U.S. GOVERNMENT PRINTING OFFICE

64–808 CC WASHINGTON : 2000

YEAR 2000 PREVIEW

HEARING

BEFORE THE

SUBCOMMITTEE ON THE

DISTRICT OF COLUMBIA

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

JANUARY 21, 2000

Serial No. 106–124

Printed for the use of the Committee on Government Reform

(

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

http://www.house.gov/reform

(II)

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

HELEN CHENOWETH-HAGE, Idaho

DAVID VITTER, Louisiana

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

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

JANICE D. SCHAKOWSKY, Illinois

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

DAVID A. KASS, Deputy Counsel and Parliamentarian

LISA SMITH ARAFUNE, Chief Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON THE DISTRICT OF COLUMBIA

THOMAS M. DAVIS, Virginia, Chairman

CONSTANCE A. MORELLA, Maryland

STEPHEN HORN, California

JOE SCARBOROUGH, Florida

ELEANOR HOLMES NORTON, Washington,

DC

CAROLYN B. MALONEY, New York

EDOLPHUS TOWNS, New York

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

HOWIE DENIS, Staff Director and Counsel

ANNE BARNES, Professional Staff Member

MELISSA WOJCIAK, Professional Staff Member

JENNY MAYER, Clerk

JON BOUKER, Minority Counsel

(III)

C O N T E N T S

Page

Hearing held on January 21, 2000 ......................................................................... 1

Statement of:

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

Authority (D.C. Control Board); and Linda Cropp, chair, District of

Columbia City Council .................................................................................. 23

Letters, statements, et cetera, submitted for the record by:

Cropp, Linda, chair, District of Columbia City Council, prepared statement of ........................................................................................................... 48

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

of Virginia, prepared statement of .............................................................. 4

Morella, Hon. Constance A., a Representative in Congress from the State

of Maryland, prepared statement of ............................................................ 18

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

District of Columbia, prepared statement of .............................................. 13

Rivlin, Alice, chair, District of Columbia Financial Responsibility and

Management Assistance Authority (D.C. Control Board), prepared

statement of ................................................................................................... 40

Williams, Anthony, Mayor, District of Columbia, prepared statement of ... 29

(1)

YEAR 2000 PREVIEW

FRIDAY, JANUARY 21, 2000

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON THE DISTRICT OF COLUMBIA,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 10:10 a.m., in room

2154, Rayburn House Office Building, Hon. Thomas M. Davis

(chairman of the subcommittee) presiding.

Present: Representatives Davis, Morella, and Norton.

Staff present: Howie Denis, staff director/counsel; Anne Barnes

and Melissa Wojciak, professional staff members; David Marin,

communications director; Jenny Mayer, clerk; Jon Bouker, minority

counsel; and Jean Gosa, minority assistant clerk.

Mr. DAVIS. Good morning. The hearing will come to order. Welcome to the first hearing of the new millennium of this subcommittee.

It is a very cold morning in Washington. I was telling Ms. Norton

it was so cold on Capitol Hill this morning Members of Congress

had their hands in their own pockets just to stay warm. It’s one

of those days.

You know, back in the last century, and sometimes it seems like

almost 100 years ago, the District of Columbia was in the midst of

a crisis of epic proportions. Exactly 10 years ago, the commission,

chaired by Dr. Alice Rivlin, prophetically warned of an impending

disaster. Exactly 5 years ago when this subcommittee was created,

the disaster was upon the city and, therefore, upon the entire

Washington area.

At our very first hearing on February 22, 1995, I stated that the

District of Columbia faced a spending problem of monumental proportions and a management failure as well. The crisis was so severe that the District government couldn’t deliver basic services.

There was very real concerns that the city would run out of cash

to pay debt service or meet its payroll.

We formed a bipartisan bond with the ranking member of the

subcommittee, Eleanor Holmes Norton, and we’ve worked together

ever since to resolve the crisis working with city officials, working

with the administration and others and then move forward.

I am grateful for all of the subcommittee members and congressional leaders in both parties, House and Senate, for devoting so

much effort to these issues. I am grateful as well to the Clinton administration for working with us in a very cooperative manner. We

have put partisanship and politics aside when it comes to our Nation’s Capital.

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As Congress has a unique quasimunicipal charge under the District clause of the Constitution, this subcommittee’s issues are likewise unique. Along with bringing the Control Board into existence

in 1995 and revising the city’s budget process, we created the position of chief financial officer for the city. We then opened a window

for the Treasury Department to deal with the District’s cash and

short-term budget problem. The District’s bond rating had slipped

to junk status, and the GAO had testified under oath that the city

was insolvent.

It was never the intent of Congress, nor do I believe that it ever

should be our role, to micromanage this city. Our purpose has been

to create a team to rescue and revive the Nation’s Capital, and I

think we have done that.

The first chief financial officer is, of course, now the elected

Mayor Tony Williams, who is now in the second year of his administration. In his first testimony before this subcommittee on March

19, 1996, then CFO Williams stated that his top priority was to reestablish credibility by taking steps to improve the District’s financial management. This and much more was done.

As Mayor, he has given himself goals, and he has achieved many

of them. The MCI arena and the new convention center project

would not have been possible without the fresh start that we made

together.

In 1997, the Revitalization Act relieved the city of many of its

fastest-growing budget items to put the city in a far stronger position to perform basic municipal services, dealing with the unfunded

pension liability, closing Lorton, striking a more equitable balance

with Medicaid. All of this helped to maintain our momentum toward economic recovery.

1999 was a banner year for the city and the subcommittee. The

memorandum of agreement between the Control Board and the

Mayor was ratified into legislation that originated right here. In

fact, it was the very first enactment of the 106th Congress to be

signed by the President, and as a result, substantial authority was

shifted from the Control Board back to the Mayor. We thus gave

Mayor Williams the tools to do the job.

Last year also saw passage of landmark legislation to enable

D.C. high school graduates to pay in-State rates at public colleges

in Virginia and Maryland.

What the District needs now more than anything else is more

taxpayers. I am gratified that the city’s population finally appears

to be stabilizing. The real estate market is up-aided by the incentives we helped to provide and the leadership that the city’s voters

have provided. There is a great demand for rental units. More regional residents are making leisure trips into the city, a very

healthy sign of economic activity.

The Control Board was created to work itself out of a job. Within

the foreseeable future, that’s going to occur. And I expect testimony

today on what the process will be and what progress needs to be

made. But make no mistake, the District government must not just

play out the clock and then revert to the bad old days of fiscal mismanagement. We will all do our job to keep the city on the right

track. They who keep the city can never rest.

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There are many serious ongoing concerns that demand our oversight and attention. And the documented cases of abuses, deaths,

and missing records involving the mentally retarded is outrageous.

It’s unacceptable. We are demanding answers, and we are going to

continue action, and the Mayor’s rebuilding efforts this week are

welcome.

We also intend to monitor reform efforts involving the fire department, pothole repairs, rat infestation, and management practices. I also want to work with the city to get a better handle on

the receiverships to see if those departments are better or worse

off than they were before. And I want to make sure that our coordination with the independent agencies, such as water and sewer, is

providing the region with the best service at the lowest cost.

We will continue to work toward enhancing the tax base of the

city so that the economic climate is healthy and resources are

available for needed services.

So I thank Mayor Williams, Dr. Rivlin, and Council Chair Cropp

for being with us here today. I appreciate the job you are doing.

I look forward to your testimony as we proceed on our bipartisan

visions for the Nation’s Capital.

[The prepared statement of Hon. Thomas M. Davis follows:]

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Mr. DAVIS. I want to now yield to Delegate Norton, the ranking

member of this subcommittee and my partner here for the last 5

years.

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

thanks to Chairman Tom Davis for this hearing to start off the last

operating year of the financial authority. My appreciation as well

to Tom for his friendship and for the collegial and bipartisan way

in which he has always dealt with me and with the city. It will be

a sad day if the Republicans retain control of the House when he

leaves. Otherwise, I would be pleased to have him as my ranking

member.

My congratulations.

Mr. DAVIS. I take it that is a compliment.

Ms. NORTON. My congratulations to Mayor Williams, Chairwoman Cropp and the City Council, and Chairwoman Rivlin and

the Authority all who have cooperated to reconstruct a government

that increasingly we all can be proud of.

The Financial Authority statute automatically sunsets the authority after 4 consecutive years of balanced budgets. As a matter

of fact, the District has far surpassed this goal. The District not

only achieved a balanced budget 2 years ahead of the statutory

goal, it has run healthy surpluses each year.

At the same time, the District government has made substantial

improvements in its management both before and after the present

administration came into office. Anyone who lives in the District

and has experienced its service delivery has seen the improvement.

The Control Board has ratified this view of the District government and deserves credit for the seamless transition to full control

by elected officials the Authority has fostered while maintaining its

oversight responsibilities consistent with the statute. At the same

time, all involved would be quick to acknowledge that many important reforms and operational improvements can be accomplished

only after more time is devoted to them and that significant problems can be found alongside considerable progress.

The questions that Chairman Davis and I will raise in this hearing fulfill our oversight responsibilities, but, consistent with the

way he and I have always operated, do not seek to micromanage

the District government. Based on their records, city officials and

the Control Board need no advice from Congress on how to proceed

to fully reform the operations of the District government.

However, I would make one suggestion this morning, in light of

the Mayor’s self-audit of the D.C. Mental Retardation and Developmental Disabilities Agency, which has laid the predicate for dismissals, new personnel, and other improvements the Mayor has already initiated, Mayor Williams deserves praise for conducting his

own no-holds-barred objective audit. Its very usefulness, however,

suggests that had there been in place a systematic plan for self-audits of every other agency, the District might have caught this tragedy before it reached 116 deaths.

To one degree or another, every agency of the city government

needs a thoroughgoing audit that would assure systematic improvements rather than reform by crisis. It is time to draw up a plan

and set a timetable to do an audit of each agency in operation of

the D.C. government.

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I feel obligated to raise another early warning this morning, but

this one is not addressed to the elected officials or the Control

Board. Their best efforts do not assure the stability of the District

government or even its solvency over the long term according to experts. The region’s premier analyst, Stephen Fuller of George

Mason University, last week projected that the District economy

will peak in 2001 and will decline every year thereafter for 4 consecutive years.

According to Dr. Fuller, ‘‘You can’t assume the District economy

stays healthy just because it’s had a couple of good years.’’ He cites

the growth in construction as responsible for much of the increase

in the District’s economic output, and, of course, construction does

not produce permanent jobs.

I must add that the District went through good times in the

1980’s because of a construction boom in downtown office space and

by the early 1990’s was already showing signs of insolvency.

Almost all the financial reform effort thus far has gone into controlling expenditures, with the burden falling largely on the District, plus an enormous boost from the President’s Revitalization

Act. I am very gratified that Congress passed and extended my

$5,000 homebuyer credit and added important D.C.-only tax credits

for businesses we negotiated. But valuable and productive as these

credits have been, Congress must do more to help the District enlarge its revenue base. Either the city must get tens of thousands

of new residents and businesses in short order, or revenue must

come from another source.

Because the District has no State to fall back on, the only available source is the Federal Government. It would be folly to wait

until 2001 or after to see how long the District can hold on. The

District cannot afford to wait. That is why I have prepared a set

of bills for introduction this year. Among them will be an annual

public safety Federal payment that was often included in prior

years in addition to the annual Federal payment. This amount for

police operations is necessary to assure that the city does not go

down paying costs such as the half million dollars spent on the neoNazi demonstration and thousands of others who come every year

to petition the Congress and the President, not the District government.

To cite another example, if the region insists that the non-resident commuters use D.C. services free of charge, I am obligated to

seek a subsidy from the Federal Government to pay the cost of the

services used.

I also have new ideas about State functions that were not taken

by the President’s Revitalization Act that continue to burden the

District, and I will detail these ideas soon. This avenue in particular must be explored, considering that the only reason the District

of Columbia is able to report a balanced budget and surpluses is

the President’s revitalization plan, which removed pension liability

and the costs of the courts and Lorton prison and reduced Medicaid

liability. These and other similar measures must be explored.

If Congress has better ideas, let’s begin to hear them now before

it is too late. The District is doing its part to overhaul its finances

and operation, but the Congress has yet to move beyond its initial

contribution of instituting a Control Board, an indispensable vehiVerDate 11-MAY-2000 13:31 Aug 01, 2000 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 C:\DOCS\64808.TXT HGOVREF1 PsN: HGOVREF1
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cle to assure recovery whenever a city becomes insolvent. However,

Congress has not streamlined its own cumbersome processes. As a

result, Congress adds substantial unnecessary costs to the District

government by requiring that its budget be micromanaged and

often delayed here and the District laws be held over. Yet Congress

could accomplish any change it desires at any time without cumbersome preemptive measures instituted by standing congressional

committees.

District residents, Mayor Williams, Chairwoman Cropp and their

colleagues deserve better. They deserve to be met at least halfway

on the revenue needs of the Nation’s Capital and the costs of bureaucracy Congress adds to the city’s finances and operations.

These problems will be far more difficult for the Congress to face

than the substantial help we have given to the city thus far.

The Congress and the city have much to be proud of in what has

been jointly achieved. I have every reason to believe that the Congress will want to build on this good work to assure the permanent

stability and continuing improvement of the Nation’s Capital.

Thank you very much, Mr. Chairman.

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

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

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Mr. DAVIS. Now I would like to hear any statement the vice

chairman of our subcommittee, the gentlelady from Maryland,

would like to make.

Mrs. MORELLA. Thank you, Mr. Chairman. I appreciate your efforts to hold this important oversight hearing on major issues affecting the District of Columbia during the year 2000. And I look

forward certainly to hearing the testimony of Mayor Williams,

Chairwoman Rivlin of the D.C. Control Board, and Chairwoman

Cropp of the District of Columbia City Council.

January is named for Janus. That was a god that had two heads,

one that could look back and one that could look ahead. I think this

is what this oversight hearing is about.

You have heard from the Chairman A litany—a chronology actually of the accomplishments through the years, having been added

to by Congresswoman Norton.

Incidentally, as an aside, I think the Chairman has shown tremendous leadership and commitment to the District of Columbia,

and the ranking member has also. We do care about what happens

to the District. It is our star in the center of our entire region. So

I want to say that I am pleased that, as a result of the strength,

expertise, and management capabilities of the District leadership,

such as the distinguished panel we have before us, we have made

some tremendous strides.

I want to personally commend you, Mayor Williams, and your

team, and Councilwoman Cropp, on the team that demonstrated

that we didn’t have a Y2K millennium bug that wasn’t handled. I

remember the concerns that we had in terms of the District was

starting a little bit late, are they going to be in good shape. I hope

it has given an opportunity for an appraisal and an assessment of

what we have in terms of technology so we can move ahead with

other issues, and I would be very interested in the role of long-term

technology improvement plan for the District of Columbia and what

it will play in the future prosperity of the District.

In addition to the testimony we are about to hear on efforts to

revitalize the Nation’s Capital, I just want to comment briefly on

two other matters that I hope will be formally addressed here. One

is the issue that concerns me, and it is status of the District’s Mental Retardation and Developmental Disabilities Agency. And I refer

to the Washington Post reports that there had not been any investigation of the causes of 116 deaths in homes for the mentally retarded, combined with admissions of document shredding, and

these are serious concerns.

And I am encouraged, Mayor Williams, that you are or have appointed a coalition of private groups lead by the Lieutenant Joseph

P. Kennedy Institute, and I have great respect for that institute,

to temporarily manage the care of the city’s mentally retarded

wards. I would, however, like an update of the progress for the

record here today.

Second issue is also related to a report in the Washington Post.

On January 15, Martin Luther King, Jr.’s birthday, the Post quoted

D.C. Taxicab Commissioner Sandra Seegars urging cab drivers to

pass up ‘‘dangerous-looking’’ people. When asked for an example of

a dangerous-looking person, Commissioner Seegars stated, ‘‘A

young black guy, OK, with his hat on backward, shirttail hanging

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down longer than his coat, baggy pants down below his underwear,

and unlaced tennis shoes.’’

Is this an invitation to return to the days of 1993 when, according to the Post, a Lawyers Committee for Civil Rights survey found

that one-third of the taxi drivers in the District routinely refused

to stop for black customers? At a time when we are facing rising

concerns about racial profiling, I am curious and interested in what

impact a statement like this has on our society.

I would also like to know how the District government will balance the need to ensure the safety of taxicab drivers versus the

rights of citizens not to be discriminated against on the basis of a

racial profile.

That having been said, I again want to welcome you, and thank

you very much for appearing before us, and we look forward to

hearing your comment.

Thank you, Mr. Chairman.

Mr. DAVIS. Thank you, Mrs. Morella.

[The prepared statement of Hon. Constance A. Morella follows:]

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Mr. DAVIS. I am going to now call on our distinguished panel of

witnesses to testify, Mayor Anthony Williams, Dr. Alice Rivlin, and

the chair of the Control Board and City Council, Chair Linda

Cropp.

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

be sworn before they testify. If you just rise with me and raise your

right hands.

[Witnesses sworn.]

Mr. DAVIS. Mayor Williams, why don’t we start with you. Then

we will go to Dr. Rivlin. And then, Ms. Cropp, you will be our

cleanup.

STATEMENTS OF ANTHONY WILLIAMS, MAYOR, DISTRICT OF

COLUMBIA; ALICE RIVLIN, CHAIR, DISTRICT OF COLUMBIA

FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE AUTHORITY (D.C. CONTROL BOARD); AND LINDA

CROPP, CHAIR, DISTRICT OF COLUMBIA CITY COUNCIL

Mayor WILLIAMS. Chairman Davis, Congresswoman Norton, Congresswoman Morella, thank you for having us here today and giving us the opportunity to testify before you at this oversight hearing. I want to begin by thanking you for your continued support for

our city and its efforts to show that democracy can work and that

we can achieve great autonomy and self-determination.

I want to also make it a point of saying thank you to Chairman

Davis and the members of the committee, Congresswoman Norton,

Congresswoman Morella, for your support for the District’s college

access bill. I really believe that this law, over the long term, is

going to have an unparalleled long-term positive impact on our

city, and all of you should be proud of your work in that regard.

We certainly recognize it here in the city and are going to be working mightily to see that it is implemented well and speedily.

A little more than a year ago, I was honored to be elected Mayor.

It has turned out to be, day by day, one of the most rewarding experiences of my life. When I came to this job, I came with a simple

vision, and I maintain that vision, and that is that our citizens in

our city, America’s flagship city, deserve the very best. That means

strong schools, safe streets, clean communities, affordable housing,

reliable transportation. It means access to health care. It means vibrant economies downtown and in our neighborhoods. Most of all,

it means all of us in our city putting our bodies and souls in motion, empowering men, women, and children in all our communities

to work and solve our problems together.

Now, the first thing we had to do was to create a sense of urgency in our government to set ambitious goals and deadlines so

that all of us, the Council, the Congress, Control Board, and most

importantly our citizens, can see our progress and hold us accountable and begin to restore faith in our government.

There were short-term action plans, some 28 of them. We held

ourselves accountable for achieving real results. While we didn’t

get everything accomplished, and we missed a few self-imposed

deadlines, we accomplished a vast majority of our action goals; 20

goals were completed, 5 are under way toward completion, and only

3 were pretty much missed.

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Now, although we have much to do, I am very, very proud of

what we have achieved in the short term. But while I believe some

of these goals are not unparalleled in their magnitude or scope,

they have done step by step, item by item a lot to restore our citizens’ faith and confidence in our government.

To give you just a few examples, streets and alleys still have a

lot of room for improvement, but they are noticeably cleaner. During yesterday’s snowstorm, I got a number of calls not from people

complaining, but calls from people saying they were pleased to see

policemen at the intersections. They actually thought that we were

doing, in some respects, a better job with our roads than surrounding jurisdictions. I haven’t heard that a lot.

In August we had a gun buy-back program. We took more than

3,000 guns off the streets. Monday-morning quarterbacking can

say, well, were they the right guns, wrong guns. The fact of the

matter is we listened to one of our policemen. We were proactive,

worked with Chief Ramsey, worked with the Alcohol, Tobacco and

Firearms folks and got 3,000 guns off the streets.

We created a record 10,000 jobs for high school students this

summer. A little known fact, but we created the highest number

of jobs last summer than any administration in the District’s history. I am very, very proud of that.

Making progress with the phones. You can now call a single

number, 727–1000, to reach any agency in the District government

with your request. You get a case number. We track that case number. We have set up a quality control team of citizen volunteers

and our own people who track our progress in responding to mail,

e-mail, and our phone calls. Again, there is a lot of room for improvement, but we recognize our problems, and we are managing

against those problems.

Now, in the second year, I believe we are going to have to operate on two parallel tracks. One is to continue to produce these visible results that I have talked about while we are making the structural changes that all of you have alluded to in respect to, for example, MRDDA, or Retardation Development Disabilities Agency.

Now, during the first year, we put a new management team in

place, and I am proud of the new structure we have put in place

with our deputy mayors, that will allow each deputy mayor to approach a cluster of issues and work the interrelationship between

those issues. For example, there were a number of different agencies that work on issues relating to children and families. They’re

not single silos. All these issues work together. We have one person

to work those issues, one person to work the public safety issues.

I am proud of that. I am proud of the fact that we are implementing something called the Management Supervisory Service.

This is legislation from the Council a couple years ago that we are

aggressively implementing that is going to see that midlevel managers will be held more accountable while at the same time having

a greater incentive to excel in their jobs.

We are making a new commitment in training, millions of dollars

going to training, continuing education for our workers, making a

massive commitment now with our new coordinator with the receiverships, Grace Lopes, to see that we are working with the Federal judges to bring our receiverships back under the fold of regular

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District government and regular democratic government in the District.

Labor strategy is a big, big part of our upcoming agenda next

year, I would say a foundation for everything we are going to do,

because reforming management is only one-half of the equation. I

think it is very, very important that we work with our labor unions

to help improve service delivery in the District, and not until we

fundamentally change for the next century our relationship with

our employees that the District will reach its goal that we all want

to achieve.

During this past year we have begun working with labor very,

very intensively on a number of issues. We have made very good

our promise—on a promise made by this individual CFO, by the

Council, by the Control Board to give our workers a bonus for their

sacrifice during the financial crisis. And I am proud to say we have

carried through on that promise. We have created good faith. But

I think, as everybody would admit, now the hard work begins.

Working with outside counsel, we are going to be negotiating a

labor agreement that I hope will achieve the following: one, provide

gainsharing opportunities for employees, essentially profit-sharing

for the public sector; two, achieve real success on six pilot programs; and managed competition, so that we can fairly compare

what we have achieved in managed competition, allowing our employees to compete in the real world, comparing that with what we

have achieved with other devices, such as a labor-management

partnership that we are working very, very closely with our unions

to achieve. That is a matter of sitting down with our employees,

looking at a broken system and working with them to find a solution and find ways to fix it.

Does this work? It absolutely works. I would argue that the turnaround in our tax collection system—and we had Nat Gandhi here,

I believe, who is our deputy CFO. Nat and I worked turning

around the refund system, not by paying millions of dollars to consultants, but by sitting down with our employees and a new management team and working out a new solution. We went from one

of the worst in the country to sending refunds—people forgot they

were owed a refund by the time they got it—to now we are providing refunds ahead of the IRS.

Now, Congresswoman Norton mentioned risk management. We

consider this to be a crucial part of our agenda for next year. As

a matter of fact, we have included a component of risk management in every contract with our deputy mayors, with our agency

heads, and this is going to be part of our evaluation system for the

Management Supervisory Service as well.

Risk management is an absolutely essential component of effective management. I am proposing that we establish an Office of

Risk Management as part of the fiscal year 2001 budget. And the

responsibilities of this office would include, one, addressing areas

of risk involving employee disability issues; addressing areas of

risk involving insurance issues; conducting reviews of the areas of

greatest risk. This is based on a program or issue focus, although

I have no problem with the Congresswoman’s focus on agencies, focusing on our areas of greatest risk, doing the audits, doing the reviews, and instituting risk elimination, mitigation, avoidance efVerDate 11-MAY-2000 13:31 Aug 01, 2000 Jkt 000000 PO 00000 Frm 00029 Fmt 6633 Sfmt 6633 C:\DOCS\64808.TXT HGOVREF1 PsN: HGOVREF1
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forts in cooperation with the important agencies such as Office of

the Inspector General and Office of CFO; determining the appropriate performance measures to work us out of these bad situations; and, very importantly, establishing review committees as an

appropriate tool to review specific situations and determine causation where it’s appropriate.

I want to just give a brief overview of the financial snapshot from

my point of view.

I think it’s easy to sit here and report that after 3 straight years

of balanced budgets and a 4th year projected to be balanced that

the District is now entering into a new century of unparalleled

prosperity from a financial point of view. But I think that we

should be on guard; that while we have gone farther and faster,

and I still believe this in similarly situated American cities, we still

have a long way to go.

So we’ve made progress on expenditure control. We’ve made

great progress in our fiscal relationship with the Federal Government. We are beginning to inch along in our way to revive our

economy.

But I think there are still warning signs ahead. Members of the

committee alluded to them. I am very, very cognizant of them. I

think we approach each and every one of our budgets with that in

mind, one that there is still work to do in expenditure control.

If you look at our agencies in comparison to benchmarks in other

jurisdictions, there are still economies to be realized, I’ll put it that

way. If you look at it from cost per capita or cost per unit of service, there are a number of different dimensions from which you can

look at this. There is a lot of progress, a lot of progress to bring

back our economy, and I will be talking about that in a second.

I guess I would like to begin now and through this budget cycle

to just pour a little bit of rain on the parade so that we keep a

proper focus on the challenges that confront us. And I will say

frankly that I may have juiced the parade up a little bit too much

last year going into the budget with all—you know, you have just

been inaugurated, you are obviously going to have a bright outlook.

It may not have had a fully balanced, fully nuanced view of our future going into this. And I think we need that. I will just leave it

like that.

Another key focus going into the next year, and I just want to

be very, very brief with this, are going to be children and our

neighborhoods. I say children and neighborhoods because this is on

the basis of our Citizen Summit, on the basis of something we are

calling Neighborhood Action, where we are linking citizen input to

our budget, linking citizen input to our contracts with our vendors

and our employees and our agency managers.

Citizen input is a tool to bring together the faith community, the

business sector, the nonprofit sector to better support our children,

to better support our neighborhoods.

In the area of children, I am particularly proud of the college access program, proud of our summer jobs program, proud of our onestop shop centers that we are having now for—employment centers

we are building in six of our neighborhoods in cooperation with the

private sector, the safe passages legislation that we passed with

our Council wherein we are going to be tracking on a case-by-case

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basis the children in the District and holding ourselves accountable

for clear, measurable results in terms of health, in terms of nutrition, in terms of education.

In neighborhoods and economic development, I believe that we

have to spend an enormous amount of time and effort in neighborhood development in the following areas: No. 1 is recognizing that

it’s important to bring new investment to the District. And in the

future we need to find a way, and we are beginning discussions

now with the technology leaders in our region, find a way to seize

on strategic opportunities, international trade and, very, very importantly, seize on opportunities in the technology sector, bringing

in new technology investment to the District.

No. 2, very, very importantly, trying to catapult on, Congresswoman Norton, your efforts with the home buyer tax credit and

others, to make an effort and to say to ourselves we will as a District government set a goal of, maybe it’s 50,000, maybe it’s 60,

maybe it’s 100,000 new residents over the next 10 years, and try

to achieve that goal. Because, as Chairman Rivlin and others have

said, we have got a number of jobs in the District. What we need

are tax-paying residents in the District, and that is going to be a

key part of our economic strategy.

I am proud to say that we are beginning to assemble a first-rate

team in economic development. And this team I think is going to

put this District on the forefront of other cities over the coming

years in housing development.

I also want to note something over the last year that I think

really does set a good precedent and two things that really do herald I think the changes that are afoot and under way.

No. 1, in ward 8, for example, where residents have been working for more than 20 years to attract new development, 2,000 new

units of housing are now under construction, 2,000 new units of

housing. And this is, I think, without even including the Hope 6

grant we got this year. This is more housing right now in ward 8

than the rest of the city combined.

Another example is back in October when Hugh Panaro and the

owners of XM Satellite Radio passed up a chance to locate in the

suburbs, and they came and they made their home on New York

Avenue, bringing 300 jobs to Northeast and beginning a renaissance of this important corridor in our city.

Finally, I think I would be remiss if I didn’t mention on natural

resources and our effort to work with this Congress, our Congresswoman and the Federal Government to bring back the Anacostia

River, to promote the redevelopment of brownfield sites and to

show that economic development and natural resource management can go hand in hand.

And finally the issue of Y2K. I have to say a word about the Y2K

issue because I think it’s one of our signal achievements over the

last year. You know, over the course of the last year we testified

to this subcommittee a number of times. And on two of those occasions we focused exclusively, as Congresswoman Morella was mentioning, on Y2K readiness. Simply put, we made it.

The District, though, didn’t make it alone. We certainly want to

recognize and need to thank members of this committee as well as

our Federal partners at OMB, Sally Katzen and John Koskinen,

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the Treasury Department, HHS, the Clinton administration in general for helping make the District Y2K compliant.

As of now, the entire system’s infrastructure of the District continues to run without problems; 95 percent of the District’s systems

are operational and all city-wide technology infrastructures are operating normally, including and most importantly our public safety

operations.

The several-year effort most intensified over the last couple of

months produced the expected results, an entire city-wide readiness and technological spring cleaning that resulted in the complete upgrade of antiquated systems, producing higher standards of

greater efficiencies, which is a fancy way of saying that we have

used the occasion of Y2K, the crisis of Y2K, to seize an opportunity.

And I want to thank the leadership of Suzanne Peck and Norman Dong for using the occasion of Y2K to begin putting in an infrastructure in this city that is going to allow this city to, I think,

really excel over the next 4 or 5 years in on-line service to citizens,

to excel with a webpage that we are going to be launching in another couple of months or so that will be second to none in its utility and functionality. So we really are using this occasion and making progress.

I get a number of calls from our citizens, and I am sure you do

as well, complaining about all the road cuts and the coordination

of the road cuts. And if you look at our city, sometimes I just want

to jump out of the car, I’m just so frustrated looking at these road

cuts because it is frustrating. That is the bad news.

The good news is that all these road cuts show us that this city

in another year or so is going to be one of the most technologically

connected cities in the world. We are like St. Louis back in the

19th century with the confluence of the Missouri and Mississippi

Rivers. We are here at one of the major hubs of technology. And

I think the moral of this story going into the next century is use

the resources, the tools, the partnerships, that we have to really

seize this advantage.

So, as I say, the residents of our city need and they deserve and

they expect a government that works for everyone, particularly our

youngest and our most vulnerable citizens. That is a commitment

that I have made as our mayor. I believe that we have made

progress. There is much more to be done, but I want to thank this

committee, and particularly Chairman Davis for his partnership,

his support of our city and self-government in our city, his support

of this administration and his belief that the District really can be

America’s flagship city.

So I want to thank you, Chairman Davis, and thank members of

the committee.

Mr. DAVIS. Thank you, Mr. Mayor.

[The prepared statement of Mayor Williams follows:]

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Mr. DAVIS. Dr. Rivlin, you have been with us, but even before we

started, you have been predicting this 5 years before it happened

and worked through to help.

Ms. RIVLIN. Well, it happened, but now it is getting better.

Thank you, Mr. Chairman. I want to join my colleagues in expressing appreciation for the work of this committee. I think the

District is very fortunate to have the leadership of this committee

on both sides of the aisle and the District and its surrounding jurisdictions represented so prominently and so ably on this committee

and its enormous strength for those of us who work in the city and

care about its future.

Your letter of invitation asking me to testify covered a great

many questions. I believe you want to hear most from me about the

Authority’s transition plan for suspending its activities, so I will

get to that fairly quickly.

The Authority, as you remember, was created by act of Congress

in April 1995 at a time when the District was in financial disaster.

It was in terrible shape, and there was no way of hiding that.

Now, almost 5 years later, the District is in much better financial

shape. In fact, the recovery, as you all know, has been quite dramatic. We have had two balanced budgets behind us. We are about

to have a third. We are into year 4 where we also confidently expect that we will have a surplus.

The District’s bills are getting paid. Its taxes are being collected.

Debt obligations once again sell for market rates. And from a financial standpoint, there has been much progress.

But it is important to recognize that the District needs to expand

its economic foundation. Its tax base is still too narrow. Vigorous

and sustained efforts are needed to attract and to keep new residents and add and to enhance business opportunities. Otherwise,

we are in trouble going forward.

The District also has considerable deferred maintenance and a

history of inadequate infrastructure investment. Its decayed and

outmoded infrastructure will take substantial resources to correct.

The District is focusing on modernizing its infrastructure, using

that word loosely, to require—broadly that is, to cover streets,

roads, and computers and all sorts of things. And I urge the Congress to assist the city’s elected leadership with the necessary resources.

Over the past year, the Mayor has assembled a strong team of

experienced professionals to run major agencies of the District, and

this team has worked hard to put together the Mayor’s strategic

priority action plans which are very impressive indeed and which

we expect will improve the performance of the District visibly over

the next year or so. Indeed, visible, measurable improvements have

already occurred in the delivery of many District services, and

more will be evident in the coming months.

Despite the improvements, however, we are all conscious that serious deficiencies remain in the delivery of many public services in

the District. Tragically, as you have noted, some of the egregious

problems of neglect and mismanagement affect some of the District’s most vulnerable citizens.

We have also made considerable investments in technology, but

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formation systems. We are particularly concerned that systems

modernization urgently needs to be completed, employees hired and

trained to maintain and use these systems.

Reform will not come easily or quickly to a government that has

been neglected and mismanaged for many years. It will take sustained and concentrated effort to effect permanent change. But we

can all be proud that the process is under way and moving forward.

Mr. Chairman, I turn now to my main topic, the time by which

the Authority must suspend its activities. How do we become a city

without the Authority?

In order for the Authority to suspend its activities, the Financial

Authority Act requires that the District government must end the

fiscal year with a balanced budget for 4 consecutive years as verified by the comprehensive annual financial report. The District

must have access to private credit markets at reasonable interest

rates; and any obligation incurred by the Authority from the

issuance of securities, and in fact there have been none, must be

certified as discharged; and all short-term requisitions by the District government from the Treasury must also have been repaid.

The various statutory requirements read together almost certainly take the Authority through the end of fiscal year 2001. If,

as we expect, the District achieves a balanced budget in fiscal year

2000, it will have satisfied the statutory requirements to terminate

the control period. However, the District would still be in a control

year at that time since the fiscal year 2001 is a year for which a

financial planning budget approved by the Authority will be in effect.

So, as we interpret the statute, the Authority would continue its

normal functions through September 2001, with the exception of

approving the budget for fiscal year 2002, which the Authority was

merely required under the statute to review and report on to the

Mayor, the Council, the President, and the Congress.

Over the year and a half between now and the time that we hope

to suspend activities, the Authority will be working hard with the

Mayor, the Council and the leadership of the city to ensure that we

believe the District government is in good shape and strong fiscal

health.

We will be working on three major fronts: strengthening the decisionmaking processes of the city, strengthening management of

D.C. agencies and the effectiveness of service, and growing the city

and its tax base.

We also plan to make recommendations to the Federal and District governments for improvements in the governance structure of

the District to fulfill one of the purposes of the Financial Authority

Act.

On strengthening decisionmaking processes, good decisions must

be based on accurate, timely information which is available and

well understood by the participants in the decisionmaking process.

While considerable progress has been made with strong leadership

from both the chief technology officer and the chief financial officer

in bringing D.C.’s information systems at least up to the standards

of the late 20th century, if not quite into the 21st, much remains

to be done.

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The well-known difficulties with implementing the new payroll

system called CAPPS, the source of the infuriating teacher payment errors; and the implementation problems of the new financial

management system called SOAR, which have complicated the closing of the fiscal year 1999 audit, illustrate the need for sustained

attention to improving the District’s ability to produce timely, accurate information for decisionmakers. The Authority will be working

hard with the CFO and the CTO to facilitate the upgrading of D.C.

information systems.

Good decisions also flow from decision processes in which participants know their roles and work well together to get the decision

made, even when they disagree strongly about what the outcome

should be.

Last year’s budget process left much to be desired, even though

it resulted in a consensus budget strongly supported by the Mayor,

the Council, and the Authority. Inadequate preparation and unresolved differences between the Mayor and the Council forced the

Authority to play a major role in brokering a final compromise.

This year we hope that earlier agreement on fundamental assumptions underlying the budget and better communication between the

Mayor and the Council will enable the consensus budget process to

flow more smoothly with less active intervention from the Authority.

A major process issue that must be resolved soon is how the District of Columbia public school system is to be governed. The Authority is prepared to turn over governance of the school system

but must be assured that there is a new governance system in

place that will serve the best interests of the city and its children.

In view of the need to resolve the issue of school governance and

to establish a workable system, which may require one or more

referenda, the Authority is prepared to be responsive to a request

from local elected officials to delay the return of school governance

until the end of this calendar year.

On strengthening management and the effectiveness of services,

the Authority will be working closely with the Mayor and the

Council and the Inspector General and others to strengthen management and accountability for producing effective services responsive to citizen needs and concerns, including developing performance benchmarks for services.

We believe the city’s work force must be heavily involved through

labor management partnerships and other arrangements in improving the efficiency of operations, outreach to the public, and a

sense of pride in services delivered.

We are particularly concerned that important services, for example, mental health and child welfare, remain in receivership and

accountable to judges, not local officials and citizens.

We will be working hard with the Mayor and the Council to help

the agencies in receivership to achieve service standards acceptable

to the courts and established a firm basis for seeking their return

to local control.

Finally, growing the city. Although the financial future of the

city looks far brighter than it did 5 years ago, its continued fiscal

health, as others have stressed, is by no means assured. The city

has a narrow tax base and much of its current prosperity could

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fade if the national and regional economic boom were to lose its

momentum. The city has lost a third of its population in the past

20 years and has suffered job loss with the downsizing of both the

Federal and the D.C. governments.

The continued fiscal health of the District of Columbia depends

on growing its job base and its resident population, especially the

latter. The Authority will be working with the elected officials of

the District and its business, labor and nonprofit leadership to help

create a vibrant process of economic development.

In conclusion, Mr. Chairman, much progress has been made in

Washington. However, much hard work remains. The Authority

looks forward to closing down on September 30, 2001. Meanwhile,

we will be cooperating with the Mayor and the Council to be sure

that the city is functioning well and no longer needs us.

Thank you.

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

[The prepared statement of Ms. Rivlin follows:]

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Mr. DAVIS. Ms. Cropp.

Ms. CROPP. Good morning, Chairman Davis, Congresswomen

Norton and Morella. I am pleased to appear before you today with

my colleagues, Mayor Anthony Williams and Alice Rivlin. Let me

join with them in thanking the committee so very much for the

work that you have done on behalf of the citizens of the District

of Columbia. We think that we are better for it.

As we begin the 21st century, I hope that you share the feeling,

from what I am hearing, of the real pride and optimism about

Washington, DC, which I have sensed among our residents and our

businesses. As I had said before when we first saw it coming, there

is a new feeling of our citizens holding their heads up and their

shoulders back.

We recognize that there are still lingering problems with the

functioning of the District of Columbia government, many of which

have been experienced by other cities, some of which are of our own

making, and some of which the responsibility lies elsewhere. But

I believe that we are well on the right track to addressing most of

these problems.

I also hope, Mr. Chairman, that you would agree that the locally

elected officials of the District are more than willing and able to

do our part, as we expect our Federal and regional partners are

willing and able to do their part, in taking the actions necessary

to continue our progress and ensure the long-term financial health

of this city.

1999 was a very good year for the District of Columbia. A new

reform-minded Council and the Mayor have worked hard together,

sometimes with constructive tension, often with Congress and the

Financial Authority, and always with our residents and businesses,

to continue the ongoing revitalization of our city. Taxes have been

cut, housing and economic development has been growing, and

major legislative reforms have been or are about to be enacted that

will improve the functioning of our local government.

Last year was the first year in more than a decade in which the

number of jobs grew in our city instead of declined, and the decadelong loss of population has finally begun to stabilize. We still want

and need many more residents and jobs in Washington, DC, in

order to expand our revenue base and ensure our economic viability

for the future. That is why we are redoubling our efforts to make

the city a more attractive place to live, to work, and visit.

Neighborhood stabilization and revitalization remains our collective No. 1 priority, which of course cannot be achieved without

making real improvements first and foremost in education, in our

public schools, along with continuing improvements in public works

and public safety throughout the city.

The Council, as you know, initiated a recent dialog that is ongoing with the Mayor and with our citizenry to focus upon how we

can improve the governance of our public school system so that we

can achieve more accountability and best serve the interests of the

children of the District of Columbia. That effort, led by council

member Kevin Chavous, chair of the education committee, introduced legislation that would look at the governance of our school

system. And it has created an awful lot of dialog, I think healthy,

in this city to that end.

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Let me take this opportunity to note just a few of the many other

major legislative initiatives by the Council during the past year:

the Tax Parity Act, which is designed to make the District more

competitive with our surrounding jurisdictions in terms of retaining and attracting more residents and businesses; the legislation

establishing an independent housing authority to replace the receivership that has been in place for public housing; tax increment

financing for major retail and housing development, such as we are

experiencing right now at Gallery Place, which is a mechanism

that can be and will be duplicated to help spur revitalization of our

neighborhoods throughout the city; the legislation providing the

chief of the Metropolitan Police Department with additional tools

to retain and attract experienced police officers to fight crime; the

emergency legislation that was enacted to address in part the fatal

neglect of the mentally retarded persons in group homes; and the

legislation that it is about to be considered by the Council which

comprehensively reforms the system by which the city manages

and disposes of its own property.

I would like to provide to the committee a record of a copy of the

legislative agenda for Council period 13. It is the first time that the

Council has put together an agenda that we expect to accomplish

over a 2-year period, a set of goals that we hope to initiate.

This is the strategic planning document that the Council developed again for the first time last year. The agenda identifies 33

Council goals for this legislative period. And we, in fact, will be

meeting next week in another strategic planning session to assess

our own performance in accomplishing these goals and update and

revise our priorities where appropriate and working together with

the Mayor and Financial Authority to initiate many of these reforms.

A little more than 2 years ago, the opening of the MCI Center

at Gallery Place as a home to professional basketball and hockey

helped spark the downtown development boom that we now see

evidenced by the many construction cranes in the sky.

Last year, Chinese New Year, sitting in the middle of H Street,

as you looked up, you saw seven cranes in the sky of the District

of Columbia. The new convention center is under construction on

schedule north of Mount Vernon Square. The Carnegie Library is

being renovated as the new City Museum of Washington, DC. The

Business Improvement Districts authorized by the Council are

helping the city clean up and provide additional services in commercial areas. In fact, for the first time in a long time, we even saw

Woodie’s windows during the holiday season based on the efforts

of the BIDs.

New apartments, condominiums, hotels, restaurants, movie theaters, grocery stores, and other retail arts and entertainment venues

are being created or planned, not only downtown but in our neighborhoods as well.

The District government, as you know, has experienced 3 consecutive years of budget surpluses, thanks to the sacrifices by our

workers, our citizens, and thanks to management reforms, to a

strong national and regional economy, and thanks to the revitalization legislation that you enacted to relieve the city of several costly

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assumption of the unfunded pension liability that the Federal Government had created and transferred to the city.

We also appreciate, Mr. Chairman, your sponsorship of the legislation enacted by Congress last year with our Congresswoman Eleanor Holmes Norton to provide the District high school graduates

with the ability to attend public universities in Maryland and Virginia at in-state tuition rates, plus the new financial assistance to

the University of the District of Columbia and to students attending private colleges in the District. This will be very helpful to us,

and we need to assure that our students are academically qualified

for these higher educational opportunities, which I hope we will be

able to expand at both the local and Federal levels.

We expect fiscal year 2000 to end with the budget surplus for the

District government as well, which would trigger the beginning of

the end of the Financial Authority pursuant to the legislation

which you were instrumental in enacting 5 years ago.

At this time next year, when the audit for fiscal year 2000 is

completed, we expect to have worked hard to achieve the statutory

requirements of four consecutive balanced budget—surplus budgets. We also hope that 2000 will be the year that includes historic

steps toward full realization of American democracy for residents

of the District of Columbia and that we are finally successful in our

long-standing struggle to gain voting representation in the U.S.

Congress.

We ask that you give serious consideration to remedying the denial of this fundamental right to our citizens and that you, therefore, take a new and positive look at Congresswoman’s Norton’s

proposal in this regard, particularly her legislation to provide

greater legislative autonomy for the D.C. Council and also to allow

the District’s locally raised revenues and expenditures to be excluded from the annual national politics of the congressional appropriations process.

In closing, let me reiterate some of what I stated to you almost

1 year ago today. Prior to and since the enactment of the Financial

Responsibility and Management Assistance Act, this city has gone

through some rocky times, some challenging times, and some very

creative times.

We have recently entered 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 toward the day

when governance of this city is solely by elected officials who are

accountable to the citizens.

A lot of things still need to be done, but the first and major step

of recovering from our financial crisis has been accomplished. Implementation of significant reforms to service delivery improvement

are ongoing. And we, the elected council and elected mayor, collectively have the vision, commitment, and democratic mandate from

our citizens to work together with other stakeholders toward a renewed and revitalized District of Columbia.

Thank you for this opportunity to testify before the Congress. I

am, of course, available to answer any questions you may have.

[The prepared statement of Ms. Cropp follows:]

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Mr. DAVIS. Thank you. We are going to go right to questions. I

am going to start the questioning with our vice chairman, Mrs.

Morella. But before I do that, I want to ask one question.

Ms. Cropp, you focused a lot on the economic development, and

I think everyone did. Ultimately, that is what is going to be critical

for the city, because I think we can get the service delivery and we

are moving in the right direction in all of these areas, but if the

city does not establish an independent tax base over the long term

to sustain it, we have huge problems. There is tremendous opportunity in those areas, whether it is down at the Navy Yard or

whether it is at Gallery Place downtown. We are starting to see

things moving.

When I get to my round of questions, I want to focus a little bit

on some of those strategies, because it is a very competitive market

to attract capital in the major cities, and you are competing against

a suburban market that is very competitive at this point. But there

is a niche there. So we will get into that.

Let me start the questioning if I can with my colleague from

Maryland, Mrs. Morella. Let me say that I think we will do 10 minutes, and I will go from you to Ms. Norton and then to myself.

Mrs. MORELLA. Thank you, Mr. Chairman.

I want to thank the three of you for being very honest in your

appraisal as you look back and yet applauding yourselves for what

has happened with the progress that has been made in the District

of Columbia and then looking ahead at what more needs to be

done.

A question for the Mayor and anyone else who may want to comment on it is actually related to what I and Congresswoman Norton both referred to in our opening statements, and that is the

Mental Retardation and Developmental Disabilities Agency.

I know you took very, very strong action this past week in that

regard, essentially firing top personnel and temporarily privatizing

the operation. And this resulted no doubt from the deplorable and

disgraceful conditions which were allowed to exist, including the

documented cases of abuse, deaths, missing records.

I wanted to ask you, where do we go from here? How could this

agency have been allowed to function the way it has been? And

with regard to that part of the questioning, I guess I would also

ask Councilwoman Cropp about what happened to Council oversight of this agency.

Mayor WILLIAMS. Well, let me talk about how we got there and

then I’ll talk about what we are doing to get out of where we are.

I think it is an important question.

When I came into this job, I always believed the key to our success was laying a good foundation; and just as a major part of

building a bridge is the foundation, a major part of rebuilding this

government is going to be in its foundation. And that is ensuring

that we have integrity in our government, that we’ve got management control in our government, that we manage risk well in our

government.

These can sound like arcane technical terms, but they really are,

as you’re saying, connected to and are synonymous with people not

getting good service, renting buildings that are unoccupied, people

dying. So we have asked each and every one of our agencies,

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through the contracts that we are laying out with each and every

one of our agency heads and the evaluation standards for middle

managers, to take risk management as one of their top priorities;

and we began doing this some months ago, even before this report

came to light.

I think a second part of this was alluded to by Congresswoman

Norton, and I talked to our inspector general about this, and that

is a need to do a systematic auditing, performance auditing,

throughout the government so that we have an independent third

party evaluating where we are against where we have established

a certain standard.

In respect to—and we haven’t had this in the past to a level that

we should and, frankly, some of the management reform work that

was done in DHS didn’t pick this up—and I think a fair question

to ask is why wasn’t it, because there was a thorough review of the

management ‘‘review’’ of DHS and did not pick up these problems.

And you have got to ask, did you get what you paid for in that connection?

In terms of what we are doing, though, now that we know where

we are, what we have done is the following: Recognized that a total

rebuild of this system has to take place, but it’s not going to be successful unless all the different parties are consulted, all the different parties are briefed, all the different parties feel that they are

participating in this, including our labor community, because I

think bottom-up action is necessary.

I was criticized early because within days I had not fired two or

three people. I think it is easy to satisfy yourself and figure, well,

I fired two or three top people, you have solved the problem. You

really haven’t. And if you haven’t done it right, you actually have

undermined morale on our management team. I think what you

have to do is to look broadly and systematically at the work that

needs to be done. And we have done that.

We have done a 30-day report, found these systematic problems

on our only self-assessment, and we have done the following. No.

1, bring in a consortium of providers headed up under the Joseph

P. Kennedy Institute to manage, short term, this system, the operations of this system, and to see that the services are getting to our

disabled citizens. That is No. 1.

No. 2, work with a task force that will work with us in designing

a completely new system, new managers. Employees will now compete for jobs in this new system. If they have not succeeded in

making it into this new system, we are going to help them with

outplacement, severance assistance, we hope relocation within the

District government. We are going to be very, very methodical and

thoughtful and humane in that. But we really need to rebuild this

system.

And also key to this is seeing that, as we rebuild this new system, we not only have new contracts in place, but we have a system of monitoring these contracts. And we are looking to this task

force, which includes everyone from HHS to people who are in the

community in terms of masters and providers to help us see that

that system design works.

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So that is a somewhat long, extensive answer. But I think a bottom-up solution was called for, and it was worth the time and

worth the method to do it.

Mrs. MORELLA. We would be interested in your keeping us posted

in the progress that is made.

Concilwoman Cropp, would you like to comment on that?

Ms. CROPP. I would. There is no doubt that we need better oversight of that whole area. The Council recently, in addition to what

the Mayor has done, has passed emergency legislation that would

require autopsies on all boards of the city and also requires investigation of every injury of death in mentally retarded and group

homes. We join with the Mayor in applauding him with this action

that he has taken recently.

I think it also shows what has happened, not as an excuse, but

what had happened when that particular area was totally decimated recently, somewhat of funding, that there was a huge, huge

cut of more than $100 million over a very short period of time. It

is not as an excuse, but perhaps when you see large cuts happening

to any particular area, maybe the onus is on us to more vigorously

do oversight to see what impact that type of cut will have from it.

So throughout that process, we have learned that we need to

probably take a better approach and a different approach in it.

Mrs. MORELLA. So we have learned the hard way?

Ms. CROPP. Unfortunately, yes.

Mrs. MORELLA. And the way to go.

I and this committee are very interested in not only watching

what happens but being willing to help you. If you need any help,

let us know.

Mayor Williams, I would like to pick up again on an issue that

I raised in my opening statement, and that is the tendency for racial profiling with the taxis. Does that mean that if you are not

white and you are black you have to have a three-piece suit on and

look like you do with a bow tie, and look so good, in order to hail

a cab or not be rejected?

I have actually heard this from other people, too, not only the

Washington Post, but I have heard it from people and I know that

they have a tough time getting a cab.

Mayor WILLIAMS. Racial profiling is inexcusable, and I can actually say in truth that I have been in cities with my bow tie and

have not been able to find a cab. So—I’m a student of Harvard and

Yale and I can’t get a cab, so everybody is exposed to racial

profiling. And that is why I find the remarks of the Commissioner

there, I think she has done a good job otherwise, but I think these

remarks are inexcusable and unfortunate and they do not reflect

the policy of this administration.

I think there are problems here with our cab industry that are

going to take some real leadership. We are not going to address the

problems in our cab industry based on trying to ferret out, or fathom through ESP or otherwise, some kind of emerging bubbling consensus, because there really isn’t. They are so divided on everything. The cab industry is divided. Our cabbies are divided on medallions, permitting, licensing, separators in the car.

After one incident, I told our cabbies we need separators in the

car. This is being done in every city and it protects you. And one

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cabbie said, well, this is going to interfere with the ambiance of the

cab.

So I think we are going to need, all of us as elected officials, to

step up and just say, this is how it is going to be done, because

I think trying to wait for consensus in the cabbie community is not

going to happen. And we are going to need locator devices. I think

we need separator devices. I think again we need to get at the

deep-seated issues with our cabbies, work with them on the economics of our cab industry so that they’re getting the capital,

they’re getting the assistance to build a first-rate cab fleet, which

we don’t have.

Mrs. MORELLA. Will you be doing that and the Council also doing

that?

Ms. CROPP. Yes, we will be working with the Mayor to take a holistic and comprehensive approach to the taxicab industry. Of

course, that type of profiling cannot be tolerated nor encouraged.

But quite frankly, if you talk to citizens of the District of Columbia,

you could have a three-piece suit on and anything else, and if you

are going to certain sections of the city, certain cab drivers won’t

even take you there and even anywhere. So we need to discourage

that totally.

But while we are looking at that and must not tolerate that, I

think the other side of the coin is that we need to look at approaches that we can help protect the safety of our cab drivers.

And perhaps it is some of the things that the Mayor has said, looking at whether or not they have partitions from the front or back.

There are other ways that we need to look at it, and it is a serious

concern for taxicab drivers. But while doing that, we must ensure

that all citizens can get into a cab, have the ability to go wherever

they need to go.

Mrs. MORELLA. I thank you.

Sorry, Dr. Rivlin, I did not have a chance to ask you whether or

not the Mayor had consulted with you on the performance plan.

Ms. RIVLIN. The Mayor does a lot of consulting with us.

Mr. DAVIS. Ms. Norton.

Ms. NORTON. Thank you, Mr. Chairman.

Mayor Williams, there were reports earlier this week of a possible strike by non-teaching school personnel. Could you give us a

status report on that matter?

Ms. RIVLIN. Well, there’s active negotiation going on at the moment. I don’t know that I could bring you up to date on the exact

status.

Ms. NORTON. But you do not expect a strike anytime soon?

Mayor WILLIAMS. We are hoping there won’t be a strike. And I

was referring to Alice because I know that Connie Newman, who

is taking the lead on education issues at the board along with Arlene Ackerman, has been actively working with the unions to try

to resolve this.

Ms. NORTON. That matter raises larger questions that I know

have been at the forefront of your thinking and goals, Mayor Williams, and that is to get a hold of labor relations, a key, of course,

to assuring long-term stability in the city and reform of the government itself.

69

You were left, of course, with a system that was very piecemeal,

not your own creation, but something that frankly comes out of

years of the way labor relations have developed, kind of, on their

own potion in the District of Columbia, so that you have some who

had negotiated for bonuses, others who had not.

I wonder if you could give us any idea of how you intend to draw

together, into one cohesive system, labor relations in the city and

how you intend to keep this piecemeal approach, which is broken

out in the school system, from repeating itself in other parts, from

other personnel in the government.

Mayor WILLIAMS. Well, I think we need a global labor strategy.

And for the agencies under my purview, we have—we have retained on a pro bono basis a lead negotiator; and we are working

hard with the labor community to see that we have a first-rate

labor liaison and office of negotiation that can work these issues,

chief among them over time, I think, trying to reduce the number

of bargaining units, which makes life hard in terms of negotiation

and makes life hard in everything from paying payroll and everything else; and trying to see whether we can do that, trying to work

with the schools and our independent agencies and their labor situations.

Independent agencies, we meet regularly with the boards and

commissions I think for the first time in a long time to try to bring

our boards and commissions more in line with what we are doing

in the regular executive branch of government.

So, for example, we bring together the boards and commissions

in the economic area, boards and commissions in the children and

families area and some other issues—we try to get coordination on

is labor.

Ms. NORTON. I really don’t understand this difference between

boards and commissions and the way in which you are talking in

any other part of the government.

Mayor WILLIAMS. Well, you’ve got WASA for example. They have

got labor issues over at WASA. I don’t have direct control.

Ms. NORTON. But most commissions, even though they are independent, would not, in fact, be beyond your purview in this regard,

would they?

The one thing I really do not understand, and maybe legislation

is required, we keep hearing from mayors, well, you know, these

are independent agencies. You take a position with respect to the

School Board, OK, this really ought to be under one person. I

mean, is there something about boards and commissions that

makes labor relations or other parts of the District of Columbia not

hold together or hang together, and does it require congressional

legislation or legislation from the Council itself?

What is the difference between—I can understand WASA, which

also has some input from the region, but most of these so-called

independent agencies are under—somehow or the other under the

D.C. government—and I do not understand the difference between

them or your control and the Council’s control over them and control over so-called mayoral agencies. And if there is a difference

that goes to better management in the D.C. government, then I

think that should be brought out and it should be dealt with either

by the Council or, if it is a charter change, by us.

70

Mayor WILLIAMS. To answer the question the best way I can, I

don’t have direct operational control over D.C. General Hospital

or——

Ms. NORTON. How about the lottery?

Mayor WILLIAMS. Well, the lottery, I don’t either because the lottery right now is under the independent CFO. So it is a matter of

persuasion. It is a matter of getting the right people appointed to

these boards like UDC and D.C. General or WASA. But I don’t

have direct operational control.

Ms. NORTON. Have you looked to see whether that is the way

other cities do it or whether that is the best operation? I just do

not know. I do not know how they got set up that way. I do not

know if it is the best way to do it. I do not know if it is different

from other cities.

All I know is that if the Congress is told, I’m sorry, this is an

independent agency, that invites the Congress to get into it. So I

would like to know how these independent agencies ought to relate

to the central government so that we can all work together to do

something about it.

Ms. RIVLIN. Well, you are raising a very good issue. And there

are really several issues here. One is the independent agency. And

we just talked about one. We talked about the school system and

that the school system does not report to the Mayor. At the moment, it reports ultimately to the Authority, which is why the

Mayor turned to me for the answer on the question of exactly what

is going on in these labor negotiations. So it is a complicated situation.

Even within the agencies that report to the Mayor, there are an

enormous number of bargaining units, and we have all talked

about working together to sort of formulate a strategy with the

unions as to how to reduce the number of bargaining units to get

a common labor policy across the city as a whole.

Ms. NORTON. I would just ask the Control Board, the Council,

and the Mayor to look at the independent agencies to see whether

to effect the kind of streamlined government and financially efficient government you are after before changes of any kind are

made.

Dr. Rivlin, I recall that last year you had a different view on the

tax cuts as originally proposed by the Council. If I recall, you and

the Mayor both had different views based on your long-term judgment of the D.C. Economy. I would like to ask you if you think that

there should be tax cuts yet again this year within the District?

Ms. RIVLIN. We are just starting into the process of looking at

the revenue forecast and the spending forecast for the next year

and going forward.

Personally, I think the District is in a situation in which further

cutting of taxes, although I can understand why one might want

to, is a risky thing to do in view of the needs for improving services

and the fact that we can’t be sure that the revenue flow into the

District, which has been very satisfyingly high in the last couple

of years, will continue, especially if we have a downturn or even

a leveling out of the rapid growth of the regional economy.

The District treasury has benefited from the same thing the Federal treasury has. Everybody is earning a lot of money and capital

71

gains are going up, and that is very beneficial to all governments

that tax income and capital gains. But it may not continue forever,

which is why this important focus on economic development and

growing the population must happen.

And I personally would be nervous about any further tax cuts,

in fact—tax restructuring is another question—but net cuts until

we get on a firmer financial basis going forward.

Ms. NORTON. Until it is assured that more revenue coming into

the District.

Ms. RIVLIN. Yeah, until we can form the tax base.

Mr. DAVIS. Dr. Rivlin, as I understand your answer, you are

against revenue cuts, it is not the tax cuts per se. If a tax cut could

produce more revenue, you would not have any aversion, but it is

the revenue cuts you are concerned with.

Ms. RIVLIN. That’s correct, Mr. Chairman. But there are often

revenue—those who favor tax cuts often have very optimistic views

about——

Mr. DAVIS. I do not want to get into scoring. But, for example,

the first-time homebuyer’s tax cut did not come out of city revenue.

That is a tax cut that has probably done more to build the tax

base.

Ms. RIVLIN. Oh, yes. That is terrific. My son just bought a house.

Mr. DAVIS. I hear Michael Jordan is buying one, too. I am sure

with that tax benefit he can use that, too.

Ms. NORTON. Thank you, Mr. Chairman. I know the chairman

will work with me as I try to get more tax cuts of that kind that

do not cost the District anything.

Chairwoman Cropp, I want to give you an early warning because

I expect Senator Durbin is going to be back. With my $5,000 firsttime homebuyer’s tax cut, an independent study was done that

showed the nexus between that tax cut. Of course, that tax cut is

the kind of cut that you would expect the nexus to be rather clear:

Here is $5,000, come live in the District. And of course, that levels

the playing field when it is very difficult otherwise to do so.

There was a lot of skepticism as to whether or not a small income tax cut would have that effect, not because of the District, but

because historically that has been very difficult to show.

Now, Senator Durbin, who is a strong proponent of home rule,

was so disturbed at the notion that the first thing that the Council

would do was to cut taxes—he got close to—to his credit he did not

do it—he got close to trying to intervene in the District, itself. That

is just how risky he thought it would be. Instead, what he did was

to pull back and indicate that the District should, and I am sure

he will raise it during the appropriation period—during the next

period, track and be able to show what kinds of results it is beginning to get from the Tax Parity Act.

I say this to you, because it is going to happen, and ask whether

or not any attempt is being made to see whether some independent

source can look at the tax cuts to see what effect they had, and I

would like to know what was the average amount of that tax cut

for the average D.C. resident.

Ms. CROPP. Well, let me just remind you that with the Tax Parity Act, the initial set of cuts had nothing to do with the income

tax. In fact, we won’t know that and won’t even have an idea of

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that for several years out. That wouldn’t happen until year 3 of the

plan.

Ms. NORTON. So when is the first year that residents will see any

reduction in their own taxes paid to the D.C. government from

whatever source?

Ms. CROPP. I believe the first year would be the year 2001; 2001

is the first year.

Ms. NORTON. Will it be an income tax?

Ms. CROPP. Yes, that’s correct.

Ms. NORTON. What will be the average amount of that income

tax reduction?

Ms. CROPP. I would submit this to you: The year 2003, it comes

down to 9.3—it comes down to 9 percent from 9.975 percent in the

year 2002. So for the income tax piece it will not see it actually

until the year 2003.

We have realized, very clearly, that we could not make a tax cut,

income tax cut, in the first year, and in fact, that was part of the

compromise in order for us to do it in out-years to give us an opportunity for stabilization. And also the tax cut is built upon a certain

amount of revenues being there. If, in fact, the dollars are not

there, there is a safety valve in that.

There is a very clear safety valve. The Council, in initiating tax

cuts, we did not want to do anything that would destabilize the financial picture of the District of Columbia at all. We have worked

very hard to stabilize it. So the tax cut is very small, a very small

tax cut for our citizens. While we were doing tax cuts for businesses, it was strongly felt that the individual citizen and resident

also needed to see something. We needed to have an opportunity

to see what we could do to expand our population, and we felt that

would happen. But if, in fact, through a formula we do not have

the dollars there, then the tax cut would not occur.

We were talking about an awful lot of dollars, surpluses, in the

District government; and this tax cut was based on that. The initial

tax cuts were for businesses and efforts to try to make sure that

we encourage economic growth on that side. But we officially believe that we need to also encourage economic growth on the side

of our residents.

Ms. NORTON. Thank you very much.

The dilemma is inherent in how you have expressed your answer. They had to be small, and so the question becomes, can a

small tax cut have the effect that was trumpeted, namely, of bringing people into the District. It has got to be small because of the

revenue problems of the District; and yet, the smaller it is the less

the trumpeted effect that somehow people, on the basis of a small

amount of money, are going to decide to move to the District rather

than someplace else.

All I ask, because I have no judgment and think that is a matter

of data—and I appreciate that the Council did, in fact, try to reflect

the revenue problems of the District. But I do say that whatever

you can say when you testify before the Senate Appropriations

Committee should bear in mind that you need to have in place

something that objectively tracks the effect here, because Senator

Durbin spent the major part—this is a man who helped us enormously on tuition access, but spent the major part of the rest of

73

the time voting against our appropriation in subcommittee because

of this tax cut. And this is a Democrat who very strongly supports

us on home rule.

The best thing you could have is the kind of evidence that indicates that no harm is done, even if somehow the tax cut has not

performed miracles. I do not think anybody expected that.

Ms. CROPP. But keep in mind that there is no way to track that

for this year’s budget.

Ms. NORTON. All I say is this: The man said ‘‘track it.’’ If you

cannot track it yet, come in with an indication of why you cannot,

when you are going to begin and what your methodology will be,

or I will have problems up here dealing with a Democrat in the

House. And I do not need the kind of problems I had with Senator

Durbin last time.

Ms. CROPP. Fair enough.

Mr. DAVIS. We will do another round. Let me start with the

Mayor and then ask for comments.

We talked before about the tax base and about how it is coming

back. And you talked about the 2,000 additional homes. We are

opening facilities that were being closed before. It is moving in the

right direction—there is no question about it—that needs to continue. The regional growth has been phenomenal. The city is starting to share in that.

Can you share with us a little bit of your vision? And I know that

when a company makes a decision to open a branch office or headquarters somewhere they are making a very competitive decision

about what it is going to cost them, how efficient they can be. You

understand this and we have had some conversations.

Give me a little bit of your vision if you can and so forth where

you think you are going, what we need to do better, how we can

help you from a congressional point of view. And then I would like

to hear from Dr. Rivlin and Chairman Cropp.

Mayor WILLIAMS. Just in general, I think we create the background conditions in terms of tax incentives for our businesses, and

we have a range of employee tax incentives, capital tax incentives,

including in areas of our city no Federal capital gains with certain

provisions, improving public safety in these capital communities

where crime has gone down now for the last 2 or 3 months in these

areas where we have concentrated our activity. All these things,

better public service, creating the background conditions.

A question of marketing. I am the first Mayor to have gone to

Las Vegas to, it was actually to a convention, it was to the International Convention of Shopping Centers. And I was out there talking with all the shopping centers from around the country about

Anacostia. And we are now in negotiations with some major retailers about locating in the District. We are very proud of that.

I recognize that and I have talked to the folks here on the panel

and with you, as well, that this boom isn’t going to last forever and

we have to make the transition from a retail tourist service economy to try to do a better job with health technology and technology

per se. And we have begun a series of discussions with the major

industry leaders in technology in our region about directly and personally what it will take to create conditions here, whether we will

make some investments.

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So, for example, if AOL is going to be locating a data center, I

think they are going to be putting a data center in Manassas, we

want them to be thinking about the District. If you are making a

major location decision, we want to ask you, what does it take to

locate here in the District of Columbia?

We have made a major effort to work with folks such as Fannie

Mae to move the District ahead in housing, putting together the financing tools, putting together the technical assistance, so that

over the next couple of years, I believe we can be one of the top

cities in the country in housing. And why I think that is important

is because I think it is important for us to talk about not only attracting retail investment or business investment, but how do we

attract residents. And that gets me to my final point.

I think a big part of our neighborhood development efforts has

to be reform in our schools so that we can target the reform efforts

in our schools in a way that parallels and aligns and complements

what we are doing in our neighborhoods. We have a HOPE VI

grant from the Federal Government, working with the private sector, Federal and city council, with Douglas and Stanton dwellings.

And all of us, and Eleanor, were there and we announced this

major grant, some $50 million.

We have got to make sure that the schools in that area are also

on a reform track so that we are leveraging effort. And right now

that is problematic. Linda talked about the governance discussion

that is going on. If we don’t get the governance question resolved

and really focus that effort down in the neighborhood schools, we

really are in the long run impairing the ability of this city to really

attract the residents that we need.

Because I think are you seeing cities around the country right

now that are attracting single couples, that are attracting gay couples, that are attracting couples that are retired, they have raised

their kids and they now want to come to the city. We need to attract now families with children who have confidence in our

schools.

Ms. RIVLIN. I agree with all of that very strongly. I think it takes

a very coordinated effort from marketing to taxes to improving

services, especially schools.

Let me mention just one other thing that the Mayor has focused

on but did not mention, namely regulatory reform and improving,

which the Control Board took the lead on. In working with the

Council, we have had considerable simplification and streamlining

of regulations in the District, and I think that we can go further.

But the other is the permitting and issuing of various kinds of permits that you need to do something.

The District had a very bad reputation. Business people would

say, well, all right, even if I decide to locate here, it’s such a terrible hassle. I can’t build anything. I can’t get permission to do this

or that.

I think we’ve turned that around in quite a dramatic way and

the District may end up being thought of as a really good place to

start your business from that point of view.

Mr. DAVIS. Thank you.

Chairman Cropp, you brought this up as a big part of your testimony.

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Ms. CROPP. Well, it really is a major component of the District’s

continued health. I think one thing that is happening that is quite

different is the Mayor’s new team that he has put together to help

this, and that is with the deputy mayor for Economic Development

and Planning.

For the first time in a long time, the District really has a planning director that can look at not only what is happening downtown but also look at what is happening in our neighborhood.

There is a combined focus from the Mayor and the Council on

neighborhood revitalization.

It was really heartening for the Council to hear from the deputy

mayor for Economic Development that we are going to look at really trying to bring businesses into the community, we are going to

look, we are going to have a team together to be aware businesses

are talking about leaving the District, to see how we can encourage

them to stay there.

One other thing that is happening in the sector outside of the

District and that I think is equally as important and that is from

the CDCs and the nonprofit housing group. They have recently

merged and that merger I think really will be important for neighborhood development to bring in small businesses in the neighborhoods and where you also will see the nonprofit housing group

building, restoring housing to encourage our neighborhoods to come

in.

So an awful lot is going in that direction and I think it is positive, and I agree with what the Mayor and Alice Rivlin have said.

Mr. DAVIS. I think from the city’s perspective it is obvious why

you would want this development to come in—tax base, employment opportunities, what it does for the charities, all of those

things. But from a suburban perspective, it is important as well.

Let me just tell you why. First of all, if you argue against the

commuter tax, we ought to be doing everything we can to make

sure you have your own tax base. That takes those kind of issues

away when we reach in together.

Second, we talk about our traffic problems in the suburbs. We

have an infrastructure to get people into the city and we have people living in the suburbs who, frankly, if they live in the city where

we have mass transit available, it makes the whole system run a

lot more efficiently instead of the kind of sprawl that we have gotten.

For a lot of reasons, there is an infrastructure in the city that

will support more people that is not existing in the suburbs and

frankly strains our resources and adds to the traffic.

And finally, you cannot have a society where you have half very

wealthy and affluent and thriving and a core there that is not

going anywhere. It just does not work that way.

I think the thing that has made me the proudest of sitting here

for 5 years and watching the city is not the fact that it is fiscally

better off and they are delivering services, but the fact that you are

starting to see a tax base come up. This is not a zero sum game.

This is not you are taking it from the suburbs and moving it to the

city. The whole region benefits when these things happen.

I think a lot of the rhetoric that we heard originally, where you

would have one jurisdiction against another, has now dissipated,

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and I think everyone has come to the understanding that a strong

city makes for a stronger regional climate, a suburban climate. And

frankly, having our kids come down here, now you do not worry

about it on a Saturday night if they are coming down to the MCI

Center. It is the way it was when I was in high school. And there

is a long way to go, but I think we’re going in the right direction.

And you have kind of articulated the vision where you want to go,

and we want to make sure you have the tools to go about it and

continue to do that.

Ms. CROPP. One thing, Mr. Chairman, I would like to put on the

record—and the Mayor speaks of this frequently and he may be

able to help me out here—is the housing market in ward 8. They

are developing more housing in the ward 8 community than in any

other area.

Mr. DAVIS. He noted that in his testimony, 2,000 houses I think

he talked about.

Ms. CROPP. And that is a big statement. Wards 7 and 8, if you

look at the past two decades, that’s where you have seen our largest exodus of our population. And we do see that turnaround as a

big statement.

Mr. DAVIS. It is also important that we make these developments

work. The worst thing that would happen is to build these developments and have them not continue to sell and the resales and everything else. So we all have an interest in making sure that these

developments work, and that will attract more capital.

Mayor WILLIAMS. I was going to say because, Mr. Chairman, the

housing market now in the District is so, so strong, we are trying

to seize this opportunity over the next couple of years while it is

strong to really make an impact on housing.

We committed one of our short-term goals to take 200 units of

abandoned housing and turn them into homeownership. We had a

housing lottery. I think we had 6,000 people waiting to get a shot

at owning one of these homes. That is how strong the market is.

We need to take advantage of it.

Mr. DAVIS. I have got a whole series of more questions, but my

10 minutes are up and I am now going to recognize Ms. Norton for

some more questioning.

Ms. NORTON. Thank you, Mr. Chairman.

I would like to ask a question about a provision that we, the

chairman and I, enacted or passed, actually, as a makeshift measure before the Control Board had an opportunity to get a hold of

contracts; and that is the million dollar review by the Council.

We recognize that that is perhaps unique in American government. And the only reason that we included that, it may have

passed at the time of the Control Board statute, was because there

had been such overspending, there was no Control Board, we kind

of looked for somebody else to look at contracts.

Now, I note that we have had to exclude the Water and Sewer

Authority, and should have. It was the right thing to do. We excluded the Convention Center because we wanted to make sure

that that happened. After the highway money came through,

money for which I worked very hard, working with the Council, we

got it kind of passed through, whereby you did not have to go

through all of the paces.

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Far too late, the city recognized, in my judgment because it only

put more pressure on the technology people in Y2K, that they

should, in fact, not go through these paces here. I want just to say

to you, we did not do it because we thought it was anything but

a makeshift way to get at contract and procurement problems

while you were getting your act together.

My inclination, since it was we who did it and it does not raise

a home rule issue, since no government has it, since it adds to the

bureaucracy, since we have other ways in place even after the Control Board leaves to, in fact, assure competitive contracting—my inclination would be to say it ought to go. I would like your own opinion on whether or not this unique way to control contracts is necessary or whether it may indeed at another time perhaps with a

different council have the exact opposite effect, and that is to say

‘‘politicize contracts.’’

Ms. CROPP. Well, I think that we need to probably review that.

It’s a good issue that you bring up. We needed to be able to move

quickly with regard to Y2K. At this point I do think that we need

to slow down that pace and look at it more carefully.

The whole contracting process, though, we need to make sure

that we do streamline it in a way that it does not prevent us from

being able to enact on different things outside of those areas that

you talked about. And that was part of what we did in the Appropriations Act last year, we looked at the contracting piece. And I

think we need to continue to review it.

We may not need to exempt an awful lot of agencies or different

programs from it, but we do need to continue to be vigilant as to

an approach that we can speed it. The Mayor and the Council, we

have initiated a new process where we do summaries at the Council. That has made us move quicker. We need to just review it and

continue to watch and see if there are other areas in which we can

make it speedy, but at the same time with due diligence with regard to the contracting process.

Ms. NORTON. Do you think this process is necessary to control

contracts at procurement in the District of Columbia, each of you?

Ms. RIVLIN. Well, the current process doesn’t involve the Control

Board. We were reviewing contracts over a million of the District.

We have turned that power back when we did the memorandum

of understanding to the Mayor.

Mayor WILLIAMS. I think that for contracts under a million dollars the best role for the Council in terms of oversight is to take

a performance management approach and spend a lot of time asking as programs are being developed, and then retrospectively as

they are being executed, kind of on a diagnostic basis, are we getting what we paid for and spending oversight there as opposed to

on a transactional basis, where I think the temptation arises and

where sometimes you see, not just with our council but with legislatures in general, excepting present company I guess, a legislature

would have a tendency to become a contracts appeals board. And

you have seen in our city just contracts endlessly delayed while

people jockey the different players against one another.

So what I would like to see is a process where we could work

with a relevant committee chair, design a program, work with that

committee chair where we can design a contract over $1 million

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and then have the kind of summary review that Linda is talking

about, but then understand that we are going to have some intensive scrutiny and review, and I welcome that from the Council, in

terms of what did we get in terms of performance from the contract?

Because, you know, we spend an enormous amount of time talking about the performance of our employees. We need to spend a

lot of time talking about the performance of our contractors.

Ms. NORTON. I could not agree more on that score. I must say

that that has been one of the huge failings of the D.C. government.

You got a contract, you kept getting the contract, it did not matter

how you did on the contract. This is where the oversight is, of

course, particularly needed; and I know that is where the Council

and the Mayor are beginning to do it.

I would like finally to ask you a question about the procurement

system, period. I know that the Control Board and the city have

been working to improve procurement ever since the Control Board

was set up. I have to tell you, the impression is still left with me

that our procurement system is far more cumbersome than others

in the region, that it takes far longer to order almost everything

that it does for other systems in the region. Am I wrong?

I get that impression on an ad hoc basis when specific things

come to my attention. But it is not my impression that as improved

as the procurement system is, if you laid it alongside the other systems in the region, that it would be as efficient as those systems.

I am told, we have to wait because we are waiting for the time

period for this contract to come in or for the RPF to come in. I still

hear those kinds of things. I am simply trying to get to the bottom

of what it would take to get a procurement system like Virginia’s,

you know, 45 days or whatever it is, out on the street, or you need

to order some books and you get them within 30 days. Or maybe

I am wrong, since I am, in fact, reacting to ad hoc information.

Mayor WILLIAMS. Well, we were talking about, to speak of economic development and to quote Michael Jordan, who is actually

in and of himself a major economic development coup for the city,

I was listening to him talking about the team, and I really could

imagine one of us talking about agency management because he

was talking about accountability; and people need to like, you

know, perform for the dollar that they are getting and this and

that. He was saying that, you know, it took the Chicago Bulls several years to get up to speed. And I use that by way of analogy because I think Elliott Branch, whom we brought in as our new procurement director, was head of procurement for the entire U.S.

Navy, so he has dealt with very, very sophisticated and complicated

procurements and he understands, working with Steve Kilman in

performance contracting.

Two things I think are very becoming about Elliott’s approach

and I think are going to redound to our benefit and cut down procurement times. One is, Elliott understands intuitively that we

need to spend much more time internally on our multimillion dollar contracts and much less time on the contracts under $25,000.

And he is pursuing and is launching a small purchase card so that

we are spending our time and effort where we need to spend our

time and effort, because right now we are spending an enormous

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amount of time and effort on small purchases and we are letting

by the major traffic in terms of dollar volumes. That is completely

backward.

Second, you know, as long as you have been here, we have all

heard people talking about improving the procurement work force

and really haven’t seen a lot to show for it. Elliott came in, he

briefed the accounts and the Control Board on his program for setting standards, tough standards, and providing the requisite training for his people to give them a chance to meet those standards

in the procurement work force in the District government. We

haven’t had that before and I think that is going to bring the efficiencies and the economies that you’ve talked about, because when

it comes to licensing and permitting, Alice is right, we’ve made a

lot of progress in the District government with business, but if it

still takes too long to get a contract that is related to sliding that

business in the District, we’re behind the eight ball.

Ms. NORTON. Ms. Rivlin, did you have anything you wanted to

say, since I know the Control Board has spent a lot of time on the

procurement system, in particular?

Ms. RIVLIN. We have. And I would second what the Mayor said.

I have a lot of confidence in Elliott Branch. And he is working very

hard to improve the system, and I think we are going to see it fairly soon.

Mr. DAVIS. Thank you. Let me just ask a few questions.

We are all aware of the horrible tragedy that resulted with the

death of 2-year-old Brianna Blackman. I think that was widely covered. I understand the District’s foster care program is under receivership and that the courts have jurisdiction. But I think there

has to be closer coordination between the receiver and the District

government.

The toddler, of course, had been in a foster care home and was

killed by a blow to the head at the home of her biological mother

during a 2-week return to the home by order of a local judge. There

was no court hearing. The judge apparently never saw the report

from Child and Family Services recommending the child not be

sent back to the mother. Obviously, something went terribly wrong

in this case. This is something that we do not ever want to see repeated in this city.

What are we doing about it? And overall, is the District’s foster

care program better off now than it was before the receivership?

Let me start with the Mayor, and I will let you talk and then

get any comments from anyone else on this.

Mayor WILLIAMS. I would say that one of the biggest problems

is, I cannot really confidently or reliably tell you whether we are

better off or not, because we don’t really have any system of measuring, of knowing whether we are better off or not. And I think it’s

really incumbent on us as our first order of business with Grace

Lewis who we brought in. Grace has got experience working with

a receivership up in Baltimore, working with a receivership here.

She was got actual hands-on experience working as a master in receivership situations to work with the mental health receivership,

work with the child and family services receivership, to put us on

a 2-year track to get out of those receiverships. And the way we

want to do that is to try to sit down with the masters, sit down

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with the judge and agree on a set of standards that we have got

to meet and we have got to fulfill and we’ve got to satisfy, and resource in order to get out of that arrangement. And I think setting

that standard will allow us to say what we are actually accomplishing.

I actually find it horrifying that I really can’t tell you—I really

can’t tell you whether we are better off or not. I know that we have

got overspending. And I thought the whole purpose of this exercise

was to reduce the amount of overspending. I know we have parents

who are criticizing us because they are not getting paid, because

the adults in all these different jurisdictions cannot bring things together.

I think the answer is trying to, with this liaison, agreeing on

some set of standards with a judge. I think—as CFO, I often

thought that maybe the answer was some kind of legislation, because the Congress put in place a Control Board to manage better

the District government while at the same time you had a number

of judges acting on a statutory basis in a receivership situation trying to do the same thing; and everybody is working at cross-purposes.

Mr. DAVIS. Maybe we ought to let the GAO come in here and

play referee and give us some data, and maybe we will go in a different direction. This case, I know broke everybody’s heart who

read about it. And this kind of thing should never happen. I appreciate your candor in terms of how you deal with it. And maybe we

need somebody to come in and do an analysis that does not have

an ax to grind in this. And GAO would fit the bill and tell us what

still is not working well and how it is working.

Mayor WILLIAMS. I think that would be useful actually.

Ms. RIVLIN. At this stage, I am not sure we need another outside

player. Because I think the Mayor has taken the steps to bring everybody together.

Judges do not want to run these agencies, really. And the receiver in this particular case has been struggling. But I don’t think

it’s clear that the services are much better than they were.

But I think we now have a mechanism for bringing everybody together and trying to get some standards and some measurable outcomes and then going to the judge and saying, look, this is what

the city is able to do and it may be time to end the receivership.

Mr. DAVIS. I do not know. I mean, just when you see a case like

this, this should not happen anywhere. It should not happen anywhere. And this is not the first time that we have been on report

here that things have not been going so well.

We will look at it. We are not trying to add another element, but

we would like somebody to come in and honestly call balls and

strikes, and that is what the GAO does on these issues.

Ms. RIVLIN. The GAO would come in and tell you things aren’t

going well, I’m pretty sure. Whether they are the right people to

bring the parties together to do that——

Mr. DAVIS. We may end up working with you to do that at the

end of it. But if we could just get more ammunition to change the

status quo that right now we are kind of mired in how you get out

of this. But I appreciate your comments.

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Ms. CROPP. I agree with a lot of what Dr. Rivlin is saying. But

I would like to just add, part of the biggest problem was that the

District was not provided the appropriate level of service that was

needed. That is how we got into it with the receivership.

What the Mayor suggested is, we need to find out what the

standards are and then demonstrate our capacity to do it. I think

it would be much better for us to get out from under the receivership for things to come under the Mayor.

Part of the other problem that the District had was, for the past

decade or two, the District was overly ambitious in what it said it

could do. We were the only city, for example, that required that our

social workers had to have a master’s degree. Therefore, we did not

have enough social workers; and that helped to lead us into that

problem. We got to a point where we said that foster care homes,

that a home could not have more than four or five children in one

home. Well, if a foster parent had demonstrated that they had the

capacity and the ability to do that, why wouldn’t we allow that to

happen and keep families, keep siblings together?

So we need to have the ability to be able to change some of those

things that the District had agreed to earlier, to establish what the

standards are, and to come out from under the receivership.

I think that the existing receiver is struggling, and I’m not certain if we would not be much better now under the leadership of

our mayor, and with the Council’s oversight, that we could not establish standards and live up to them.

Mr. DAVIS. Let me turn to the fire department if I can for a

minute, and then I’m going to get into education. Mayor Williams,

are you searching for a permanent fire chief or at this point are

you satisfied with the interim chief?

Mayor WILLIAMS. We have a committee under us, Steve Harlan,

with the support and participation of Bob Watkins from the Financial Authority doing a national search. We’ve involved leaders from

throughout our city, all the different interests. We are looking for

a chief. But all of us recognize that Chief Tippett has really

stepped up to the plate and is really beginning to turn the organization around, and all of us support him in that effort. I’ll give you

just one example of where I’m really impressed with what the chief

has done. That is, shortly after coming into office, I don’t know how

he did it, he looked in a phone book or he went to the Internet,

he just looked and he found some used fire ladder trucks and he

brought them here to the District. We’ve been talking over and

over and over again about while you have people criticizing the department about the lack of equipment, where we have the money,

No. 1, you’ve got to make the order. No. 2, even while you’re waiting for this order to get through the system, what can you do as

a stopgap measure to ensure that we’re filling the hole with some

temporary equipment. And I wasn’t getting any answer. Chief

Tippett got in, a week later I got—he invited me over to the training center and I looked and there were two ladder trucks.

Ms. NORTON. Did he borrow them or did he have to go through

the procurement system?

Mr. DAVIS. Some questions are probably better off not asked. He

got them there, right? They were there.

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Mayor WILLIAMS. He showed the initiative and he showed the

leadership. I think there’s a precedent for that throughout the government. We fell behind in leaf collection. I think one of the things

we could have done in retrospect is instead of falling behind on leaf

collection because our equipment had broken down, go up to one

of the higher latitudes where they had already finished collecting

their leaves and made some deal to get some leaf collection equipment from there to fill the hole. That’s good thinking. I think he’s

shown that.

Mr. DAVIS. You could still do a national search and arrive and

keep him on is the point. You’re not abandoning the search. It

sounds like he could probably stand up to——

Mayor WILLIAMS. We’ve got to do due diligence but the search

committee has looked at the work he’s doing. We’re very impressed

with his work, I’ll say that.

Mr. DAVIS. The average response time for 911 fire department

calls, is it improving or not? Do you have a sense of that?

Mayor WILLIAMS. The good thing about 911 is we do have data

that people can judge us on. Right now it’s not good.

Mr. DAVIS. It hadn’t been good for years though.

Mayor WILLIAMS. That’s right. What we pledged to do was put

in new software. We’ve done that. We’re working with Bell Atlantic

on their part of the system that needs some work. I support strongly Chief Tippett’s commitment to on a pilot basis do cross training

of our firefighters who are the first responders. I think that’s more

cost effective than building up a huge parallel ambulance fleet.

This is being done all over the country. We need to do it here. I

think we’re going to see those times start to reduce as all those

things are in place.

Mr. DAVIS. And you talked about the procurement system, just

getting things. One of the things I know that we hear about is the

gear and breathing apparatus available to the firefighters who are

out there in some very tough situations.

Mayor WILLIAMS. You’ve got a serious procurement system problem if someone hasn’t even ordered the equipment. It’s one thing

to order the equipment and have barriers in the system, but in

some cases no one had made an order.

Mr. DAVIS. Who do you blame then, right? Exactly. My 10 minutes are up. I’ll yield back to Ms. Norton. Then I just have a few

questions.

Ms. NORTON. Mr. Mayor, continuing on my revenue concern for

the District, one clear revenue source has been the lottery. Yet

there was some sense that it was up and then it was down. I would

like to know where lottery receipts are now relative to prior years.

Has the good economy meant that the lottery receipts are continuing to go up? Is it a strong source, as strong a source or a stronger

source than it has been for revenue?

Mayor WILLIAMS. Yes, they were up in 1998 under the leadership

of the great former CFO—no. Congresswoman Norton, the lottery

receipts, we showed them up in 1998. They’re going to be down in

1999, and it really isn’t a matter of management. It really is a matter that we had some big jackpots built up and they draw in a huge

volume. We haven’t had the big jackpots in 1999. I really think

that we as a city ought to as a conscious effort decide that we’re

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going to keep our lottery receipts somewhere between 60 to 75 and

as long as they’re between 65 to 75, be happy and not mount too

aggressive a marketing effort. I really believe that. Because I think

a lot of times people are playing the lottery and that’s not the best.

I don’t want to be patronizing or condescending, but it’s not the

best use of income.

Ms. NORTON. I couldn’t agree with you more indeed, unless you

sell them to Maryland and Virginia. I could not agree with you

more. This is a poor people’s tax, no matter how you look at it.

Mayor WILLIAMS. I agree with you.

Ms. NORTON. There’s nothing we can do about it. They’ve swept

the country. But it means the better educated, the more income

you have, the less you are involved in that way of raising revenue.

It’s too bad. Frank Wolf would very much agree with me on this.

Mr. DAVIS. I was going to ask him how his trip to Las Vegas was

when he was doing these other things. It seems to have been a

good experience for him.

Ms. NORTON. Of course, given the state of our revenues, we can’t

afford to let any revenue source we have stabilize now, and that

has to be kept in mind as well.

Mr. Mayor, I don’t believe any of you mentioned the University

of the District of Columbia in your testimony. That’s understandable considering what this hearing is about. I want to thank the

chairman that as we worked together on the D.C. College Access

Act, I asked him to work with me to include the University of the

District of Columbia in it to make it a historically black college and

university and indeed it was the only historically black college and

university that had not been funded and he was entirely supportive

of that, stuck with us entirely through that, and considering the

hard times that the university has gone through, it was and will

continue to be an important revenue source. As delighted as we are

about our work on college access, we don’t fool ourselves. We know

that the majority of the students from this city are still going to—

far more students are going to go—to the University of the District

of Columbia than are going to, in fact, go elsewhere, and that has

a lot to do with our public schools, it has a lot to do with the demographics of our population. I would like to know, especially given

the way in which you hope to better integrate the public schools

with the D.C. government, what your plans are for better integration of the University of the District of Columbia with the D.C. government and improving our own state university.

Mayor WILLIAMS. I think first and foremost, Congresswoman, in

my talks with a number of different people with experience in higher education, including Donna Shalala, and we all know of her remarkable history in education, it really does start with a first rate

board. It frankly took me too long, but I think we’ve come up with

just that kind of board. I’ll give you an example. We have Reg

Gilliam, who’s got substantial marketing experience with Hill &

Knowlton; George Wiley, accounting experience; Ambassador Mark

Palmer, development experience; Peggy Cooper Catritz’s experience

with our educational system right here in the District, Reverend

Willie Wilson’s experience and community leadership with the faith

community; and very, very importantly and profoundly, Charles

Ogletree. He’s a professor at Harvard Law School but what people

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don’t know, extensive experience as the alumni development, he

ran the development campaign for Stanford University so he’s got

extensive experience now in development. And I think that’s a combination of the package that we need for UDC. They’re ready, and

I’ve been meeting with the board. They’re ready to step in with a

short-term action plan for the university that talks about modernization, that talks about infrastructure, that talks about all the

tools that we know the university needs. But, as you suggest, begin

talking about the relationships in its continuing education mission,

in its undergraduate mission, the relationship between UDC and

our public schools. I was delighted to hear the board members talk

about—first of all, I was delighted to see that the board members

were very, very diligent and somewhat skeptical, and that’s a good

thing, in the reading materials they had gotten for their first meeting, asking a lot of different questions about the education environment, if you will, the market, how UDC was going to situate itself

in a reform agenda for the D.C. schools, and those are all good

things to hear. So it’s too early to say exactly what their strategy

is, but I know they would love to talk to you and work with the

other elected officials as they begin their strategy for improvement.

We’ve got some great people on that board now.

Ms. NORTON. Mr. Chairman, I have just one more question. Mr.

Mayor, I was intrigued to hear your testimony concerning risk

management and your plans there and I think that’s much to your

credit. I want to try to understand how it would operate by just

plotting it against some examples. Would the risk management notion you have in place have discovered, for example, that 116 people had already died or would it be more current? Would it get to

operational and management dysfunction? Would it get to an evaluation of managers so you don’t have to fire a manager as, in fact,

things come out? I can understand its great benefit across agencies.

I’m wondering if it also would deal with these very serious, what

I cannot believe are not very serious, unless some magic has happened, problems in the way in which each agency functions as an

operational matter.

Mayor WILLIAMS. I told our agency heads in a Cabinet meeting

a month or so ago that the bar had now been raised. They all knew

that we had some tough standards but I don’t believe in moving

the goal post and I believe that people need fair notice, so I told

my managers, ‘‘I am now officially bringing the bar to a higher

level. Each of you have got to go into your agencies, go into your

agencies and tell me on the basis of your own self-assessment

where there are areas of risk. If you’ve gone and you’ve done the

assessment and on the basis of your assessment we find that there

are some problems, you’re not going to be held responsible. But if

you haven’t done an adequate assessment or even with an adequate assessment there has been some management failure and

you’re responsible, you’ve got to be held accountable. You’ve got to

be held accountable.’’ I can give you examples. These examples

range from the trivial, cell phones, car pools. In Philadelphia, the

only way they figured out the number of cars they had is they just

said—when Ed DeSeve was in Philadelphia, they said, OK, everybody with a car, you’ve got to come down to memorial stadium and

leave the keys. That’s how they did the car audit. The only way

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they figured out how many cars they had. TVs, furniture, it’s junk

like that which is important because it goes to confidence in the

government and waste, to police mismanaging informants, not

managing investigation of deaths and contracts. All that has to be

covered, so that we can look at a corrective plan of action. So as

we get this information, we’ve got to take a range of actions from,

one, literally rebuilding the agency because it can’t really be fixed

all the way to on the other extreme in a much more proactive

range, and we’re doing this. As we create this management supervisory service, we’re saying that, yes, this management supervisory

service is going to be at will formally and nominally but really the

managers are going to be performing according to objective criteria

that are laid out in accordance with these performance standards,

one of them being risk management. So in other words, if you’re

a middle manager, are you managing your resources, your assets,

your phones, your cars? Are you managing your risk in terms of exposure and liability? You’re going to be held accountable for doing

that. So it’s not going to be whether I have a headache or not or

what I feel, it’s going to be an objective standard, and risk management is a big part of it.

Ms. NORTON. Am I to understand that agencies now, you said

you spoke to your Cabinet, particularly after the deaths involving

mentally retarded people, realizing that they are to do their own

self-audit of the kind, for example, that was so well done after on

which you are now acting for the mental disabilities agency, do

they now know that they’re supposed to be looking at that ahead

of time?

Mayor WILLIAMS. Right, in cooperation with the CFO and the IG,

creating this Office of Risk Management, creating a process for ourselves going in and doing the assessments and taking ourselves the

corrective action. I’ve talked to Linda about this, I’ve talked to

Alice about this, particularly Alice, avoiding what I saw myself in

the Federal Government where if you’re not careful you just end

up with a lot—you’re generating a lot of paper but nothing is really

happening. We want to avoid a simple paper exercise and make

sure that there’s a connection between the assessment of a problem

and some real corrective measures.

Ms. NORTON. Dr. Rivlin.

Ms. RIVLIN. I thoroughly agree with what the Mayor is saying,

but just one more point. I think the Mayor certainly wouldn’t disagree with this. Special care has to go into programs where children or the mentally retarded or people who are especially vulnerable where their lives and well-being are at stake. And that’s different from managing property or managing other things, all of

which we want to do well, too, but there’s a special risk there. I

think we all need to be conscious of that.

Ms. CROPP. Hand in hand with that, if I may, is the Council’s

oversight in all of this. One of the objectives that we have been trying to do is to strengthen our oversight, not to be critical but to

be a partner in trying to make things function better. Before we

have our budget hearings, for example, we are about to go into a

set of hearings where we deal specifically with performance measures and we will look at exactly what the Mayor and his agency

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marks, to his credit, that he has come up with against other cities

and to see where we stand with them. So it’s really one of those

partnership things. While the executive branch looks at the challenge before the agencies, the Council must also do its part in the

oversight of it.

Ms. NORTON. The notion that was in the paper that somebody

opined that what we had created was a miniature Forest Haven.

We closed Forest Haven but say that then we create little Forest

Haven around town. That was spine tingling to hear. I appreciate

that Kathy Patterson, to show you the way in which I think confidence is being restored, indicated that she thought that the Council should have uncovered some of this. When you hear that kind

of thing, you know that it’s going to get better because what we

haven’t heard are a set of apologetics about it. The chairman has

asked me to ask you, Mayor Williams, while he was out of the

room, he had to go out of the room for a minute, do you plan to

replenish the tobacco settlement fund? If so when and how?

Mayor WILLIAMS. The answer is of course yes and that will be

happening in 30 to 60 days, as soon as the reprogramming has

taken effect. I also support actually—I’m just not speaking—I’m

not speaking for the city here but as a Mayor I personally support

separating the tobacco fund more fully as a trust instrument so

that we can be assured that into the future this tobacco fund has

been segregated properly from the regular operations activities of

the District’s budget operations.

Ms. NORTON. One more question in that regard. Congress did

something very important last time. It is a permanent change

which allows you for the first time I think since home rule not to

be treated like a Federal agency with respect to any surplus, but

set aside some of it and then to do as other jurisdictions do, to be

able to allocate the rest of it. Is there a way in which—is there a

modus operandi you have for carrying out that change that we

made in the charter? For example, there is probably going to be a

surplus this year. How will the District treat that surplus? Will you

have to set aside all of it because of the amount that the Congress

said should be set aside or will there be some allocation so that

some of it can be used?

Mayor WILLIAMS. I think there is a reserve and there was also

I guess a provision of 50 percent of unforecasted revenue. Together

I think what we do with it is going to be on the basis of criteria

that are established between the Council, the Mayor and the Financial Authority executed by the CFO.

Ms. NORTON. In the budget process coming up?

Mayor WILLIAMS. No, this will be looking back on the reserve

that will come into effect—I guess—well, we’ve done the audit,

we’ll know where we sit. We’ve got criteria. We’ll have to make

sure that expenditures are in accordance with the criteria and are

one-time-only expenditures.

Ms. NORTON. One-time-only expenditures would be chosen this

year, though.

Mayor WILLIAMS. This will be this year, in year 2000.

Ms. NORTON. Thank you, Mr. Chairman.

Mr. DAVIS. Thank you. I just have a couple of questions. Dr.

Rivlin, you were with us when we wrote the Control Board Act.

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You were at the White House. We worked very cooperatively together. Before that you were prophesying for years this is where

the city was heading if they didn’t make some changes and they

didn’t heed your advise. As we approach now the end of the Control

Board’s active oversight under the act, are you confident at this

point that the Control Board—that the act should allow the Control

Board to phaseout at this point and that the city is moving in the

right direction and that Mayor Williams and the Council are doing

the appropriate things?

Ms. RIVLIN. I am, though I think there’s a lot more to be done.

But I would not advocate extending the Control Board beyond the

period in the current statute.

Mr. DAVIS. I just wanted to get that on the record, not to say

that there isn’t more to do but the reasons you were created in

terms of the fiscal mismanagement and everything else, you have

made tremendous progress.

Ms. RIVLIN. That’s correct. You will remember, Mr. Chairman,

that the act does not say that the Control Board is abolished at the

end of the last control year. It says that it somehow, I forget what

the words are, but its activities are suspended, it goes dormant,

and it could come back if things went into a bad situation.

Mr. DAVIS. Thank you.

Ms. NORTON. Could I just have a word on that? The chairman

and I were a party to that, so people won’t think that that means

that there’s a looming Control Board hanging over you, that’s a

much better way to account for any possible threat of insolvency

in the future because the chairman and I would never want to go

through what we went through together. We were strong home rule

advocates, in fact produced a statute that left home rule in place.

The District gave back a lot of that home rule through the appropriation process through the way it dealt with the Control Board.

What it does was to set criteria that are rather draconian before

any Control Board could pop up. But we would certainly not want

to ever have to come before the Congress and start all over again.

We would rather have exactly what we have now, which is automatic sunset. And if things really go down the tube, if you miss a

payday, for example.

Mayor WILLIAMS. It’s not going to happen.

Ms. NORTON. Then of course automatically you would have a

board to come in place. Otherwise, the chairman and I, if that were

to happen again, I think we might be faced with a receivership and

not the notion of a Control Board at all. So I don’t think that the

fact that there is a dormant Control Board is any threat to elected

government in the District of Columbia because we do not see now,

neither the chairman nor I, that the circumstances that would give

rise to the springback of a Control Board would occur again.

Mr. DAVIS. You’re absolutely right. Whoever sits in this chair in

the future and whoever sits in yours, you don’t want to have to put

them through what we went through. I think that strong oversight

is the best remedy for no interference quite frankly and a good dialog in terms of everybody sharing. I think we’ve all learned from

our past mistakes. Mayor Williams, I just want to ask you a few

questions about the education system in the city. You came up with

I think a fairly bold proposal. The Council has taken its cut at it

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as we move ahead. I don’t know that if my adding my opinion to

that helps or hurts your cause or Council’s cause in the city, within

the city politics but I want to make an observation and allow everybody to respond. We took a major step this year in Congress in giving D.C. students the same right students everywhere else have

and that is basically to pay instate tuition, make a college education, a quality college education and broad based choices available at affordable rates, something that is very, very important.

College if it’s not affordable it’s just a dream and people really

don’t pursue it. But we still have to get people to that level where

they’re ready for college, where they’re attuned for that, and the

educational system in the city, I think Ms. Ackerman has done a

great job as the superintendent but it’s still lacking in a lot of

ways. As the Control Board phases out and we go through these

other items, we return back to a school board that has basically

been dysfunctional for 30 years in my judgment. Mayor Williams,

you had a proposal to get some accountability basically under the

Mayor’s office and Mayor and Council. The way we used to do it

in Fairfax before we went to elected boards is the county board

would appoint the members of the school board and we were accountable. What is happening to that proposal? How are we going

to get to—it’s being chewed apart by the local media and so on. But

this is the toughest nut for this city to crack. If you really want

to get your residential areas booming again, getting people moving

into these houses that they’re building in Anacostia and other

areas, you have to have a school system that people are willing to

send their kids or they have to be so wealthy that they’ll send their

kids to private. And that’s a nonstarter. Organizationally how you

set that up, what is the accountability, who’s in charge is a critical

component to that. I think we all understand that the current system prior to the Control Board wasn’t working. Mayor Williams, let

me just ask you where do we go from here, how do you feel about

it and then just say I applaud the leadership you’ve taken and I

think the Council needs to be a partner in this, but going back to

where we were before I think gives me some concern, I think it

gives a lot of our colleagues some concern. We obviously want this

resolved within the city without having congressional interference.

As you know, a lot of my colleagues have had absolutely no compunction about interfering in the D.C. educational system at any

time. So we’re looking for you to try to resolve this.

Mayor WILLIAMS. Right now, Mr. Chairman, as to my proposal,

I believe that—I’m willing to say that since as the chief elected official of the city I’m going to be held responsible every day, certainly

3 years from now, for the quality of the education of our children,

it’s only fair that I be given the authority commensurate with the

responsibility, that this is the most critical thing that we’re going

to do, that we have to put in place a system so that you have a

strategy, you can build the support, you can have the operations

all working together for our kids. Right now we’ve got everybody

finger-pointing at one another and we’re not allowing Arlene to be

the superintendent that I think she really can be with the support

that she really needs. That’s my feeling. Now, in a political point

of view despite the support from I think a number of rank-and-file

citizens and the leadership of the city, I think we’re cresting at two

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votes on the Council so we’re not doing as well as we could be

doing on the Council, and I think the moral of that story is the

Washington Post doesn’t run the city because clearly if they ran

the city we wouldn’t be sitting at two votes. Having said that, I

think entering this debate I think has really helped because I think

that there is, and Linda can speak more authoritatively on this

than I can as it goes through the Council, but it seems to me that

there is a consensus on the following, that there should be elected

leadership for the board, there should be stronger operational authority somewhere with or aligned with the Mayor and that we

need to define better the roles and responsibilities of the Board.

Those three things. I think everyone agrees.

My problem with what came out of the Council a couple of days

ago was that left intact without any modification, you have an

elected board that’s either completely advisory and frivolous, and

I don’t think that’s going to work, or you have a board with some

authority and a Mayor with some authority and we’ve gone from

a situation where we have six or seven people in charge to a situation where we have only three or four but you still have blurred

accountability. So I’m meeting with Councilman Chavous this

afternoon, have been talking regularly with Linda, be talking with

the whole Council and try to work through something that meets

the test of focusing accountability and trying in one way or another

to satisfy some of the Council’s concerns. I think the question

though is really not—ultimately the question in our city and other

American cities is not whether or not we’re going to have an elected board or an appointed board. The real fundamental, important

question looming is whether we’re going to be able to really see our

public school system not only survive but thrive and avoid what

more and more people are saying is vouchers.

Mr. DAVIS. That is, as you know, barring substantive changes in

the way the city does things, Congress has voted that before, that’s

a very hot item, and I think if there’s an admonition here it’s to

have you work these issues out so we feel there’s some proactivity

going on at the local level because my colleagues, I think many of

them are not going to hesitate to try to take control if they don’t

see that. I would also add that within the city itself we are seeing

polling numbers on vouchers and other issues where citizens get

upset if they’re not getting quality. They want to see at least some

changes from what we currently have. That’s my comment sitting

as an outsider and someone across the river who is trying to do everything we can to give those kids the same opportunity in the city

that they have out in my District.

Ms. Cropp.

Ms. CROPP. The Council feels strongly that perhaps one of the

No. 1 issues that we face is improving the educational system of

Washington, DC, so that we can produce children who can be functioning members of society, educated children who will be functioning members of society. The Council feels so strongly about it that

this controversial issue of school governance was initiated by the

Council. It was the Council who recognized very clearly that the

system of governance that we have now was not functioning. Under

the leadership of the Education Committee chair Kevin Chavous,

a proposal was put forward on school governance. With that an

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awful lot of debate, controversy, and I think healthy, has started

in this city. We still need to decide on I think what the basic issue

ought to be, and that is what system, what form of governance will

really produce a better educated child. Now, we keep hearing

whether or not it should be with an elected leadership of an elected

board of education or whether or not it should be with the appointment by the Mayor. That’s where it has centered at this point. I

think everyone’s goal is to have a better educated child. I would

suggest that if the Mayor, if the Post, if Congress, if the President,

if the Council can share data with us that would show that an appointment as opposed to an elected board would present a better

educated child, I think the Council would be there. The Council

will truly be there. We have done research on the issue to try to

get that type of information. We constantly hear about cities such

as Chicago where it has occurred, Boston, Cleveland, and when you

look at the data, data does not support necessarily any improvement at all with the student. Now, if you’re talking about the political alignment, yes, there’s a difference. But when you look specifically at the students, the data does not support that, that I have

seen at this point, and the Council has tried to get it and we want

it because it will help us make a more informed decision. Where

we have seen a difference is in one school district, where I think

it’s about 2,700 students, and I think it was Cleveland, where there

was significant improvement with the students, and that happened

to have been with what the Mayor just said, the vouchers, and it

was where the students, 2700 students had vouchers and there was

significant improvement there. We have not yet in the District seen

that type of improvement across the board. We do think that the

governance needs to change. We’re in dialog with the Mayor to try

to figure out what the best approach for us to take in the District

of Columbia. How can we help for the system to be more accountable? We’re all pleased that the Mayor is stepping up to the plate

and saying, ‘‘Hold me accountable.’’ we think that with the Mayor’s

total involvement with the school system, we will end up with a

better school system. The only way education is going to improve

is for the Mayor, for the Council, for all of us to understand its

strong importance. We’re looking at that issue, we’re debating the

issue and hopefully we will come out with something that will

make for a better system.

We have made some changes. We have reduced the number of

school boards, members on the school board. What we found as we

did the research throughout the country that the average size of a

school board is from five to nine members. We had 11 members,

way above the average. We heard concern with regard to the school

boards being tied up too politically and being too vested in their

own ward as opposed to the overall interest of the city as a whole,

so we looked at the districts for the school system and we changed

that. We’re looking at the superintendent, because we strongly believe that the superintendent ought to be a part of the Mayor’s

Cabinet in the sense that what we do in human services, we talked

an awful lot about, the school system needs to be a part of it. What

we do with economic development in our work force, the school system needs to help to train our young people to be available for that.

So we will continue the discussion and hopefully the outcome will

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be one that we all want, and that is one that will present a better

educated child.

Mr. DAVIS. Chairman Cropp, thanks. I know your longstanding

commitment to education as well. This is the toughest nut to crack.

Everything else—I guess my only admonition is we’re looking for

you to solve this. That’s where it ought to be solved, at the local

level. It doesn’t necessarily happen that way all the time but to the

extent you all can work these issues out, it makes it a lot easier.

Anything else anyone wants to add at this point?

Let me just say we might want to supplement with a question

or two that we’ll send you but you’ve been up here for 21⁄2 hours.

We very much appreciate your testimony. I’m most encouraged to

hear your comments today. Without objection, the record will remain open until February 1. The subcommittee may be sending

written questions to the witnesses to followup on issues raised. We

will certainly have additional hearings on these matters. I want to

continue to work with all interested parties to achieve these objectives. These proceedings are closed.

[Whereupon, at 12:45 p.m., the subcommittee was adjourned.]

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