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



                           YEAR 2000 PREVIEW

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

                                HEARING

                               before the

                          SUBCOMMITTEE ON THE
                          DISTRICT OF COLUMBIA

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 21, 2000

                               __________

                           Serial No. 106-124

                               __________

       Printed for the use of the Committee on Government Reform


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

                                 ______
                     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                PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia            CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana           ELEANOR HOLMES NORTON, Washington, 
MARK E. SOUDER, Indiana                  DC
JOE SCARBOROUGH, Florida             CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South     DENNIS J. KUCINICH, Ohio
    Carolina                         ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia                    DANNY K. DAVIS, Illinois
DAN MILLER, Florida                  JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas             JIM TURNER, Texas
LEE TERRY, Nebraska                  THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois               HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California                             ------
PAUL RYAN, Wisconsin                 BERNARD SANDERS, Vermont 
HELEN CHENOWETH-HAGE, Idaho              (Independent)
DAVID VITTER, Louisiana


                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
           David A. Kass, Deputy Counsel and Parliamentarian
                    Lisa Smith Arafune, Chief Clerk
                 Phil Schiliro, Minority Staff Director
                                 ------                                

                Subcommittee on the District of Columbia

                  THOMAS M. DAVIS, Virginia, Chairman
CONSTANCE A. MORELLA, Maryland       ELEANOR HOLMES NORTON, Washington, 
STEPHEN HORN, California                 DC
JOE SCARBOROUGH, Florida             CAROLYN B. MALONEY, New York
                                     EDOLPHUS TOWNS, New York

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
                Howie Denis, Staff Director and Counsel
                 Anne Barnes, Professional Staff Member
               Melissa Wojciak, Professional Staff Member
                           Jenny Mayer, Clerk
                      Jon Bouker, Minority Counsel
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on January 21, 2000.................................     1
Statement of:
    Williams, Anthony, Mayor, District of Columbia; Alice Rivlin, 
      chair, District of Columbia Financial Responsibility and 
      Management Assistance Authority (D.C. Control Board); and 
      Linda Cropp, chair, District of Columbia City Council......    23
Letters, statements, et cetera, submitted for the record by:
    Cropp, Linda, chair, District of Columbia City Council, 
      prepared statement of......................................    48
    Davis, Hon. Thomas M., a Representative in Congress from the 
      State of Virginia, prepared statement of...................     4
    Morella, Hon. Constance A., a Representative in Congress from 
      the State of Maryland, prepared statement of...............    18
    Norton, Hon. Eleanor Holmes, a Representative in Congress 
      from the District of Columbia, prepared statement of.......    13
    Rivlin, Alice, chair, District of Columbia Financial 
      Responsibility and Management Assistance Authority (D.C. 
      Control Board), prepared statement of......................    40
    Williams, Anthony, Mayor, District of Columbia, prepared 
      statement of...............................................    29

 
                           YEAR 2000 PREVIEW

                              ----------                              


                        FRIDAY, JANUARY 21, 2000

                  House of Representatives,
          Subcommittee on the District of Columbia,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:10 a.m., in 
room 2154, Rayburn House Office Building, Hon. Thomas M. Davis 
(chairman of the subcommittee) presiding.
    Present: Representatives Davis, Morella, and Norton.
    Staff present: Howie Denis, staff director/counsel; Anne 
Barnes and Melissa Wojciak, professional staff members; David 
Marin, communications director; Jenny Mayer, clerk; Jon Bouker, 
minority counsel; and Jean Gosa, minority assistant clerk.
    Mr. Davis. Good morning. The hearing will come to order. 
Welcome to the first hearing of the new millennium of this 
subcommittee.
    It is a very cold morning in Washington. I was telling Ms. 
Norton it was so cold on Capitol Hill this morning Members of 
Congress had their hands in their own pockets just to stay 
warm. It's one of those days.
    You know, back in the last century, and sometimes it seems 
like almost 100 years ago, the District of Columbia was in the 
midst of a crisis of epic proportions. Exactly 10 years ago, 
the commission, chaired by Dr. Alice Rivlin, prophetically 
warned of an impending disaster. Exactly 5 years ago when this 
subcommittee was created, the disaster was upon the city and, 
therefore, upon the entire Washington area.
    At our very first hearing on February 22, 1995, I stated 
that the District of Columbia faced a spending problem of 
monumental proportions and a management failure as well. The 
crisis was so severe that the District government couldn't 
deliver basic services. There was very real concerns that the 
city would run out of cash to pay debt service or meet its 
payroll.
    We formed a bipartisan bond with the ranking member of the 
subcommittee, Eleanor Holmes Norton, and we've worked together 
ever since to resolve the crisis working with city officials, 
working with the administration and others and then move 
forward.
    I am grateful for all of the subcommittee members and 
congressional leaders in both parties, House and Senate, for 
devoting so much effort to these issues. I am grateful as well 
to the Clinton administration for working with us in a very 
cooperative manner. We have put partisanship and politics aside 
when it comes to our Nation's Capital.
    As Congress has a unique quasimunicipal charge under the 
District clause of the Constitution, this subcommittee's issues 
are likewise unique. Along with bringing the Control Board into 
existence in 1995 and revising the city's budget process, we 
created the position of chief financial officer for the city. 
We then opened a window for the Treasury Department to deal 
with the District's cash and short-term budget problem. The 
District's bond rating had slipped to junk status, and the GAO 
had testified under oath that the city was insolvent.
    It was never the intent of Congress, nor do I believe that 
it ever should be our role, to micromanage this city. Our 
purpose has been to create a team to rescue and revive the 
Nation's Capital, and I think we have done that.
    The first chief financial officer is, of course, now the 
elected Mayor Tony Williams, who is now in the second year of 
his administration. In his first testimony before this 
subcommittee on March 19, 1996, then CFO Williams stated that 
his top priority was to reestablish credibility by taking steps 
to improve the District's financial management. This and much 
more was done.
    As Mayor, he has given himself goals, and he has achieved 
many of them. The MCI arena and the new convention center 
project would not have been possible without the fresh start 
that we made together.
    In 1997, the Revitalization Act relieved the city of many 
of its fastest-growing budget items to put the city in a far 
stronger position to perform basic municipal services, dealing 
with the unfunded pension liability, closing Lorton, striking a 
more equitable balance with Medicaid. All of this helped to 
maintain our momentum toward economic recovery.
    1999 was a banner year for the city and the subcommittee. 
The memorandum of agreement between the Control Board and the 
Mayor was ratified into legislation that originated right here. 
In fact, it was the very first enactment of the 106th Congress 
to be signed by the President, and as a result, substantial 
authority was shifted from the Control Board back to the Mayor. 
We thus gave Mayor Williams the tools to do the job.
    Last year also saw passage of landmark legislation to 
enable D.C. high school graduates to pay in-State rates at 
public colleges in Virginia and Maryland.
    What the District needs now more than anything else is more 
taxpayers. I am gratified that the city's population finally 
appears to be stabilizing. The real estate market is up-aided 
by the incentives we helped to provide and the leadership that 
the city's voters have provided. There is a great demand for 
rental units. More regional residents are making leisure trips 
into the city, a very healthy sign of economic activity.
    The Control Board was created to work itself out of a job. 
Within the foreseeable future, that's going to occur. And I 
expect testimony today on what the process will be and what 
progress needs to be made. But make no mistake, the District 
government must not just play out the clock and then revert to 
the bad old days of fiscal mismanagement. We will all do our 
job to keep the city on the right track. They who keep the city 
can never rest.
    There are many serious ongoing concerns that demand our 
oversight and attention. And the documented cases of abuses, 
deaths, and missing records involving the mentally retarded is 
outrageous. It's unacceptable. We are demanding answers, and we 
are going to continue action, and the Mayor's rebuilding 
efforts this week are welcome.
    We also intend to monitor reform efforts involving the fire 
department, pothole repairs, rat infestation, and management 
practices. I also want to work with the city to get a better 
handle on the receiverships to see if those departments are 
better or worse off than they were before. And I want to make 
sure that our coordination with the independent agencies, such 
as water and sewer, is providing the region with the best 
service at the lowest cost.
    We will continue to work toward enhancing the tax base of 
the city so that the economic climate is healthy and resources 
are available for needed services.
    So I thank Mayor Williams, Dr. Rivlin, and Council Chair 
Cropp for being with us here today. I appreciate the job you 
are doing. I look forward to your testimony as we proceed on 
our bipartisan visions for the Nation's Capital.
    [The prepared statement of Hon. Thomas M. Davis follows:]
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    Mr. Davis. I want to now yield to Delegate Norton, the 
ranking member of this subcommittee and my partner here for the 
last 5 years.
    Ms. Norton. Thank you very much, Mr. Chairman. Many thanks 
to Chairman Tom Davis for this hearing to start off the last 
operating year of the financial authority. My appreciation as 
well to Tom for his friendship and for the collegial and 
bipartisan way in which he has always dealt with me and with 
the city. It will be a sad day if the Republicans retain 
control of the House when he leaves. Otherwise, I would be 
pleased to have him as my ranking member.
    My congratulations.
    Mr. Davis. I take it that is a compliment.
    Ms. Norton. My congratulations to Mayor Williams, 
Chairwoman Cropp and the City Council, and Chairwoman Rivlin 
and the Authority all who have cooperated to reconstruct a 
government that increasingly we all can be proud of.
    The Financial Authority statute automatically sunsets the 
authority after 4 consecutive years of balanced budgets. As a 
matter of fact, the District has far surpassed this goal. The 
District not only achieved a balanced budget 2 years ahead of 
the statutory goal, it has run healthy surpluses each year.
    At the same time, the District government has made 
substantial improvements in its management both before and 
after the present administration came into office. Anyone who 
lives in the District and has experienced its service delivery 
has seen the improvement.
    The Control Board has ratified this view of the District 
government and deserves credit for the seamless transition to 
full control by elected officials the Authority has fostered 
while maintaining its oversight responsibilities consistent 
with the statute. At the same time, all involved would be quick 
to acknowledge that many important reforms and operational 
improvements can be accomplished only after more time is 
devoted to them and that significant problems can be found 
alongside considerable progress.
    The questions that Chairman Davis and I will raise in this 
hearing fulfill our oversight responsibilities, but, consistent 
with the way he and I have always operated, do not seek to 
micromanage the District government. Based on their records, 
city officials and the Control Board need no advice from 
Congress on how to proceed to fully reform the operations of 
the District government.
    However, I would make one suggestion this morning, in light 
of the Mayor's self-audit of the D.C. Mental Retardation and 
Developmental Disabilities Agency, which has laid the predicate 
for dismissals, new personnel, and other improvements the Mayor 
has already initiated, Mayor Williams deserves praise for 
conducting his own no-holds-barred objective audit. Its very 
usefulness, however, suggests that had there been in place a 
systematic plan for self-audits of every other agency, the 
District might have caught this tragedy before it reached 116 
deaths.
    To one degree or another, every agency of the city 
government needs a thoroughgoing audit that would assure 
systematic improvements rather than reform by crisis. It is 
time to draw up a plan and set a timetable to do an audit of 
each agency in operation of the D.C. government.
    I feel obligated to raise another early warning this 
morning, but this one is not addressed to the elected officials 
or the Control Board. Their best efforts do not assure the 
stability of the District government or even its solvency over 
the long term according to experts. The region's premier 
analyst, Stephen Fuller of George Mason University, last week 
projected that the District economy will peak in 2001 and will 
decline every year thereafter for 4 consecutive years.
    According to Dr. Fuller, ``You can't assume the District 
economy stays healthy just because it's had a couple of good 
years.'' He cites the growth in construction as responsible for 
much of the increase in the District's economic output, and, of 
course, construction does not produce permanent jobs.
    I must add that the District went through good times in the 
1980's because of a construction boom in downtown office space 
and by the early 1990's was already showing signs of 
insolvency.
    Almost all the financial reform effort thus far has gone 
into controlling expenditures, with the burden falling largely 
on the District, plus an enormous boost from the President's 
Revitalization Act. I am very gratified that Congress passed 
and extended my $5,000 homebuyer credit and added important 
D.C.-only tax credits for businesses we negotiated. But 
valuable and productive as these credits have been, Congress 
must do more to help the District enlarge its revenue base. 
Either the city must get tens of thousands of new residents and 
businesses in short order, or revenue must come from another 
source.
    Because the District has no State to fall back on, the only 
available source is the Federal Government. It would be folly 
to wait until 2001 or after to see how long the District can 
hold on. The District cannot afford to wait. That is why I have 
prepared a set of bills for introduction this year. Among them 
will be an annual public safety Federal payment that was often 
included in prior years in addition to the annual Federal 
payment. This amount for police operations is necessary to 
assure that the city does not go down paying costs such as the 
half million dollars spent on the neo-Nazi demonstration and 
thousands of others who come every year to petition the 
Congress and the President, not the District government.
    To cite another example, if the region insists that the 
non-resident commuters use D.C. services free of charge, I am 
obligated to seek a subsidy from the Federal Government to pay 
the cost of the services used.
    I also have new ideas about State functions that were not 
taken by the President's Revitalization Act that continue to 
burden the District, and I will detail these ideas soon. This 
avenue in particular must be explored, considering that the 
only reason the District of Columbia is able to report a 
balanced budget and surpluses is the President's revitalization 
plan, which removed pension liability and the costs of the 
courts and Lorton prison and reduced Medicaid liability. These 
and other similar measures must be explored.
    If Congress has better ideas, let's begin to hear them now 
before it is too late. The District is doing its part to 
overhaul its finances and operation, but the Congress has yet 
to move beyond its initial contribution of instituting a 
Control Board, an indispensable vehicle to assure recovery 
whenever a city becomes insolvent. However, Congress has not 
streamlined its own cumbersome processes. As a result, Congress 
adds substantial unnecessary costs to the District government 
by requiring that its budget be micromanaged and often delayed 
here and the District laws be held over. Yet Congress could 
accomplish any change it desires at any time without cumbersome 
preemptive measures instituted by standing congressional 
committees.
    District residents, Mayor Williams, Chairwoman Cropp and 
their colleagues deserve better. They deserve to be met at 
least halfway on the revenue needs of the Nation's Capital and 
the costs of bureaucracy Congress adds to the city's finances 
and operations. These problems will be far more difficult for 
the Congress to face than the substantial help we have given to 
the city thus far.
    The Congress and the city have much to be proud of in what 
has been jointly achieved. I have every reason to believe that 
the Congress will want to build on this good work to assure the 
permanent stability and continuing improvement of the Nation's 
Capital.
    Thank you very much, Mr. Chairman.
    Mr. Davis. Ms. Norton, thank you very much.
    [The prepared statement of Hon. Eleanor Holmes Norton 
follows:]
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    Mr. Davis. Now I would like to hear any statement the vice 
chairman of our subcommittee, the gentlelady from Maryland, 
would like to make.
    Mrs. Morella. Thank you, Mr. Chairman. I appreciate your 
efforts to hold this important oversight hearing on major 
issues affecting the District of Columbia during the year 2000. 
And I look forward certainly to hearing the testimony of Mayor 
Williams, Chairwoman Rivlin of the D.C. Control Board, and 
Chairwoman Cropp of the District of Columbia City Council.
    January is named for Janus. That was a god that had two 
heads, one that could look back and one that could look ahead. 
I think this is what this oversight hearing is about.
    You have heard from the Chairman A litany--a chronology 
actually of the accomplishments through the years, having been 
added to by Congresswoman Norton.
    Incidentally, as an aside, I think the Chairman has shown 
tremendous leadership and commitment to the District of 
Columbia, and the ranking member has also. We do care about 
what happens to the District. It is our star in the center of 
our entire region. So I want to say that I am pleased that, as 
a result of the strength, expertise, and management 
capabilities of the District leadership, such as the 
distinguished panel we have before us, we have made some 
tremendous strides.
    I want to personally commend you, Mayor Williams, and your 
team, and Councilwoman Cropp, on the team that demonstrated 
that we didn't have a Y2K millennium bug that wasn't handled. I 
remember the concerns that we had in terms of the District was 
starting a little bit late, are they going to be in good shape. 
I hope it has given an opportunity for an appraisal and an 
assessment of what we have in terms of technology so we can 
move ahead with other issues, and I would be very interested in 
the role of long-term technology improvement plan for the 
District of Columbia and what it will play in the future 
prosperity of the District.
    In addition to the testimony we are about to hear on 
efforts to revitalize the Nation's Capital, I just want to 
comment briefly on two other matters that I hope will be 
formally addressed here. One is the issue that concerns me, and 
it is status of the District's Mental Retardation and 
Developmental Disabilities Agency. And I refer to the 
Washington Post reports that there had not been any 
investigation of the causes of 116 deaths in homes for the 
mentally retarded, combined with admissions of document 
shredding, and these are serious concerns.
    And I am encouraged, Mayor Williams, that you are or have 
appointed a coalition of private groups lead by the Lieutenant 
Joseph P. Kennedy Institute, and I have great respect for that 
institute, to temporarily manage the care of the city's 
mentally retarded wards. I would, however, like an update of 
the progress for the record here today.
    Second issue is also related to a report in the Washington 
Post. On January 15, Martin Luther King, Jr.'s birthday, the 
Post quoted D.C. Taxicab Commissioner Sandra Seegars urging cab 
drivers to pass up ``dangerous-looking'' people. When asked for 
an example of a dangerous-looking person, Commissioner Seegars 
stated, ``A young black guy, OK, with his hat on backward, 
shirttail hanging down longer than his coat, baggy pants down 
below his underwear, and unlaced tennis shoes.''
    Is this an invitation to return to the days of 1993 when, 
according to the Post, a Lawyers Committee for Civil Rights 
survey found that one-third of the taxi drivers in the District 
routinely refused to stop for black customers? At a time when 
we are facing rising concerns about racial profiling, I am 
curious and interested in what impact a statement like this has 
on our society.
    I would also like to know how the District government will 
balance the need to ensure the safety of taxicab drivers versus 
the rights of citizens not to be discriminated against on the 
basis of a racial profile.
    That having been said, I again want to welcome you, and 
thank you very much for appearing before us, and we look 
forward to hearing your comment.
    Thank you, Mr. Chairman.
    Mr. Davis. Thank you, Mrs. Morella.
    [The prepared statement of Hon. Constance A. Morella 
follows:]
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    Mr. Davis. I am going to now call on our distinguished 
panel of witnesses to testify, Mayor Anthony Williams, Dr. 
Alice Rivlin, and the chair of the Control Board and City 
Council, Chair Linda Cropp.
    As you know, it's the policy of this committee that all 
witnesses be sworn before they testify. If you just rise with 
me and raise your right hands.
    [Witnesses sworn.]
    Mr. Davis. Mayor Williams, why don't we start with you. 
Then we will go to Dr. Rivlin. And then, Ms. Cropp, you will be 
our cleanup.

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

    Mayor Williams. Chairman Davis, Congresswoman Norton, 
Congresswoman Morella, thank you for having us here today and 
giving us the opportunity to testify before you at this 
oversight hearing. I want to begin by thanking you for your 
continued support for our city and its efforts to show that 
democracy can work and that we can achieve great autonomy and 
self-determination.
    I want to also make it a point of saying thank you to 
Chairman Davis and the members of the committee, Congresswoman 
Norton, Congresswoman Morella, for your support for the 
District's college access bill. I really believe that this law, 
over the long term, is going to have an unparalleled long-term 
positive impact on our city, and all of you should be proud of 
your work in that regard. We certainly recognize it here in the 
city and are going to be working mightily to see that it is 
implemented well and speedily.
    A little more than a year ago, I was honored to be elected 
Mayor. It has turned out to be, day by day, one of the most 
rewarding experiences of my life. When I came to this job, I 
came with a simple vision, and I maintain that vision, and that 
is that our citizens in our city, America's flagship city, 
deserve the very best. That means strong schools, safe streets, 
clean communities, affordable housing, reliable transportation. 
It means access to health care. It means vibrant economies 
downtown and in our neighborhoods. Most of all, it means all of 
us in our city putting our bodies and souls in motion, 
empowering men, women, and children in all our communities to 
work and solve our problems together.
    Now, the first thing we had to do was to create a sense of 
urgency in our government to set ambitious goals and deadlines 
so that all of us, the Council, the Congress, Control Board, 
and most importantly our citizens, can see our progress and 
hold us accountable and begin to restore faith in our 
government.
    There were short-term action plans, some 28 of them. We 
held ourselves accountable for achieving real results. While we 
didn't get everything accomplished, and we missed a few self-
imposed deadlines, we accomplished a vast majority of our 
action goals; 20 goals were completed, 5 are under way toward 
completion, and only 3 were pretty much missed.
    Now, although we have much to do, I am very, very proud of 
what we have achieved in the short term. But while I believe 
some of these goals are not unparalleled in their magnitude or 
scope, they have done step by step, item by item a lot to 
restore our citizens' faith and confidence in our government.
    To give you just a few examples, streets and alleys still 
have a lot of room for improvement, but they are noticeably 
cleaner. During yesterday's snowstorm, I got a number of calls 
not from people complaining, but calls from people saying they 
were pleased to see policemen at the intersections. They 
actually thought that we were doing, in some respects, a better 
job with our roads than surrounding jurisdictions. I haven't 
heard that a lot.
    In August we had a gun buy-back program. We took more than 
3,000 guns off the streets. Monday-morning quarterbacking can 
say, well, were they the right guns, wrong guns. The fact of 
the matter is we listened to one of our policemen. We were 
proactive, worked with Chief Ramsey, worked with the Alcohol, 
Tobacco and Firearms folks and got 3,000 guns off the streets.
    We created a record 10,000 jobs for high school students 
this summer. A little known fact, but we created the highest 
number of jobs last summer than any administration in the 
District's history. I am very, very proud of that.
    Making progress with the phones. You can now call a single 
number, 727-1000, to reach any agency in the District 
government with your request. You get a case number. We track 
that case number. We have set up a quality control team of 
citizen volunteers and our own people who track our progress in 
responding to mail, e-mail, and our phone calls. Again, there 
is a lot of room for improvement, but we recognize our 
problems, and we are managing against those problems.
    Now, in the second year, I believe we are going to have to 
operate on two parallel tracks. One is to continue to produce 
these visible results that I have talked about while we are 
making the structural changes that all of you have alluded to 
in respect to, for example, MRDDA, or Retardation Development 
Disabilities Agency.
    Now, during the first year, we put a new management team in 
place, and I am proud of the new structure we have put in place 
with our deputy mayors, that will allow each deputy mayor to 
approach a cluster of issues and work the interrelationship 
between those issues. For example, there were a number of 
different agencies that work on issues relating to children and 
families. They're not single silos. All these issues work 
together. We have one person to work those issues, one person 
to work the public safety issues.
    I am proud of that. I am proud of the fact that we are 
implementing something called the Management Supervisory 
Service. This is legislation from the Council a couple years 
ago that we are aggressively implementing that is going to see 
that midlevel managers will be held more accountable while at 
the same time having a greater incentive to excel in their 
jobs.
    We are making a new commitment in training, millions of 
dollars going to training, continuing education for our 
workers, making a massive commitment now with our new 
coordinator with the receiverships, Grace Lopes, to see that we 
are working with the Federal judges to bring our receiverships 
back under the fold of regular District government and regular 
democratic government in the District.
    Labor strategy is a big, big part of our upcoming agenda 
next year, I would say a foundation for everything we are going 
to do, because reforming management is only one-half of the 
equation. I think it is very, very important that we work with 
our labor unions to help improve service delivery in the 
District, and not until we fundamentally change for the next 
century our relationship with our employees that the District 
will reach its goal that we all want to achieve.
    During this past year we have begun working with labor 
very, very intensively on a number of issues. We have made very 
good our promise--on a promise made by this individual CFO, by 
the Council, by the Control Board to give our workers a bonus 
for their sacrifice during the financial crisis. And I am proud 
to say we have carried through on that promise. We have created 
good faith. But I think, as everybody would admit, now the hard 
work begins.
    Working with outside counsel, we are going to be 
negotiating a labor agreement that I hope will achieve the 
following: one, provide gainsharing opportunities for 
employees, essentially profit-sharing for the public sector; 
two, achieve real success on six pilot programs; and managed 
competition, so that we can fairly compare what we have 
achieved in managed competition, allowing our employees to 
compete in the real world, comparing that with what we have 
achieved with other devices, such as a labor-management 
partnership that we are working very, very closely with our 
unions to achieve. That is a matter of sitting down with our 
employees, looking at a broken system and working with them to 
find a solution and find ways to fix it.
    Does this work? It absolutely works. I would argue that the 
turnaround in our tax collection system--and we had Nat Gandhi 
here, I believe, who is our deputy CFO. Nat and I worked 
turning around the refund system, not by paying millions of 
dollars to consultants, but by sitting down with our employees 
and a new management team and working out a new solution. We 
went from one of the worst in the country to sending refunds--
people forgot they were owed a refund by the time they got it--
to now we are providing refunds ahead of the IRS.
    Now, Congresswoman Norton mentioned risk management. We 
consider this to be a crucial part of our agenda for next year. 
As a matter of fact, we have included a component of risk 
management in every contract with our deputy mayors, with our 
agency heads, and this is going to be part of our evaluation 
system for the Management Supervisory Service as well.
    Risk management is an absolutely essential component of 
effective management. I am proposing that we establish an 
Office of Risk Management as part of the fiscal year 2001 
budget. And the responsibilities of this office would include, 
one, addressing areas of risk involving employee disability 
issues; addressing areas of risk involving insurance issues; 
conducting reviews of the areas of greatest risk. This is based 
on a program or issue focus, although I have no problem with 
the Congresswoman's focus on agencies, focusing on our areas of 
greatest risk, doing the audits, doing the reviews, and 
instituting risk elimination, mitigation, avoidance efforts in 
cooperation with the important agencies such as Office of the 
Inspector General and Office of CFO; determining the 
appropriate performance measures to work us out of these bad 
situations; and, very importantly, establishing review 
committees as an appropriate tool to review specific situations 
and determine causation where it's appropriate.
    I want to just give a brief overview of the financial 
snapshot from my point of view.
    I think it's easy to sit here and report that after 3 
straight years of balanced budgets and a 4th year projected to 
be balanced that the District is now entering into a new 
century of unparalleled prosperity from a financial point of 
view. But I think that we should be on guard; that while we 
have gone farther and faster, and I still believe this in 
similarly situated American cities, we still have a long way to 
go.
    So we've made progress on expenditure control. We've made 
great progress in our fiscal relationship with the Federal 
Government. We are beginning to inch along in our way to revive 
our economy.
    But I think there are still warning signs ahead. Members of 
the committee alluded to them. I am very, very cognizant of 
them. I think we approach each and every one of our budgets 
with that in mind, one that there is still work to do in 
expenditure control.
    If you look at our agencies in comparison to benchmarks in 
other jurisdictions, there are still economies to be realized, 
I'll put it that way. If you look at it from cost per capita or 
cost per unit of service, there are a number of different 
dimensions from which you can look at this. There is a lot of 
progress, a lot of progress to bring back our economy, and I 
will be talking about that in a second.
    I guess I would like to begin now and through this budget 
cycle to just pour a little bit of rain on the parade so that 
we keep a proper focus on the challenges that confront us. And 
I will say frankly that I may have juiced the parade up a 
little bit too much last year going into the budget with all--
you know, you have just been inaugurated, you are obviously 
going to have a bright outlook. It may not have had a fully 
balanced, fully nuanced view of our future going into this. And 
I think we need that. I will just leave it like that.
    Another key focus going into the next year, and I just want 
to be very, very brief with this, are going to be children and 
our neighborhoods. I say children and neighborhoods because 
this is on the basis of our Citizen Summit, on the basis of 
something we are calling Neighborhood Action, where we are 
linking citizen input to our budget, linking citizen input to 
our contracts with our vendors and our employees and our agency 
managers.
    Citizen input is a tool to bring together the faith 
community, the business sector, the nonprofit sector to better 
support our children, to better support our neighborhoods.
    In the area of children, I am particularly proud of the 
college access program, proud of our summer jobs program, proud 
of our one-stop shop centers that we are having now for--
employment centers we are building in six of our neighborhoods 
in cooperation with the private sector, the safe passages 
legislation that we passed with our Council wherein we are 
going to be tracking on a case-by-case basis the children in 
the District and holding ourselves accountable for clear, 
measurable results in terms of health, in terms of nutrition, 
in terms of education.
    In neighborhoods and economic development, I believe that 
we have to spend an enormous amount of time and effort in 
neighborhood development in the following areas: No. 1 is 
recognizing that it's important to bring new investment to the 
District. And in the future we need to find a way, and we are 
beginning discussions now with the technology leaders in our 
region, find a way to seize on strategic opportunities, 
international trade and, very, very importantly, seize on 
opportunities in the technology sector, bringing in new 
technology investment to the District.
    No. 2, very, very importantly, trying to catapult on, 
Congresswoman Norton, your efforts with the home buyer tax 
credit and others, to make an effort and to say to ourselves we 
will as a District government set a goal of, maybe it's 50,000, 
maybe it's 60, maybe it's 100,000 new residents over the next 
10 years, and try to achieve that goal. Because, as Chairman 
Rivlin and others have said, we have got a number of jobs in 
the District. What we need are tax-paying residents in the 
District, and that is going to be a key part of our economic 
strategy.
    I am proud to say that we are beginning to assemble a 
first-rate team in economic development. And this team I think 
is going to put this District on the forefront of other cities 
over the coming years in housing development.
    I also want to note something over the last year that I 
think really does set a good precedent and two things that 
really do herald I think the changes that are afoot and under 
way.
    No. 1, in ward 8, for example, where residents have been 
working for more than 20 years to attract new development, 
2,000 new units of housing are now under construction, 2,000 
new units of housing. And this is, I think, without even 
including the Hope 6 grant we got this year. This is more 
housing right now in ward 8 than the rest of the city combined.
    Another example is back in October when Hugh Panaro and the 
owners of XM Satellite Radio passed up a chance to locate in 
the suburbs, and they came and they made their home on New York 
Avenue, bringing 300 jobs to Northeast and beginning a 
renaissance of this important corridor in our city.
    Finally, I think I would be remiss if I didn't mention on 
natural resources and our effort to work with this Congress, 
our Congresswoman and the Federal Government to bring back the 
Anacostia River, to promote the redevelopment of brownfield 
sites and to show that economic development and natural 
resource management can go hand in hand.
    And finally the issue of Y2K. I have to say a word about 
the Y2K issue because I think it's one of our signal 
achievements over the last year. You know, over the course of 
the last year we testified to this subcommittee a number of 
times. And on two of those occasions we focused exclusively, as 
Congresswoman Morella was mentioning, on Y2K readiness. Simply 
put, we made it.
    The District, though, didn't make it alone. We certainly 
want to recognize and need to thank members of this committee 
as well as our Federal partners at OMB, Sally Katzen and John 
Koskinen, the Treasury Department, HHS, the Clinton 
administration in general for helping make the District Y2K 
compliant.
    As of now, the entire system's infrastructure of the 
District continues to run without problems; 95 percent of the 
District's systems are operational and all city-wide technology 
infrastructures are operating normally, including and most 
importantly our public safety operations.
    The several-year effort most intensified over the last 
couple of months produced the expected results, an entire city-
wide readiness and technological spring cleaning that resulted 
in the complete upgrade of antiquated systems, producing higher 
standards of greater efficiencies, which is a fancy way of 
saying that we have used the occasion of Y2K, the crisis of 
Y2K, to seize an opportunity.
    And I want to thank the leadership of Suzanne Peck and 
Norman Dong for using the occasion of Y2K to begin putting in 
an infrastructure in this city that is going to allow this city 
to, I think, really excel over the next 4 or 5 years in on-line 
service to citizens, to excel with a webpage that we are going 
to be launching in another couple of months or so that will be 
second to none in its utility and functionality. So we really 
are using this occasion and making progress.
    I get a number of calls from our citizens, and I am sure 
you do as well, complaining about all the road cuts and the 
coordination of the road cuts. And if you look at our city, 
sometimes I just want to jump out of the car, I'm just so 
frustrated looking at these road cuts because it is 
frustrating. That is the bad news.
    The good news is that all these road cuts show us that this 
city in another year or so is going to be one of the most 
technologically connected cities in the world. We are like St. 
Louis back in the 19th century with the confluence of the 
Missouri and Mississippi Rivers. We are here at one of the 
major hubs of technology. And I think the moral of this story 
going into the next century is use the resources, the tools, 
the partnerships, that we have to really seize this advantage.
    So, as I say, the residents of our city need and they 
deserve and they expect a government that works for everyone, 
particularly our youngest and our most vulnerable citizens. 
That is a commitment that I have made as our mayor. I believe 
that we have made progress. There is much more to be done, but 
I want to thank this committee, and particularly Chairman Davis 
for his partnership, his support of our city and self-
government in our city, his support of this administration and 
his belief that the District really can be America's flagship 
city.
    So I want to thank you, Chairman Davis, and thank members 
of the committee.
    Mr. Davis. Thank you, Mr. Mayor.
    [The prepared statement of Mayor Williams follows:]
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    Mr. Davis. Dr. Rivlin, you have been with us, but even 
before we started, you have been predicting this 5 years before 
it happened and worked through to help.
    Ms. Rivlin. Well, it happened, but now it is getting 
better.
    Thank you, Mr. Chairman. I want to join my colleagues in 
expressing appreciation for the work of this committee. I think 
the District is very fortunate to have the leadership of this 
committee on both sides of the aisle and the District and its 
surrounding jurisdictions represented so prominently and so 
ably on this committee and its enormous strength for those of 
us who work in the city and care about its future.
    Your letter of invitation asking me to testify covered a 
great many questions. I believe you want to hear most from me 
about the Authority's transition plan for suspending its 
activities, so I will get to that fairly quickly.
    The Authority, as you remember, was created by act of 
Congress in April 1995 at a time when the District was in 
financial disaster. It was in terrible shape, and there was no 
way of hiding that.
    Now, almost 5 years later, the District is in much better 
financial shape. In fact, the recovery, as you all know, has 
been quite dramatic. We have had two balanced budgets behind 
us. We are about to have a third. We are into year 4 where we 
also confidently expect that we will have a surplus.
    The District's bills are getting paid. Its taxes are being 
collected. Debt obligations once again sell for market rates. 
And from a financial standpoint, there has been much progress.
    But it is important to recognize that the District needs to 
expand its economic foundation. Its tax base is still too 
narrow. Vigorous and sustained efforts are needed to attract 
and to keep new residents and add and to enhance business 
opportunities. Otherwise, we are in trouble going forward.
    The District also has considerable deferred maintenance and 
a history of inadequate infrastructure investment. Its decayed 
and outmoded infrastructure will take substantial resources to 
correct. The District is focusing on modernizing its 
infrastructure, using that word loosely, to require--broadly 
that is, to cover streets, roads, and computers and all sorts 
of things. And I urge the Congress to assist the city's elected 
leadership with the necessary resources.
    Over the past year, the Mayor has assembled a strong team 
of experienced professionals to run major agencies of the 
District, and this team has worked hard to put together the 
Mayor's strategic priority action plans which are very 
impressive indeed and which we expect will improve the 
performance of the District visibly over the next year or so. 
Indeed, visible, measurable improvements have already occurred 
in the delivery of many District services, and more will be 
evident in the coming months.
    Despite the improvements, however, we are all conscious 
that serious deficiencies remain in the delivery of many public 
services in the District. Tragically, as you have noted, some 
of the egregious problems of neglect and mismanagement affect 
some of the District's most vulnerable citizens.
    We have also made considerable investments in technology, 
but problems remain with managing technology, including 
financial information systems. We are particularly concerned 
that systems modernization urgently needs to be completed, 
employees hired and trained to maintain and use these systems.
    Reform will not come easily or quickly to a government that 
has been neglected and mismanaged for many years. It will take 
sustained and concentrated effort to effect permanent change. 
But we can all be proud that the process is under way and 
moving forward.
    Mr. Chairman, I turn now to my main topic, the time by 
which the Authority must suspend its activities. How do we 
become a city without the Authority?
    In order for the Authority to suspend its activities, the 
Financial Authority Act requires that the District government 
must end the fiscal year with a balanced budget for 4 
consecutive years as verified by the comprehensive annual 
financial report. The District must have access to private 
credit markets at reasonable interest rates; and any obligation 
incurred by the Authority from the issuance of securities, and 
in fact there have been none, must be certified as discharged; 
and all short-term requisitions by the District government from 
the Treasury must also have been repaid.
    The various statutory requirements read together almost 
certainly take the Authority through the end of fiscal year 
2001. If, as we expect, the District achieves a balanced budget 
in fiscal year 2000, it will have satisfied the statutory 
requirements to terminate the control period. However, the 
District would still be in a control year at that time since 
the fiscal year 2001 is a year for which a financial planning 
budget approved by the Authority will be in effect.
    So, as we interpret the statute, the Authority would 
continue its normal functions through September 2001, with the 
exception of approving the budget for fiscal year 2002, which 
the Authority was merely required under the statute to review 
and report on to the Mayor, the Council, the President, and the 
Congress.
    Over the year and a half between now and the time that we 
hope to suspend activities, the Authority will be working hard 
with the Mayor, the Council and the leadership of the city to 
ensure that we believe the District government is in good shape 
and strong fiscal health.
    We will be working on three major fronts: strengthening the 
decisionmaking processes of the city, strengthening management 
of D.C. agencies and the effectiveness of service, and growing 
the city and its tax base.
    We also plan to make recommendations to the Federal and 
District governments for improvements in the governance 
structure of the District to fulfill one of the purposes of the 
Financial Authority Act.
    On strengthening decisionmaking processes, good decisions 
must be based on accurate, timely information which is 
available and well understood by the participants in the 
decisionmaking process. While considerable progress has been 
made with strong leadership from both the chief technology 
officer and the chief financial officer in bringing D.C.'s 
information systems at least up to the standards of the late 
20th century, if not quite into the 21st, much remains to be 
done.
    The well-known difficulties with implementing the new 
payroll system called CAPPS, the source of the infuriating 
teacher payment errors; and the implementation problems of the 
new financial management system called SOAR, which have 
complicated the closing of the fiscal year 1999 audit, 
illustrate the need for sustained attention to improving the 
District's ability to produce timely, accurate information for 
decisionmakers. The Authority will be working hard with the CFO 
and the CTO to facilitate the upgrading of D.C. information 
systems.
    Good decisions also flow from decision processes in which 
participants know their roles and work well together to get the 
decision made, even when they disagree strongly about what the 
outcome should be.
    Last year's budget process left much to be desired, even 
though it resulted in a consensus budget strongly supported by 
the Mayor, the Council, and the Authority. Inadequate 
preparation and unresolved differences between the Mayor and 
the Council forced the Authority to play a major role in 
brokering a final compromise. This year we hope that earlier 
agreement on fundamental assumptions underlying the budget and 
better communication between the Mayor and the Council will 
enable the consensus budget process to flow more smoothly with 
less active intervention from the Authority.
    A major process issue that must be resolved soon is how the 
District of Columbia public school system is to be governed. 
The Authority is prepared to turn over governance of the school 
system but must be assured that there is a new governance 
system in place that will serve the best interests of the city 
and its children.
    In view of the need to resolve the issue of school 
governance and to establish a workable system, which may 
require one or more referenda, the Authority is prepared to be 
responsive to a request from local elected officials to delay 
the return of school governance until the end of this calendar 
year.
    On strengthening management and the effectiveness of 
services, the Authority will be working closely with the Mayor 
and the Council and the Inspector General and others to 
strengthen management and accountability for producing 
effective services responsive to citizen needs and concerns, 
including developing performance benchmarks for services.
    We believe the city's work force must be heavily involved 
through labor management partnerships and other arrangements in 
improving the efficiency of operations, outreach to the public, 
and a sense of pride in services delivered.
    We are particularly concerned that important services, for 
example, mental health and child welfare, remain in 
receivership and accountable to judges, not local officials and 
citizens.
    We will be working hard with the Mayor and the Council to 
help the agencies in receivership to achieve service standards 
acceptable to the courts and established a firm basis for 
seeking their return to local control.
    Finally, growing the city. Although the financial future of 
the city looks far brighter than it did 5 years ago, its 
continued fiscal health, as others have stressed, is by no 
means assured. The city has a narrow tax base and much of its 
current prosperity could fade if the national and regional 
economic boom were to lose its momentum. The city has lost a 
third of its population in the past 20 years and has suffered 
job loss with the downsizing of both the Federal and the D.C. 
governments.
    The continued fiscal health of the District of Columbia 
depends on growing its job base and its resident population, 
especially the latter. The Authority will be working with the 
elected officials of the District and its business, labor and 
nonprofit leadership to help create a vibrant process of 
economic development.
    In conclusion, Mr. Chairman, much progress has been made in 
Washington. However, much hard work remains. The Authority 
looks forward to closing down on September 30, 2001. Meanwhile, 
we will be cooperating with the Mayor and the Council to be 
sure that the city is functioning well and no longer needs us.
    Thank you.
    Mr. Davis. Thank you very much, Dr. Rivlin.
    [The prepared statement of Ms. Rivlin follows:]
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    Mr. Davis. Ms. Cropp.
    Ms. Cropp. Good morning, Chairman Davis, Congresswomen 
Norton and Morella. I am pleased to appear before you today 
with my colleagues, Mayor Anthony Williams and Alice Rivlin. 
Let me join with them in thanking the committee so very much 
for the work that you have done on behalf of the citizens of 
the District of Columbia. We think that we are better for it.
    As we begin the 21st century, I hope that you share the 
feeling, from what I am hearing, of the real pride and optimism 
about Washington, DC, which I have sensed among our residents 
and our businesses. As I had said before when we first saw it 
coming, there is a new feeling of our citizens holding their 
heads up and their shoulders back.
    We recognize that there are still lingering problems with 
the functioning of the District of Columbia government, many of 
which have been experienced by other cities, some of which are 
of our own making, and some of which the responsibility lies 
elsewhere. But I believe that we are well on the right track to 
addressing most of these problems.
    I also hope, Mr. Chairman, that you would agree that the 
locally elected officials of the District are more than willing 
and able to do our part, as we expect our Federal and regional 
partners are willing and able to do their part, in taking the 
actions necessary to continue our progress and ensure the long-
term financial health of this city.
    1999 was a very good year for the District of Columbia. A 
new reform-minded Council and the Mayor have worked hard 
together, sometimes with constructive tension, often with 
Congress and the Financial Authority, and always with our 
residents and businesses, to continue the ongoing 
revitalization of our city. Taxes have been cut, housing and 
economic development has been growing, and major legislative 
reforms have been or are about to be enacted that will improve 
the functioning of our local government.
    Last year was the first year in more than a decade in which 
the number of jobs grew in our city instead of declined, and 
the decade-long loss of population has finally begun to 
stabilize. We still want and need many more residents and jobs 
in Washington, DC, in order to expand our revenue base and 
ensure our economic viability for the future. That is why we 
are redoubling our efforts to make the city a more attractive 
place to live, to work, and visit.
    Neighborhood stabilization and revitalization remains our 
collective No. 1 priority, which of course cannot be achieved 
without making real improvements first and foremost in 
education, in our public schools, along with continuing 
improvements in public works and public safety throughout the 
city.
    The Council, as you know, initiated a recent dialog that is 
ongoing with the Mayor and with our citizenry to focus upon how 
we can improve the governance of our public school system so 
that we can achieve more accountability and best serve the 
interests of the children of the District of Columbia. That 
effort, led by council member Kevin Chavous, chair of the 
education committee, introduced legislation that would look at 
the governance of our school system. And it has created an 
awful lot of dialog, I think healthy, in this city to that end.
    Let me take this opportunity to note just a few of the many 
other major legislative initiatives by the Council during the 
past year: the Tax Parity Act, which is designed to make the 
District more competitive with our surrounding jurisdictions in 
terms of retaining and attracting more residents and 
businesses; the legislation establishing an independent housing 
authority to replace the receivership that has been in place 
for public housing; tax increment financing for major retail 
and housing development, such as we are experiencing right now 
at Gallery Place, which is a mechanism that can be and will be 
duplicated to help spur revitalization of our neighborhoods 
throughout the city; the legislation providing the chief of the 
Metropolitan Police Department with additional tools to retain 
and attract experienced police officers to fight crime; the 
emergency legislation that was enacted to address in part the 
fatal neglect of the mentally retarded persons in group homes; 
and the legislation that it is about to be considered by the 
Council which comprehensively reforms the system by which the 
city manages and disposes of its own property.
    I would like to provide to the committee a record of a copy 
of the legislative agenda for Council period 13. It is the 
first time that the Council has put together an agenda that we 
expect to accomplish over a 2-year period, a set of goals that 
we hope to initiate.
    This is the strategic planning document that the Council 
developed again for the first time last year. The agenda 
identifies 33 Council goals for this legislative period. And 
we, in fact, will be meeting next week in another strategic 
planning session to assess our own performance in accomplishing 
these goals and update and revise our priorities where 
appropriate and working together with the Mayor and Financial 
Authority to initiate many of these reforms.
    A little more than 2 years ago, the opening of the MCI 
Center at Gallery Place as a home to professional basketball 
and hockey helped spark the downtown development boom that we 
now see evidenced by the many construction cranes in the sky.
    Last year, Chinese New Year, sitting in the middle of H 
Street, as you looked up, you saw seven cranes in the sky of 
the District of Columbia. The new convention center is under 
construction on schedule north of Mount Vernon Square. The 
Carnegie Library is being renovated as the new City Museum of 
Washington, DC. The Business Improvement Districts authorized 
by the Council are helping the city clean up and provide 
additional services in commercial areas. In fact, for the first 
time in a long time, we even saw Woodie's windows during the 
holiday season based on the efforts of the BIDs.
    New apartments, condominiums, hotels, restaurants, movie 
theaters, grocery stores, and other retail arts and 
entertainment venues are being created or planned, not only 
downtown but in our neighborhoods as well.
    The District government, as you know, has experienced 3 
consecutive years of budget surpluses, thanks to the sacrifices 
by our workers, our citizens, and thanks to management reforms, 
to a strong national and regional economy, and thanks to the 
revitalization legislation that you enacted to relieve the city 
of several costly State-like functions that no other city has 
to pay, plus Federal reassumption of the unfunded pension 
liability that the Federal Government had created and 
transferred to the city.
    We also appreciate, Mr. Chairman, your sponsorship of the 
legislation enacted by Congress last year with our 
Congresswoman Eleanor Holmes Norton to provide the District 
high school graduates with the ability to attend public 
universities in Maryland and Virginia at in-state tuition 
rates, plus the new financial assistance to the University of 
the District of Columbia and to students attending private 
colleges in the District. This will be very helpful to us, and 
we need to assure that our students are academically qualified 
for these higher educational opportunities, which I hope we 
will be able to expand at both the local and Federal levels.
    We expect fiscal year 2000 to end with the budget surplus 
for the District government as well, which would trigger the 
beginning of the end of the Financial Authority pursuant to the 
legislation which you were instrumental in enacting 5 years 
ago.
    At this time next year, when the audit for fiscal year 2000 
is completed, we expect to have worked hard to achieve the 
statutory requirements of four consecutive balanced budget--
surplus budgets. We also hope that 2000 will be the year that 
includes historic steps toward full realization of American 
democracy for residents of the District of Columbia and that we 
are finally successful in our long-standing struggle to gain 
voting representation in the U.S. Congress.
    We ask that you give serious consideration to remedying the 
denial of this fundamental right to our citizens and that you, 
therefore, take a new and positive look at Congresswoman's 
Norton's proposal in this regard, particularly her legislation 
to provide greater legislative autonomy for the D.C. Council 
and also to allow the District's locally raised revenues and 
expenditures to be excluded from the annual national politics 
of the congressional appropriations process.
    In closing, let me reiterate some of what I stated to you 
almost 1 year ago today. Prior to and since the enactment of 
the Financial Responsibility and Management Assistance Act, 
this city has gone through some rocky times, some challenging 
times, and some very creative times.
    We have recently entered a new era which all of us here at 
this table recognize is a transitional time. Implicit in the 
word ``transition'' is the concept of rebuilding bridges, of 
moving toward the day when governance of this city is solely by 
elected officials who are accountable to the citizens.
    A lot of things still need to be done, but the first and 
major step of recovering from our financial crisis has been 
accomplished. Implementation of significant reforms to service 
delivery improvement are ongoing. And we, the elected council 
and elected mayor, collectively have the vision, commitment, 
and democratic mandate from our citizens to work together with 
other stakeholders toward a renewed and revitalized District of 
Columbia.
    Thank you for this opportunity to testify before the 
Congress. I am, of course, available to answer any questions 
you may have.
    [The prepared statement of Ms. Cropp follows:]
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    Mr. Davis. Thank you. We are going to go right to 
questions. I am going to start the questioning with our vice 
chairman, Mrs. Morella. But before I do that, I want to ask one 
question.
    Ms. Cropp, you focused a lot on the economic development, 
and I think everyone did. Ultimately, that is what is going to 
be critical for the city, because I think we can get the 
service delivery and we are moving in the right direction in 
all of these areas, but if the city does not establish an 
independent tax base over the long term to sustain it, we have 
huge problems. There is tremendous opportunity in those areas, 
whether it is down at the Navy Yard or whether it is at Gallery 
Place downtown. We are starting to see things moving.
    When I get to my round of questions, I want to focus a 
little bit on some of those strategies, because it is a very 
competitive market to attract capital in the major cities, and 
you are competing against a suburban market that is very 
competitive at this point. But there is a niche there. So we 
will get into that.
    Let me start the questioning if I can with my colleague 
from Maryland, Mrs. Morella. Let me say that I think we will do 
10 minutes, and I will go from you to Ms. Norton and then to 
myself.
    Mrs. Morella. Thank you, Mr. Chairman.
    I want to thank the three of you for being very honest in 
your appraisal as you look back and yet applauding yourselves 
for what has happened with the progress that has been made in 
the District of Columbia and then looking ahead at what more 
needs to be done.
    A question for the Mayor and anyone else who may want to 
comment on it is actually related to what I and Congresswoman 
Norton both referred to in our opening statements, and that is 
the Mental Retardation and Developmental Disabilities Agency.
    I know you took very, very strong action this past week in 
that regard, essentially firing top personnel and temporarily 
privatizing the operation. And this resulted no doubt from the 
deplorable and disgraceful conditions which were allowed to 
exist, including the documented cases of abuse, deaths, missing 
records.
    I wanted to ask you, where do we go from here? How could 
this agency have been allowed to function the way it has been? 
And with regard to that part of the questioning, I guess I 
would also ask Councilwoman Cropp about what happened to 
Council oversight of this agency.
    Mayor Williams. Well, let me talk about how we got there 
and then I'll talk about what we are doing to get out of where 
we are. I think it is an important question.
    When I came into this job, I always believed the key to our 
success was laying a good foundation; and just as a major part 
of building a bridge is the foundation, a major part of 
rebuilding this government is going to be in its foundation. 
And that is ensuring that we have integrity in our government, 
that we've got management control in our government, that we 
manage risk well in our government.
    These can sound like arcane technical terms, but they 
really are, as you're saying, connected to and are synonymous 
with people not getting good service, renting buildings that 
are unoccupied, people dying. So we have asked each and every 
one of our agencies, through the contracts that we are laying 
out with each and every one of our agency heads and the 
evaluation standards for middle managers, to take risk 
management as one of their top priorities; and we began doing 
this some months ago, even before this report came to light.
    I think a second part of this was alluded to by 
Congresswoman Norton, and I talked to our inspector general 
about this, and that is a need to do a systematic auditing, 
performance auditing, throughout the government so that we have 
an independent third party evaluating where we are against 
where we have established a certain standard.
    In respect to--and we haven't had this in the past to a 
level that we should and, frankly, some of the management 
reform work that was done in DHS didn't pick this up--and I 
think a fair question to ask is why wasn't it, because there 
was a thorough review of the management ``review'' of DHS and 
did not pick up these problems. And you have got to ask, did 
you get what you paid for in that connection?
    In terms of what we are doing, though, now that we know 
where we are, what we have done is the following: Recognized 
that a total rebuild of this system has to take place, but it's 
not going to be successful unless all the different parties are 
consulted, all the different parties are briefed, all the 
different parties feel that they are participating in this, 
including our labor community, because I think bottom-up action 
is necessary.
    I was criticized early because within days I had not fired 
two or three people. I think it is easy to satisfy yourself and 
figure, well, I fired two or three top people, you have solved 
the problem. You really haven't. And if you haven't done it 
right, you actually have undermined morale on our management 
team. I think what you have to do is to look broadly and 
systematically at the work that needs to be done. And we have 
done that.
    We have done a 30-day report, found these systematic 
problems on our only self-assessment, and we have done the 
following. No. 1, bring in a consortium of providers headed up 
under the Joseph P. Kennedy Institute to manage, short term, 
this system, the operations of this system, and to see that the 
services are getting to our disabled citizens. That is No. 1.
    No. 2, work with a task force that will work with us in 
designing a completely new system, new managers. Employees will 
now compete for jobs in this new system. If they have not 
succeeded in making it into this new system, we are going to 
help them with outplacement, severance assistance, we hope 
relocation within the District government. We are going to be 
very, very methodical and thoughtful and humane in that. But we 
really need to rebuild this system.
    And also key to this is seeing that, as we rebuild this new 
system, we not only have new contracts in place, but we have a 
system of monitoring these contracts. And we are looking to 
this task force, which includes everyone from HHS to people who 
are in the community in terms of masters and providers to help 
us see that that system design works.
    So that is a somewhat long, extensive answer. But I think a 
bottom-up solution was called for, and it was worth the time 
and worth the method to do it.
    Mrs. Morella. We would be interested in your keeping us 
posted in the progress that is made.
    Concilwoman Cropp, would you like to comment on that?
    Ms. Cropp. I would. There is no doubt that we need better 
oversight of that whole area. The Council recently, in addition 
to what the Mayor has done, has passed emergency legislation 
that would require autopsies on all boards of the city and also 
requires investigation of every injury of death in mentally 
retarded and group homes. We join with the Mayor in applauding 
him with this action that he has taken recently.
    I think it also shows what has happened, not as an excuse, 
but what had happened when that particular area was totally 
decimated recently, somewhat of funding, that there was a huge, 
huge cut of more than $100 million over a very short period of 
time. It is not as an excuse, but perhaps when you see large 
cuts happening to any particular area, maybe the onus is on us 
to more vigorously do oversight to see what impact that type of 
cut will have from it.
    So throughout that process, we have learned that we need to 
probably take a better approach and a different approach in it.
    Mrs. Morella. So we have learned the hard way?
    Ms. Cropp. Unfortunately, yes.
    Mrs. Morella. And the way to go.
    I and this committee are very interested in not only 
watching what happens but being willing to help you. If you 
need any help, let us know.
    Mayor Williams, I would like to pick up again on an issue 
that I raised in my opening statement, and that is the tendency 
for racial profiling with the taxis. Does that mean that if you 
are not white and you are black you have to have a three-piece 
suit on and look like you do with a bow tie, and look so good, 
in order to hail a cab or not be rejected?
    I have actually heard this from other people, too, not only 
the Washington Post, but I have heard it from people and I know 
that they have a tough time getting a cab.
    Mayor Williams. Racial profiling is inexcusable, and I can 
actually say in truth that I have been in cities with my bow 
tie and have not been able to find a cab. So--I'm a student of 
Harvard and Yale and I can't get a cab, so everybody is exposed 
to racial profiling. And that is why I find the remarks of the 
Commissioner there, I think she has done a good job otherwise, 
but I think these remarks are inexcusable and unfortunate and 
they do not reflect the policy of this administration.
    I think there are problems here with our cab industry that 
are going to take some real leadership. We are not going to 
address the problems in our cab industry based on trying to 
ferret out, or fathom through ESP or otherwise, some kind of 
emerging bubbling consensus, because there really isn't. They 
are so divided on everything. The cab industry is divided. Our 
cabbies are divided on medallions, permitting, licensing, 
separators in the car.
    After one incident, I told our cabbies we need separators 
in the car. This is being done in every city and it protects 
you. And one cabbie said, well, this is going to interfere with 
the ambiance of the cab.
    So I think we are going to need, all of us as elected 
officials, to step up and just say, this is how it is going to 
be done, because I think trying to wait for consensus in the 
cabbie community is not going to happen. And we are going to 
need locator devices. I think we need separator devices. I 
think again we need to get at the deep-seated issues with our 
cabbies, work with them on the economics of our cab industry so 
that they're getting the capital, they're getting the 
assistance to build a first-rate cab fleet, which we don't 
have.
    Mrs. Morella. Will you be doing that and the Council also 
doing that?
    Ms. Cropp. Yes, we will be working with the Mayor to take a 
holistic and comprehensive approach to the taxicab industry. Of 
course, that type of profiling cannot be tolerated nor 
encouraged. But quite frankly, if you talk to citizens of the 
District of Columbia, you could have a three-piece suit on and 
anything else, and if you are going to certain sections of the 
city, certain cab drivers won't even take you there and even 
anywhere. So we need to discourage that totally.
    But while we are looking at that and must not tolerate 
that, I think the other side of the coin is that we need to 
look at approaches that we can help protect the safety of our 
cab drivers. And perhaps it is some of the things that the 
Mayor has said, looking at whether or not they have partitions 
from the front or back. There are other ways that we need to 
look at it, and it is a serious concern for taxicab drivers. 
But while doing that, we must ensure that all citizens can get 
into a cab, have the ability to go wherever they need to go.
    Mrs. Morella. I thank you.
    Sorry, Dr. Rivlin, I did not have a chance to ask you 
whether or not the Mayor had consulted with you on the 
performance plan.
    Ms. Rivlin. The Mayor does a lot of consulting with us.
    Mr. Davis. Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    Mayor Williams, there were reports earlier this week of a 
possible strike by non-teaching school personnel. Could you 
give us a status report on that matter?
    Ms. Rivlin. Well, there's active negotiation going on at 
the moment. I don't know that I could bring you up to date on 
the exact status.
    Ms. Norton. But you do not expect a strike anytime soon?
    Mayor Williams. We are hoping there won't be a strike. And 
I was referring to Alice because I know that Connie Newman, who 
is taking the lead on education issues at the board along with 
Arlene Ackerman, has been actively working with the unions to 
try to resolve this.
    Ms. Norton. That matter raises larger questions that I know 
have been at the forefront of your thinking and goals, Mayor 
Williams, and that is to get a hold of labor relations, a key, 
of course, to assuring long-term stability in the city and 
reform of the government itself.
    You were left, of course, with a system that was very 
piecemeal, not your own creation, but something that frankly 
comes out of years of the way labor relations have developed, 
kind of, on their own potion in the District of Columbia, so 
that you have some who had negotiated for bonuses, others who 
had not.
    I wonder if you could give us any idea of how you intend to 
draw together, into one cohesive system, labor relations in the 
city and how you intend to keep this piecemeal approach, which 
is broken out in the school system, from repeating itself in 
other parts, from other personnel in the government.
    Mayor Williams. Well, I think we need a global labor 
strategy. And for the agencies under my purview, we have--we 
have retained on a pro bono basis a lead negotiator; and we are 
working hard with the labor community to see that we have a 
first-rate labor liaison and office of negotiation that can 
work these issues, chief among them over time, I think, trying 
to reduce the number of bargaining units, which makes life hard 
in terms of negotiation and makes life hard in everything from 
paying payroll and everything else; and trying to see whether 
we can do that, trying to work with the schools and our 
independent agencies and their labor situations.
    Independent agencies, we meet regularly with the boards and 
commissions I think for the first time in a long time to try to 
bring our boards and commissions more in line with what we are 
doing in the regular executive branch of government.
    So, for example, we bring together the boards and 
commissions in the economic area, boards and commissions in the 
children and families area and some other issues--we try to get 
coordination on is labor.
    Ms. Norton. I really don't understand this difference 
between boards and commissions and the way in which you are 
talking in any other part of the government.
    Mayor Williams. Well, you've got WASA for example. They 
have got labor issues over at WASA. I don't have direct 
control.
    Ms. Norton. But most commissions, even though they are 
independent, would not, in fact, be beyond your purview in this 
regard, would they?
    The one thing I really do not understand, and maybe 
legislation is required, we keep hearing from mayors, well, you 
know, these are independent agencies. You take a position with 
respect to the School Board, OK, this really ought to be under 
one person. I mean, is there something about boards and 
commissions that makes labor relations or other parts of the 
District of Columbia not hold together or hang together, and 
does it require congressional legislation or legislation from 
the Council itself?
    What is the difference between--I can understand WASA, 
which also has some input from the region, but most of these 
so-called independent agencies are under--somehow or the other 
under the D.C. government--and I do not understand the 
difference between them or your control and the Council's 
control over them and control over so-called mayoral agencies. 
And if there is a difference that goes to better management in 
the D.C. government, then I think that should be brought out 
and it should be dealt with either by the Council or, if it is 
a charter change, by us.
    Mayor Williams. To answer the question the best way I can, 
I don't have direct operational control over D.C. General 
Hospital or----
    Ms. Norton. How about the lottery?
    Mayor Williams. Well, the lottery, I don't either because 
the lottery right now is under the independent CFO. So it is a 
matter of persuasion. It is a matter of getting the right 
people appointed to these boards like UDC and D.C. General or 
WASA. But I don't have direct operational control.
    Ms. Norton. Have you looked to see whether that is the way 
other cities do it or whether that is the best operation? I 
just do not know. I do not know how they got set up that way. I 
do not know if it is the best way to do it. I do not know if it 
is different from other cities.
    All I know is that if the Congress is told, I'm sorry, this 
is an independent agency, that invites the Congress to get into 
it. So I would like to know how these independent agencies 
ought to relate to the central government so that we can all 
work together to do something about it.
    Ms. Rivlin. Well, you are raising a very good issue. And 
there are really several issues here. One is the independent 
agency. And we just talked about one. We talked about the 
school system and that the school system does not report to the 
Mayor. At the moment, it reports ultimately to the Authority, 
which is why the Mayor turned to me for the answer on the 
question of exactly what is going on in these labor 
negotiations. So it is a complicated situation.
    Even within the agencies that report to the Mayor, there 
are an enormous number of bargaining units, and we have all 
talked about working together to sort of formulate a strategy 
with the unions as to how to reduce the number of bargaining 
units to get a common labor policy across the city as a whole.
    Ms. Norton. I would just ask the Control Board, the 
Council, and the Mayor to look at the independent agencies to 
see whether to effect the kind of streamlined government and 
financially efficient government you are after before changes 
of any kind are made.
    Dr. Rivlin, I recall that last year you had a different 
view on the tax cuts as originally proposed by the Council. If 
I recall, you and the Mayor both had different views based on 
your long-term judgment of the D.C. Economy. I would like to 
ask you if you think that there should be tax cuts yet again 
this year within the District?
    Ms. Rivlin. We are just starting into the process of 
looking at the revenue forecast and the spending forecast for 
the next year and going forward.
    Personally, I think the District is in a situation in which 
further cutting of taxes, although I can understand why one 
might want to, is a risky thing to do in view of the needs for 
improving services and the fact that we can't be sure that the 
revenue flow into the District, which has been very 
satisfyingly high in the last couple of years, will continue, 
especially if we have a downturn or even a leveling out of the 
rapid growth of the regional economy.
    The District treasury has benefited from the same thing the 
Federal treasury has. Everybody is earning a lot of money and 
capital gains are going up, and that is very beneficial to all 
governments that tax income and capital gains. But it may not 
continue forever, which is why this important focus on economic 
development and growing the population must happen.
    And I personally would be nervous about any further tax 
cuts, in fact--tax restructuring is another question--but net 
cuts until we get on a firmer financial basis going forward.
    Ms. Norton. Until it is assured that more revenue coming 
into the District.
    Ms. Rivlin. Yeah, until we can form the tax base.
    Mr. Davis. Dr. Rivlin, as I understand your answer, you are 
against revenue cuts, it is not the tax cuts per se. If a tax 
cut could produce more revenue, you would not have any 
aversion, but it is the revenue cuts you are concerned with.
    Ms. Rivlin. That's correct, Mr. Chairman. But there are 
often revenue--those who favor tax cuts often have very 
optimistic views about----
    Mr. Davis. I do not want to get into scoring. But, for 
example, the first-time homebuyer's tax cut did not come out of 
city revenue. That is a tax cut that has probably done more to 
build the tax base.
    Ms. Rivlin. Oh, yes. That is terrific. My son just bought a 
house.
    Mr. Davis. I hear Michael Jordan is buying one, too. I am 
sure with that tax benefit he can use that, too.
    Ms. Norton. Thank you, Mr. Chairman. I know the chairman 
will work with me as I try to get more tax cuts of that kind 
that do not cost the District anything.
    Chairwoman Cropp, I want to give you an early warning 
because I expect Senator Durbin is going to be back. With my 
$5,000 first-time homebuyer's tax cut, an independent study was 
done that showed the nexus between that tax cut. Of course, 
that tax cut is the kind of cut that you would expect the nexus 
to be rather clear: Here is $5,000, come live in the District. 
And of course, that levels the playing field when it is very 
difficult otherwise to do so.
    There was a lot of skepticism as to whether or not a small 
income tax cut would have that effect, not because of the 
District, but because historically that has been very difficult 
to show.
    Now, Senator Durbin, who is a strong proponent of home 
rule, was so disturbed at the notion that the first thing that 
the Council would do was to cut taxes--he got close to--to his 
credit he did not do it--he got close to trying to intervene in 
the District, itself. That is just how risky he thought it 
would be. Instead, what he did was to pull back and indicate 
that the District should, and I am sure he will raise it during 
the appropriation period--during the next period, track and be 
able to show what kinds of results it is beginning to get from 
the Tax Parity Act.
    I say this to you, because it is going to happen, and ask 
whether or not any attempt is being made to see whether some 
independent source can look at the tax cuts to see what effect 
they had, and I would like to know what was the average amount 
of that tax cut for the average D.C. resident.
    Ms. Cropp. Well, let me just remind you that with the Tax 
Parity Act, the initial set of cuts had nothing to do with the 
income tax. In fact, we won't know that and won't even have an 
idea of that for several years out. That wouldn't happen until 
year 3 of the plan.
    Ms. Norton. So when is the first year that residents will 
see any reduction in their own taxes paid to the D.C. 
government from whatever source?
    Ms. Cropp. I believe the first year would be the year 2001; 
2001 is the first year.
    Ms. Norton. Will it be an income tax?
    Ms. Cropp. Yes, that's correct.
    Ms. Norton. What will be the average amount of that income 
tax reduction?
    Ms. Cropp. I would submit this to you: The year 2003, it 
comes down to 9.3--it comes down to 9 percent from 9.975 
percent in the year 2002. So for the income tax piece it will 
not see it actually until the year 2003.
    We have realized, very clearly, that we could not make a 
tax cut, income tax cut, in the first year, and in fact, that 
was part of the compromise in order for us to do it in out-
years to give us an opportunity for stabilization. And also the 
tax cut is built upon a certain amount of revenues being there. 
If, in fact, the dollars are not there, there is a safety valve 
in that.
    There is a very clear safety valve. The Council, in 
initiating tax cuts, we did not want to do anything that would 
destabilize the financial picture of the District of Columbia 
at all. We have worked very hard to stabilize it. So the tax 
cut is very small, a very small tax cut for our citizens. While 
we were doing tax cuts for businesses, it was strongly felt 
that the individual citizen and resident also needed to see 
something. We needed to have an opportunity to see what we 
could do to expand our population, and we felt that would 
happen. But if, in fact, through a formula we do not have the 
dollars there, then the tax cut would not occur.
    We were talking about an awful lot of dollars, surpluses, 
in the District government; and this tax cut was based on that. 
The initial tax cuts were for businesses and efforts to try to 
make sure that we encourage economic growth on that side. But 
we officially believe that we need to also encourage economic 
growth on the side of our residents.
    Ms. Norton. Thank you very much.
    The dilemma is inherent in how you have expressed your 
answer. They had to be small, and so the question becomes, can 
a small tax cut have the effect that was trumpeted, namely, of 
bringing people into the District. It has got to be small 
because of the revenue problems of the District; and yet, the 
smaller it is the less the trumpeted effect that somehow 
people, on the basis of a small amount of money, are going to 
decide to move to the District rather than someplace else.
    All I ask, because I have no judgment and think that is a 
matter of data--and I appreciate that the Council did, in fact, 
try to reflect the revenue problems of the District. But I do 
say that whatever you can say when you testify before the 
Senate Appropriations Committee should bear in mind that you 
need to have in place something that objectively tracks the 
effect here, because Senator Durbin spent the major part--this 
is a man who helped us enormously on tuition access, but spent 
the major part of the rest of the time voting against our 
appropriation in subcommittee because of this tax cut. And this 
is a Democrat who very strongly supports us on home rule.
    The best thing you could have is the kind of evidence that 
indicates that no harm is done, even if somehow the tax cut has 
not performed miracles. I do not think anybody expected that.
    Ms. Cropp. But keep in mind that there is no way to track 
that for this year's budget.
    Ms. Norton. All I say is this: The man said ``track it.'' 
If you cannot track it yet, come in with an indication of why 
you cannot, when you are going to begin and what your 
methodology will be, or I will have problems up here dealing 
with a Democrat in the House. And I do not need the kind of 
problems I had with Senator Durbin last time.
    Ms. Cropp. Fair enough.
    Mr. Davis. We will do another round. Let me start with the 
Mayor and then ask for comments.
    We talked before about the tax base and about how it is 
coming back. And you talked about the 2,000 additional homes. 
We are opening facilities that were being closed before. It is 
moving in the right direction--there is no question about it--
that needs to continue. The regional growth has been 
phenomenal. The city is starting to share in that.
    Can you share with us a little bit of your vision? And I 
know that when a company makes a decision to open a branch 
office or headquarters somewhere they are making a very 
competitive decision about what it is going to cost them, how 
efficient they can be. You understand this and we have had some 
conversations.
    Give me a little bit of your vision if you can and so forth 
where you think you are going, what we need to do better, how 
we can help you from a congressional point of view. And then I 
would like to hear from Dr. Rivlin and Chairman Cropp.
    Mayor Williams. Just in general, I think we create the 
background conditions in terms of tax incentives for our 
businesses, and we have a range of employee tax incentives, 
capital tax incentives, including in areas of our city no 
Federal capital gains with certain provisions, improving public 
safety in these capital communities where crime has gone down 
now for the last 2 or 3 months in these areas where we have 
concentrated our activity. All these things, better public 
service, creating the background conditions.
    A question of marketing. I am the first Mayor to have gone 
to Las Vegas to, it was actually to a convention, it was to the 
International Convention of Shopping Centers. And I was out 
there talking with all the shopping centers from around the 
country about Anacostia. And we are now in negotiations with 
some major retailers about locating in the District. We are 
very proud of that.
    I recognize that and I have talked to the folks here on the 
panel and with you, as well, that this boom isn't going to last 
forever and we have to make the transition from a retail 
tourist service economy to try to do a better job with health 
technology and technology per se. And we have begun a series of 
discussions with the major industry leaders in technology in 
our region about directly and personally what it will take to 
create conditions here, whether we will make some investments.
    So, for example, if AOL is going to be locating a data 
center, I think they are going to be putting a data center in 
Manassas, we want them to be thinking about the District. If 
you are making a major location decision, we want to ask you, 
what does it take to locate here in the District of Columbia?
    We have made a major effort to work with folks such as 
Fannie Mae to move the District ahead in housing, putting 
together the financing tools, putting together the technical 
assistance, so that over the next couple of years, I believe we 
can be one of the top cities in the country in housing. And why 
I think that is important is because I think it is important 
for us to talk about not only attracting retail investment or 
business investment, but how do we attract residents. And that 
gets me to my final point.
    I think a big part of our neighborhood development efforts 
has to be reform in our schools so that we can target the 
reform efforts in our schools in a way that parallels and 
aligns and complements what we are doing in our neighborhoods. 
We have a HOPE VI grant from the Federal Government, working 
with the private sector, Federal and city council, with Douglas 
and Stanton dwellings. And all of us, and Eleanor, were there 
and we announced this major grant, some $50 million.
    We have got to make sure that the schools in that area are 
also on a reform track so that we are leveraging effort. And 
right now that is problematic. Linda talked about the 
governance discussion that is going on. If we don't get the 
governance question resolved and really focus that effort down 
in the neighborhood schools, we really are in the long run 
impairing the ability of this city to really attract the 
residents that we need.
    Because I think are you seeing cities around the country 
right now that are attracting single couples, that are 
attracting gay couples, that are attracting couples that are 
retired, they have raised their kids and they now want to come 
to the city. We need to attract now families with children who 
have confidence in our schools.
    Ms. Rivlin. I agree with all of that very strongly. I think 
it takes a very coordinated effort from marketing to taxes to 
improving services, especially schools.
    Let me mention just one other thing that the Mayor has 
focused on but did not mention, namely regulatory reform and 
improving, which the Control Board took the lead on. In working 
with the Council, we have had considerable simplification and 
streamlining of regulations in the District, and I think that 
we can go further. But the other is the permitting and issuing 
of various kinds of permits that you need to do something.
    The District had a very bad reputation. Business people 
would say, well, all right, even if I decide to locate here, 
it's such a terrible hassle. I can't build anything. I can't 
get permission to do this or that.
    I think we've turned that around in quite a dramatic way 
and the District may end up being thought of as a really good 
place to start your business from that point of view.
    Mr. Davis. Thank you.
    Chairman Cropp, you brought this up as a big part of your 
testimony.
    Ms. Cropp. Well, it really is a major component of the 
District's continued health. I think one thing that is 
happening that is quite different is the Mayor's new team that 
he has put together to help this, and that is with the deputy 
mayor for Economic Development and Planning.
    For the first time in a long time, the District really has 
a planning director that can look at not only what is happening 
downtown but also look at what is happening in our 
neighborhood. There is a combined focus from the Mayor and the 
Council on neighborhood revitalization.
    It was really heartening for the Council to hear from the 
deputy mayor for Economic Development that we are going to look 
at really trying to bring businesses into the community, we are 
going to look, we are going to have a team together to be aware 
businesses are talking about leaving the District, to see how 
we can encourage them to stay there.
    One other thing that is happening in the sector outside of 
the District and that I think is equally as important and that 
is from the CDCs and the nonprofit housing group. They have 
recently merged and that merger I think really will be 
important for neighborhood development to bring in small 
businesses in the neighborhoods and where you also will see the 
nonprofit housing group building, restoring housing to 
encourage our neighborhoods to come in.
    So an awful lot is going in that direction and I think it 
is positive, and I agree with what the Mayor and Alice Rivlin 
have said.
    Mr. Davis. I think from the city's perspective it is 
obvious why you would want this development to come in--tax 
base, employment opportunities, what it does for the charities, 
all of those things. But from a suburban perspective, it is 
important as well.
    Let me just tell you why. First of all, if you argue 
against the commuter tax, we ought to be doing everything we 
can to make sure you have your own tax base. That takes those 
kind of issues away when we reach in together.
    Second, we talk about our traffic problems in the suburbs. 
We have an infrastructure to get people into the city and we 
have people living in the suburbs who, frankly, if they live in 
the city where we have mass transit available, it makes the 
whole system run a lot more efficiently instead of the kind of 
sprawl that we have gotten.
    For a lot of reasons, there is an infrastructure in the 
city that will support more people that is not existing in the 
suburbs and frankly strains our resources and adds to the 
traffic.
    And finally, you cannot have a society where you have half 
very wealthy and affluent and thriving and a core there that is 
not going anywhere. It just does not work that way.
    I think the thing that has made me the proudest of sitting 
here for 5 years and watching the city is not the fact that it 
is fiscally better off and they are delivering services, but 
the fact that you are starting to see a tax base come up. This 
is not a zero sum game. This is not you are taking it from the 
suburbs and moving it to the city. The whole region benefits 
when these things happen.
    I think a lot of the rhetoric that we heard originally, 
where you would have one jurisdiction against another, has now 
dissipated, and I think everyone has come to the understanding 
that a strong city makes for a stronger regional climate, a 
suburban climate. And frankly, having our kids come down here, 
now you do not worry about it on a Saturday night if they are 
coming down to the MCI Center. It is the way it was when I was 
in high school. And there is a long way to go, but I think 
we're going in the right direction. And you have kind of 
articulated the vision where you want to go, and we want to 
make sure you have the tools to go about it and continue to do 
that.
    Ms. Cropp. One thing, Mr. Chairman, I would like to put on 
the record--and the Mayor speaks of this frequently and he may 
be able to help me out here--is the housing market in ward 8. 
They are developing more housing in the ward 8 community than 
in any other area.
    Mr. Davis. He noted that in his testimony, 2,000 houses I 
think he talked about.
    Ms. Cropp. And that is a big statement. Wards 7 and 8, if 
you look at the past two decades, that's where you have seen 
our largest exodus of our population. And we do see that 
turnaround as a big statement.
    Mr. Davis. It is also important that we make these 
developments work. The worst thing that would happen is to 
build these developments and have them not continue to sell and 
the resales and everything else. So we all have an interest in 
making sure that these developments work, and that will attract 
more capital.
    Mayor Williams. I was going to say because, Mr. Chairman, 
the housing market now in the District is so, so strong, we are 
trying to seize this opportunity over the next couple of years 
while it is strong to really make an impact on housing.
    We committed one of our short-term goals to take 200 units 
of abandoned housing and turn them into homeownership. We had a 
housing lottery. I think we had 6,000 people waiting to get a 
shot at owning one of these homes. That is how strong the 
market is. We need to take advantage of it.
    Mr. Davis. I have got a whole series of more questions, but 
my 10 minutes are up and I am now going to recognize Ms. Norton 
for some more questioning.
    Ms. Norton. Thank you, Mr. Chairman.
    I would like to ask a question about a provision that we, 
the chairman and I, enacted or passed, actually, as a makeshift 
measure before the Control Board had an opportunity to get a 
hold of contracts; and that is the million dollar review by the 
Council.
    We recognize that that is perhaps unique in American 
government. And the only reason that we included that, it may 
have passed at the time of the Control Board statute, was 
because there had been such overspending, there was no Control 
Board, we kind of looked for somebody else to look at 
contracts.
    Now, I note that we have had to exclude the Water and Sewer 
Authority, and should have. It was the right thing to do. We 
excluded the Convention Center because we wanted to make sure 
that that happened. After the highway money came through, money 
for which I worked very hard, working with the Council, we got 
it kind of passed through, whereby you did not have to go 
through all of the paces.
    Far too late, the city recognized, in my judgment because 
it only put more pressure on the technology people in Y2K, that 
they should, in fact, not go through these paces here. I want 
just to say to you, we did not do it because we thought it was 
anything but a makeshift way to get at contract and procurement 
problems while you were getting your act together.
    My inclination, since it was we who did it and it does not 
raise a home rule issue, since no government has it, since it 
adds to the bureaucracy, since we have other ways in place even 
after the Control Board leaves to, in fact, assure competitive 
contracting--my inclination would be to say it ought to go. I 
would like your own opinion on whether or not this unique way 
to control contracts is necessary or whether it may indeed at 
another time perhaps with a different council have the exact 
opposite effect, and that is to say ``politicize contracts.''
    Ms. Cropp. Well, I think that we need to probably review 
that. It's a good issue that you bring up. We needed to be able 
to move quickly with regard to Y2K. At this point I do think 
that we need to slow down that pace and look at it more 
carefully.
    The whole contracting process, though, we need to make sure 
that we do streamline it in a way that it does not prevent us 
from being able to enact on different things outside of those 
areas that you talked about. And that was part of what we did 
in the Appropriations Act last year, we looked at the 
contracting piece. And I think we need to continue to review 
it.
    We may not need to exempt an awful lot of agencies or 
different programs from it, but we do need to continue to be 
vigilant as to an approach that we can speed it. The Mayor and 
the Council, we have initiated a new process where we do 
summaries at the Council. That has made us move quicker. We 
need to just review it and continue to watch and see if there 
are other areas in which we can make it speedy, but at the same 
time with due diligence with regard to the contracting process.
    Ms. Norton. Do you think this process is necessary to 
control contracts at procurement in the District of Columbia, 
each of you?
    Ms. Rivlin. Well, the current process doesn't involve the 
Control Board. We were reviewing contracts over a million of 
the District. We have turned that power back when we did the 
memorandum of understanding to the Mayor.
    Mayor Williams. I think that for contracts under a million 
dollars the best role for the Council in terms of oversight is 
to take a performance management approach and spend a lot of 
time asking as programs are being developed, and then 
retrospectively as they are being executed, kind of on a 
diagnostic basis, are we getting what we paid for and spending 
oversight there as opposed to on a transactional basis, where I 
think the temptation arises and where sometimes you see, not 
just with our council but with legislatures in general, 
excepting present company I guess, a legislature would have a 
tendency to become a contracts appeals board. And you have seen 
in our city just contracts endlessly delayed while people 
jockey the different players against one another.
    So what I would like to see is a process where we could 
work with a relevant committee chair, design a program, work 
with that committee chair where we can design a contract over 
$1 million and then have the kind of summary review that Linda 
is talking about, but then understand that we are going to have 
some intensive scrutiny and review, and I welcome that from the 
Council, in terms of what did we get in terms of performance 
from the contract?
    Because, you know, we spend an enormous amount of time 
talking about the performance of our employees. We need to 
spend a lot of time talking about the performance of our 
contractors.
    Ms. Norton. I could not agree more on that score. I must 
say that that has been one of the huge failings of the D.C. 
government. You got a contract, you kept getting the contract, 
it did not matter how you did on the contract. This is where 
the oversight is, of course, particularly needed; and I know 
that is where the Council and the Mayor are beginning to do it.
    I would like finally to ask you a question about the 
procurement system, period. I know that the Control Board and 
the city have been working to improve procurement ever since 
the Control Board was set up. I have to tell you, the 
impression is still left with me that our procurement system is 
far more cumbersome than others in the region, that it takes 
far longer to order almost everything that it does for other 
systems in the region. Am I wrong?
    I get that impression on an ad hoc basis when specific 
things come to my attention. But it is not my impression that 
as improved as the procurement system is, if you laid it 
alongside the other systems in the region, that it would be as 
efficient as those systems.
    I am told, we have to wait because we are waiting for the 
time period for this contract to come in or for the RPF to come 
in. I still hear those kinds of things. I am simply trying to 
get to the bottom of what it would take to get a procurement 
system like Virginia's, you know, 45 days or whatever it is, 
out on the street, or you need to order some books and you get 
them within 30 days. Or maybe I am wrong, since I am, in fact, 
reacting to ad hoc information.
    Mayor Williams. Well, we were talking about, to speak of 
economic development and to quote Michael Jordan, who is 
actually in and of himself a major economic development coup 
for the city, I was listening to him talking about the team, 
and I really could imagine one of us talking about agency 
management because he was talking about accountability; and 
people need to like, you know, perform for the dollar that they 
are getting and this and that. He was saying that, you know, it 
took the Chicago Bulls several years to get up to speed. And I 
use that by way of analogy because I think Elliott Branch, whom 
we brought in as our new procurement director, was head of 
procurement for the entire U.S. Navy, so he has dealt with 
very, very sophisticated and complicated procurements and he 
understands, working with Steve Kilman in performance 
contracting.
    Two things I think are very becoming about Elliott's 
approach and I think are going to redound to our benefit and 
cut down procurement times. One is, Elliott understands 
intuitively that we need to spend much more time internally on 
our multimillion dollar contracts and much less time on the 
contracts under $25,000. And he is pursuing and is launching a 
small purchase card so that we are spending our time and effort 
where we need to spend our time and effort, because right now 
we are spending an enormous amount of time and effort on small 
purchases and we are letting by the major traffic in terms of 
dollar volumes. That is completely backward.
    Second, you know, as long as you have been here, we have 
all heard people talking about improving the procurement work 
force and really haven't seen a lot to show for it. Elliott 
came in, he briefed the accounts and the Control Board on his 
program for setting standards, tough standards, and providing 
the requisite training for his people to give them a chance to 
meet those standards in the procurement work force in the 
District government. We haven't had that before and I think 
that is going to bring the efficiencies and the economies that 
you've talked about, because when it comes to licensing and 
permitting, Alice is right, we've made a lot of progress in the 
District government with business, but if it still takes too 
long to get a contract that is related to sliding that business 
in the District, we're behind the eight ball.
    Ms. Norton. Ms. Rivlin, did you have anything you wanted to 
say, since I know the Control Board has spent a lot of time on 
the procurement system, in particular?
    Ms. Rivlin. We have. And I would second what the Mayor 
said. I have a lot of confidence in Elliott Branch. And he is 
working very hard to improve the system, and I think we are 
going to see it fairly soon.
    Mr. Davis. Thank you. Let me just ask a few questions.
    We are all aware of the horrible tragedy that resulted with 
the death of 2-year-old Brianna Blackman. I think that was 
widely covered. I understand the District's foster care program 
is under receivership and that the courts have jurisdiction. 
But I think there has to be closer coordination between the 
receiver and the District government.
    The toddler, of course, had been in a foster care home and 
was killed by a blow to the head at the home of her biological 
mother during a 2-week return to the home by order of a local 
judge. There was no court hearing. The judge apparently never 
saw the report from Child and Family Services recommending the 
child not be sent back to the mother. Obviously, something went 
terribly wrong in this case. This is something that we do not 
ever want to see repeated in this city.
    What are we doing about it? And overall, is the District's 
foster care program better off now than it was before the 
receivership?
    Let me start with the Mayor, and I will let you talk and 
then get any comments from anyone else on this.
    Mayor Williams. I would say that one of the biggest 
problems is, I cannot really confidently or reliably tell you 
whether we are better off or not, because we don't really have 
any system of measuring, of knowing whether we are better off 
or not. And I think it's really incumbent on us as our first 
order of business with Grace Lewis who we brought in. Grace has 
got experience working with a receivership up in Baltimore, 
working with a receivership here. She was got actual hands-on 
experience working as a master in receivership situations to 
work with the mental health receivership, work with the child 
and family services receivership, to put us on a 2-year track 
to get out of those receiverships. And the way we want to do 
that is to try to sit down with the masters, sit down with the 
judge and agree on a set of standards that we have got to meet 
and we have got to fulfill and we've got to satisfy, and 
resource in order to get out of that arrangement. And I think 
setting that standard will allow us to say what we are actually 
accomplishing.
    I actually find it horrifying that I really can't tell 
you--I really can't tell you whether we are better off or not. 
I know that we have got overspending. And I thought the whole 
purpose of this exercise was to reduce the amount of 
overspending. I know we have parents who are criticizing us 
because they are not getting paid, because the adults in all 
these different jurisdictions cannot bring things together.
    I think the answer is trying to, with this liaison, 
agreeing on some set of standards with a judge. I think--as 
CFO, I often thought that maybe the answer was some kind of 
legislation, because the Congress put in place a Control Board 
to manage better the District government while at the same time 
you had a number of judges acting on a statutory basis in a 
receivership situation trying to do the same thing; and 
everybody is working at cross-purposes.
    Mr. Davis. Maybe we ought to let the GAO come in here and 
play referee and give us some data, and maybe we will go in a 
different direction. This case, I know broke everybody's heart 
who read about it. And this kind of thing should never happen. 
I appreciate your candor in terms of how you deal with it. And 
maybe we need somebody to come in and do an analysis that does 
not have an ax to grind in this. And GAO would fit the bill and 
tell us what still is not working well and how it is working.
    Mayor Williams. I think that would be useful actually.
    Ms. Rivlin. At this stage, I am not sure we need another 
outside player. Because I think the Mayor has taken the steps 
to bring everybody together.
    Judges do not want to run these agencies, really. And the 
receiver in this particular case has been struggling. But I 
don't think it's clear that the services are much better than 
they were.
    But I think we now have a mechanism for bringing everybody 
together and trying to get some standards and some measurable 
outcomes and then going to the judge and saying, look, this is 
what the city is able to do and it may be time to end the 
receivership.
    Mr. Davis. I do not know. I mean, just when you see a case 
like this, this should not happen anywhere. It should not 
happen anywhere. And this is not the first time that we have 
been on report here that things have not been going so well.
    We will look at it. We are not trying to add another 
element, but we would like somebody to come in and honestly 
call balls and strikes, and that is what the GAO does on these 
issues.
    Ms. Rivlin. The GAO would come in and tell you things 
aren't going well, I'm pretty sure. Whether they are the right 
people to bring the parties together to do that----
    Mr. Davis. We may end up working with you to do that at the 
end of it. But if we could just get more ammunition to change 
the status quo that right now we are kind of mired in how you 
get out of this. But I appreciate your comments.
    Ms. Cropp. I agree with a lot of what Dr. Rivlin is saying. 
But I would like to just add, part of the biggest problem was 
that the District was not provided the appropriate level of 
service that was needed. That is how we got into it with the 
receivership.
    What the Mayor suggested is, we need to find out what the 
standards are and then demonstrate our capacity to do it. I 
think it would be much better for us to get out from under the 
receivership for things to come under the Mayor.
    Part of the other problem that the District had was, for 
the past decade or two, the District was overly ambitious in 
what it said it could do. We were the only city, for example, 
that required that our social workers had to have a master's 
degree. Therefore, we did not have enough social workers; and 
that helped to lead us into that problem. We got to a point 
where we said that foster care homes, that a home could not 
have more than four or five children in one home. Well, if a 
foster parent had demonstrated that they had the capacity and 
the ability to do that, why wouldn't we allow that to happen 
and keep families, keep siblings together?
    So we need to have the ability to be able to change some of 
those things that the District had agreed to earlier, to 
establish what the standards are, and to come out from under 
the receivership.
    I think that the existing receiver is struggling, and I'm 
not certain if we would not be much better now under the 
leadership of our mayor, and with the Council's oversight, that 
we could not establish standards and live up to them.
    Mr. Davis. Let me turn to the fire department if I can for 
a minute, and then I'm going to get into education. Mayor 
Williams, are you searching for a permanent fire chief or at 
this point are you satisfied with the interim chief?
    Mayor Williams. We have a committee under us, Steve Harlan, 
with the support and participation of Bob Watkins from the 
Financial Authority doing a national search. We've involved 
leaders from throughout our city, all the different interests. 
We are looking for a chief. But all of us recognize that Chief 
Tippett has really stepped up to the plate and is really 
beginning to turn the organization around, and all of us 
support him in that effort. I'll give you just one example of 
where I'm really impressed with what the chief has done. That 
is, shortly after coming into office, I don't know how he did 
it, he looked in a phone book or he went to the Internet, he 
just looked and he found some used fire ladder trucks and he 
brought them here to the District. We've been talking over and 
over and over again about while you have people criticizing the 
department about the lack of equipment, where we have the 
money, No. 1, you've got to make the order. No. 2, even while 
you're waiting for this order to get through the system, what 
can you do as a stopgap measure to ensure that we're filling 
the hole with some temporary equipment. And I wasn't getting 
any answer. Chief Tippett got in, a week later I got--he 
invited me over to the training center and I looked and there 
were two ladder trucks.
    Ms. Norton. Did he borrow them or did he have to go through 
the procurement system?
    Mr. Davis. Some questions are probably better off not 
asked. He got them there, right? They were there.
    Mayor Williams. He showed the initiative and he showed the 
leadership. I think there's a precedent for that throughout the 
government. We fell behind in leaf collection. I think one of 
the things we could have done in retrospect is instead of 
falling behind on leaf collection because our equipment had 
broken down, go up to one of the higher latitudes where they 
had already finished collecting their leaves and made some deal 
to get some leaf collection equipment from there to fill the 
hole. That's good thinking. I think he's shown that.
    Mr. Davis. You could still do a national search and arrive 
and keep him on is the point. You're not abandoning the search. 
It sounds like he could probably stand up to----
    Mayor Williams. We've got to do due diligence but the 
search committee has looked at the work he's doing. We're very 
impressed with his work, I'll say that.
    Mr. Davis. The average response time for 911 fire 
department calls, is it improving or not? Do you have a sense 
of that?
    Mayor Williams. The good thing about 911 is we do have data 
that people can judge us on. Right now it's not good.
    Mr. Davis. It hadn't been good for years though.
    Mayor Williams. That's right. What we pledged to do was put 
in new software. We've done that. We're working with Bell 
Atlantic on their part of the system that needs some work. I 
support strongly Chief Tippett's commitment to on a pilot basis 
do cross training of our firefighters who are the first 
responders. I think that's more cost effective than building up 
a huge parallel ambulance fleet. This is being done all over 
the country. We need to do it here. I think we're going to see 
those times start to reduce as all those things are in place.
    Mr. Davis. And you talked about the procurement system, 
just getting things. One of the things I know that we hear 
about is the gear and breathing apparatus available to the 
firefighters who are out there in some very tough situations.
    Mayor Williams. You've got a serious procurement system 
problem if someone hasn't even ordered the equipment. It's one 
thing to order the equipment and have barriers in the system, 
but in some cases no one had made an order.
    Mr. Davis. Who do you blame then, right? Exactly. My 10 
minutes are up. I'll yield back to Ms. Norton. Then I just have 
a few questions.
    Ms. Norton. Mr. Mayor, continuing on my revenue concern for 
the District, one clear revenue source has been the lottery. 
Yet there was some sense that it was up and then it was down. I 
would like to know where lottery receipts are now relative to 
prior years. Has the good economy meant that the lottery 
receipts are continuing to go up? Is it a strong source, as 
strong a source or a stronger source than it has been for 
revenue?
    Mayor Williams. Yes, they were up in 1998 under the 
leadership of the great former CFO--no. Congresswoman Norton, 
the lottery receipts, we showed them up in 1998. They're going 
to be down in 1999, and it really isn't a matter of management. 
It really is a matter that we had some big jackpots built up 
and they draw in a huge volume. We haven't had the big jackpots 
in 1999. I really think that we as a city ought to as a 
conscious effort decide that we're going to keep our lottery 
receipts somewhere between 60 to 75 and as long as they're 
between 65 to 75, be happy and not mount too aggressive a 
marketing effort. I really believe that. Because I think a lot 
of times people are playing the lottery and that's not the 
best. I don't want to be patronizing or condescending, but it's 
not the best use of income.
    Ms. Norton. I couldn't agree with you more indeed, unless 
you sell them to Maryland and Virginia. I could not agree with 
you more. This is a poor people's tax, no matter how you look 
at it.
    Mayor Williams. I agree with you.
    Ms. Norton. There's nothing we can do about it. They've 
swept the country. But it means the better educated, the more 
income you have, the less you are involved in that way of 
raising revenue. It's too bad. Frank Wolf would very much agree 
with me on this.
    Mr. Davis. I was going to ask him how his trip to Las Vegas 
was when he was doing these other things. It seems to have been 
a good experience for him.
    Ms. Norton. Of course, given the state of our revenues, we 
can't afford to let any revenue source we have stabilize now, 
and that has to be kept in mind as well.
    Mr. Mayor, I don't believe any of you mentioned the 
University of the District of Columbia in your testimony. 
That's understandable considering what this hearing is about. I 
want to thank the chairman that as we worked together on the 
D.C. College Access Act, I asked him to work with me to include 
the University of the District of Columbia in it to make it a 
historically black college and university and indeed it was the 
only historically black college and university that had not 
been funded and he was entirely supportive of that, stuck with 
us entirely through that, and considering the hard times that 
the university has gone through, it was and will continue to be 
an important revenue source. As delighted as we are about our 
work on college access, we don't fool ourselves. We know that 
the majority of the students from this city are still going 
to--far more students are going to go--to the University of the 
District of Columbia than are going to, in fact, go elsewhere, 
and that has a lot to do with our public schools, it has a lot 
to do with the demographics of our population. I would like to 
know, especially given the way in which you hope to better 
integrate the public schools with the D.C. government, what 
your plans are for better integration of the University of the 
District of Columbia with the D.C. government and improving our 
own state university.
    Mayor Williams. I think first and foremost, Congresswoman, 
in my talks with a number of different people with experience 
in higher education, including Donna Shalala, and we all know 
of her remarkable history in education, it really does start 
with a first rate board. It frankly took me too long, but I 
think we've come up with just that kind of board. I'll give you 
an example. We have Reg Gilliam, who's got substantial 
marketing experience with Hill & Knowlton; George Wiley, 
accounting experience; Ambassador Mark Palmer, development 
experience; Peggy Cooper Catritz's experience with our 
educational system right here in the District, Reverend Willie 
Wilson's experience and community leadership with the faith 
community; and very, very importantly and profoundly, Charles 
Ogletree. He's a professor at Harvard Law School but what 
people don't know, extensive experience as the alumni 
development, he ran the development campaign for Stanford 
University so he's got extensive experience now in development. 
And I think that's a combination of the package that we need 
for UDC. They're ready, and I've been meeting with the board. 
They're ready to step in with a short-term action plan for the 
university that talks about modernization, that talks about 
infrastructure, that talks about all the tools that we know the 
university needs. But, as you suggest, begin talking about the 
relationships in its continuing education mission, in its 
undergraduate mission, the relationship between UDC and our 
public schools. I was delighted to hear the board members talk 
about--first of all, I was delighted to see that the board 
members were very, very diligent and somewhat skeptical, and 
that's a good thing, in the reading materials they had gotten 
for their first meeting, asking a lot of different questions 
about the education environment, if you will, the market, how 
UDC was going to situate itself in a reform agenda for the D.C. 
schools, and those are all good things to hear. So it's too 
early to say exactly what their strategy is, but I know they 
would love to talk to you and work with the other elected 
officials as they begin their strategy for improvement. We've 
got some great people on that board now.
    Ms. Norton. Mr. Chairman, I have just one more question. 
Mr. Mayor, I was intrigued to hear your testimony concerning 
risk management and your plans there and I think that's much to 
your credit. I want to try to understand how it would operate 
by just plotting it against some examples. Would the risk 
management notion you have in place have discovered, for 
example, that 116 people had already died or would it be more 
current? Would it get to operational and management 
dysfunction? Would it get to an evaluation of managers so you 
don't have to fire a manager as, in fact, things come out? I 
can understand its great benefit across agencies. I'm wondering 
if it also would deal with these very serious, what I cannot 
believe are not very serious, unless some magic has happened, 
problems in the way in which each agency functions as an 
operational matter.
    Mayor Williams. I told our agency heads in a Cabinet 
meeting a month or so ago that the bar had now been raised. 
They all knew that we had some tough standards but I don't 
believe in moving the goal post and I believe that people need 
fair notice, so I told my managers, ``I am now officially 
bringing the bar to a higher level. Each of you have got to go 
into your agencies, go into your agencies and tell me on the 
basis of your own self-assessment where there are areas of 
risk. If you've gone and you've done the assessment and on the 
basis of your assessment we find that there are some problems, 
you're not going to be held responsible. But if you haven't 
done an adequate assessment or even with an adequate assessment 
there has been some management failure and you're responsible, 
you've got to be held accountable. You've got to be held 
accountable.'' I can give you examples. These examples range 
from the trivial, cell phones, car pools. In Philadelphia, the 
only way they figured out the number of cars they had is they 
just said--when Ed DeSeve was in Philadelphia, they said, OK, 
everybody with a car, you've got to come down to memorial 
stadium and leave the keys. That's how they did the car audit. 
The only way they figured out how many cars they had. TVs, 
furniture, it's junk like that which is important because it 
goes to confidence in the government and waste, to police 
mismanaging informants, not managing investigation of deaths 
and contracts. All that has to be covered, so that we can look 
at a corrective plan of action. So as we get this information, 
we've got to take a range of actions from, one, literally 
rebuilding the agency because it can't really be fixed all the 
way to on the other extreme in a much more proactive range, and 
we're doing this. As we create this management supervisory 
service, we're saying that, yes, this management supervisory 
service is going to be at will formally and nominally but 
really the managers are going to be performing according to 
objective criteria that are laid out in accordance with these 
performance standards, one of them being risk management. So in 
other words, if you're a middle manager, are you managing your 
resources, your assets, your phones, your cars? Are you 
managing your risk in terms of exposure and liability? You're 
going to be held accountable for doing that. So it's not going 
to be whether I have a headache or not or what I feel, it's 
going to be an objective standard, and risk management is a big 
part of it.
    Ms. Norton. Am I to understand that agencies now, you said 
you spoke to your Cabinet, particularly after the deaths 
involving mentally retarded people, realizing that they are to 
do their own self-audit of the kind, for example, that was so 
well done after on which you are now acting for the mental 
disabilities agency, do they now know that they're supposed to 
be looking at that ahead of time?
    Mayor Williams. Right, in cooperation with the CFO and the 
IG, creating this Office of Risk Management, creating a process 
for ourselves going in and doing the assessments and taking 
ourselves the corrective action. I've talked to Linda about 
this, I've talked to Alice about this, particularly Alice, 
avoiding what I saw myself in the Federal Government where if 
you're not careful you just end up with a lot--you're 
generating a lot of paper but nothing is really happening. We 
want to avoid a simple paper exercise and make sure that 
there's a connection between the assessment of a problem and 
some real corrective measures.
    Ms. Norton. Dr. Rivlin.
    Ms. Rivlin. I thoroughly agree with what the Mayor is 
saying, but just one more point. I think the Mayor certainly 
wouldn't disagree with this. Special care has to go into 
programs where children or the mentally retarded or people who 
are especially vulnerable where their lives and well-being are 
at stake. And that's different from managing property or 
managing other things, all of which we want to do well, too, 
but there's a special risk there. I think we all need to be 
conscious of that.
    Ms. Cropp. Hand in hand with that, if I may, is the 
Council's oversight in all of this. One of the objectives that 
we have been trying to do is to strengthen our oversight, not 
to be critical but to be a partner in trying to make things 
function better. Before we have our budget hearings, for 
example, we are about to go into a set of hearings where we 
deal specifically with performance measures and we will look at 
exactly what the Mayor and his agency heads have said that they 
were going to do, to look at their benchmarks, to his credit, 
that he has come up with against other cities and to see where 
we stand with them. So it's really one of those partnership 
things. While the executive branch looks at the challenge 
before the agencies, the Council must also do its part in the 
oversight of it.
    Ms. Norton. The notion that was in the paper that somebody 
opined that what we had created was a miniature Forest Haven. 
We closed Forest Haven but say that then we create little 
Forest Haven around town. That was spine tingling to hear. I 
appreciate that Kathy Patterson, to show you the way in which I 
think confidence is being restored, indicated that she thought 
that the Council should have uncovered some of this. When you 
hear that kind of thing, you know that it's going to get better 
because what we haven't heard are a set of apologetics about 
it. The chairman has asked me to ask you, Mayor Williams, while 
he was out of the room, he had to go out of the room for a 
minute, do you plan to replenish the tobacco settlement fund? 
If so when and how?
    Mayor Williams. The answer is of course yes and that will 
be happening in 30 to 60 days, as soon as the reprogramming has 
taken effect. I also support actually--I'm just not speaking--
I'm not speaking for the city here but as a Mayor I personally 
support separating the tobacco fund more fully as a trust 
instrument so that we can be assured that into the future this 
tobacco fund has been segregated properly from the regular 
operations activities of the District's budget operations.
    Ms. Norton. One more question in that regard. Congress did 
something very important last time. It is a permanent change 
which allows you for the first time I think since home rule not 
to be treated like a Federal agency with respect to any 
surplus, but set aside some of it and then to do as other 
jurisdictions do, to be able to allocate the rest of it. Is 
there a way in which--is there a modus operandi you have for 
carrying out that change that we made in the charter? For 
example, there is probably going to be a surplus this year. How 
will the District treat that surplus? Will you have to set 
aside all of it because of the amount that the Congress said 
should be set aside or will there be some allocation so that 
some of it can be used?
    Mayor Williams. I think there is a reserve and there was 
also I guess a provision of 50 percent of unforecasted revenue. 
Together I think what we do with it is going to be on the basis 
of criteria that are established between the Council, the Mayor 
and the Financial Authority executed by the CFO.
    Ms. Norton. In the budget process coming up?
    Mayor Williams. No, this will be looking back on the 
reserve that will come into effect--I guess--well, we've done 
the audit, we'll know where we sit. We've got criteria. We'll 
have to make sure that expenditures are in accordance with the 
criteria and are one-time-only expenditures.
    Ms. Norton. One-time-only expenditures would be chosen this 
year, though.
    Mayor Williams. This will be this year, in year 2000.
    Ms. Norton. Thank you, Mr. Chairman.
    Mr. Davis. Thank you. I just have a couple of questions. 
Dr. Rivlin, you were with us when we wrote the Control Board 
Act. You were at the White House. We worked very cooperatively 
together. Before that you were prophesying for years this is 
where the city was heading if they didn't make some changes and 
they didn't heed your advise. As we approach now the end of the 
Control Board's active oversight under the act, are you 
confident at this point that the Control Board--that the act 
should allow the Control Board to phaseout at this point and 
that the city is moving in the right direction and that Mayor 
Williams and the Council are doing the appropriate things?
    Ms. Rivlin. I am, though I think there's a lot more to be 
done. But I would not advocate extending the Control Board 
beyond the period in the current statute.
    Mr. Davis. I just wanted to get that on the record, not to 
say that there isn't more to do but the reasons you were 
created in terms of the fiscal mismanagement and everything 
else, you have made tremendous progress.
    Ms. Rivlin. That's correct. You will remember, Mr. 
Chairman, that the act does not say that the Control Board is 
abolished at the end of the last control year. It says that it 
somehow, I forget what the words are, but its activities are 
suspended, it goes dormant, and it could come back if things 
went into a bad situation.
    Mr. Davis. Thank you.
    Ms. Norton. Could I just have a word on that? The chairman 
and I were a party to that, so people won't think that that 
means that there's a looming Control Board hanging over you, 
that's a much better way to account for any possible threat of 
insolvency in the future because the chairman and I would never 
want to go through what we went through together. We were 
strong home rule advocates, in fact produced a statute that 
left home rule in place. The District gave back a lot of that 
home rule through the appropriation process through the way it 
dealt with the Control Board. What it does was to set criteria 
that are rather draconian before any Control Board could pop 
up. But we would certainly not want to ever have to come before 
the Congress and start all over again. We would rather have 
exactly what we have now, which is automatic sunset. And if 
things really go down the tube, if you miss a payday, for 
example.
    Mayor Williams. It's not going to happen.
    Ms. Norton. Then of course automatically you would have a 
board to come in place. Otherwise, the chairman and I, if that 
were to happen again, I think we might be faced with a 
receivership and not the notion of a Control Board at all. So I 
don't think that the fact that there is a dormant Control Board 
is any threat to elected government in the District of Columbia 
because we do not see now, neither the chairman nor I, that the 
circumstances that would give rise to the springback of a 
Control Board would occur again.
    Mr. Davis. You're absolutely right. Whoever sits in this 
chair in the future and whoever sits in yours, you don't want 
to have to put them through what we went through. I think that 
strong oversight is the best remedy for no interference quite 
frankly and a good dialog in terms of everybody sharing. I 
think we've all learned from our past mistakes. Mayor Williams, 
I just want to ask you a few questions about the education 
system in the city. You came up with I think a fairly bold 
proposal. The Council has taken its cut at it as we move ahead. 
I don't know that if my adding my opinion to that helps or 
hurts your cause or Council's cause in the city, within the 
city politics but I want to make an observation and allow 
everybody to respond. We took a major step this year in 
Congress in giving D.C. students the same right students 
everywhere else have and that is basically to pay instate 
tuition, make a college education, a quality college education 
and broad based choices available at affordable rates, 
something that is very, very important. College if it's not 
affordable it's just a dream and people really don't pursue it. 
But we still have to get people to that level where they're 
ready for college, where they're attuned for that, and the 
educational system in the city, I think Ms. Ackerman has done a 
great job as the superintendent but it's still lacking in a lot 
of ways. As the Control Board phases out and we go through 
these other items, we return back to a school board that has 
basically been dysfunctional for 30 years in my judgment. Mayor 
Williams, you had a proposal to get some accountability 
basically under the Mayor's office and Mayor and Council. The 
way we used to do it in Fairfax before we went to elected 
boards is the county board would appoint the members of the 
school board and we were accountable. What is happening to that 
proposal? How are we going to get to--it's being chewed apart 
by the local media and so on. But this is the toughest nut for 
this city to crack. If you really want to get your residential 
areas booming again, getting people moving into these houses 
that they're building in Anacostia and other areas, you have to 
have a school system that people are willing to send their kids 
or they have to be so wealthy that they'll send their kids to 
private. And that's a nonstarter. Organizationally how you set 
that up, what is the accountability, who's in charge is a 
critical component to that. I think we all understand that the 
current system prior to the Control Board wasn't working. Mayor 
Williams, let me just ask you where do we go from here, how do 
you feel about it and then just say I applaud the leadership 
you've taken and I think the Council needs to be a partner in 
this, but going back to where we were before I think gives me 
some concern, I think it gives a lot of our colleagues some 
concern. We obviously want this resolved within the city 
without having congressional interference. As you know, a lot 
of my colleagues have had absolutely no compunction about 
interfering in the D.C. educational system at any time. So 
we're looking for you to try to resolve this.
    Mayor Williams. Right now, Mr. Chairman, as to my proposal, 
I believe that--I'm willing to say that since as the chief 
elected official of the city I'm going to be held responsible 
every day, certainly 3 years from now, for the quality of the 
education of our children, it's only fair that I be given the 
authority commensurate with the responsibility, that this is 
the most critical thing that we're going to do, that we have to 
put in place a system so that you have a strategy, you can 
build the support, you can have the operations all working 
together for our kids. Right now we've got everybody finger-
pointing at one another and we're not allowing Arlene to be the 
superintendent that I think she really can be with the support 
that she really needs. That's my feeling. Now, in a political 
point of view despite the support from I think a number of 
rank-and-file citizens and the leadership of the city, I think 
we're cresting at two votes on the Council so we're not doing 
as well as we could be doing on the Council, and I think the 
moral of that story is the Washington Post doesn't run the city 
because clearly if they ran the city we wouldn't be sitting at 
two votes. Having said that, I think entering this debate I 
think has really helped because I think that there is, and 
Linda can speak more authoritatively on this than I can as it 
goes through the Council, but it seems to me that there is a 
consensus on the following, that there should be elected 
leadership for the board, there should be stronger operational 
authority somewhere with or aligned with the Mayor and that we 
need to define better the roles and responsibilities of the 
Board. Those three things. I think everyone agrees.
    My problem with what came out of the Council a couple of 
days ago was that left intact without any modification, you 
have an elected board that's either completely advisory and 
frivolous, and I don't think that's going to work, or you have 
a board with some authority and a Mayor with some authority and 
we've gone from a situation where we have six or seven people 
in charge to a situation where we have only three or four but 
you still have blurred accountability. So I'm meeting with 
Councilman Chavous this afternoon, have been talking regularly 
with Linda, be talking with the whole Council and try to work 
through something that meets the test of focusing 
accountability and trying in one way or another to satisfy some 
of the Council's concerns. I think the question though is 
really not--ultimately the question in our city and other 
American cities is not whether or not we're going to have an 
elected board or an appointed board. The real fundamental, 
important question looming is whether we're going to be able to 
really see our public school system not only survive but thrive 
and avoid what more and more people are saying is vouchers.
    Mr. Davis. That is, as you know, barring substantive 
changes in the way the city does things, Congress has voted 
that before, that's a very hot item, and I think if there's an 
admonition here it's to have you work these issues out so we 
feel there's some proactivity going on at the local level 
because my colleagues, I think many of them are not going to 
hesitate to try to take control if they don't see that. I would 
also add that within the city itself we are seeing polling 
numbers on vouchers and other issues where citizens get upset 
if they're not getting quality. They want to see at least some 
changes from what we currently have. That's my comment sitting 
as an outsider and someone across the river who is trying to do 
everything we can to give those kids the same opportunity in 
the city that they have out in my District.
    Ms. Cropp.
    Ms. Cropp. The Council feels strongly that perhaps one of 
the No. 1 issues that we face is improving the educational 
system of Washington, DC, so that we can produce children who 
can be functioning members of society, educated children who 
will be functioning members of society. The Council feels so 
strongly about it that this controversial issue of school 
governance was initiated by the Council. It was the Council who 
recognized very clearly that the system of governance that we 
have now was not functioning. Under the leadership of the 
Education Committee chair Kevin Chavous, a proposal was put 
forward on school governance. With that an awful lot of debate, 
controversy, and I think healthy, has started in this city. We 
still need to decide on I think what the basic issue ought to 
be, and that is what system, what form of governance will 
really produce a better educated child. Now, we keep hearing 
whether or not it should be with an elected leadership of an 
elected board of education or whether or not it should be with 
the appointment by the Mayor. That's where it has centered at 
this point. I think everyone's goal is to have a better 
educated child. I would suggest that if the Mayor, if the Post, 
if Congress, if the President, if the Council can share data 
with us that would show that an appointment as opposed to an 
elected board would present a better educated child, I think 
the Council would be there. The Council will truly be there. We 
have done research on the issue to try to get that type of 
information. We constantly hear about cities such as Chicago 
where it has occurred, Boston, Cleveland, and when you look at 
the data, data does not support necessarily any improvement at 
all with the student. Now, if you're talking about the 
political alignment, yes, there's a difference. But when you 
look specifically at the students, the data does not support 
that, that I have seen at this point, and the Council has tried 
to get it and we want it because it will help us make a more 
informed decision. Where we have seen a difference is in one 
school district, where I think it's about 2,700 students, and I 
think it was Cleveland, where there was significant improvement 
with the students, and that happened to have been with what the 
Mayor just said, the vouchers, and it was where the students, 
2700 students had vouchers and there was significant 
improvement there. We have not yet in the District seen that 
type of improvement across the board. We do think that the 
governance needs to change. We're in dialog with the Mayor to 
try to figure out what the best approach for us to take in the 
District of Columbia. How can we help for the system to be more 
accountable? We're all pleased that the Mayor is stepping up to 
the plate and saying, ``Hold me accountable.'' we think that 
with the Mayor's total involvement with the school system, we 
will end up with a better school system. The only way education 
is going to improve is for the Mayor, for the Council, for all 
of us to understand its strong importance. We're looking at 
that issue, we're debating the issue and hopefully we will come 
out with something that will make for a better system.
    We have made some changes. We have reduced the number of 
school boards, members on the school board. What we found as we 
did the research throughout the country that the average size 
of a school board is from five to nine members. We had 11 
members, way above the average. We heard concern with regard to 
the school boards being tied up too politically and being too 
vested in their own ward as opposed to the overall interest of 
the city as a whole, so we looked at the districts for the 
school system and we changed that. We're looking at the 
superintendent, because we strongly believe that the 
superintendent ought to be a part of the Mayor's Cabinet in the 
sense that what we do in human services, we talked an awful lot 
about, the school system needs to be a part of it. What we do 
with economic development in our work force, the school system 
needs to help to train our young people to be available for 
that. So we will continue the discussion and hopefully the 
outcome will be one that we all want, and that is one that will 
present a better educated child.
    Mr. Davis. Chairman Cropp, thanks. I know your longstanding 
commitment to education as well. This is the toughest nut to 
crack. Everything else--I guess my only admonition is we're 
looking for you to solve this. That's where it ought to be 
solved, at the local level. It doesn't necessarily happen that 
way all the time but to the extent you all can work these 
issues out, it makes it a lot easier. Anything else anyone 
wants to add at this point?
    Let me just say we might want to supplement with a question 
or two that we'll send you but you've been up here for 2\1/2\ 
hours. We very much appreciate your testimony. I'm most 
encouraged to hear your comments today. Without objection, the 
record will remain open until February 1. The subcommittee may 
be sending written questions to the witnesses to followup on 
issues raised. We will certainly have additional hearings on 
these matters. I want to continue to work with all interested 
parties to achieve these objectives. These proceedings are 
closed.
    [Whereupon, at 12:45 p.m., the subcommittee was adjourned.]

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