together to bring

new investment to the region. Clearly there are opportunities

there.

Dennis Archer is an inspiration to me. He has forged a regional

alliance. And you could argue that the Detroit region has been

much more punishing to him than it has been to us, given all of

our history and legacy, because of that huge manufacturing job

loss, that huge flight of residents over—about half of the population. But they are working on a regional basis to compete. I think

we can do that.

I think there are options for mutual gain in transportation, not

only transportation as it benefits the city because, you know, I

talked to the mayor in Indianapolis. If you live 90 miles outside of

Indianapolis, it takes you 90 minutes to get into town. If you lived

90 miles from Washington, DC, it would take you 3 or 4 weeks to

get into town, given the transportation. That is the strategic opportunity we have in Washington, DC, to bring people back into our

city; and I think there is potential mutual gain for all of us in that.

There is also mutual gain for us in transportation. Our regional

economy, one of the hottest in the world—we are one of the largest

centers of technology on the planet, in many areas of our region we

have practically negative unemployment. If we can, as part of a

welfare-to-work strategy, develop public-private partnerships with

firms out in the region and work with WMATA and private sector

firms to provide better transportation for our residents, that is a

great gain for both of us, because our residents and our city are

getting jobs. Firms out in the region are getting dedicated employees, and it is a win-win for everyone.

Down in Phoenix, I saw examples of where they have got the city

of Phoenix, Tempe, Arizona, Scottsdale, and all of these different

towns around Phoenix. There are no boundaries when it comes to

deployment of fire and emergency services. Basically all of the fire

and emergency services on a real-time basis are deployed all over

that region according to need, and I think there are areas of cooperation between our District and the region, the same way that

Fairfax and Montgomery cooperate. I think Montgomery and

Prince George’s cooperate in that fashion, and I think we can cooperate in this fashion as well, again for mutual gain.

Sharing training facilities, working together on purchasing, recognizing the fact that we want to support our businesses and give

our businesses opportunity, there have got to be opportunities for

joint purchasing where all of us can benefit.

Those are some of the things on my agenda that I want to push

individually in meetings with executives when we meet, and collectively when we meet on a monthly basis.

Mrs. MORELLA. So the ‘‘big four’’ are all going to be involved?

Mayor WILLIAMS. The ‘‘big four,’’ but I also look forward to meeting with the folks in Prince William and Loudoun County.

Mrs. MORELLA. Good. Traffic congestion remains one of the biggest concerns in the region and certainly in the city. The city has

to be more user friendly to the residents and commuters, and particularly during the rush hours. What steps do you think should be

taken, or maybe you have something planned to address the probVerDate 11-MAY-2000 10:42 Sep 22, 2000 Jkt 065954 PO 00000 Frm 00095 Fmt 6633 Sfmt 6602 E:\HEARINGS\56983 pfrm04 PsN: 56983
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lem, because I would also ask, are you working with the Secretary

of Transportation, Rod Slater?

Mayor WILLIAMS. We have a very, very good relationship with

each of the Cabinet secretaries and with the White House task

force headed by Carol Thompson Cole and Jack Lew. They have

been very supportive.

What we are trying to be is very proactive in our relations with

them. So it is not just a matter where they have an idea; we are

trying to be much more responsive in getting that idea out on the

street, but at the same time coming to them with an agenda of

where they can be helpful.

So, for example, in my charge to the agencies to come up with

short-term action plans, one of the specific things that I asked

them was, show me where you need more flexibility, show me

where the Federal Government can provide in-kind resources, show

me where in your action plans what you are doing can be complemented by what one of the Federal agencies is doing. And they

are coming to me this weekend with that list, and I will be going

forward to individual departments, as well as this task force, with

this agenda, again to make improvements on the street.

Transportation, in particular in my mind, with the police, it is

a matter of focusing on customer service. You know, if you have a

traffic jam and the officer is focused on whatever the officer is focused on and is not focused on relieving that congestion and that

traffic jam, that is a question again of this customer service focus,

because you have a lot of drivers here who need some help.

Ms. CROPP. If I may add to that, the earlier question asked by

Mr. Horn, one of the things that we need to do is look at the E

Street dual traffic. That will certainly help downtown.

The Department of Public Works is looking at better synchronization of our traffic signals. That is an issue that will help with the

flow of traffic, particularly during work hours, as we improve our

technology. That will have a significant impact.

In addition, we need to look at something that we have that is

working quite well for expansion and enhancement, and that is our

Metrorail system, which is one of the best in the world. We need

to look at ways to expand it as our population throughout the region becomes more mobile. There is an article today about expansion in the Tysons Corner area. We need to look at expansion for

the Red and Green Lines and encourage more carpooling.

If we take a multipronged approach with regard to our traffic

signals and looking at our traffic patterns, particularly where you

can help us with E Street, and that really has made gridlock occur

downtown with Pennsylvania Avenue and E Street. It has impacted traffic from Independence Avenue straight up past K Street,

and that is a large segment of this city that impacts not only the

District of Columbia, Montgomery County, but also Virginia as people try to move in that direction. So I think that will play a significant role.

Mrs. MORELLA. I agree, education, traffic congestion are two critical issues which affect everybody.

My time has expired, but are you Y2K OK? I heard a comedian

last night say something about, I asked somebody about Y2K and

they wondered if it was a new cereal on the market.

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Mayor WILLIAMS. One of the mayors I talked to said he had no

Y2K problem, because the cards in the shoe box were working just

fine. But for us, we have a good technology officer. She is getting

some added help from the Federal Government, and I believe that

with the Herculean effort we are going to put in, as every jurisdiction will be putting in, we will be all right. We will be happy to

report in more detail.

Mrs. MORELLA. Steve and I co-chair the task force, and the Federal agencies are supposed to be compliant by the end of March;

and I would hope that the District of Columbia would also be compliant by that time to allow some time for testing. I would very

much appreciate, and I think this whole subcommittee would, your

having that person get back to us with their report and the contingency plans.

Mayor WILLIAMS. In many cases, we are putting in new systems

off the shelf which, by their nature, are Y2K-compliant. So we have

kind of benefited from the fact that our systems were so far behind

we needed to replace them anyway.

Mrs. MORELLA. True, but that requires resources on your part,

too, so one has to be ready for it. Thank you.

Mr. HORN. Watch the new systems. We had one Federal agency

give us that answer a few years ago, we’re getting a new system,

it’ll be OK. They never checked. They never tested the new equipment to make sure it was 2000 compliant. It was not so your people ought to run tests through there before accepting it.

Mayor WILLIAMS. OK, that’s a good point, Congressman.

Mr. DAVIS. Thank you.

Mr. Mayor, just a few questions.

Let me begin with commuter and traffic issues in the city. I

would say the city has had a generally good response from the District Police but there have been a few bad episodes through the

years.

We had a problem a few years ago with people blocking the

bridges and we felt the city was slow to respond. I think we were

able to work that out.

We had the slug lines where the city police were moving them

and which created a little bit of chaos.

We had the spot checks on the seat belts, which crippled this city

one evening.

We had the bridge jumper, which was a tough issue all the way

through that I think in retrospect would have been handled differently.

We just want to make sure as we look for regional cooperation

in these issues that your police are sensitive to the issues of moving traffic in and out of the Nation’s Capital.

Traffic is bad enough, and when you get somebody pulled off the

side of a road or anything like this, it just cripples it. That is true

within the city as well as out. I just want to emphasize that we’ve

talked about that and I know we’re in the same queue.

If you really want the city to succeed, than you want businesses

to go downtown. They have to be confident that their workers are

going to be able to move in and out about the city in a constructive

manner. So I just want to emphasize that point.

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I know we’re on the same page on that kind of issue, but we keep

getting every few months something that perhaps could have been

handled a little more sensitively and differently. I know you’re sensitive to that, but we just want that to be a priority for the city

and for the region. I know it’s going to work.

Mayor Williams, do you have any plans right now to propose any

tax cuts? You mentioned shortly after the election you would be

seeking some tax cuts for small technology firms and other businesses. As you know yesterday in our discussions with the Speaker,

Delegate Norton and I were forceful in trying to expand some of

the Federal tax breaks that the city receives now throughout the

city. We think this could be very helpful in having the city attract

capital in that area.

I just want to know, is it too early now to get into any specifics?

What’s your thinking on that? I will ask Ms. Cropp the same thing.

Mayor WILLIAMS. Right. In my vision, there’s an overall package

of tax relief for our city. There are tax reliefs for individuals. A

home buyer assistance is certainly welcome. I didn’t really take a

policy position, but supported it as a candidate, support it as a

Mayor. Progressive flat tax, I certainly support as a former development official, as Mayor, extending economic empowerment incentives, the capital gains provisions in our city. That’s the Federal assistance side of it.

Again, I think my own policy preference—but this is going to be

a discussion with the Financial Authority and the Council, but I’m

going to be arguing that we ought to take our tax dollars on the

local side, OK, complementing what ought to be happening on the

Federal side, take our precious local dollars and apply them where

they have the most impact.

And I think analysis will show you on the local side you’re going

to have the most impact providing reduction for a small business.

That’s 60 percent of your economy. You get the most elasticity, in

terms of response, you know, hiring new people, expanding the tax

base by their own organizational growth. That’s where I would like

to see our dollars go.

And our staffs are working up models as part of the fiscal year

2000 budget process that costs these things out and give the

Mayor, the Financial Authority, the Council, you know, the ability

to make some of these decisions. I certainly would hope that in the

year 2000 budget there will be that kind of focused tax reduction.

Mr. DAVIS. We want to obviously work with you on that issue.

That’s a legitimate concern up here as well.

Ms. Cropp.

Ms. CROPP. Yes, Mr. Chairman, as you may be aware, the Council had commissioned a Tax Revision Commission. Have you seen

that report by any chance? We would like to make sure that you

get a copy. It’s a very comprehensive report, that tax revision.

Mr. DAVIS. My staff has seen it. I have not, but your reference

to it has kindled my interest.

Ms. CROPP. Good. If you need a copy, we will make sure you get

a copy of it. When the Council commissioned that, it was with the

idea that we needed to look at tax reform in the District of Columbia. That is one of the very basic focuses that we are going to do

in the upcoming year.

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I’m happy that the Mayor and the Financial Authority agree

with that. And we’re all looking at tax revision, tax reform in some

way. There are different opinions as to the approach that we

should take, but we are all clear that we need to do it. That homebuyers credit has just been absolutely wonderful, and I think it has

had a positive impact in the District. I think the audit will show

that there were sizable revenue that was achieved from that.

We need to look at other initiatives such as that that will help

the District’s economy grow as we deal with tax credit. And as we

look at the downturn of the economy, that probably will occur, not

only here but nationwide in the future. We need to look at a tax

policy that will help look at and address that problem for the future.

Mr. DAVIS. Thank you. It helps the economy, and that did a lot

to stop the free-fall in residential real estate and the like. You have

a healthy economy in this city. A healthy economy saves the Federal Government a lot of money in terms of bailout costs. I agree

with you. I know Mrs. Norton played a role in making sure that

was included.

Mayor Williams, in your agency briefings on January 4th, you

quote from one of my favorite 20th century philosophers, Fats

Domino, when he said a lot of fellows nowadays have a BA and MD

or a Ph.D.; unfortunately, they don’t have a J-O-B. And job training is critical. In my State of Virginia, we graduate more psychology majors than we do computer science majors by a ratio of

about 4 to 1. Yet you have to have the work force today or the jobs

leave the region.

The whole region is working on this. It’s great to see the big four

jurisdictions working on this and bringing the others in. That’s one

of the things, along with strong support from the business community, that prompted this initiative which would allow D.C. students

to pay in-state tuition at out-of-state universities across the country, which you don’t have now.

Can you share a few more thoughts? We talked about it briefly

in your power points in terms of job training. Focusing on UDC

playing a role in job training areas, making sure that city students

and city young adults and people who need retraining will get it,

either through the private sector or with the government acting as

a catalyst or directly. I wonder if you could talk about that a little

bit.

Mayor WILLIAMS. A couple of things. You know, I believe that

there is a whole continuum of education from preschool through

postsecondary graduate school, and what we’re looking for is to develop public-private partnerships that support us in that effort. I

talked about the public-private partnerships that we’re seeking,

along with partnerships with the faith community to provide support for children outside of school and preschool; and that will be

a major initiative in our budget in year 2000.

It will again be a partnership. It’s not just government alone, but

all of us. We want to make a major effort on school-to-work. European countries, for example, some other cities and regions have

done a better job at school-to-work than we have in our city providing the internships, apprenticeships for students, particularly

who don’t want to pursue a professional career, you know, want to

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be a welder, a technician of some sort or another, providing more

opportunities for our students in that fashion.

And I’m committed to pursuing the idea of a technology high

school over in Southeast. I think that we can do this in a fiscally

responsible way in partnership with the private sector. We’ve got,

again, this concentration of technology, this concentration of technology in the region. I think this is a real possibility for us.

As to higher education, I think, one, our students ought to be

given the same kind of opportunities to pursue quality, affordable

education as students anywhere in the country. And I strongly support conception—I don’t know the details, but I strongly support

conceptually the bill that you put forward that would give our D.C.

students greater higher education opportunity.

This would complement, in my mind as opposed to detract from

the mission of UDC. I support a 4-year mission for UDC. But, you

know, I went to Yale as an undergraduate, you know, big institution, big endowment. It has had to focus its educational mission in

light of current technology and current realities. UDC with a 4-

year mission will and must do the same. It’s part of developing a

new strategic plan.

And I would—I would as Mayor argue to the Council and to the

Financial Authority that we establish a Commission on Postsecondary Education and balance a focused 4-year mission for the

University of the District of Columbia along with our need to provide remediation for our students who graduate from high school.

Our need to provide continuing education, our need to provide vocational education, all of these things are in the mix, as you know.

They all have to be harmonized. But I don’t think the two are mutually exclusive at all.

Mr. DAVIS. Do you want to add anything to that?

Ms. CROPP. Let me just go—in addition to that, let me also say

that the District needs to truly focus on job training and retraining

within the local government. That’s an extremely important part of

revitalizing the city as a whole.

Unfortunately, as most—well, as the District looked at financial

downturn, one of the first things that went was any type of training program. You need that training program more so than ever

before, because you’re changing the way you’re doing government,

people are doing different jobs, a lot of people left, new managers

are moving up.

One of the things—one of the partnerships that I’m pleased developed out of this crisis was with Fannie Mae and George Washington University in having a training academy for our midlevel

managers; and that’s something that is extremely important, to

train our work force how to be managers.

So—in addition to what we do in early childhood and high school,

secondary and higher education, which obviously is extremely important, we must also look at job training for our work force.

Mr. DAVIS. I just would add that I’ve been through Lorton and

talked to some of the inmates there and when they all come out

to return to the workforce they need educational opportunities to

succeed. We want them to have an equal chance at life. Some of

these kids did not have the educational opportunities or they

dropped out and didn’t have constuctive activities. It seems almost

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like a whole generation in this city that didn’t get the opportunities

and even if they worked and performed couldn’t see that there was

going to be anything at the end of the tunnel for them.

If we can just give them a career path, where if you stick to the

rules, if you work hard, there’s going to be some reward. That’s

what this scholarship program we’re talking about is about. If you

succeed, you’re going to have the same opportunities that the kids

in Virginia and Maryland and every other State have and that the

breadth—not that UDC is bad or can’t be enhanced in many, many

ways as a 4-year school, but have the breadth of opportunities that

State universities and university systems across this country have.

If you can take just one kid out of Lorton and you make them

productive and job producers, these things pay for themselves.

Mayor Williams.

Mayor WILLIAMS. If I can just say, one of the things that’s instructive and I think really good about this proposal is that, you

know, it complements what the business leadership and the city

and the region is doing to provide higher education opportunity as

well, and that’s to me what ought to be endemic in everything that

we do that we’re working in partnership.

Mr. DAVIS. Ms. Norton and I talked about this and you heard

support from Mrs. Morella, and you will hear it from suburban

leaders, suburban business leaders like Lou Noto, who really is the

brainchild of this plan. We all have a vested interest in these kids

succeeding, not going to Lorton but going up the career ladder and

being very productive members. This is just one of a series of

things I think we can accomplish to take the city to the next step.

I’m very hopeful.

Ms. CROPP. Mr. Chairman, I really feel as if I must add this one

part as we talk about education. You know, I’m a former teacher

in the public schools and a counselor of public schools. I was on the

board of education. And, actually, as I reflected on how can you

make things better, what could be done, one of the concerns that

I truly have as I looked and thought about how children really

learn, they learn through their entire environment. That’s how

children learn. And if they’re in schools 6 hours out of the day,

there are 18 other hours that impact on who our children are and

what they learn.

And as we look at the education of our young people, it has to

go beyond the classrooms, and that’s why it’s so important with

what the Mayor is saying with recreation and other things such as

that, because that is an important part of the education of our

young people. And it’s 18 hours, and that will overwhelm the 6

hours that they’re in school any day.

And, you know, if it is structured activities like sports or something like that, not that we think everyone would be a Michael Jordan and multimillion dollar contract athlete, but it teaches them

certain basic skills such as discipline, how to follow rules, how to

play as part of a team. And then those schools help to reinforce

positive things for when they go into school for the 6 hours.

So I felt compelled to say that as we look at strengthening education of our young people, if you look at how children learn, they

learn through their entire environment, which means that it has

to be a comprehensive approach to make sure that those 18 hours

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that the children aren’t in school are a positive learning environment for them.

Mr. DAVIS. I would like to respond. In the city, it’s even more

acute. The District can be a real role model, because the District

has a much higher percentage of kids from single parent homes—

I came from a single parent home—or no parent homes, in some

cases, where just having other available options after school besides going home. They need other options available and having

that career path available makes a huge difference.

So we can work together on that. We want to complement what

you’re doing up here on the Hill. We have yielded to you on a lot

of these issues in terms of what the glide path is.

Let me now recognize my colleague, Ms. Norton.

Ms. NORTON. Thank you, Mr. Chairman.

I appreciate the answers and your questions on job training, particularly in light of the economic development that’s going on in the

city. I’ve really begun to think long and hard about economic development, because what I think the District has to face is those jobs

are going to suburbanites, and sometimes in extraordinary numbers.

If you talk to business people from downtown, they will tell you

8 out of 10 of the folks that they hire are from some part of the

suburb, because that’s the most readily available pool of people

that come through the door that seem fully qualified. That’s why,

for example, in my tax package, one of the most important sections

is the section that’s says if you have a D.C. employee, not just hire

one but have one, you get $3,000 off the first $15,000 that you pay

that employee. Unless we’re willing to come down with some incentives like that, our own people are not the most readily available

people and all of this economic development is not going to do

much for D.C. residents.

You need the kind of training you’re talking about, and you need

incentives for people to hire our folks as opposed to hire everybody

else, and that even goes for jobs in the hotel industry.

I appreciate the chairman’s humor, who says to me, Eleanor, if

we pay them more, they’re likely to become Republicans. And I do

want to note for the record that the Republican majority has been

very ungenerous when it comes to the salaries of Federal employees and managers. And I note the role reversal here at this podium

with the great generosity of the Republican majority and the use

of taxpayers’ money, D.C. taxpayers’ money, to pay salaries that

they would never abide comparably for the Federal sector.

Mr. DAVIS. Would the gentlelady yield for a second?

Ms. NORTON. I would certainly yield to the chairman.

Mr. DAVIS. I would just add that I know Mrs. Morella has been

very critical of this Democratic administration on the way they

have used FEPCA, Federal Employees Pay Comparability Act. For

each year under existing law, signed by President Bush, Federal

employees would be getting more money.

This is not a partisan issue, it is a philosophical issue of how you

get the best managers. I would join with you in saying we don’t

want to overpay people if we don’t have to.

Ms. NORTON. My only point, Mr. Chairman—and I expect to see

you on the floor the next time that once again—because it has hapVerDate 11-MAY-2000 10:42 Sep 22, 2000 Jkt 065954 PO 00000 Frm 00102 Fmt 6633 Sfmt 6602 E:\HEARINGS\56983 pfrm04 PsN: 56983
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pened now for more than a decade—Federal employees don’t get

the statutory raise. I know you will be there since so many of them

are in your district.

Mr. DAVIS. I have always been there.

Ms. NORTON. Now, let me also respond to the notion that we

have to pay this money to get the talent. Where is the talent? That

is my point, Mr. Mayor, that is my point to the empty chair of Alice

Rivlin, if you had to pay the money to get the talent, why is it, Mr.

Mayor, that you are having to be your own city administrator, revise the plans that have come forward; if, in fact, we had gotten

the talent, this is one person who would have taken her hat off to

everybody.

I inherited, when I came to this city, the most messed-up agency

in town, the EEOC, with a huge backload. I know something about

what it takes to attract good people and what it means to be limited in salaries. But I do not expect city officials to sit before me

and say you have to understand, Eleanor, we needed this in order

to find a talent, without being able to point up to me where that

talent is.

And I also want to say that this is an issue of no small moment

to District residents. When District residents raise issues that they

may not have all the information on, I will come back and give the

information. For example, with Camille Barnett’s contract, that

there were other things here, like the present Control Board is

locked in with a bad decision of the prior Control Board to give

somebody a 5-year contract. Nobody can tell me that in order to get

a competent, a good manager, you had to have a 5-year contract.

But I want you to know that I believe that the residents of this

city deserve hard bargaining for their high tax dollars, and I do not

believe that hard bargaining occurred when people can write their

own checks and severance pay. And I say this also in this context,

that the reason I think there is some consternation in the city

about it is that city employees all through the crisis took it in the

butt, it was they who had to do furloughs with no money. It was

they who got no increases.

So I think there is a burden. If you happen to live outside the

city, you may not see that burden. But there is a burden for those

who live here and have a responsibility here to make sure that you

can justify going way above, not just a little above, but way above

market rates. And if the answer is we needed to get the talent,

then I want a list of the names of the talent that that money

bought, because I, for one, don’t see it.

I also don’t appreciate comments about bulletproof vests to come

to work in the District of Columbia. The only people who need bulletproof vests are people who live where cabinet members and managers do not live, and it is that kind of stereotype that is unnecessary and that I will always protest against.

Now, I have a question for the Mayor. Mr. Mayor, there is also

concern that for a couple of months, and you’ve said it would be

for a short period of time, you were going to be your own city administrator. I have to confess I’m not as concerned. I think it would

be hard for you to find a city administrator who knew the government and the finances of the government as well as you do. I also

100

trust your judgment. I think you’ve shown you have the ability to

plan and to focus, not to promise what you can’t deliver.

I heard you promise that you would resign if you didn’t have a

clean audit. Far from just having a clean audit, you helped work

up a surplus. I’m really not concerned because of your own track

record. But I think it would ease the anxiety, at least some have

expressed, if you would offer some greater detail about how you

would manage the notion of being your own mayor and your own

administrator and, in particular, what kind of assistance, from

where, in what degree, do you think it will hold you for the full

couple of months, what will you be doing in the meantime, what

kind of search will you be doing for city administrator, what kind

of city administrator are you after?

Those are the kinds of questions I have for you.

Mayor WILLIAMS. Well, on Monday we hope to announce in great

detail exactly what this staffing arrangement will be, what this assistance plan will be to give me the tools to maintain direct accountability for the operational administrative functions of the government, assistance from the Federal Government in helping us

with the crosscutting issues, making sure they’re coordinated, making sure we’re looking for ways to get around logjams as they develop in personnel or procurement, assistance from the Federal

Government, we hope, in helping us with advice and consultation

on moving forward, very, very importantly, restructuring and providing for the right staffing between the Mayor’s office and an ongoing city administrator’s office and the right kind of span or control, the right kind of contact between those offices in the government.

Because one of the things that I’m trying to avoid now and in the

future is too much insulation between the Mayor and these departments, because if you’ve got a lot—too much insulation, by the time

a problem gets up to the Mayor, it’s insolvable, you know, because

for general—in a general bureaucracy, people don’t want to fess up

to problems. They try to manage them down at their level, and

you’ve got that problem.

The arrangement that I’m looking at over this 2-month period involves, I think, an unprecedented coordination between my office

and the Financial Authority as well, because I think we all have

to look at the fact that they’re going to be providing management

assistance. They can on a very operational basis provide us management assistance in both, providing for continuity in the longterm improvement in the government while focusing on a change

effort.

So, specifically, we will have a staff person whose job it will be—

reporting to me, a staff person whose job it will be to monitor and

make sure we can continue the long-term improvement agenda we

already have underway that I support, make sure that on a defensive basis, you know, planes aren’t crashing, things aren’t coming

into conflict, that the agency day-to-day concerns are getting taken

care of. We will have a staff person with assistants focusing on

these action plans that I talked about. We will have these other

private sector Federal people, providing me assistance, all of us

working in executive committee, all of them giving me the tools I

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believe to do this job over the next month, 2-month period to get

these changes.

As for searching for the city administrator, I think we ought to

bargain with top officials the same way we bargain with our employees, and we ought to be moving always toward competitive

wages based upon the right kind of indicators. Who could argue

with that. We are modifying the search committee that we already

have in place for a CFO to take a list of candidates as they come

forward for the city administrator, and I’m confident that for a lot

of different reasons we’re going to have a very good list of strong

candidates for that position in 2 months that we can bring forward

to the Council and Financial Authority for their consultation, recognizing that, depending on how this works out, this is a mayor’s decision.

One issue is are we talking about a chief management official or

a city administrator. In my mind we’re working generally with the

Authority. In my mind it doesn’t really matter as long as they’re

doing the operational part of the government. What we call them,

I don’t want to get all bogged down in him or her.

Mr. DAVIS. Why don’t you finish your questions? We will try to

wrap this up. I know the Mayor needs to get over to the Senate

side.

Ms. NORTON. My questions are aimed at giving you the opportunity to elaborate or explain issues that I know are troubling people, and you’re not finding me give you softballs.

Let me give you another one. It has to do with managed competition, which can be a very exciting idea and we know has been used

in other cities. Philadelphia, a comparable city has used it. Could

you give us some idea of how you would implement managed competition and how you would involve city unions and city employees

in the implementation of managed competition for people who, for

example, have never had to bid before, don’t know anything about

and have had no reason to know anything about requests for proposals? How are they going to be on a level playing field with folks

out in the private sector who do that kind of thing every day to

earn a living?

Mayor WILLIAMS. Right. I think that as part of our overall staffing assessment we’re always looking to distinguish between, to be

blunt about it, employees who really have a bad attitude. You can

be a rocket scientist, and if you’ve got a bad attitude there’s nothing you can ever do about that. And everything that I’ve talked

about for years about accountability has always focused on that

employee, not who doesn’t necessarily know what he or she is

doing, you can work on that. It’s that employee who has a bad attitude, right, you’ve got to address that. Once you’ve addressed that,

you’re talking about a group of hard working employees who ought

to have the same ability to succeed as anyone else. And I believe

it is incumbent on us to work with labor, work with our employees

to first of all fashion the criteria we’re going to use for this competition.

I will give you some of the factors that you have to look at. Do

you have adequate cost information? If you don’t have adequate

cost information you don’t really know what you’re choosing in

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terms—it’s like going to a supermarket and no price tags, you need

good cost information.

Ms. NORTON. Market information that doesn’t have you overpaying people who do the work?

Mayor WILLIAMS. Absolutely, absolutely; one. And, second, an

issue that we want them involved in, another criteria is are there

private vendors who can do the job? We’ve had instances in our

city, and you’ve seen it in other cities, where you’ve had private

vendors that were doing the job, they weren’t able to do the job,

that’s a problem.

Another problem is staging or bundling, if you will. Many of the

cities that have pursued this have not pursued outsourcing for the

entire city or the entire jurisdiction. What you may do is, you may

do one part labor, you may do one part one vendor, one part another vendor. So you have some backup and you really give the employees some opportunity on what they can do.

And finally before you even begin this process, you’ve got to provide employees with the assistance, the legal assistance, the technical assistance, the tools in terms of these training kits that I

talked about for individual employees, so when they bid to do a job

it’s a realistic bid and you’re not just going through a shell game

with them, and that I’m committed to do. What I’m trying to do

is provide better service at lower costs for our citizens. What I’m

not trying to do is just simply drive down wages of good workers

simply for the sake of driving down wages. That is not my goal, nor

should it be my goal.

Ms. NORTON. One final question, this is really for Ms. Cropp, as

well as you, Mr. Mayor, and it’s inspired by what the chair said

about the charter. I was so pleased to hear you say that the city

was going to initiate a look at its own charter, that is not the work

and should not be the work of the Congress. And I congratulate

you on that initiative.

Let me just say that the Mayor said something in his testimony

that is not unrelated to what you said and that is when the Control

Board sunsets, he would be concerned that there be an independent CFO, and how to work that into the present government

is obviously a problem to consider. The concern expressed to you

about opening up the charter is understandable.

It is true that there are members who might be inclined to jump

in with both feet, and so it’s very important if we open it up, to

open it up for the right positions and very responsibly. That’s why

I focus in on this CFO notion, and I ask this question without having any opinion because I really don’t know. I spent the earlier part

of my career in New York and noted that the way in which there

was real independence in the budget process; it was a comptroller

who was elected and who had, therefore, a built-in adversarial relationship to the Mayor. And the one elected official that the Congress might readily add to the charter might be something like an

elected comptroller. As you’re faced with who appoints this CFO,

how do you make him truly independent without writing a lot of

legislation to insulate him? How do you make him truly independent from the Mayor, even if he is confirmed by the Council?

I wondered if you’ve thought about whether that position can be

insulated in some way as it is when power goes back to the Mayor,

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whether it should be an elected position, or whether there might

be other solutions to that problem of fiscal independence?

Ms. CROPP. Ms. Norton, as you indicated you have not reached

an opinion, quite frankly, neither have I. I think you have raised

a very serious issue that we must look at. Those are the decisions

that we must come to. Whether or not it’s an elected position,

whether or not an appointed position that cannot be removed except for cause, I’m not certain. But that was one of the areas that

I think we need to look at as we look at the charter. And, hopefully, as we go about discussing it, we will evaluate which method

may be the best method, if in fact that’s the direction we want to

go.

Mayor WILLIAMS. I would just say as a former financial official,

in looking at the District, the problem, I don’t think an elected

comptroller is necessarily the answer. When New York City went

insolvent they had an elected comptroller. I think Philadelphia has

an elected comptroller, if I’m not mistaken, they may not. Some cities have had elected comptrollers and they still had these problems.

I think really what we ought to try to do is, through this process,

and I support the general idea of citizen involvement in a charter

reform as we move back to self-government, that we look at giving

independence by statute to this officer and financial reporting. This

is also in the Control Act. So even when the CFO turns into a

pumpkin after the end of the control period and the powers are diminished that person will still have responsibility for accurate financial reporting. To me that’s very, very important.

We have to make sure that this person has responsibility for internal control and integrity, in terms of systems development. I

think that’s very, very important. And finally, I think personally,

and I’m Mayor now, I still think it’s very, very important that this

person have responsibility, some autonomy, I will put it that way,

in setting the revenue estimate for the District, because that’s the

ballgame.

If you have some independent objective party setting up that revenue investment, it removes from us a temptation to stop playing

games. If you look at the history of all of these debacles, a lot of

it goes to overestimating revenues, underestimating expenditures.

Mr. DAVIS. Thank you very much.

I will now recognize Mrs. Morella.

Mrs. MORELLA. My question to you, Mr. Mayor, and if Councilwoman Cropp wants to respond, too, is that the D.C. appropriations bill for fiscal year 1999 limits attorneys fees for representation of special needs kids.

I have learned that this provision has been applied retroactively

and yet that wasn’t the intent of Congress. I wondered if you would

respond to that. Congress never intended to have it be extended

retroactively, and I am just very concerned about that interpretation of it. And I’m hoping that you will be able to remedy that, and

what your comments are on it?

Ms. CROPP. I was not aware of the retroactivity aspect of it. I

would need to look into that.

Mr. DAVIS. If you could look at that and get back to us.

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Mrs. MORELLA. I would be glad to get a letter off to you about

that.

Mr. DAVIS. That’s fine.

Mrs. MORELLA. Mr. Mayor, are you familiar with this?

Mayor WILLIAMS. I would echo what Chairman Cropp has stated.

I am not familiar with the fact we had gone retroactive with it and

would be happy to get more information to you.

Mrs. MORELLA. It requires a clarification coming from you; both

of you would be great. Thank you.

[The information referred to follows:]

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107

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Mr. DAVIS. Thank you very much, Mrs. Morella.

And without objection, all written statements submitted by witnesses will be made a part of the permanent record, and the record

will remain open for 10 days.

The subcommittee will continue to work with all interested parties to achieve our objectives, and these proceedings are closed.

[Whereupon, at 1:35 p.m., the committee was adjourned.]

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