- The Washington Times - Thursday, February 15, 2001

District of Columbia financial control board members yesterday approved the District's finances, as expected, then warned city officials to stay fiscally responsible or risk the board's return.
Board members unanimously voted to certify the city's fourth consecutive balanced budget, the requirement to end the authority's control Sept. 30. The board also certified revenue estimates for 2002 and revised revenue estimates for 2001.
"I want to emphasize because there has been some misunderstanding in the media and elsewhere that our governing statute requires that the authority continue all its normal functions and exercise all its powers through Sept. 30, 2001," said Alice M. Rivlin, board chairman.
Mrs. Rivlin was referring to, among other things, comments by D.C. congressional Delegate Eleanor Holmes Norton, who implied several weeks ago the board's work would be finished yesterday, according to city government sources.
Full home rule has not arrived. The only power the board will not exercise for the next seven months will be approval of the city's fiscal 2002 budget, on which Mayor Anthony A. William and the D.C. Council are working.
The control board's power to kill or mandate contracts and laws remains.
Board member Constance Berry Newman issued a warning to the city, saying, "Every goodbye ain't gone."
"The statute provides for a return of a group of people like us if the city doesn't do what I think it's going to do, which is to be responsible," she said.
In the next seven months, the board will issue recommendations on the District's budget process, personnel, asset management, information technology, economic development and procurement.
The board also will monitor the District's performance in delivering city services.
The board, officially known as the District of Columbia Financial Responsibility and Management Assistance Authority, has an annual budget of about $7.8 million and a staff of 30 mostly finance and budget analysts, lawyers and accountants.
Several of the board's employees are looking for work elsewhere, and some already have left.
But "we will be as fully staffed as possible to the end of the fiscal year," which is Sept. 30, one board official said.
Yesterday's board meeting was an anticlimactic end to five years of oversight of the District, which began in the midst of the city's financial crisis.
Board members and local officials announced two weeks ago the city had received a "clean" audit of its Comprehensive Annual Financial Report, and yesterday seemed more of a formality than any sort of celebration of home rule's return.
No elected city officials attended the meeting. Beforehand, Mr. Williams said citizens should be confident because "you're in good hands with this mayor."
Board member Robert P. Watkins III said he was delighted the city met its requirements, which had to be set after "the former mayor [Marion Barry] and former council did not pay attention in the way that they should to the day-to-day details that allowed the city to run in a fiscally responsible way."
Chief Financial Officer Natwar M. Gandhi gave the board a mixed assessment of the city's fiscal status.
"Revenues are growing more rapidly than anticipated," he said. "At the same time, there are new pressures and constraints on the budget."
Mr. Gandhi laid out several long-term challenges to keeping the city fiscally sound: including a small tax base; burdens of both a city and a state; and the responsibilities of being the nation's capital.
"The bottom line is we need more residents working, and working in good jobs so they can pay taxes," he said. "When I look outside my 11th floor window, I can't see anything I can tax."
Mrs. Rivlin and Mr. Gandhi agreed the relationship between the federal government and District must change. The District often picks up the tab for handling major events involving groups from out of the area.
"Unless that redefinition occurs, all the good news we're talking about" may change, Mr. Gandhi said. "Looking ahead, there may be some problems."
Another city economist warned the District is particularly vulnerable to any downturn in the economy.
"What looks like a wonderful, robust economy is not necessarily a wonderful, robust revenue system," said Julia Friedman, CFO for the Office of Research and Analysis.

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