[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]



 
                NEW VISIONS FOR THE DISTRICT OF COLUMBIA

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                            JANUARY 22, 1999

                               __________

                            Serial No. 106-8

                               __________

       Printed for the use of the Committee on Government Reform


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



                     U.S. GOVERNMENT PRINTING OFFICE
56-983                       WASHINGTON : 2000


                                 ______
                     COMMITTEE ON GOVERNMENT REFORM

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut       ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
STEPHEN HORN, California             PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida                GARY A. CONDIT, California
THOMAS M. DAVIS, Virginia            PATSY T. MINK, Hawaii
DAVID M. McINTOSH, Indiana           CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELEANOR HOLMES NORTON, Washington, 
JOE SCARBOROUGH, Florida                 DC
STEVEN C. LaTOURETTE, Ohio           CHAKA FATTAH, Pennsylvania
MARSHALL ``MARK'' SANFORD, South     ELIJAH E. CUMMINGS, Maryland
    Carolina                         DENNIS J. KUCINICH, Ohio
BOB BARR, Georgia                    ROD R. BLAGOJEVICH, Illinois
DAN MILLER, Florida                  DANNY K. DAVIS, Illinois
ASA HUTCHINSON, Arkansas             JOHN F. TIERNEY, Massachusetts
LEE TERRY, Nebraska                  JIM TURNER, Texas
JUDY BIGGERT, Illinois               THOMAS H. ALLEN, Maine
GREG WALDEN, Oregon                  HAROLD E. FORD, Jr., Tennessee
DOUG OSE, California                             ------
PAUL RYAN, Wisconsin                 BERNARD SANDERS, Vermont 
------ ------                            (Independent)
------ ------


                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
           David A. Kass, Deputy Counsel and Parliamentarian
                      Carla J. Martin, Chief Clerk
                 Phil Schiliro, Minority Staff Director



                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on January 22, 1999.................................     1
Statement of:
    Rivlin, Alice, chair, D.C. Financial Responsibility and 
      Management Assistance Authority; Anthony Williams, Mayor, 
      District of Columbia; and Linda Cropp, chair, District of 
      Columbia City Council......................................    22
Letters, statements, etc., submitted for the record by:
    Cropp, Linda, chair, District of Columbia City Council, 
      prepared statement of......................................    78
    Davis, Hon. Thomas M., a Representative in Congress from the 
      State of Virginia, letter dated January 19, 1999...........     2
    Norton, Hon. Eleanor Holmes, a Representative in Congress 
      from the District of Columbia:
        Information concerning salaries......................... 83, 85
        Prepared statement of....................................     8
    Rivlin, Alice, chair, D.C. Financial Responsibility and 
      Management Assistance Authority, prepared statement of.....    27
    Williams, Anthony, Mayor, District of Columbia:
        Information concerning attorneys fees....................   105
        Prepared statement of....................................    44


                NEW VISIONS FOR THE DISTRICT OF COLUMBIA

                              ----------                              


                        FRIDAY, JANUARY 22, 1999

                          House of Representatives,
                            Committee on Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9 a.m., in room 
2154, Rayburn House Office Building, Hon. Thomas M. Davis 
presiding.
    Present: Representatives Davis, Morella, Horn, and Norton.
    Staff present: Peter Sirh, staff director, Howard Denis, 
counsel, Anne Mack, professional staff member, Ellen Brown, 
clerk, and Trey Hardin, communications director, Subcommittee 
on the District of Columbia; and Jon Bouker, minority counsel, 
and Jean Gosa, minority staff assistant, Committee on 
Government Reform.
    Mr. Davis. Good morning and welcome.
    This hearing is being convened under the auspices and with 
the cooperation of the Government Reform Committee. I am 
grateful to Chairman Burton for his leadership in facilitating 
this hearing, and I also wish to thank the ranking minority 
leader, Henry Waxman, and all the members of the full committee 
for their help.
    Pursuant to the rules, I've been authorized to administer 
oaths to witnesses. As per Chairman Burton's authorization, 
this hearing will be conducted in accordance with the Rules of 
the House and, to the extent possible, the Committee Rules of 
the 105th Congress. Without objection, I ask Chairman Burton's 
letter to me of January 19, 1999, be entered into the record.
    [The letter referred to follows:]

    [GRAPHIC] [TIFF OMITTED]65954.001
    
    Mr. Davis. I look forward to continuing the excellent 
bipartisan working relationships which we have enjoyed from day 
one of this subcommittee's creation 4 years ago. I am so 
grateful to the ranking member, Eleanor Holmes Norton, for 
helping to make that possible, as well as my vice chairman, 
Connie Morella, and my colleague, Steve Horn, who is here on my 
left.
    The District of Columbia Subcommittee is proud to have 
played a constructive, bipartisan role in the revitalization of 
the Nation's Capital. Back in 1990, the Commission, chaired by 
Dr. Alice Rivlin, had warned of an impending crisis in the 
District of Columbia.
    By 1995 the District, and consequently the region, was in 
the midst of such a profound crisis. The Rivlin Commission had 
noted, to take just one example, that the District government, 
even considering its county and state functions, had about 40 
percent more employees then comparable cities. I stated in our 
first hearing on February 22, 1995, that the District of 
Columbia faced a spending problem of monumental proportions and 
a management failure to enforce controls.
    The crisis was so severe that the District government 
couldn't deliver basic services. There were very real concerns 
that the city would run out of cash to pay debt service or meet 
its payroll. The District clause of the Constitution gives 
Congress a unique role in the Nation's Capital.
    I think we can all be proud of the responsible way in which 
Congress has stepped up to the plate and worked together in 
exercising this function. It's been my great, great pleasure to 
work closely with my ranking member as we helped the District 
alleviate the unprecedented crisis we found 4 years ago. I am 
also grateful to the Clinton administration for working with 
us. This could not have been done had we had both ends of 
Pennsylvania Avenue going in the same direction.
    Along with revising the District's budget process, we 
created the position of Chief Financial Officer to work from 
within the government. A window was opened to the Treasury for 
dealing with the District's cash and short-term budget 
problems, as well as the District's bond rating which had 
slipped to junk bond status.
    It was never our intent, nor do I believe that it should be 
Congress' role, to involve itself intimately in the 
relationships that were created within the city in such a 
bipartisan fashion. Our purpose in acting as we did with the 
passage of Public Law 104-8 was to create one team to rescue 
and revive Washington, DC.
    The legislation creating the Control Board and the position 
of Chief Financial Officer was signed by President Clinton on 
April 17, 1995. Anthony Williams was not appointed as Chief 
Financial Officer until October 1995, but he was worth waiting 
for. The Control Board and the CFO working together, helped the 
District government to find weaknesses and implement solutions. 
Mayor Williams, I say was worth waiting for. I think there's 
some instruction there as you look for your chief 
administrative officers; sometimes acting precipitously you 
don't always get the best people right off and we learned a 
lesson in getting you as CFO was a godsend.
    Public Law 104-8 makes it abundantly clear that the CFO is 
an organic part of home rule government. Nothing else would 
make sense as the position is a permanent one, which will exist 
long after the Control Board moves into its dormant phase.
    As Chief Financial Officer, Tony Williams supervised and 
performed the financial responsibilities of the Mayor, as well 
as those duties normally assigned to a CFO. These duties 
included tax collection and assessment, bill paying, approving 
contracts, allocating available money in compliance with the 
appropriations and ensuring that the budget is adhered to. In 
Mr. Williams' testimony to the subcommittee at an oversight 
hearing on March 19, 1996, he stated that his top priority was 
to reestablish credibility by taking steps to improve the 
District's financial management, and this was done.
    Today we are very excited about the prospect of hearing 
testimony reflecting the solid accomplishments and a real 
surplus that the Control Board, the Mayor and all the City 
Council and all of us who worked together to make positive 
changes can take pride in having helped to achieve.
    The MCI Arena and the new Convention Center project 
wouldn't have been possible without the enhanced credibility we 
achieved by working together to resolve tough issues. Passage 
of the D.C. Revitalization Act of July 1997 moved us into the 
next phase. We relieved the District of many of the fastest 
growing items of its budget, putting the city in a far stronger 
position to perform basic municipal services. Dealing with the 
unfunded pension liability, closing Lorton, and striking a more 
equitable balance with Medicaid helped to maintain our momentum 
toward achieving economic recovery.
    We are here today with enthusiasm and optimism. As now 
Mayor Anthony Williams said in his inaugural address on January 
2, 1999, this is indeed a time for renewal and recommitment. I 
commend as well the City Council and its chair Linda Cropp for 
working with us and for taking a positive bipartisan approach.
    The phrase ``new era'' and ``new day'' is on everyone's 
lips, and rightly so. I applaud the emphasis in Mayor Williams 
inaugural address to basics, such as filling potholes and 
sweeping streets, washing away graffiti, repairing road signs 
and collecting garbage.
    While we are gratified that crime is down and home sales 
are up, we also recognize the continuing need to restore 
Washington's image in the eyes of the world. So even though the 
city is a far more stable place than it was 4 years ago, we 
clearly have a long way to go. Regional priorities, such as 
traffic congestion, must be addressed, to take just one 
example. And whether it's traffic, economic development, 
education or public safety, it has always been my philosophy 
that we need a healthy city to have a healthy region.
    Mayor Williams' action in requiring his cabinet members, 
agency heads and senior staffers to come up with detailed plans 
for improving services, to require department heads to sign 
performance agreements is very intriguing to say the least.
    I will be very interested to know how those agreements are 
being implemented. Mayor Williams has put himself under some 
deadlines and he established similar goals and targets as CFO, 
and he was very able to achieve some very concrete solid 
results.
    The memorandum of agreement between the Control Board and 
the Mayor has my full support, and I will be introducing 
legislation with the ranking member, Ms. Norton, and vice 
chairman, Connie Morella, to facilitate its provisions. The 
time has come to shift substantial authority from the Control 
Board to the city's elected Mayor and to give the Mayor the 
greater flexibility he has sought over top personnel. In other 
words, I want to give Mayor Williams the tools he has requested 
to do the job.
    I also expect to be introducing legislation to afford high 
school graduates from the District of Columbia opportunities to 
pay in-state tuition to State universities outside the city, so 
they will have the same opportunities that people and students 
in the other 50 States have.
    I look forward to today's testimony as we proceed with our 
joint efforts on behalf of the Nation's Capital, and I would 
now yield to Delegate Norton, the ranking member of the 
Subcommittee on the District of Columbia and our partner here, 
for an opening statement.
    Ms. Norton. Thank you very much, Mr. Chairman.
    My sincere thanks to Chairman Tom Davis, who has initiated 
this hearing so early in the 106th Congress allowing the new 
Mayor, the new Council, through its chair, and the new Control 
Board chair to affirmatively lay out their plans and ideas for 
the District.
    The officials who appear before us today have strong 
records, both of bringing improvements to the city government 
and of unequivocal support for home rule. All three have 
demonstrated that the necessary reforms they are undertaking to 
create a new resident oriented city government are part and 
parcel of home rule and give self-government its essential 
meaning.
    Chairman Davis arranged a very good and encouraging meeting 
with Speaker Dennis Hastert, Mayor Williams and me yesterday. 
Speaker Hastert, the House leadership and others in the new 
Congress have indicated that the Congress wants to help, not 
hurt; to step up, not step in. However, for all the city's 
traditional and justifiable concern about undue interference, 
the truth is that full and permanent recovery cannot occur 
without assistance from the President, the Congress and Federal 
agencies alike.
    We have already begun to think through how the Federal 
Government may be useful in helping to meet a revenue gap which 
may show up in a few years. The fiscal crisis that began early 
in this decade forced the District into a one-sided focus on 
the expenditure side at the expense of the revenue side of the 
budget. That emphasis was in response to unusual amounts of 
overspending that resulted in the loss of the most important 
asset any city can have, a credit rating allowing it to borrow 
money.
    However, the city government, the Federal Government, and 
the private sector are all now deeply engaged in planning an 
action on the revenue side. For example, this week the Mayor 
and I spoke at the opening of City First Bank, the first 
community development bank to open in the District, a financial 
institution that could not have been established without 
assistance from the Federal Government, Georgetown University, 
and several private financial institutions. Howard University, 
Fannie Mae, and the District government have kicked off an 
ambitious plan for home ownership and reinvigoration of the 
historic neighborhoods surrounding Howard.
    I have recently worked with private business interests, 
HUD, and the District government to secure infrastructure funds 
from HUD for a privately financed shopping center in ward 8. It 
will house a 12-screen movie theater and a supermarket to 
replace Safeway, the last remaining supermarket in the ward, 
which precipitously left in October.
    During budget negotiations in October, the White House 
helped me get $25 million into our appropriation to fund an 
economic development corporation. I very much appreciate that 
Chairman Davis has indicated an interest in pressing a 
District-wide enterprise zone, such as the one I proposed last 
Congress. We already have evidence that new thinking on urban 
tax policy can produce revenue for the District, and my $5,000 
homebuyer credit has helped produce a home ownership boom that 
is slowing the loss of the residents, including the middle 
income population, whose flight has ravaged the city during 
this decade.
    These significant public-private initiatives are only a 
small part of the mounting evidence that the District has 
climbed out of its fiscal crisis and is unquestionably moving 
quickly ahead. However, there are governance tools that the new 
administration needs if it is to be held accountable and if 
residents and the Congress are to be assured that revenue from 
them will be productively used, not wasted in the bureaucracy.
    The chairman has already agreed to the first such tool. I 
very much appreciate that Chairman Davis has indicated that in 
early February the committee will mark up the first section of 
H.R. 214, the D.C. Democracy 2000 Act, which will become a 
Davis-Norton bill and will go to the floor as one of the first 
bills of the 106th Congress.
    This provision puts into law what the Control Board has 
already done in delegating to Mayor Williams the responsibility 
for the nine agencies removed from executive control in 1997. 
The bill also eliminates any doubt that the Mayor alone has the 
power to hire and fire his cabinet and managers.
    The heart of the District of Columbia 2000 Act is not yet 
ripe. But I appreciate that the chairman does not have a closed 
mind on whether the Control Board should sunset in the year 
2000, a year earlier than anticipated.
    I have proposed this provision, not only because democracy 
delayed is democracy denied, but also because the District 
already has significantly surpassed the goals set for it by 
Congress. Instead of a balanced budget by 1999, the District 
will have 3 straight years of balanced budgets plus surpluses 
by 1999.
    The Congress gave the city the authority to borrow to 
eliminate its accumulated deficit, but the city will eliminate 
that deficit without any borrowing. With the administration of 
the city in the hands of a Mayor who came to office with a 3-
year management and financial track record in this city and 
surpluses he helped produce, the burden should be on those who 
insist on an un-elected overseer for elected officials.
    Congress has been quick to criticize, even punish, the 
District for low performance. Let us now see if Congress will 
be as quick to recognize the city's concrete accomplishments 
and a new administration with more than lip service when the 
District outpaces congressional expectations and mandates. 
However, from the beginning I have indicated I would not press 
H.R. 214 until the city develops a track record that can 
command passage this year.
    It is difficult to get bills empowering the District 
through the Congress and impossible without a strong case. I 
believe that the city can accrue the necessary evidence in time 
for the District's historic year 2000 on its own like any free 
American jurisdiction. At the same time, the Mayor, the City 
Council, and I are neither lulled by the present surplus 
revenues nor naively optimistic about the city's financial 
future. Part of the surplus consists of revenues that were not 
spent because of operational problems in the District.
    Further, in the face of wholesale flight from the city, the 
good economy has kept revenues from reflecting the depth of the 
loss of middle income taxpayers. We know what must be done, and 
it is clear that our elected officials can do it. Some long-
term fiscal problems remain to be solved, but the fiscal crisis 
that necessitated a Control Board is over.
    Even the best run city government, however, will have to 
work hard to convince the Congress that a payment in lieu of 
taxes or a substantial Federal payment is not only fair, but is 
necessary.
    At an appropriate time, I expect to work with the Mayor, 
the City Council, and Chairman Davis on how to achieve reliable 
and regular revenue sources for a city without a state and 
without the power to tax commuters. Today, I welcome Mayor 
Williams and Financial Authority Chair Rivlin in their first 
appearance in the Congress in their new roles, and Council 
Chair Cropp once again to the subcommittee.
    I look forward to today's hearing, particularly for the way 
it begins to lay the groundwork for the appropriate return of 
authority and hopefully new assistance to the District. I want 
to note that, among those in attendance in this hearing are 
Councilwoman Charlene Drew Jarvis, Councilman David Catania, 
Control Board Member Eugene Kinlow and Statehood Senator Paul 
Strauss.
    I thank you, Mr. Chairman.
    [The prepared statement of Hon. Eleanor Holmes Norton 
follows:]
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    Mr. Davis. Thank you very much, Ms. Norton.
    Let me recognize our vice chairman, Mrs. Morella, for any 
comments she may wish to make.
    Mrs. Morella. Thank you, Mr. Chairman.
    This is pretty exciting. Here we are together considering 
new visions for the District of Columbia. I want to welcome our 
panelists, certainly welcome our new Mayor, Anthony Williams 
and welcome Linda Cropp, who is here with us, who is the chair 
of the District of Columbia City Council and, of course, Alice 
Rivlin, chair of the D.C. Financial Responsibilities and 
Management Assistance Authority. We've spread that title out.
    I'm very proud to serve on the District of Columbia 
Subcommittee and certainly very proud of the achievements that 
have been made to add to the luster and strength of the 
District of Columbia. As a result of the D.C. Revitalization 
Act, the Federal Government has relieved the District of 
certain burdensome expenses, such as the unfunded pension 
liability and the Federal Government has also assumed a larger 
share of the Medicare costs and has taken over the operations 
of the prison system.
    Relieved of these cumbersome administrative tasks, local 
officials are now able to concentrate on the daily operations 
of the city. The city government can devote more time to 
improving police and fire services, collecting trash, fixing 
potholes, maintaining neighborhoods, and improving schools. 
These are the toughest tasks of all and the most important 
because they touch the lives of everybody on a day-to-day 
basis.
    This hearing does mark a new beginning; although we 
continue our bipartisan efforts from the 105th Congress, we do 
so with a refreshing new landscape. As the Chief Financial 
Officer Anthony Williams has testified before this subcommittee 
on many occasions. This is the first time that he is here today 
as Mayor Anthony Williams. I'm certainly pleased to welcome him 
in his new role.
    Although Mayor Williams has been on the job for less than a 
month, he's already made a difference. I, too, applaud him for 
his commitment to fix potholes, sweep the streets, pick up the 
garbage, rid buildings of graffiti. It has been gratifying to 
see him with rolled up sleeves pouring over city documents and 
directing his staff to improve city services in a timely 
fashion. And I even note in today's Post, too, the Mayor's 
commitment and demand for a better short-term action plan from 
city agency directors.
    Yes, he's tough on others, but he is just as tough on 
himself. I look forward to working with Mayor Williams and also 
with the City Council, its great members and its very able and 
effective chairman, Linda Cropp.
    There is much to be done, although I want to make it clear 
that I strongly believe that Congress should not try to 
micromanage the District of Columbia. That would be 
counterproductive, would encroach on the legislative roles of 
the Mayor, the City Council and the Control Board. We can, 
however, be helpful in many ways. And like you, Mr. Chairman, 
and Ms. Norton, I think it's time to restore substantial 
authority from the Control Board to the newly elected Mayor and 
to give him the flexibility he needs to effectively fulfill his 
role.
    I also want to commend you, Mr. Chairman, for the bill that 
you're about to introduce to give high school graduates in the 
District of Columbia the opportunity to attend State 
universities throughout the country at in-state tuition rates. 
It looks like a really good and fair proposal, and I'm pleased 
to be a cosponsor with you, and I want to work with you in any 
way I can to get the legislation passed and implemented.
    As a former teacher, I'm most concerned about the status of 
education in the District of Columbia. At the hearing last 
September on the District of Columbia school system, I was 
alarmed at the declining test scores in math and science of 
students in the poor sections of the city. Thousands of D.C. 
students are leaving school without the fundamental skills 
needed to find a job and function as productive members of 
their communities. Consequently, there are a high number of 
unemployed workers in the District who are undereducated and 
undertrained, unable to meet the emerging technological needs 
of the workplace.
    We must work together to find a way to break this cycle of 
failure and defeat. The present economy is an information 
economy. People who can process information to develop goods 
and services and use technology effectively will excel in the 
next century. We must prepare those who are undereducated and 
underserved so that they, too, will be prepared for the new 
economy.
    It will mean lower taxes, better services, a higher quality 
of life, not only for the District, but for the region as a 
whole. In addition to work force development, there are many 
critical regional issues that challenge us to work together as 
a team, traffic congestion, growth management, water and air 
quality and getting our computers ready for the year 2000.
    I look forward to the testimony from our excellent panel. I 
want to thank you, Mr. Chairman, for holding this very 
important meeting and for your leadership, Ms. Norton's 
leadership and Mr. Horn's leadership.
    Mr. Davis. Thank you very much, and let me now introduce my 
distinguished colleague from California Mr. Horn, whose family 
roots go back deep into this city.
    Mr. Horn. 1840's to be exact, and I'm the only one who 
hasn't been born here but I went 1 year to high school here, 
Mr. Mayor. And this has been a great city over the years and 
the members of this subcommittee and the Speaker are very 
committed, as the previous Speaker was, to help the government 
be a very responsive government.
    I congratulate you on your excellent record in the past as 
a public servant. I know you bring tremendous skills to the 
leadership and chief executive of this city and not too many 
mayors have had your experience. So you're way ahead of the 
game. And I've gone through your program proposals. I think 
they're excellent.
    And I think you need the power to appoint, to discipline, 
to remove managers, not only at the top level, but also in the 
intermediate level. I remember one of the things that took me 5 
years to get accomplished from the board of trustees of the 
California State University system and that was to provide 
flexibility of management. We could appoint, we could remove, 
and we could pay according to their commitment on a particular 
contract, 6 months, 1 year. In other words, we provided a 
results-oriented government. We asked: what are you going to 
accomplish in this time period? I believe that you should be 
the judge of whether or not your managers have accomplished 
what was agreed on their contract. That will turn a bureaucracy 
around very rapidly.
    I think also that what you've said in here about children 
and health is very important, and recreation. And I would hope 
that the neighborhood school, which is really the visible 
aspect of government for people around them, would be able to 
combine health services at the local level, recreational 
services after school. Schools seldom have their lights on 
after 3 p.m. The community should be able to use those playing 
fields for little children under appropriate supervision.
    As I mentioned to your predecessor Mayor in one of these 
hearings, I stood for 3 hours in line in a sports shirt. No one 
knew I was a Member of Congress, and I just wanted to see how 
people were treated. The motor vehicle department was not 
treating them very well in that northeast operation; one, they 
didn't even have their people informed as to what kind of 
service was there.
    So I happened to stand for 3\1/2\ hours after asking five 
people who said, ``oh, yes, this office will do that,'' and 
then when I finally get to the window, it was sorry, it is 
5:30--that's over in the municipal building.'' That's not very 
good; 200 citizens that day were standing in the heat, no one 
from management came out to say, ``come on in, we're going to 
cue you up and it's cooler in here than it is out there.'' The 
signs were misleading. The security guard was helpful, but 
untrained.
    So a little bit of initiative obviously was needed, and 
several hundred residents, black and white, in this city 
weren't too happy with their experience. Neither was this 
Member of Congress.
    Economic development I think is key. And I recall when 
Disney was talking about desecrating a few Civil War 
battlefields to bring the feeling of history to people who had 
come to Washington.
    Washington is where much of our history has occurred and is 
occurring. Disney ought to be approached to build in the 
District of Columbia. That means Disney building new housing as 
a condition for them to occupy certain land. It means jobs for 
the citizens of this District.
    As for the public schools, the Mayor of Chicago has taken 
over education, and so should you. That will place 
responsibility.
    I know you have the interest. I think any powers we need to 
give you we should give you. And somebody mentioned 
micromanaging, my last micromanagement would be one pothole at 
Independence and 3rd----
    Mayor Williams. Take that address down.
    Mr. Horn. It just about took my axle out the other night, 
Mr. Mayor. But you have my strongest support. Anything I can do 
to help, I will.
    Thank you, Mr. Chairman.
    Mr. Davis. Thank you very much, Mr. Horn.
    I just want to note for the record, although Mr. Horn who 
had grandparents who were born in the city, parents born in the 
city, kids born in the city, Mr. Horn wanted to be born in the 
city, but he thought it was more important to be with his 
mother on that important day, and he couldn't be here.
    I would like to call our panel of witnesses to testify: Dr. 
Alice Rivlin, the Control Board chair; Mayor Anthony Williams; 
and the City Council chairman, Linda Cropp.
    As you know, it's the policy of the committee that all 
witnesses be sworn in before you testify.
    [Witnesses sworn.]
    Mr. Davis. Thank you. You can be seated.
    I ask unanimous consent any written statements be made a 
part of the permanent record.
    We will begin with Dr. Rivlin, who needs to leave by 10:30. 
Dr. Rivlin will be testifying before this subcommittee for the 
first time; followed by Mayor Williams, who will be testifying 
before the subcommittee for the first time as Mayor; and City 
Council Chair Cropp, who is now a frequent visitor and has 
testified before this committee.
    Dr. Rivlin.

       STATEMENTS OF ALICE RIVLIN, CHAIR, D.C. FINANCIAL 
  RESPONSIBILITY AND MANAGEMENT ASSISTANCE AUTHORITY; ANTHONY 
WILLIAMS, MAYOR, DISTRICT OF COLUMBIA; AND LINDA CROPP, CHAIR, 
               DISTRICT OF COLUMBIA CITY COUNCIL

    Ms. Rivlin. Thank you, Mr. Chairman. I'm delighted to be 
here in this capacity. I think the citizens of the District may 
not realize how lucky they are to have the strong, 
constructive, bipartisan leadership of this committee helping 
us as we move into our new era.
    It's also a pleasure to be on this panel with the new Mayor 
of the District, Anthony Williams, and with the chair of the 
Council, Linda Cropp. I think the District is very fortunate, 
and I say this even when I'm not with them, to have such 
strong, qualified elected officials at the helm to lead us as 
we move into this new era of effective, responsive city 
government.
    And, Mr. Chairman, I do believe we are entering a new era 
in the District. There is renewed energy in the city and a 
sense of hope that the cooperative efforts of the District, the 
region and the Federal Government will help us build on the 
progress that the Nation's Capital has made in the last few 
years.
    The District of Columbia Financial Responsibility and 
Management Assistance Authority, and I never can get through 
that whole title, affectionately known as the Control Board, 
has enormous respect for Mayor Williams. My four colleagues on 
the board and I are working hard to build a collaborative and 
constructive relationship with him.
    We're also working closely with the new Council. The 
Council has three energetic new members elected in November. 
Both the new and the returning Council members are endeavoring 
to build on the positive results that the city has recently 
achieved. Altogether, it is a promising time to be working for 
the revitalization of the Nation's Capital.
    As you have noted, Mr. Chairman, the Authority was created 
by an act of Congress in April 1995 to assist the District in 
restoring financial solvency and improving management 
effectiveness. At the time, the District was virtually 
bankrupt. It was unable to pay its employees or its 
contractors. It was running a significant operating deficit and 
had a large accumulated deficit. Since the District's bonds 
could not be sold at market rates, the U.S. Treasury was the 
city's only source of funds.
    Moreover, the District at that time was not responding 
adequately to the needs of its citizens. Streets were filled 
with potholes and often went unplowed in winter. Citizens 
seeking ordinary services, such as motor vehicle inspections or 
building permits, encountered long delays and often confused 
records. Medical care for the needy, child welfare services and 
assistance to the elderly were often lacking and inadequately 
provided. Crime was rising. Neighborhoods were decaying. The 
public schools were deteriorating. Residents and businesses 
were fleeing the city.
    Now, nearly 4 years later, the District is in much better 
shape. Thanks to the efforts of many people, including the 
former members of the Authority and my predecessor Andrew 
Brimmer, Mayor Williams in his former position as CFO, members 
of the Council, the President and the Congress, the District 
has not only stemmed the deterioration, it has considerably 
improved its overall condition.
    When the books are closed on fiscal year 1998, which ended 
in September, they will show that the city ran an operating 
surplus for the second straight year and was able to pay off in 
its entirety its accumulated deficit. The city has greatly 
improved the integrity and internal controls of its budgeting 
process and financial systems. The bills get paid, the taxes 
are collected, and the District's securities sell at market 
rates. From a financial standpoint, the city's comeback has 
been remarkable.
    However, while--and there's always a however--while the 
fiscal progress has been gratifying, it is important for 
everybody to understand that the city still faces an uncertain 
financial future. Its tax base is narrow and can grow only if 
vigorous efforts to attract new residents and enhance business 
opportunities are sustained and successful. Deferred 
maintenance and inadequate investment have left a legacy of 
decayed and outmoded infrastructure, from bursting pipes to 
leaky roofs and decrepit or nonexistent computers, and that 
will take substantial resources to put right.
    Similarly, while the quality of the District's public 
services has demonstrably improved--and those lines, 
Congressman Horn, are shorter than they were before--much 
remains to be done. In response to the National Capital 
Revitalization and Government Self-Improvement Act passed by 
the Congress in 1997, the Authority has in the past year laid 
the groundwork for long-term, sustainable improvements in the 
quality of public services. Through the process of management 
reform and the establishment of a chief management officer to 
focus on service delivery improvements, the District has made 
measurable progress in the quality and efficiency of service.
    In recognition of the new era in the District, the 
Authority and the Mayor have signed a memorandum of agreement 
describing their new relationship. The memorandum makes clear 
that, while the Authority retains all of the responsibilities 
under the statute, the Mayor will be in charge of the day-to-
day running of the city and supervision of executive branch 
departments. The Mayor will also have the responsibility for 
program and policy matters related to the departments and 
agencies. There must be no confusion about who is in charge of 
delivering services, the Mayor is.
    The memorandum further states that the Chief Management 
Officer will report to the Mayor and that most government 
agencies will report to the Mayor through the CMO. The 
agreement calls for the Mayor to combine the existing authority 
and staff of the city administrator with those of the CMO.
    The Metropolitan Police Department and the Office of 
Corporation Council and some smaller agencies will report 
directly to the Mayor. The public schools will continue to 
report to the Authority. The agreement can be revoked by either 
the Authority or the Mayor with 30 days' written notice.
    To ensure effective communication and cooperation, the 
Authority has invited the Mayor to attend meetings of the 
Authority in a nonvoting capacity. And we have also extended 
the same invitation to the chair of the Council. We have met 
three times under the new arrangement, and we are communicating 
very well.
    I am very pleased by the strong working relationships that 
the elected and appointed officials of the city are developing. 
We have found shared purpose and common ground in our efforts 
to improve the District. Together, we are already working to 
achieve consensus in such areas as the fiscal year 2000 
financial plan and budget, strategic plan priorities for the 
District, the National Capital Revitalization Cooperation and a 
strategy for accelerating economic development.
    The Mayor has publicly stated his strong intentions to make 
immediate improvements in public services, and Authority 
members have told the Mayor that he can count on our full 
support in his efforts to improve the quality and performance 
of government services. The faster the better. All of us look 
forward to cleaner and safer streets and alleys, more 
responsive public officials, a safety net that is compassionate 
and timely, and all of the other things that citizens expect 
that their local government will effectively provide. We 
believe visible short-run improvements are feasible, but we are 
also conscious that many aspects of the D.C. service delivery 
are still deeply broken and will take sustained effort to 
repair.
    The Mayor and the Council and the Authority are also 
working together on long-term priorities for the District.
    One of the fundamental goals we have all agreed on is 
accelerating economic development. The District, through a 
collaborative process with the private sector, nonprofit 
organizations and community groups, recently issued an economic 
development strategy that focuses on a list of specific actions 
to leverage jobs and growth in the city. We view this approach 
as the beginning of an intensive effort to make the District 
more attractive to new business, retaining those businesses and 
Federal agencies that are already located in the city and 
creating greater opportunity for neighborhood development, not 
just activity in the central business district. It is vital 
that we focus our attention on economic development.
    Other long-term priorities the Mayor, the Council and the 
Authority will stress in the coming months include improvements 
in financial management, tax reform to create a more equitable 
structure, targeted investments in technology and other 
infrastructure areas and the widespread improvement of public 
services. We will give special emphasis to investing in our 
young people and the skills and vitality of our work force.
    The Authority is working closely with Superintendent Arlene 
Ackerman to strengthen the D.C. public schools. There is no 
question that, as Congresswoman Morella has noted, that our 
ability to build a bright future for the city and to keep and 
attract residents requires quality public education and safe 
schools. We are optimistic that the strides made in the last 
year to rebuild decaying schools, make facilities safer and 
increase the quality of education are laying the groundwork for 
sustained improvement in education; and we are working closely 
with the Superintendent, the Emergency Transitional Education 
Board of Trustees and the elected school board to make that 
happen.
    Finally, the District must make the transition to normal 
governance. This city, like every other city in America, 
deserves to be managed by professional managers responsible to 
elected officials who, in turn, are responsible to an engaged 
electorate. Democracy is the cornerstone of our Nation's 
heritage; and the District should be an example of how well 
democracy can work, not a shameful exception.
    We all recognize that the District is our Nation's Capital 
at the same time it is a local community. As such, it occupies 
a unique and sometimes complex place in our governmental 
structure. The District is fundamentally intertwined with the 
Federal Government. The city's prosperity, its well-being, its 
future are all influenced by how we interact with the Federal 
Government and responsibly steward the resources that support 
the city, both as a community and as a capital.
    In 1995, and again in 1997, the Congress was sufficiently 
concerned about the condition of the District that it passed 
laws aimed at improving the financial and management health of 
the city. The laws stipulated that control periods would remain 
in force--and the Authority would remain active--until certain 
conditions were met. The District was required to first run its 
operating budget without a deficit for 4 consecutive years and 
to repay any borrowings by the Authority. More general 
provisions of the law mandated that the District improve the 
quality of its public services and strengthen the structure of 
government in the city and help sort out the functions between 
the District and the Federal Government.
    Mr. Chairman, the District is on its way to accomplishing 
the goals and objectives of the congressional statutes, but let 
me stress that we're not there yet. I've highlighted some of 
the achievements today and some of the issues we will be 
working on in coming months. Through the cooperation that the 
Mayor, the Council and the Authority have established, I 
believe we will continue to make progress in meeting the goals 
set by the Congress so the District can make the transition to 
normal government as soon as possible. I know the Mayor and the 
Council chair join me in welcoming the
opportunity to come back to the Hill and report to the 
subcommittee as we move toward the statutory objectives that 
will bring about a timely return to normal governance.
    Thank you, Mr. Chairman.
    Mr. Davis. Dr. Rivlin, thank you very much.
    [The prepared statement of Ms. Rivlin follows:]
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    Mr. Davis. Mayor Williams.
    Mayor Williams. Yes. Mr. Chairman and members of the 
committee, Congresswoman Norton, Congresswoman Morella, 
Congressman Horn, it's a pleasure to testify here again to the 
general committee not as CFO to the District, but as Mayor. 
It's a real honor to be on the panel with Chairwoman Cropp and 
Chairwoman Rivlin.
    And I have a power point presentation I would like to make 
that states our vision for the Nation's Capital, the progress 
we've made, current efforts under way and where we see 
ourselves going.
    First, to talk about progress, we can go to the next slide. 
We talk about the financial health and, just to reiterate 
briefly, we have balanced the budget of our city for the past 3 
years. I would argue that we've gone further and faster than 
any other American city in a financial recovery. We have in 
1998 retired an accumulated deficit we inherited of $350 
million, with a surplus on top of that without any resort to 
financing of that debt. So that was done the old-fashioned, 
hard way.
    We've received a ratings upgrade of the District's bond 
rating and in our last transaction actually had a transaction 
that performed at an investment grade in practical reality.
    We received a clean audit in our last financial statement 
and look forward to having one in this financial statement with 
a lot of hard work.
    We have generated a budget surplus of at least $400 million 
in 1998 and, as I stated earlier, have eliminated that 
accumulated deficit.
    We've also made progress in public safety. Homicides in the 
District have declined 46 percent since 1991 and are at their 
lowest levels in 12 years.
    Violent crime is down 19 percent, property crimes have 
declined, and there's also been a decline in total crimes 
committed.
    Our new police chief, who I think is really setting an 
example of standing up, taking responsibility and taking 
charge, has announced that a captain is going to be assigned to 
every watch; and I think this will further strengthen the lines 
of accountability.
    We have got a lot further to go. He is the first to 
recognize that. But I think he is really a model and an example 
of where our agency heads to go.
    And I might add, our agency heads have a way to go. The 
action plans that we receive from our agency heads needed work. 
They didn't have the breadth and the depth that I expected, but 
I did not characterize and I would not characterize those plans 
as shoddy. Because, you know, as I'm going to discuss in a 
second, I'm the coach of a team now, the District government. 
I'm proud of my team. In the locker room, there's going to be 
an exchange and probably it won't be pretty and you wouldn't 
want to televise it, but out on the field, I take 
responsibility for my managers.
    Going on. We want to foster a strong Federal relationship, 
developing the role initially of the Federal Government as a 
good corporate citizen. I've traveled to cities around this 
country looking at best practices. Many of the Mayors in these 
cities are very envious of us because, unlike any cities like 
Philadelphia or Detroit, we didn't lose a huge manufacturing 
job base in the city. We still have a job base from the Federal 
Government.
    The Federal Government, whether we like it or not--and I 
happen to like it more than not, it depends on the day--is our 
No. 1 corporate citizen. And we want to foster that 
relationship. And one of the key ways to do that is responding 
promptly and professionally to Federal requests and offers of 
assistance.
    Too often in the past, there have been offers of assistance 
or have been entreaties from the Federal Government generally 
or from the Congress or from individual cabinet departments, 
and phone calls that haven't even been answered. We've got to 
change that.
    We want to be a true model for other cities in our 
relationship with the Federal Government and proactively engage 
Federal agencies. If there is any discretionary Federal grant 
out there in any of the cabinet agencies, we want to be first 
in line. Not that we're going to elbow other cities out of the 
way, but we're going to definitely use our proximity to these 
Federal departments. That's a competitive advantage we have, 
and we take it very seriously.
    A vision for our government--I've stated it for 6 months 
now. Many people are tired of hearing it. But I think it 
remains one government, good government and self-government for 
our city. One city and one government focused on major policy 
initiatives, whether they be in the areas of labor, whether 
they be in the areas of continuing management improvements, 
whether they be in the areas of health care or education or 
economic development, one city and one government should meet 
these challenges.
    Restoring faith and confidence in our government by major 
service delivery improvements and, finally, unifying our 
government and creating a foundation for lasting self-
government.
    To talk about one city and one government briefly, it's a 
vision of, very, very importantly, public/private partnerships 
coming together to meet the challenges that confront our city.
    I think everyone would agree that to do the things we have 
to do in our city, whether they're meeting the needs of 
children, rebuilding the human services network, that where one 
half of it has been placed practically in Federal receivership, 
focusing on the needs of work force development or our workers, 
economic development, health care, all of these things are 
going to take the government working with the community, 
working with our nonprofit institutions, working with the 
private sector, to successfully realize the government cannot 
do it alone.
    Some of our major initiatives: One major initiative, as 
I've stated many times, is that our children are our future; 
and that includes providing a safe, clean environment for our 
children, providing after-school programs for our children, 
again in the partnership that I talked about and, very, very 
importantly, supporting children in a neighborhood context, in 
a community context with the faith community and the other 
sectors I've talked about providing that whole continuum of 
education, including programs for healthy children, school 
readiness programs, looking at our parks and libraries to see 
that they're doing their job to support our children and, very, 
very importantly, supporting our parents so that our parents 
understand and are oriented on what it means to have a child in 
school and what those expectations should be.
    Some initiatives on rebuilding the human service network. 
Again, in partnership; the government cannot do this alone. And 
I will also state, rebuilding this network is going to 
require--and this is a theme that will come up again and 
again--is going to require some choices. There's no silver 
bullet. If there were an easy choice, if there were an obvious 
choice, it would have been made by now. So it's going to 
require some choices.
    But it involves providing quality health care to the 
greatest number of our citizens to support our other policy 
initiatives. It means meeting our children's needs before, 
during and after school. It means supporting our mothers 
initially and then families as a whole in moving from welfare 
to work. And, very, very importantly, it means utilizing more 
effectively the Federal money we're now receiving for drug 
treatment and prevention. We receive a significant amount of 
money from drug treatment and prevention, and we can do a 
better job with it.
    Work force development is very, very important to me. Work 
force development to me is essentially focusing on the issues 
of pay and the issues of performance. And both must go 
together. It's not simply an issue of we're going to have more 
accountability and workers have to do more and leaving it at 
that. It's really combining both of those tools together.
    It includes managed competition. It includes effective 
labor agreements, working in partnership with labor, not only 
on a general management level but, most importantly, down in 
the agencies where the results are actually going to be 
achieved.
    It means focused and effective training for our workers, 
each worker having a customized, individual training kit, a 
development program, if you will, that that worker can pursue, 
with the support of management, to realize that worker's aims--
that employee's aims and our agency and our government's aims 
as well. It also means, very, very importantly, the information 
systems and the communication systems to support what our 
workers are doing.
    As a former CFO and as a former background manager, if you 
will, I am a strong, fervent supporter in the groundwork that's 
been laid by the management reform program and the need to 
continue these long-term investments. The last thing I want to 
do as Mayor, in focusing our short-term visible concrete gains 
that I believe we can realize, is to do that, rob from the 
longer term management improvements I think we know we all 
need. And I echo what Alice Rivlin said in that regard.
    Continuing on in economic development. It's defining the 
role of our city as the vital center of a regional economy; 
it's spurring growth; it's achieving jobs for District 
residents not only in our city but in our region. It's 
developing our city as an international trade center, 
recognizing we have the largest diplomatic community in the 
world. And, finally, appointing a Deputy Mayor for Economic 
Development who can coordinate not only the planning and 
development functions but also those functions with our tax 
programs that, as you know, have a major impact on investment 
decisions to stay or leave our city.
    It's a matter of leveraging public-private partnerships, 
restructuring the Grants Management Office and related 
processes, putting them on a fee-for-service program, for 
example, trying to utilize, to the maximum extent possible, 
every Federal dollar we have available, establishing budget 
priorities that leverage and that reflect these partnerships 
that I talked about.
    Health care priorities I talked about, and I will just 
mention briefly again. It includes children, our low-income 
adult population and our elderly, very, very importantly, 
again, a whole continuum of health care making the choices we 
have to make over the next year to really focus our precious 
health care dollars. And that means bringing together our 
private service providers, our HMOs, our labor unions, our 
public hospitals, Medicaid. I think I've gotten every one 
together on a health care strategy for the District.
    Service delivery improvements. Much has been stated about 
service delivery improvements and their role in creating both 
an investment climate in our city and, very, very importantly, 
restoring hope and confidence in our government.
    And I mentioned some of the things that we're focusing on 
right now, including streamlining the business licensing and 
permitting process; establishing effective and reliable--or 
improving--making more effective and reliable our trash 
collection; cleaning streets and alleys; paving roads. They're 
all listed here. All of these are the kinds of visible, 
tangible, concrete improvements that we are working for with 
our agencies.
    And just to give you some illustrative examples in public 
works, licensing and permitting. In public works, for example, 
it's a matter of conducting a customer service survey to 
establish a baseline measurement of where we are with the 
public. It's a matter of implementing managed competition 
programs in selected areas and in most of these areas where 
government isn't even doing the work right now. So in many 
areas it's not a matter of outsourcing what employees are doing 
but it's a matter of extending government's reach and 
government's impact in our neighborhoods in innovative ways.
    It's a matter of increasing the involvement in the private 
sector and internships and mentoring and partnerships. And 
it's--very, very important when we talk about public works--a 
matter of partnership with the community. Not to get graphic, 
but rats eat food left by someone, you know. Trash on the 
streets doesn't fall from the sky. It comes from somewhere. So 
those partnerships are very, very important.
    To continue on, on a short-term improvement tool kit, I've 
asked our agencies to come back to me with action plans that 
distinguish between short-term, visible, concrete results and 
the longer term strategies our agencies are working on and that 
I strongly support. But to distinguish the two and in working 
on these short-term improvements to reach into a tool kit, I 
want to provide them to make sure that these things happen.
    And I list some of them here, you know: Asking what your 
customers want; thinking first about what your customers want; 
thinking about how you can do more with less.
    In many, many instances we're going from a situation over 
the last 3 years in our government of where we were getting 
less for more to where, in the short-term, we're getting more 
for more and to where, ultimately, we want to get more for 
less. That's kind of a continuum we're going around. We're 
telling them to use existing resources, to reach for the stars, 
to take a chance, to measure their progress, to lead by doing. 
Very, very important in talking about that tool kit.
    The long-term tool kit includes the area of managed 
competition, identifying the functions where our employees can 
be given the resources and can compete. This isn't a matter of 
taking jobs held by good, diligent government workers and 
shipping them to Indonesia or something. It's a matter of 
competing, giving our employees the resources and the tools to 
compete.
    And what I found looking closely at other cities is that we 
don't lose thousands of good-paying jobs for our workers, but 
what we do get is we get better quality at lower costs for our 
citizens, and our employees have pride in the work that they're 
doing.
    The longer-term tool kit also includes a personnel 
assessment, asking each of our managers to conduct this 
assessment and to maintain this assessment, not just to ensure 
accountability but again to support the individual training and 
development needs of our employees and giving them the 
resources they need.
    I list some of the others here. I think the committee, and 
I know because of its work in general oversight, is well 
familiar with performance measurement, activity-based costing 
and the need for cross-cutting governmental cooperation.
    On this next slide, I just briefly try to distinguish 
between the short-term action plans and the long-term action 
plans. In the short-term action plans, I am talking about time 
lines of anywhere from now to 1 year, and I am stating that we 
have to show our public visible improvements beginning in 6 
months. And I keep clarifying this, we are talking about 
visible improvements realized within 6 months. I am not saying 
that the city will be completely fixed within 6 months.
    We are talking about using existing resources. We are 
talking about an infrastructure, emphasizing enhanced 
management, redeploying existing resources. It is a matter of, 
as I did as CFO and now as Mayor, working very closely with the 
financial authority, very closely with our managers in 
personnel and procurement and technology to see that we have 
the supply lines to get these management changes done quickly, 
because often the snags are in procurement or personnel or some 
of these cross-cutting support functions.
    Priorities is focusing on improvements visible to the 
public; I just distinguish in the long term by focusing on 
priorities. In the long term, we are focusing on priorities 
that are internal, that are background, that support, day by 
day, the short-term initiatives, but are nonetheless very, very 
important.
    To give you an example would be the work that we are 
putting in phones, for example. We want to put in place over 
the short term measures that will give our citizens prompt and 
professional response to their phone calls, and I honestly 
believe that this can happen within 6 months.
    On the other hand, I strongly support efforts to put in 
place the technology and the resources to give all of our 
citizens one-stop 311 inquiry into our government. Now that, 
longer term, is going to take resources and it is going to take 
long-term initiative. It is going to take some improved 
technology. The short term is going to take some improvisation 
and entrepreneurial leadership and know-how. I think we can do 
both.
    Talk about unified government, Congresswoman Norton has 
spoken to this and so has Alice, and I think the need by this 
Mayor and this government to command the respect of our country 
and support the return to full self-government for our city, to 
support the statement that democracy can work in our city. And 
democracy working in our city is not just a question of our 
government working effectively; it is a civic culture and civic 
leadership working with our government to show that we all 
working together that can make this thing work.
    As I state here, it is important for the executive to 
regain statutory authority over agencies and their personnel; 
and I think Members have spoken to this, and I believe that is 
a first phase in our effort to return self-government to our 
city, that this is sorely needed, that we need this restoration 
of accountability and faith in elected leadership as a 
foundation for the kinds of independence and self-government 
that we are talking about.
    We have spoken to the memorandum of agreement. I would 
simply state that on the memorandum of agreement much has been 
stated about the need to give the Mayor this hiring and firing 
authority, and I strongly support that. I believe it is 
necessary. But having said that and without contradicting 
myself, I have got a very, very close working relationship with 
the financial authority, a good working relationship with the 
Council, and on a day-to-day basis, I think the job is getting 
done. So I don't want to leave this committee with the feeling 
that the job is not getting done and I can't do my job without 
this authority, but that authority would enhance the ability to 
move forward on some of these changes.
    As I state here on this slide, I fully support returning 
the statutory power to the Mayor taken in the Revitalization 
Act, and that this effort to bring the Control Board into a 
dormant status 1 year ahead of schedule is supported by this 
Mayor with the understanding that this Mayor not only supports 
the long-term improvements that have been initiated. I really 
do believe that, but this Mayor also supports, having been the 
independent CFO, a strong CFO function in our city and a strong 
management function in our city.
    Now, we are looking for a full-time city administrator and 
we are going to look all over the country for a full-time city 
administrator. In the interim period, yours truly, with the 
help of an expert team of advisers and assistants, is going to 
manage the government. We are going to do this with outside 
help and with help from the Federal Government and with 
assistance that we have tapped from throughout the government 
to give us the day-to-day cooperation of operational 
responsibilities, to give us the ability to proactively push 
this change agenda.
    So, saying that over the next 2 months, however long it 
takes to bring a city administrator, I am going to manage this 
government is not to say that I am going to micromanage this 
government. Those functions are going to be delegated out to 
selected individuals of the kind that I have talked about. But 
I do think that it is very, very important in this period for 
us to bring to this management change agenda, both in the long 
term and actually in the short term, something that we have had 
missing; and that is something that I think only elected 
leadership provides, and that is leadership. We can have great 
plans, we can have great organization and great controls, but 
without leadership on the ground in the agencies, we are not 
going to get where we need to go.
    Some people have said, how are you going to do that without 
completely robbing yourself of any public contact. What I 
envision is pushing these changes through the agencies, working 
in the agencies, meeting with employees and doing what I did as 
CFO. I had 60 ``brown bag lunches'' with employees as CFO. I am 
going to have the same kind of contact with employees as Mayor, 
working with labor unions, working with the employees on the 
ground, seeing how they do their jobs.
    I am talking about improving phones; I am going to answer 
the phones. I am talking about sweeping the streets; I am going 
to go out there with our agencies and sweep the streets. We 
talk about citizen contact; our citizen contact is going to be 
geared toward working with our neighbors on neighborhood 
strategies to improve how government services our 
neighborhoods, working with neighborhoods to take greater 
responsibility to improve things like graffiti, clean streets 
and very, very importantly, working with our neighborhoods to 
get their input on what these short-term plans should be. So 
this is not robbing ourselves of this critical element of 
support to get this job done.
    I am excited about the opportunity that the citizens of the 
District have given me and this unique opportunity we have to 
work in partnership with this Congress, as we have had with the 
administration, and to work with the Financial Authority, Dr. 
Rivlin and Chairman Cropp.
    So I thank the committee and look forward to answering your 
questions.
    Mr. Davis. Thank you very much.
    [The prepared statement of Mayor Williams follows:]
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    Mr. Davis. Chairman Cropp.
    Ms. Cropp. Thank you Chairman Davis, Congresswoman Norton, 
Congresswoman Morella and Congressman Horn. It is a pleasure to 
be here before you. I am joined by the chairman pro tem of the 
Council, Charlene Drew Jarvis, and Councilmember David Catania.
    The inclusive approach of the new Financial Management 
Authority under the leadership of Chair Alice Rivlin serves 
this city extremely well, and the Council looks forward to 
working with our new Mayor, Tony Williams, as together we meet 
the needs of the citizens of the District of Columbia.
    Let me briefly review how we got here and then give you the 
Council's perspective on where we are going. As you know, many 
of the problems encountered in the District of Columbia have 
been similar to those faced by other urban cities during the 
past 2 decades. Other problems have been structural and unique 
to the District as a city that is not part of a State within 
the United States--the unfunded pension liability, the 
escalating costs of the State-like functions such as Medicaid, 
the prisons and courts, the inadequate revenue base. Most 
similarly situated cities, no matter how well managed they 
were--and admittedly we have had some management problems--
would not have been able to survive under the same 
circumstances as the District has had. In fact, I would suspect 
that some of the cities probably would not have been able to do 
as well as the District has.
    The camel's back was broken in this city by the early 
1990's, but the straws have been piling up for a long time, and 
I am happy to say that the camel is now standing up again and 
we are moving in the appropriate direction.
    The Revitalization Plan of 1997 addressed some of these 
issues. Thank you. Thank you for your help in that, Mr. 
Chairman, for the leadership, for your leadership, and also for 
the Members of Congress who helped us address some of those 
very crucial structural issues. We applaud our Congresswoman, 
Eleanor Holmes Norton, for her role in that.
    Without Federal reassumption of the pension liability that 
the home rule government inherited the reality is by the year 
2004, the District would have faced a $5 billion liability, 
costing the District over three quarters of a billion dollars 
every year, and this problem was not of the District's own 
volition.
    Much progress has been made during the past couple of years 
with the Council, the Mayor and the Financial Authority playing 
a role. Certainly the consensus budget that has been developed 
was extremely helpful. We can finally see light at the end of 
the tunnel, and this light is not a train coming directly at 
us.
    Painful but necessary reductions in programs, services and 
personnel, better management of the city finances, the 
Revitalization Plan and the good fortune of a healthy national 
economy have all contributed to our recent progress from the 
brink of bankruptcy with no access to the credit markets and 
with a $536 million accumulated deficit in 1995 and an annual 
budget deficit of over $100 million, to paying off the entire 
debt within 3 years without borrowing and to a current budget 
surplus of over $400 million. That was not an easy feat. It is 
not one to take lightly. It is one that truly needs to be 
applauded.
    The fact is that the District has recovered from its 
financial crisis. We are exceeding the tangible measures that 
Congress itself established to return limited home rule to 
elected officials and to allow the Financial Authority to 
become dormant; elimination of the accumulated deficits, access 
to Wall Street credit markets, and 4 consecutive years of a 
balanced budget. 1998 was our 2nd consecutive year of a budget 
surplus. This year, 1999, will also end in a budget surplus.
    We still need to make much more progress in managing our 
government and improving just very, very basic municipal 
services--public schools, public works, public safety. 
Substantial improvements are necessary in all of these areas, 
but particularly in education. This is needed to retain and 
attract many more residents and businesses in the city and 
thereby expand our revenue base, which is critically necessary 
to our long-term financial health. In this regard, let me 
express my appreciation to your proposal, Congressman Davis, to 
provide District high school graduates the ability to attend 
public universities in States across the Nation and in State 
tuition rates. This will be very helpful to us, and we at the 
local level need to ensure that our students are academically 
qualified to attend these universities.
    At the same time, we have our own local university that we 
must also strengthen and make sure that that option and the 
option of other universities, which are economic engines in the 
District, also remain viable.
    The Revitalization Act's bifurcation of the management of 
our government was frankly not helpful in ensuring effective 
service delivery, nor was the trifurcation of the bureaucracy 
with the establishment of a CMO, but we are pleased that the 
Financial Authority has returned the day-to-day operation of 
the nine agencies and the four cross-cutting agencies to the 
elected Mayor of the District of Columbia. As Mayor Williams 
has stated, one government by elected officials helps to ensure 
good government because the citizenry then has knowledge and 
the power to hold their elected officials accountable for the 
effective delivery of public services.
    The Council is committed to working side by side with Mayor 
Williams and Dr. Rivlin's Financial Authority in achieving both 
short-term and long-term positive visible results for both our 
residents and our businesses. All of us know what our problems 
are. We have a zillion reports. I am up to the gazoo with 
reports of the problems that we have and the recommended 
solutions.
    The renewed Council is definitely about the business of 
joining our Mayor on the playing field, as he says, to keep 
moving the ball forward toward the goal of solving our city's 
problems. The Council will be a constructive partner in this 
effort. While the Council may not always agree with the Mayor 
or the Financial Authority on everything, and while we will 
continue doing strong legislative oversight, we will all 
continue to be at the table and on the field working hard with 
all of our private and public stakeholders to ensure the 
progress of our city.
    Over the past year, the Council has passed significant and 
crucial legislation impacting the District of Columbia as a 
whole. It has been an extremely hard-working council, playing a 
major role in leading the government toward positive change. 
Just as we continue to help improve the functioning of 
government agencies, we can demand no less of ourselves as a 
council. And in that light, 6 months ago the Council initiated 
a comprehensive study of our own operations and organization by 
the National Conference of State Legislatures. This study is 
only a part of the ongoing process to review and reform our 
legislative operations so that we, like the rest of the 
government, can optimize our performance.
    The executive knows that it needs to speed up the 
implementation of the business and regulatory reforms that have 
been enacted by the Council in the past year. These reforms, 
along with the pending release of the $25 million in Federal 
funds for the National Capital Revitalization Corp., will 
greatly facilitate economic development throughout the city, 
which has been synergized by the exciting downtown projects 
like the MCI Center and the new Convention Center.
    As we revitalize and we deal with economic development in 
the downtown area, it is extremely crucial, if we would like to 
see a truly revitalized city, that we also look at the 
appropriate development of our neighborhoods, for it is the 
strength of the neighborhoods, the communities, and the local 
communities that will help make the city as a whole strong. You 
cannot just have development downtown, not in the 
neighborhoods, and expect the city as a whole to grow and to 
develop.
    The Council knows that it needs to legislatively build upon 
the important reforms which we enacted in the procurement, 
personnel, and workers compensation areas by adopting 
meaningful tax legislation as well. We simply cannot compete 
for more businesses and residents without addressing local tax 
issues that need to be addressed. Tax reform is part of our 
agenda.
    So this year's budget process, even with a substantial 
surplus, will be a difficult but an extremely important one, 
because we have to do a lot of things at once. And we will have 
to make choices, because we cannot afford to do everything that 
needs to be done. After paying off our debt, we have to set 
aside a rainy day fund for unforeseen expenses that will 
inevitably occur when there is a downturn in the economy and 
less revenue is coming in. We also need to improve dramatically 
the provisions of municipal services, and we have heard our 
Mayor talk about that and his desire and will to move in that 
direction.
    We also need to continue to upgrade our work force and both 
our physical and technological infrastructures need vast 
infusions of funds after years of no investment or deferred 
maintenance. We also should probably establish a sunny day fund 
to take advantage of unique opportunities that arise to 
maintain or attract major businesses.
    Finally, as I just said, we need to begin local tax reform 
to help grow our economy on the long term. What we are 
experiencing now will probably not remain, and we need to be 
prepared in the future for what happens. So the priorities are 
many and the choices will be difficult, but that is why we are 
here.
    The Council also would like to initiate a locally based 
process of reviewing the District of Columbia's home rule 
charter. In the past, there has been some trepidation to 
opening up the idea of charter review, frankly out of fear of 
what might happen in the Congress. However, during the past few 
years not only has that door been open, but quite frankly, the 
Congress has blown the roof off, so we might as well locally 
look at this issue, review it with our citizens, have input and 
make some very important decisions with regard to our charter.
    You know, most States review their constitutions at least 
once every 20 years. It has been 25 years since the Home Rule 
Act was first adopted by Congress. And as we prepare for the 
return of the limited home rule in that act to elected rather 
than appointed officials, it is probably a good time for a 
citizen-based effort to review the provisions of that act with 
an eye toward changes that might be beneficial. For example, 
something just as simple as changing the title of the leader of 
the legislative body of ``chairman'' to a title that may be 
more gender neutral will probably also be more appropriate.
    Also, as the Mayor has talked about ensuring the 
independence of the city's Chief Financial Officer, the 
citizens and the Mayor may want to ensure that there is a 
certain independence of that office, and perhaps other offices 
such as city administrator, by being the body that steps into 
the role of the current Financial Authority. But these are 
issues that should be debated, discussed and decided upon by 
the local citizens, and we hope that this effort will start.
    In addition to local governance issues, we need to revisit 
other structural problems that the District of Columbia has 
that relate to our relationship with the Federal Government 
which are not addressed or which have been exacerbated by the 
Revitalization Plan, and probably in the future we will get 
more into that. But the Federal Government payment, as you 
know, is supposed to compensate the District for the 41 percent 
of the property base of the Nation's Capital that is tax exempt 
and receives local services. The elimination of the Federal 
payment coupled with the continued unique Federal prohibition 
of the District taxing income at its source where two-thirds of 
the income earned, even by our own government employees--not 
private sector, not Federal Government, but our own--severely 
restricts the city's revenue base. We in the District continue 
our quest for budget and legislative autonomy. I hope that as 
we look at this, we will have congressional support in this 
area.
    The District, unlike most other cities, operates a very 
costly inpatient mental health institution, St. Elizabeth's, 
which no other city has to operate. Additional Federal measures 
are needed to expand our residential and business resident base 
such as Congresswoman Norton's 15 percent Federal flat income 
tax for District residents.
    Last, voting representation in Congress must be provided 
for our District residents. We must finally bring full 
democracy to the residents of the Nation's Capital.
    In closing, let me say that prior to and since the 
enactment of the Financial Responsibility and Management 
Assistance Act, the city has gone through some rocky times, 
some challenging times, and some creative times. We are now 
entering a new era which all of us here at this table recognize 
is a transitional time. Implicit in the word ``transition'' is 
the concept of rebuilding bridges, of moving toward the day 
when the governance of this city is by locally elected 
officials who are accountable to our citizens. A lot of things 
still need to be done, but the first step of recovery from our 
financial crisis has been accomplished. Implementation of 
reforms and service delivery improvements are ongoing; and we, 
the Council, the Mayor, and the Financial Authority 
collectively have the vision and the commitment to work 
together toward a renewed and revitalized District of Columbia.
    Thank you for this opportunity to testify before the 
Congress, and of course I am available for any questions.
    Mr. Davis. Thank you.
    [The prepared statement of Ms. Cropp follows:]
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    Mr. Davis. Because of Dr. Rivlin's time constraints, we 
want to move very quickly to some specific questions for her, 
and then we will ask questions of the Mayor and the Council 
chair.
    Now, Dave Clark, the former chair of the D.C. Council, 
never complained about the name of the Council or suggest that 
we change it, but maybe it is something we ought to look at, 
and I think we have a couple of Members who would be happy to 
look at that request. Let me start with Ms. Norton who has some 
specific questions for Dr. Rivlin.
    Ms. Rivlin. Thank you.
    Ms. Norton. Thank you. I do have a question that has to do 
with the Control Board here, and it is also for the Mayor.
    Let me first recognize that State representative Tom Bryant 
has come in, and we are glad to see him here.
    Let me ask all of you a question about the surplus.
    Dr. Brimmer has announced a $400 million surplus. I have to 
look to the officials who are in charge of whether or not there 
is a surplus for accurate information on this, and so I am 
going to ask you what is your best and most accurate estimate 
of the budget surplus for 1998?
    Will it be more than $400 million, or less, or do you 
simply want to confirm Dr. Brimmer's figure?
    Ms. Rivlin. We don't have final figures yet, Congresswoman 
Norton. He is in the right ballpark. You have to remember that 
he is talking about the operating surplus. From that has to 
come the repayment of the accumulated deficit, but we will have 
a positive fund balance.
    Ms. Norton. I am, therefore, forced to rely on Dr. Brimmer. 
I am asking for your best and most accurate estimate. Perhaps 
Mr. Williams, perhaps Chairwoman Cropp can answer. Should I 
look to Dr. Brimmer for this information?
    Mayor Williams. I think the Congress ought to look to us 
for the financial information, as to what is happening, along 
with the CFO in the District.
    Ms. Norton. So what is the answer?
    Mayor Williams. Operating, it is at least $400 million. I 
would be shocked if it were something different.
    Ms. Cropp. I think the only reason that we probably have 
not said specifically at this point is because the full audit 
has not been completed, but it is in the process.
    Ms. Norton. When do you expect that audit to be available?
    Ms. Cropp. February 1.
    Ms. Norton. Thank you.
    I would like to ask that my first slide be put up.
    [The information referred to follows:]
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    Ms. Norton. First, I want to say that I have full 
confidence in the Control Board, and the question that I am 
going to ask really goes to the actions taken by the last 
Control Board, and my concern is not with a particular 
official, nor do I want to second-guess what the Control Board 
has done with respect to the Chief Management Officer. I am 
enough of a lawyer to know that there was a contractual 
obligation there. One of the problems that the last Control 
Board had is that it went willy nilly ahead and got itself into 
lawsuits.
    I am concerned with whether or not the first Control Board 
has built into the salary schedules of the District of Columbia 
a structural problem. To find out whether this was the case, 
the only place I know to look is at market rates, that is, to 
compare yourself with similarly situated folks.
    Now, the first schedule on the screen shows you the salary 
of the D.C. Chief Management Officer that was negotiated by the 
first Control Board to be greater than the salaries of chief 
administrative officers in all of the surrounding jurisdictions 
of the United States, the nearest available markets, so that 
the District of Columbia had by far the highest with $155,000 
for a population of 540,000. Compare that to Fairfax people, 
which has almost twice as many people, 914,000 people, 
$147,000. Compare that with Montgomery, 826,000-plus, or even 
with Prince George's, 770,000, and you can see the figures down 
that we are way above them.
    Moreover, the history of the first board--and this is 
relevant to the Mayor because we are about to give the Mayor 
back what would amount to this authority, albeit with the 
oversight of the Control Board because it involves money. But 
the history we are talking about involves not only these 
salaries but something that rarely happens in government, and 
that is negotiating large severance packages to outgoing 
managers. For example, Superintendent Franklin Smith, $180,000; 
former Inspector General Angela Avant, $90,000, this is 
severance going out. Former Head of Housing and then Consumer 
Regulatory Affairs, David Watts, $121,000; former DPW Cell 
Bernardino, $60,000; Cheryl Dotson, a sole contract person, 
$250,000.
    Now, let me have the second slide. To show you my concern--
where is the second slide?
    Ms. Rivlin. Congresswoman Norton----
    Ms. Norton. I want to get my question out.
    To show you my concern, my concern is not with a particular 
officer but with a perhaps systemic problem.
    [The information referred to follows:]
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    Ms. Norton. The second slide shows the salaries of 
representative D.C. government managers to be far greater than 
the average salaries for cities of comparable size. And if you 
look at those officers--chief administrative/management 
officer, chief financial officer, director of public works, 
planning and economic development, personnel--if you go down 
this slide, you will see that our salaries are 1.7 times 
greater, 1.4 times greater, sometimes two times greater, far 
greater than cities of comparable size.
    First, are you aware of a provision that was placed in the 
D.C. 1996 appropriations bill that prohibits funding during any 
fiscal year employees or contractors whose employment with the 
District of Columbia is no longer required, and was that 
considered at the time when these severances were paid out?
    The only exception provided in this 1996 provision in the 
appropriations bill was to services already provided to the 
District government. Was this provision known or did you 
consider using it? Will it be used in the future? How are we to 
justify these salaries? How are we to know that these are not 
simply built into the structure so that instead of meeting what 
I usually meet here, which is that our City Council, has the 
highest salaries in the United States, something that I am 
confronted with all the time--higher than New York, higher than 
California. Now I am going to be met on the floor with--and so 
are all of the officers, so are all of the managers and all of 
the Cabinet people--much higher for large cities and cities of 
comparable size. I need to know what is the response I am going 
to give back when I meet that in the face of these statistics?
    Ms. Rivlin. Congresswoman Norton, I am not familiar with 
the provision, and I hadn't seen these numbers before, but let 
me say that the effort to find very highly qualified people to 
run a complex government that has had very serious managerial 
problems is not an easy one, and the previous Control Board 
faced the issue of talking very qualified people into coming 
into admittedly a very difficult situation and taking over.
    Mayor Williams will face the same problem, and trying to 
get absolutely the best people that we need to run the city 
will, I think, take looking at who is available and who is 
willing to come and paying salaries that are sufficient to 
attract the talent that we need.
    Now, with all due respect to the chairman, I actually think 
it is probably easier to get somebody to run Fairfax County 
managerially than the city of Washington for reasons of 
complexity and----
    Mr. Davis. Let me intervene. There is a huge deferred 
benefit package that is not included in the Fairfax situation. 
So taking a look at the total salary is not an appropriate way 
to look at the total benefit package, which includes 
hospitalization and retirement benefits. It may include a 
severance agreement and the like.
    Ms. Rivlin. But let me say that I think these are 
interesting numbers and that we would like to answer the 
question in writing and to look at the comparability. But one 
has to be careful in making comparisons that you are really 
comparing the same things, and that we put ourselves in a 
position as a city of attracting the best people because we 
need help.
    Mr. Davis. I think one of the biggest problems we have in 
government today is salary caps; we have it at the Federal 
level. If we are going to get the best and the brightest in an 
information age, we are going to have to have a benefits 
package that is comparable.
    Ms. Norton. Could I just ask that you submit to the 
committee your view of the 1996 provision in the appropriation, 
whether it was applied and whether it will apply in the future.
    Second, let me say that I could not disagree more with the 
notion that it is harder to attract people here than to Fairfax 
County or to any other comparable city in the United States. 
Let me say why.
    I believe if you come to the District of Columbia, which is 
the center of the universe, when its government is on its knees 
and you show that you can do your stuff here--not in Fairfax, 
not in Indianapolis, but in the District of Columbia--you are 
made for life.
    So instead of bargaining, ``Can you please, Mr. Whoever-
you-are, can you come and help us?'' we need at the table 
people who say, ``Let me tell you what you get for coming to 
the District of Columbia, what a showcase this is for you, and 
what will happen for you if you succeed,'' not ``Please help 
us; we will pay you any amount.''
    And I am very disappointed if your answer is--because my 
question was a systemic one, and it was no criticism of the 
payment to any particular person, but I am very disappointed if 
your answer is this is what it takes to attract talent to the 
District of Columbia, because I do not believe that you can 
make the case that, with tough bargaining, that indeed will be 
the case.
    And so I am going to have to ask finally if Mayor Williams 
can give me any greater assurance with respect to these 
salaries already built in. Mr. Mayor, we are talking about 
people who, for example, in some cases were sitting on the job 
when the city went down, who got $20,000 increases instantly 
from the Control Board.
    Mr. Davis. Let me allow Dr. Rivlin to leave.
    We appreciate you being here. We may have some other 
questions that we will submit in writing.
    Ms. Rivlin. Thank you. I am sorry that I can't stay.
    Mayor Williams. Labor economics here, supply and demand, I 
think when our management and our city were in crisis--I was 
former CFO--it was hard to get people, and I was criticized for 
paying people what were considered to be exorbitant wages, but 
they got the job done. I will say what is past is prologue.
    Now I think we are creating a situation where we can be 
competitive and attract the best and the brightest, and we can 
buildup competition for these jobs because people want to be 
part of a change effort, and I think we can begin to see some 
decline in this overall scale. I do believe that. Not getting 
into what happened in the past, but prospectively.
    Ms. Norton. Thank you.
    Mr. Davis. Mr. Horn, do you want to start questions?
    Mr. Horn. On this salary thing, I have listened to that 
over the years in legislative bodies of one sort or another, 
and I agree completely with what Dr. Rivlin said and the 
chairman. If you are really serious about a salary study, look 
at the total benefits package. And while I share the view of 
Delegate Norton that people should step up to the plate and 
make this a better city, and they would be made elsewhere.
    There are only a few of us that self-flagellate ourselves, 
and you are looking at one that would take that challenge. But 
don't expect the average person, who has a lot of places to go 
to be a first-rate city manager, to do that. And if you are 
going to pay him or her a salary here, you might start 
deducting what it costs to get a bulletproof vest, whether it 
be coming to Congress or just walking the streets of 
Washington.
    I think this is the kind of thing that we hear all the time 
in Congress from some people. It is an easy shot at public 
officials to be sort of throwing out the salary.
    You have to pay a salary for good people or you are not 
going to get them. And if you are not willing to pay $10,000 or 
$20,000, more than other cities for a particular job, it is 
just pound foolish. You have to have good middle managers or it 
isn't going to happen.
    The Mayor can't sit there and micromanage the whole city. 
He has to depend on people with vision, people with guts, 
people who are not afraid to make personnel changes. They can't 
all land on his desk. And if those people can't do it, he has 
to deal with those officials and get them out of there and get 
new people in there.
    It won't pain me if he has a clean house in a few months, 
but that is what needs to be done in a city or a university or 
a corporation when you are trying to turn it around; and that 
is why a chief executive gets paid what they get paid, and that 
is why a competitive administrative person would get the same 
thing as either a county executive or a city manager. And I 
think a lot of this is just the easy thing to potshot in town 
meetings and all of the rest of it.
    Let me ask a question, Mr. Mayor, on your own situation. 
How do you evaluate the work product of the Water and Sewer 
Authority? Are they making enough progress in repairing the 
progress of water main leaks? Have you had a chance to look at 
that yet? Because here we are spending probably thousands of 
dollars every week on Capitol Hill having bottled water shipped 
in here because although the Corps of Engineers delivers and 
outstanding clean product to Washington, as well as to the 
surrounding suburbs, the fact is in Washington's case the 
distribution system just hasn't been kept up to date. And that 
seems to me to be something very important in the 
infrastructure capital plan; we need to systematically work at 
that. Do you have any feelings on that?
    Mayor Williams. I am spending my initial time on the 
agencies for which I am directly responsible, and then we will 
be working on to the independent agencies and make sure that 
they are coordinated with this change agenda and moving forward 
in the same fashion. I have not really delved deeply into Water 
and Sewer, but I will say this. I think that initially Michael 
Rogers, and now the present management, is moving Water and 
Sewer years and years ahead of where they were; there is no 
doubt in my mind. And they have put in place a plan to begin 
infrastructure improvements and, very importantly, management 
change efforts over there.
    I do think that there is a new spirit of accountability 
that I have seen over the last couple of weeks where we had a 
number of water main breaks. Citizens complained, and what they 
got was the usual finger-pointing. Over a week or two, after 
some phone calls and some discussions, there has been a new 
attitude of people willing to take responsibility for getting 
these things fixed. That is, I think, an early indication that 
things are going to be moving in the right direction.
    Mr. Horn. The National Park Service unveiled a plan last 
month to build a parking lot and certain other facilities under 
Pennsylvania Avenue in the vicinity of the White House. This 
follows the closing of Pennsylvania Avenue a few years ago, an 
action which severed a key east-west transportation link in the 
city. What is your view of the current situation regarding 
Pennsylvania Avenue and the National Park Service plan for 
parking in that area?
    Mayor Williams. Closing Pennsylvania Avenue has had a major 
negative effect on the overall transportation in the District 
and the marketplace in the District. It is my understanding 
from briefings that E Street is going to be reopened--I am not 
sure exactly what the date is--so that will allow two-way 
travel.
    But Pennsylvania Avenue, my general belief is--and this is 
as part of a long-range agenda with the Federal Government--
there has got to be a way that we can use modern devices to 
protect our President. We all want to do that while at the same 
time providing this critical east-west link in our city.
    Mr. Horn. I agree with you on that. They have legitimate 
security concerns in that area, and with the nuts roaming 
around this world, one can't be too careful.
    Ms. Cropp. If I may, I concur with the Mayor on that. While 
we do need to look at the security of the President, it is 
really important that we open up an east-west linkage across 
our city. E Street, there is no reason why the traffic cannot 
move east to west. Because we have traffic moving from the west 
going east, obviously traffic is flowing there. It would 
significantly have a positive impact on our traffic flow if it 
could be two-way, the traffic is moving one-way, unless we are 
saying that a nut would only come from one direction, because 
the traffic is moving.
    Mr. Horn. Well, I think you make a very good point, and I 
wish you well, as one that drives in that area fairly 
frequently.
    I think you probably share high respect for Mayor Rendell 
in Philadelphia, as I do. He is a very impressive mayor and has 
been before our committee. How do you think his philosophy of 
rejecting tax increases and emphasizing public-private 
cooperation, does that apply in the District of Columbia, do 
you believe?
    Mayor Williams. I think it definitely applies. I think to 
attract better investment, we have to improve the services of 
this government. We always call it the three publics--public 
education, public works, public safety--are the kind of 
foundation. We need better economic execution of a strategy. We 
are beginning to do that.
    We also need to lower business costs, and a key way to 
lowering business costs is on the tax side. And in my mind, 
lowering that cost for business is going to be a partnership 
between our city and the Federal Government.
    I support the legislation that has been introduced--will be 
introduced by Congresswoman Norton that would relieve a lot of 
the tax pressure using Federal resources. I think we need to 
complement that on our side using our precious ability we have 
to lower taxes, to focus that tax reduction initially on 
smaller businesses; and I think you will get relief for 
individuals coming from the Federal side and relief for smaller 
businesses coming from the local side. That, coupled with what 
we are doing to improve service, I think then you have a 
tremendous climate for investment in our city.
    But adding to the tax rates, to me is a stupid way to bring 
more revenue to our city because it is short-term gain, long-
term pain.
    Mr. Horn. Mayor Steve Goldsmith of Indianapolis is another 
mayor, for whom I have high respect. We have had him visit my 
city of Long Beach, CA, which is about the size of Washington, 
450,000, major ports, major aerospace industry and so forth. 
And as you know, Mayor Goldsmith has encouraged a competitive 
bidding process for a lot of city services. I don't know to 
what extent that might be on your agenda, but I am curious, is 
that an option?
    Mayor Williams. Again, I talked at length about managed 
competition in my presentation, and I think that is something 
that we want to pursue very aggressively in our city.
    I am a big admirer of Mayor Goldsmith and his hands-on 
approach to his management. He permanently has no city 
administrator. He manages his city himself. He didn't even have 
a chief of staff for some time. I am not arguing or advocating 
that, I am just talking about a temporary situation, but I just 
want to put that into the record.
    But when he first came to Indianapolis, his approach was 
just to privatize everything. It was only after some experience 
with that outright privatization approach that he began to 
fashion what he has became known for and what Indianapolis has 
become a mecca for; and that is--I think he said they had 3,600 
people visit Indianapolis to look at their approach to managed 
competition. It is giving his employees and his unions the 
resources to compete, exposing them to competition. They have 
kept many of those jobs and functions. They are doing a better 
job at less cost, and I think there is a direct, relevant 
example for us in the District.
    Mr. Horn. And he has the unions on his side now.
    Thank you.
    Mr. Davis. Mrs. Morella.
    Mrs. Morella. Thank you. I want to thank Chairwoman Cropp 
and Mayor Williams for their testimony, and also Dr. Rivlin.
    Mayor Williams, last month you met with officials in other 
cities. I am curious not only what you learned from those 
meetings, and some of it was in your response to Congressman 
Horn, but I am interested in hearing from you about your 
meetings regionally with county executives from Prince George's 
County, Montgomery County, and with representatives from 
Virginia. Have you devised methods of working together, and if 
so, on what issues? Will you be meeting regularly with them? 
What enlightenment can you give us in terms of regional 
cooperation?
    Mayor Williams. On regional cooperation, as I have stated 
many times, I believe that our city has to define itself as a 
vital center of a regional economy competing in a global 
economy. And I say ``vital center'' because this has got to 
work for the gain of our city as it works for the gain of the 
region. So I am not interested in exporting jobs out of my city 
or exporting revenue out of my city, no mayor would. But I 
recognize in this global economy, there are mutual gains in us 
working together.
    Certainly, and I have seen this with Mayor Rendell and 
Mayor Archer, there were mutual gains where we work together to 
bring new investment to the region. Clearly there are 
opportunities there.
    Dennis Archer is an inspiration to me. He has forged a 
regional alliance. And you could argue that the Detroit region 
has been much more punishing to him than it has been to us, 
given all of our history and legacy, because of that huge 
manufacturing job loss, that huge flight of residents over--
about half of the population. But they are working on a 
regional basis to compete. I think we can do that.
    I think there are options for mutual gain in 
transportation, not only transportation as it benefits the city 
because, you know, I talked to the mayor in Indianapolis. If 
you live 90 miles outside of Indianapolis, it takes you 90 
minutes to get into town. If you lived 90 miles from 
Washington, DC, it would take you 3 or 4 weeks to get into 
town, given the transportation. That is the strategic 
opportunity we have in Washington, DC, to bring people back 
into our city; and I think there is potential mutual gain for 
all of us in that.
    There is also mutual gain for us in transportation. Our 
regional economy, one of the hottest in the world--we are one 
of the largest centers of technology on the planet, in many 
areas of our region we have practically negative unemployment. 
If we can, as part of a welfare-to-work strategy, develop 
public-private partnerships with firms out in the region and 
work with WMATA and private sector firms to provide better 
transportation for our residents, that is a great gain for both 
of us, because our residents and our city are getting jobs. 
Firms out in the region are getting dedicated employees, and it 
is a win-win for everyone.
    Down in Phoenix, I saw examples of where they have got the 
city of Phoenix, Tempe, Arizona, Scottsdale, and all of these 
different towns around Phoenix. There are no boundaries when it 
comes to deployment of fire and emergency services. Basically 
all of the fire and emergency services on a real-time basis are 
deployed all over that region according to need, and I think 
there are areas of cooperation between our District and the 
region, the same way that Fairfax and Montgomery cooperate. I 
think Montgomery and Prince George's cooperate in that fashion, 
and I think we can cooperate in this fashion as well, again for 
mutual gain.
    Sharing training facilities, working together on 
purchasing, recognizing the fact that we want to support our 
businesses and give our businesses opportunity, there have got 
to be opportunities for joint purchasing where all of us can 
benefit.
    Those are some of the things on my agenda that I want to 
push individually in meetings with executives when we meet, and 
collectively when we meet on a monthly basis.
    Mrs. Morella. So the ``big four'' are all going to be 
involved?
    Mayor Williams. The ``big four,'' but I also look forward 
to meeting with the folks in Prince William and Loudoun County.
    Mrs. Morella. Good. Traffic congestion remains one of the 
biggest concerns in the region and certainly in the city. The 
city has to be more user friendly to the residents and 
commuters, and particularly during the rush hours. What steps 
do you think should be taken, or maybe you have something 
planned to address the problem, because I would also ask, are 
you working with the Secretary of Transportation, Rod Slater?
    Mayor Williams. We have a very, very good relationship with 
each of the Cabinet secretaries and with the White House task 
force headed by Carol Thompson Cole and Jack Lew. They have 
been very supportive.
    What we are trying to be is very proactive in our relations 
with them. So it is not just a matter where they have an idea; 
we are trying to be much more responsive in getting that idea 
out on the street, but at the same time coming to them with an 
agenda of where they can be helpful.
    So, for example, in my charge to the agencies to come up 
with short-term action plans, one of the specific things that I 
asked them was, show me where you need more flexibility, show 
me where the Federal Government can provide in-kind resources, 
show me where in your action plans what you are doing can be 
complemented by what one of the Federal agencies is doing. And 
they are coming to me this weekend with that list, and I will 
be going forward to individual departments, as well as this 
task force, with this agenda, again to make improvements on the 
street.
    Transportation, in particular in my mind, with the police, 
it is a matter of focusing on customer service. You know, if 
you have a traffic jam and the officer is focused on whatever 
the officer is focused on and is not focused on relieving that 
congestion and that traffic jam, that is a question again of 
this customer service focus, because you have a lot of drivers 
here who need some help.
    Ms. Cropp. If I may add to that, the earlier question asked 
by Mr. Horn, one of the things that we need to do is look at 
the E Street dual traffic. That will certainly help downtown.
    The Department of Public Works is looking at better 
synchronization of our traffic signals. That is an issue that 
will help with the flow of traffic, particularly during work 
hours, as we improve our technology. That will have a 
significant impact.
    In addition, we need to look at something that we have that 
is working quite well for expansion and enhancement, and that 
is our Metrorail system, which is one of the best in the world. 
We need to look at ways to expand it as our population 
throughout the region becomes more mobile. There is an article 
today about expansion in the Tysons Corner area. We need to 
look at expansion for the Red and Green Lines and encourage 
more carpooling.
    If we take a multipronged approach with regard to our 
traffic signals and looking at our traffic patterns, 
particularly where you can help us with E Street, and that 
really has made gridlock occur downtown with Pennsylvania 
Avenue and E Street. It has impacted traffic from Independence 
Avenue straight up past K Street, and that is a large segment 
of this city that impacts not only the District of Columbia, 
Montgomery County, but also Virginia as people try to move in 
that direction. So I think that will play a significant role.
    Mrs. Morella. I agree, education, traffic congestion are 
two critical issues which affect everybody.
    My time has expired, but are you Y2K OK? I heard a comedian 
last night say something about, I asked somebody about Y2K and 
they wondered if it was a new cereal on the market.
    Mayor Williams. One of the mayors I talked to said he had 
no Y2K problem, because the cards in the shoe box were working 
just fine. But for us, we have a good technology officer. She 
is getting some added help from the Federal Government, and I 
believe that with the Herculean effort we are going to put in, 
as every jurisdiction will be putting in, we will be all right. 
We will be happy to report in more detail.
    Mrs. Morella. Steve and I co-chair the task force, and the 
Federal agencies are supposed to be compliant by the end of 
March; and I would hope that the District of Columbia would 
also be compliant by that time to allow some time for testing. 
I would very much appreciate, and I think this whole 
subcommittee would, your having that person get back to us with 
their report and the contingency plans.
    Mayor Williams. In many cases, we are putting in new 
systems off the shelf which, by their nature, are Y2K-
compliant. So we have kind of benefited from the fact that our 
systems were so far behind we needed to replace them anyway.
    Mrs. Morella. True, but that requires resources on your 
part, too, so one has to be ready for it. Thank you.
    Mr. Horn. Watch the new systems. We had one Federal agency 
give us that answer a few years ago, we're getting a new 
system, it'll be OK. They never checked. They never tested the 
new equipment to make sure it was 2000 compliant. It was not so 
your people ought to run tests through there before accepting 
it.
    Mayor Williams. OK, that's a good point, Congressman.
    Mr. Davis. Thank you.
    Mr. Mayor, just a few questions.
    Let me begin with commuter and traffic issues in the city. 
I would say the city has had a generally good response from the 
District Police but there have been a few bad episodes through 
the years.
    We had a problem a few years ago with people blocking the 
bridges and we felt the city was slow to respond. I think we 
were able to work that out.
    We had the slug lines where the city police were moving 
them and which created a little bit of chaos.
    We had the spot checks on the seat belts, which crippled 
this city one evening.
    We had the bridge jumper, which was a tough issue all the 
way through that I think in retrospect would have been handled 
differently.
    We just want to make sure as we look for regional 
cooperation in these issues that your police are sensitive to 
the issues of moving traffic in and out of the Nation's 
Capital.
    Traffic is bad enough, and when you get somebody pulled off 
the side of a road or anything like this, it just cripples it. 
That is true within the city as well as out. I just want to 
emphasize that we've talked about that and I know we're in the 
same queue.
    If you really want the city to succeed, than you want 
businesses to go downtown. They have to be confident that their 
workers are going to be able to move in and out about the city 
in a constructive manner. So I just want to emphasize that 
point.
    I know we're on the same page on that kind of issue, but we 
keep getting every few months something that perhaps could have 
been handled a little more sensitively and differently. I know 
you're sensitive to that, but we just want that to be a 
priority for the city and for the region. I know it's going to 
work.
    Mayor Williams, do you have any plans right now to propose 
any tax cuts? You mentioned shortly after the election you 
would be seeking some tax cuts for small technology firms and 
other businesses. As you know yesterday in our discussions with 
the Speaker, Delegate Norton and I were forceful in trying to 
expand some of the Federal tax breaks that the city receives 
now throughout the city. We think this could be very helpful in 
having the city attract capital in that area.
    I just want to know, is it too early now to get into any 
specifics? What's your thinking on that? I will ask Ms. Cropp 
the same thing.
    Mayor Williams. Right. In my vision, there's an overall 
package of tax relief for our city. There are tax reliefs for 
individuals. A home buyer assistance is certainly welcome. I 
didn't really take a policy position, but supported it as a 
candidate, support it as a Mayor. Progressive flat tax, I 
certainly support as a former development official, as Mayor, 
extending economic empowerment incentives, the capital gains 
provisions in our city. That's the Federal assistance side of 
it.
    Again, I think my own policy preference--but this is going 
to be a discussion with the Financial Authority and the 
Council, but I'm going to be arguing that we ought to take our 
tax dollars on the local side, OK, complementing what ought to 
be happening on the Federal side, take our precious local 
dollars and apply them where they have the most impact.
    And I think analysis will show you on the local side you're 
going to have the most impact providing reduction for a small 
business. That's 60 percent of your economy. You get the most 
elasticity, in terms of response, you know, hiring new people, 
expanding the tax base by their own organizational growth. 
That's where I would like to see our dollars go.
    And our staffs are working up models as part of the fiscal 
year 2000 budget process that costs these things out and give 
the Mayor, the Financial Authority, the Council, you know, the 
ability to make some of these decisions. I certainly would hope 
that in the year 2000 budget there will be that kind of focused 
tax reduction.
    Mr. Davis. We want to obviously work with you on that 
issue. That's a legitimate concern up here as well.
    Ms. Cropp.
    Ms. Cropp. Yes, Mr. Chairman, as you may be aware, the 
Council had commissioned a Tax Revision Commission. Have you 
seen that report by any chance? We would like to make sure that 
you get a copy. It's a very comprehensive report, that tax 
revision.
    Mr. Davis. My staff has seen it. I have not, but your 
reference to it has kindled my interest.
    Ms. Cropp. Good. If you need a copy, we will make sure you 
get a copy of it. When the Council commissioned that, it was 
with the idea that we needed to look at tax reform in the 
District of Columbia. That is one of the very basic focuses 
that we are going to do in the upcoming year.
    I'm happy that the Mayor and the Financial Authority agree 
with that. And we're all looking at tax revision, tax reform in 
some way. There are different opinions as to the approach that 
we should take, but we are all clear that we need to do it. 
That homebuyers credit has just been absolutely wonderful, and 
I think it has had a positive impact in the District. I think 
the audit will show that there were sizable revenue that was 
achieved from that.
    We need to look at other initiatives such as that that will 
help the District's economy grow as we deal with tax credit. 
And as we look at the downturn of the economy, that probably 
will occur, not only here but nationwide in the future. We need 
to look at a tax policy that will help look at and address that 
problem for the future.
    Mr. Davis. Thank you. It helps the economy, and that did a 
lot to stop the free-fall in residential real estate and the 
like. You have a healthy economy in this city. A healthy 
economy saves the Federal Government a lot of money in terms of 
bailout costs. I agree with you. I know Mrs. Norton played a 
role in making sure that was included.
    Mayor Williams, in your agency briefings on January 4th, 
you quote from one of my favorite 20th century philosophers, 
Fats Domino, when he said a lot of fellows nowadays have a BA 
and MD or a Ph.D.; unfortunately, they don't have a J-O-B. And 
job training is critical. In my State of Virginia, we graduate 
more psychology majors than we do computer science majors by a 
ratio of about 4 to 1. Yet you have to have the work force 
today or the jobs leave the region.
    The whole region is working on this. It's great to see the 
big four jurisdictions working on this and bringing the others 
in. That's one of the things, along with strong support from 
the business community, that prompted this initiative which 
would allow D.C. students to pay in-state tuition at out-of-
state universities across the country, which you don't have 
now.
    Can you share a few more thoughts? We talked about it 
briefly in your power points in terms of job training. Focusing 
on UDC playing a role in job training areas, making sure that 
city students and city young adults and people who need 
retraining will get it, either through the private sector or 
with the government acting as a catalyst or directly. I wonder 
if you could talk about that a little bit.
    Mayor Williams. A couple of things. You know, I believe 
that there is a whole continuum of education from preschool 
through postsecondary graduate school, and what we're looking 
for is to develop public-private partnerships that support us 
in that effort. I talked about the public-private partnerships 
that we're seeking, along with partnerships with the faith 
community to provide support for children outside of school and 
preschool; and that will be a major initiative in our budget in 
year 2000.
    It will again be a partnership. It's not just government 
alone, but all of us. We want to make a major effort on school-
to-work. European countries, for example, some other cities and 
regions have done a better job at school-to-work than we have 
in our city providing the internships, apprenticeships for 
students, particularly who don't want to pursue a professional 
career, you know, want to be a welder, a technician of some 
sort or another, providing more opportunities for our students 
in that fashion.
    And I'm committed to pursuing the idea of a technology high 
school over in Southeast. I think that we can do this in a 
fiscally responsible way in partnership with the private 
sector. We've got, again, this concentration of technology, 
this concentration of technology in the region. I think this is 
a real possibility for us.
    As to higher education, I think, one, our students ought to 
be given the same kind of opportunities to pursue quality, 
affordable education as students anywhere in the country. And I 
strongly support conception--I don't know the details, but I 
strongly support conceptually the bill that you put forward 
that would give our D.C. students greater higher education 
opportunity.
    This would complement, in my mind as opposed to detract 
from the mission of UDC. I support a 4-year mission for UDC. 
But, you know, I went to Yale as an undergraduate, you know, 
big institution, big endowment. It has had to focus its 
educational mission in light of current technology and current 
realities. UDC with a 4-year mission will and must do the same. 
It's part of developing a new strategic plan.
    And I would--I would as Mayor argue to the Council and to 
the Financial Authority that we establish a Commission on 
Postsecondary Education and balance a focused 4-year mission 
for the University of the District of Columbia along with our 
need to provide remediation for our students who graduate from 
high school. Our need to provide continuing education, our need 
to provide vocational education, all of these things are in the 
mix, as you know. They all have to be harmonized. But I don't 
think the two are mutually exclusive at all.
    Mr. Davis. Do you want to add anything to that?
    Ms. Cropp. Let me just go--in addition to that, let me also 
say that the District needs to truly focus on job training and 
retraining within the local government. That's an extremely 
important part of revitalizing the city as a whole.
    Unfortunately, as most--well, as the District looked at 
financial downturn, one of the first things that went was any 
type of training program. You need that training program more 
so than ever before, because you're changing the way you're 
doing government, people are doing different jobs, a lot of 
people left, new managers are moving up.
    One of the things--one of the partnerships that I'm pleased 
developed out of this crisis was with Fannie Mae and George 
Washington University in having a training academy for our 
midlevel managers; and that's something that is extremely 
important, to train our work force how to be managers.
    So--in addition to what we do in early childhood and high 
school, secondary and higher education, which obviously is 
extremely important, we must also look at job training for our 
work force.
    Mr. Davis. I just would add that I've been through Lorton 
and talked to some of the inmates there and when they all come 
out to return to the workforce they need educational 
opportunities to succeed. We want them to have an equal chance 
at life. Some of these kids did not have the educational 
opportunities or they dropped out and didn't have constuctive 
activities. It seems almost like a whole generation in this 
city that didn't get the opportunities and even if they worked 
and performed couldn't see that there was going to be anything 
at the end of the tunnel for them.
    If we can just give them a career path, where if you stick 
to the rules, if you work hard, there's going to be some 
reward. That's what this scholarship program we're talking 
about is about. If you succeed, you're going to have the same 
opportunities that the kids in Virginia and Maryland and every 
other State have and that the breadth--not that UDC is bad or 
can't be enhanced in many, many ways as a 4-year school, but 
have the breadth of opportunities that State universities and 
university systems across this country have.
    If you can take just one kid out of Lorton and you make 
them productive and job producers, these things pay for 
themselves.
    Mayor Williams.
    Mayor Williams. If I can just say, one of the things that's 
instructive and I think really good about this proposal is 
that, you know, it complements what the business leadership and 
the city and the region is doing to provide higher education 
opportunity as well, and that's to me what ought to be endemic 
in everything that we do that we're working in partnership.
    Mr. Davis. Ms. Norton and I talked about this and you heard 
support from Mrs. Morella, and you will hear it from suburban 
leaders, suburban business leaders like Lou Noto, who really is 
the brainchild of this plan. We all have a vested interest in 
these kids succeeding, not going to Lorton but going up the 
career ladder and being very productive members. This is just 
one of a series of things I think we can accomplish to take the 
city to the next step. I'm very hopeful.
    Ms. Cropp. Mr. Chairman, I really feel as if I must add 
this one part as we talk about education. You know, I'm a 
former teacher in the public schools and a counselor of public 
schools. I was on the board of education. And, actually, as I 
reflected on how can you make things better, what could be 
done, one of the concerns that I truly have as I looked and 
thought about how children really learn, they learn through 
their entire environment. That's how children learn. And if 
they're in schools 6 hours out of the day, there are 18 other 
hours that impact on who our children are and what they learn.
    And as we look at the education of our young people, it has 
to go beyond the classrooms, and that's why it's so important 
with what the Mayor is saying with recreation and other things 
such as that, because that is an important part of the 
education of our young people. And it's 18 hours, and that will 
overwhelm the 6 hours that they're in school any day.
    And, you know, if it is structured activities like sports 
or something like that, not that we think everyone would be a 
Michael Jordan and multimillion dollar contract athlete, but it 
teaches them certain basic skills such as discipline, how to 
follow rules, how to play as part of a team. And then those 
schools help to reinforce positive things for when they go into 
school for the 6 hours.
    So I felt compelled to say that as we look at strengthening 
education of our young people, if you look at how children 
learn, they learn through their entire environment, which means 
that it has to be a comprehensive approach to make sure that 
those 18 hours that the children aren't in school are a 
positive learning environment for them.
    Mr. Davis. I would like to respond. In the city, it's even 
more acute. The District can be a real role model, because the 
District has a much higher percentage of kids from single 
parent homes--I came from a single parent home--or no parent 
homes, in some cases, where just having other available options 
after school besides going home. They need other options 
available and having that career path available makes a huge 
difference.
    So we can work together on that. We want to complement what 
you're doing up here on the Hill. We have yielded to you on a 
lot of these issues in terms of what the glide path is.
    Let me now recognize my colleague, Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    I appreciate the answers and your questions on job 
training, particularly in light of the economic development 
that's going on in the city. I've really begun to think long 
and hard about economic development, because what I think the 
District has to face is those jobs are going to suburbanites, 
and sometimes in extraordinary numbers.
    If you talk to business people from downtown, they will 
tell you 8 out of 10 of the folks that they hire are from some 
part of the suburb, because that's the most readily available 
pool of people that come through the door that seem fully 
qualified. That's why, for example, in my tax package, one of 
the most important sections is the section that's says if you 
have a D.C. employee, not just hire one but have one, you get 
$3,000 off the first $15,000 that you pay that employee. Unless 
we're willing to come down with some incentives like that, our 
own people are not the most readily available people and all of 
this economic development is not going to do much for D.C. 
residents.
    You need the kind of training you're talking about, and you 
need incentives for people to hire our folks as opposed to hire 
everybody else, and that even goes for jobs in the hotel 
industry.
    I appreciate the chairman's humor, who says to me, Eleanor, 
if we pay them more, they're likely to become Republicans. And 
I do want to note for the record that the Republican majority 
has been very ungenerous when it comes to the salaries of 
Federal employees and managers. And I note the role reversal 
here at this podium with the great generosity of the Republican 
majority and the use of taxpayers' money, D.C. taxpayers' 
money, to pay salaries that they would never abide comparably 
for the Federal sector.
    Mr. Davis. Would the gentlelady yield for a second?
    Ms. Norton. I would certainly yield to the chairman.
    Mr. Davis. I would just add that I know Mrs. Morella has 
been very critical of this Democratic administration on the way 
they have used FEPCA, Federal Employees Pay Comparability Act. 
For each year under existing law, signed by President Bush, 
Federal employees would be getting more money.
    This is not a partisan issue, it is a philosophical issue 
of how you get the best managers. I would join with you in 
saying we don't want to overpay people if we don't have to.
    Ms. Norton. My only point, Mr. Chairman--and I expect to 
see you on the floor the next time that once again--because it 
has happened now for more than a decade--Federal employees 
don't get the statutory raise. I know you will be there since 
so many of them are in your district.
    Mr. Davis. I have always been there.
    Ms. Norton. Now, let me also respond to the notion that we 
have to pay this money to get the talent. Where is the talent? 
That is my point, Mr. Mayor, that is my point to the empty 
chair of Alice Rivlin, if you had to pay the money to get the 
talent, why is it, Mr. Mayor, that you are having to be your 
own city administrator, revise the plans that have come 
forward; if, in fact, we had gotten the talent, this is one 
person who would have taken her hat off to everybody.
    I inherited, when I came to this city, the most messed-up 
agency in town, the EEOC, with a huge backload. I know 
something about what it takes to attract good people and what 
it means to be limited in salaries. But I do not expect city 
officials to sit before me and say you have to understand, 
Eleanor, we needed this in order to find a talent, without 
being able to point up to me where that talent is.
    And I also want to say that this is an issue of no small 
moment to District residents. When District residents raise 
issues that they may not have all the information on, I will 
come back and give the information. For example, with Camille 
Barnett's contract, that there were other things here, like the 
present Control Board is locked in with a bad decision of the 
prior Control Board to give somebody a 5-year contract. Nobody 
can tell me that in order to get a competent, a good manager, 
you had to have a 5-year contract.
    But I want you to know that I believe that the residents of 
this city deserve hard bargaining for their high tax dollars, 
and I do not believe that hard bargaining occurred when people 
can write their own checks and severance pay. And I say this 
also in this context, that the reason I think there is some 
consternation in the city about it is that city employees all 
through the crisis took it in the butt, it was they who had to 
do furloughs with no money. It was they who got no increases.
    So I think there is a burden. If you happen to live outside 
the city, you may not see that burden. But there is a burden 
for those who live here and have a responsibility here to make 
sure that you can justify going way above, not just a little 
above, but way above market rates. And if the answer is we 
needed to get the talent, then I want a list of the names of 
the talent that that money bought, because I, for one, don't 
see it.
    I also don't appreciate comments about bulletproof vests to 
come to work in the District of Columbia. The only people who 
need bulletproof vests are people who live where cabinet 
members and managers do not live, and it is that kind of 
stereotype that is unnecessary and that I will always protest 
against.
    Now, I have a question for the Mayor. Mr. Mayor, there is 
also concern that for a couple of months, and you've said it 
would be for a short period of time, you were going to be your 
own city administrator. I have to confess I'm not as concerned. 
I think it would be hard for you to find a city administrator 
who knew the government and the finances of the government as 
well as you do. I also trust your judgment. I think you've 
shown you have the ability to plan and to focus, not to promise 
what you can't deliver.
    I heard you promise that you would resign if you didn't 
have a clean audit. Far from just having a clean audit, you 
helped work up a surplus. I'm really not concerned because of 
your own track record. But I think it would ease the anxiety, 
at least some have expressed, if you would offer some greater 
detail about how you would manage the notion of being your own 
mayor and your own administrator and, in particular, what kind 
of assistance, from where, in what degree, do you think it will 
hold you for the full couple of months, what will you be doing 
in the meantime, what kind of search will you be doing for city 
administrator, what kind of city administrator are you after?
    Those are the kinds of questions I have for you.
    Mayor Williams. Well, on Monday we hope to announce in 
great detail exactly what this staffing arrangement will be, 
what this assistance plan will be to give me the tools to 
maintain direct accountability for the operational 
administrative functions of the government, assistance from the 
Federal Government in helping us with the crosscutting issues, 
making sure they're coordinated, making sure we're looking for 
ways to get around logjams as they develop in personnel or 
procurement, assistance from the Federal Government, we hope, 
in helping us with advice and consultation on moving forward, 
very, very importantly, restructuring and providing for the 
right staffing between the Mayor's office and an ongoing city 
administrator's office and the right kind of span or control, 
the right kind of contact between those offices in the 
government.
    Because one of the things that I'm trying to avoid now and 
in the future is too much insulation between the Mayor and 
these departments, because if you've got a lot--too much 
insulation, by the time a problem gets up to the Mayor, it's 
insolvable, you know, because for general--in a general 
bureaucracy, people don't want to fess up to problems. They try 
to manage them down at their level, and you've got that 
problem.
    The arrangement that I'm looking at over this 2-month 
period involves, I think, an unprecedented coordination between 
my office and the Financial Authority as well, because I think 
we all have to look at the fact that they're going to be 
providing management assistance. They can on a very operational 
basis provide us management assistance in both, providing for 
continuity in the long-term improvement in the government while 
focusing on a change effort.
    So, specifically, we will have a staff person whose job it 
will be--reporting to me, a staff person whose job it will be 
to monitor and make sure we can continue the long-term 
improvement agenda we already have underway that I support, 
make sure that on a defensive basis, you know, planes aren't 
crashing, things aren't coming into conflict, that the agency 
day-to-day concerns are getting taken care of. We will have a 
staff person with assistants focusing on these action plans 
that I talked about. We will have these other private sector 
Federal people, providing me assistance, all of us working in 
executive committee, all of them giving me the tools I believe 
to do this job over the next month, 2-month period to get these 
changes.
    As for searching for the city administrator, I think we 
ought to bargain with top officials the same way we bargain 
with our employees, and we ought to be moving always toward 
competitive wages based upon the right kind of indicators. Who 
could argue with that. We are modifying the search committee 
that we already have in place for a CFO to take a list of 
candidates as they come forward for the city administrator, and 
I'm confident that for a lot of different reasons we're going 
to have a very good list of strong candidates for that position 
in 2 months that we can bring forward to the Council and 
Financial Authority for their consultation, recognizing that, 
depending on how this works out, this is a mayor's decision.
    One issue is are we talking about a chief management 
official or a city administrator. In my mind we're working 
generally with the Authority. In my mind it doesn't really 
matter as long as they're doing the operational part of the 
government. What we call them, I don't want to get all bogged 
down in him or her.
    Mr. Davis. Why don't you finish your questions? We will try 
to wrap this up. I know the Mayor needs to get over to the 
Senate side.
    Ms. Norton. My questions are aimed at giving you the 
opportunity to elaborate or explain issues that I know are 
troubling people, and you're not finding me give you softballs.
    Let me give you another one. It has to do with managed 
competition, which can be a very exciting idea and we know has 
been used in other cities. Philadelphia, a comparable city has 
used it. Could you give us some idea of how you would implement 
managed competition and how you would involve city unions and 
city employees in the implementation of managed competition for 
people who, for example, have never had to bid before, don't 
know anything about and have had no reason to know anything 
about requests for proposals? How are they going to be on a 
level playing field with folks out in the private sector who do 
that kind of thing every day to earn a living?
    Mayor Williams. Right. I think that as part of our overall 
staffing assessment we're always looking to distinguish 
between, to be blunt about it, employees who really have a bad 
attitude. You can be a rocket scientist, and if you've got a 
bad attitude there's nothing you can ever do about that. And 
everything that I've talked about for years about 
accountability has always focused on that employee, not who 
doesn't necessarily know what he or she is doing, you can work 
on that. It's that employee who has a bad attitude, right, 
you've got to address that. Once you've addressed that, you're 
talking about a group of hard working employees who ought to 
have the same ability to succeed as anyone else. And I believe 
it is incumbent on us to work with labor, work with our 
employees to first of all fashion the criteria we're going to 
use for this competition.
    I will give you some of the factors that you have to look 
at. Do you have adequate cost information? If you don't have 
adequate cost information you don't really know what you're 
choosing in terms--it's like going to a supermarket and no 
price tags, you need good cost information.
    Ms. Norton. Market information that doesn't have you 
overpaying people who do the work?
    Mayor Williams. Absolutely, absolutely; one. And, second, 
an issue that we want them involved in, another criteria is are 
there private vendors who can do the job? We've had instances 
in our city, and you've seen it in other cities, where you've 
had private vendors that were doing the job, they weren't able 
to do the job, that's a problem.
    Another problem is staging or bundling, if you will. Many 
of the cities that have pursued this have not pursued 
outsourcing for the entire city or the entire jurisdiction. 
What you may do is, you may do one part labor, you may do one 
part one vendor, one part another vendor. So you have some 
backup and you really give the employees some opportunity on 
what they can do.
    And finally before you even begin this process, you've got 
to provide employees with the assistance, the legal assistance, 
the technical assistance, the tools in terms of these training 
kits that I talked about for individual employees, so when they 
bid to do a job it's a realistic bid and you're not just going 
through a shell game with them, and that I'm committed to do. 
What I'm trying to do is provide better service at lower costs 
for our citizens. What I'm not trying to do is just simply 
drive down wages of good workers simply for the sake of driving 
down wages. That is not my goal, nor should it be my goal.
    Ms. Norton. One final question, this is really for Ms. 
Cropp, as well as you, Mr. Mayor, and it's inspired by what the 
chair said about the charter. I was so pleased to hear you say 
that the city was going to initiate a look at its own charter, 
that is not the work and should not be the work of the 
Congress. And I congratulate you on that initiative.
    Let me just say that the Mayor said something in his 
testimony that is not unrelated to what you said and that is 
when the Control Board sunsets, he would be concerned that 
there be an independent CFO, and how to work that into the 
present government is obviously a problem to consider. The 
concern expressed to you about opening up the charter is 
understandable.
    It is true that there are members who might be inclined to 
jump in with both feet, and so it's very important if we open 
it up, to open it up for the right positions and very 
responsibly. That's why I focus in on this CFO notion, and I 
ask this question without having any opinion because I really 
don't know. I spent the earlier part of my career in New York 
and noted that the way in which there was real independence in 
the budget process; it was a comptroller who was elected and 
who had, therefore, a built-in adversarial relationship to the 
Mayor. And the one elected official that the Congress might 
readily add to the charter might be something like an elected 
comptroller. As you're faced with who appoints this CFO, how do 
you make him truly independent without writing a lot of 
legislation to insulate him? How do you make him truly 
independent from the Mayor, even if he is confirmed by the 
Council?
    I wondered if you've thought about whether that position 
can be insulated in some way as it is when power goes back to 
the Mayor, whether it should be an elected position, or whether 
there might be other solutions to that problem of fiscal 
independence?
    Ms. Cropp. Ms. Norton, as you indicated you have not 
reached an opinion, quite frankly, neither have I. I think you 
have raised a very serious issue that we must look at. Those 
are the decisions that we must come to. Whether or not it's an 
elected position, whether or not an appointed position that 
cannot be removed except for cause, I'm not certain. But that 
was one of the areas that I think we need to look at as we look 
at the charter. And, hopefully, as we go about discussing it, 
we will evaluate which method may be the best method, if in 
fact that's the direction we want to go.
    Mayor Williams. I would just say as a former financial 
official, in looking at the District, the problem, I don't 
think an elected comptroller is necessarily the answer. When 
New York City went insolvent they had an elected comptroller. I 
think Philadelphia has an elected comptroller, if I'm not 
mistaken, they may not. Some cities have had elected 
comptrollers and they still had these problems.
    I think really what we ought to try to do is, through this 
process, and I support the general idea of citizen involvement 
in a charter reform as we move back to self-government, that we 
look at giving independence by statute to this officer and 
financial reporting. This is also in the Control Act. So even 
when the CFO turns into a pumpkin after the end of the control 
period and the powers are diminished that person will still 
have responsibility for accurate financial reporting. To me 
that's very, very important.
    We have to make sure that this person has responsibility 
for internal control and integrity, in terms of systems 
development. I think that's very, very important. And finally, 
I think personally, and I'm Mayor now, I still think it's very, 
very important that this person have responsibility, some 
autonomy, I will put it that way, in setting the revenue 
estimate for the District, because that's the ballgame.
    If you have some independent objective party setting up 
that revenue investment, it removes from us a temptation to 
stop playing games. If you look at the history of all of these 
debacles, a lot of it goes to overestimating revenues, 
underestimating expenditures.
    Mr. Davis. Thank you very much.
    I will now recognize Mrs. Morella.
    Mrs. Morella. My question to you, Mr. Mayor, and if 
Councilwoman Cropp wants to respond, too, is that the D.C. 
appropriations bill for fiscal year 1999 limits attorneys fees 
for representation of special needs kids.
    I have learned that this provision has been applied 
retroactively and yet that wasn't the intent of Congress. I 
wondered if you would respond to that. Congress never intended 
to have it be extended retroactively, and I am just very 
concerned about that interpretation of it. And I'm hoping that 
you will be able to remedy that, and what your comments are on 
it?
    Ms. Cropp. I was not aware of the retroactivity aspect of 
it. I would need to look into that.
    Mr. Davis. If you could look at that and get back to us.
    Mrs. Morella. I would be glad to get a letter off to you 
about that.
    Mr. Davis. That's fine.
    Mrs. Morella. Mr. Mayor, are you familiar with this?
    Mayor Williams. I would echo what Chairman Cropp has 
stated. I am not familiar with the fact we had gone retroactive 
with it and would be happy to get more information to you.
    Mrs. Morella. It requires a clarification coming from you; 
both of you would be great. Thank you.
    [The information referred to follows:]
    [GRAPHIC] [TIFF OMITTED]65954.058
    
    [GRAPHIC] [TIFF OMITTED]65954.059
    
    [GRAPHIC] [TIFF OMITTED]65954.060
    
    [GRAPHIC] [TIFF OMITTED]65954.061
    
    Mr. Davis. Thank you very much, Mrs. Morella.
    And without objection, all written statements submitted by 
witnesses will be made a part of the permanent record, and the 
record will remain open for 10 days.
    The subcommittee will continue to work with all interested 
parties to achieve our objectives, and these proceedings are 
closed.
    [Whereupon, at 1:35 p.m., the committee was adjourned.]

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